HomeMy WebLinkAboutFinancial Reports-Comprehensive Annual Financial Report (CAFR) - 6/30/2014TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2014
11000 NORTH LA CANADA DRIVE
ORO VALLEY, ARIZONA 85737 - 7015
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2014
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, 2014
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, 2014
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, 2014
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 94
Combining Schedule of Revenues, Expenditures and
Changes in Fund Balances – Budget and Actual 96
Internal Service Funds:
Combining Statement of Net Position 102
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position 103
Combining Statement of Cash Flows 104
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2014
TABLE OF CONTENTS (Cont’d)
STATISTICAL SECTION
Financial Trends:
Net Position by Component 107
Changes in Net Position 108
Fund Balances of Governmental Funds 111
Changes in Fund Balances of Governmental Funds 112
Revenue Capacity:
Principal Employers 114
Principal Sales Taxpayers 115
Taxable Sales by Category 116
Direct and Overlapping Sales Tax Rates 117
Primary and Secondary Assessed Property Values 118
Historical and Projected Excise Tax Collections 119
Debt Capacity:
Ratio of Outstanding Debt by Type 120
Direct and Overlapping Governmental Activities Debt 121
Legal Debt Margin Information 122
Calculation of Legal Debt Margin 123
Pledged-Revenue Coverage 124
Historical and Projected Water System Revenues, Expenses,
Debt Service and Coverage 125
Demographic and Economic Information:
Demographic and Economic Statistics 126
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2014
TABLE OF CONTENTS (Concl’d)
STATISTICAL SECTION (Concl’d) Page
Operating Information:
Full-Time Equivalent Town Employees by Function 127
Water Utility Revenues by User Type 128
Operating Indicators by Function 129
Water Rates 130
Capital Assets Statistics by Function 131
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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
November 26, 2014
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, 2014.
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, 2014, 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, 2014, 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 41,887. The population of Oro Valley has increased 41% 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 are 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 August of 2014.
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 December 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.
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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 10 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 2013/14.
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 Collected over $1.3 million in plan review and permit fees.
o Issued 1,536 permits, of which 255 were commercial building permits, 1,205 were
residential permits and 76 were grading permits.
o Issued building permits for 646 new multi-family units.
o Received the Achievement of Excellence in Procurement Award for the 6th
consecutive year.
o Received Certificate of Achievement for Financial Reporting Excellence for FY
2012/13 from Government Finance Officers Association (GFOA) for the 20th
consecutive year.
o Received Distinguished Budget Presentation Award from GFOA for the 6th
consecutive year.
o Received Popular Annual Financial Reporting (PAFR) Award from GFOA for FY
2012/13 for the 2nd consecutive year.
o Received an unqualified “clean” audit opinion for FY 2012/13 financial statements.
o Completed update of Town development impact fee study in compliance with State
law with new fees effective July 1, 2014.
o Received two-notch bond rating upgrade from Standard & Poor’s (S&P) on the
Series 2005 Oracle Road Improvement District Bonds from A- to A+.
o Participated in successful loan closing through the Water Infrastructure Finance
Authority (WIFA) for $5 million at an annual interest rate of 2.65% for the Advanced
Metering Infrastructure Project.
o Began implementation of Town’s on-site health clinic.
o Transitioned the Town’s dental insurance program from fully-insured to a self-
insured program.
o Received $15,000 AZ Game & Fish grant for Naranja Park archery range.
o A water rate increase of 0.6% and the elimination of tiered rate structures for
commercial and multi-family classifications were approved.
o Completed Phase 1 of the Water Utility Energy Efficient Study and purchased new
high efficiency pumps and motors.
Communication
The Town will ensure residents are educated about and engaged in moving community
initiatives forward.
o Implemented a Citizen Self Service module to enable business owners to pay
business license fees online.
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o Implemented an automated public records request system that allows requests to be
submitted and tracked online, allows tracking of time spent on request and provides
reports regarding requests.
o Approved funding to increase the frequency of the Oro Valley Vista newsletter
distribution to residents.
o Developed and launched smart phone mobile application: OV APP.
o Developed a summer marketing campaign for the Oro Valley Aquatic Center.
o Developed a Parks & Recreation program guide that is published three times a year.
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 Oro Valley named one of “America’s 10 Safest Suburbs” by Movoto Real Estate.
o Provided a wide range of construction assistance from initial infrastructure and
grading inspections through final approvals for a multitude of both residential and
commercial developments and projects. Some of these include Securaplane, St.
Mark’s Church, the apartments at Encantada at Steam Pump and San Dorado, CVS
Pharmacy, Catalina Springs Memory Care & Basis K-6 school, and the opening of
two new residential subdivisions.
o Completed the Cañada del Oro (CDO) shared use path and pedestrian bridge.
o Launched “Play OV, Stay OV” campaign.
o Launched Visit Oro Valley microsite.
o Celebrated the 10th anniversary of the Arizona Distance Classic Half Marathon and
partnered with M3S Sports, the Greater Oro Valley Chamber of Commerce and Visit
Tucson to provide participants with OV dollars.
o Successfully attracted the 2016 Masters Synchronized Swimming Championships.
o Celebrated the Town’s 40th anniversary through a series of events, social media
campaigns, branding and signage, and partnerships with local businesses.
o Successfully hosted eight (8) large scale aquatic meets/events to include National
Synchronized Swimming.
o Aquatic Center received Arizona Parks & Recreation Association (APRA)
Outstanding New Facility award.
o Oro Valley named Playful City USA 2014 (fourth consecutive year).
o Hosted “Off the Vine Wine Festival” at Steam Pump Ranch.
Community Services
The Town Council and management are focused on providing services to enhance
residents’ quality of life.
o Authorized $2.3 million for development of Naranja Park improvements, including a
dog park, two multi-sport fields, parking lot and critical infrastructure.
o Approved the adoption of the vision and guiding principles for the Your Voice, Our
Future project, also known as the General Plan update.
o Approved $200K to help launch a Children’s Museum satellite location in Oro
Valley.
o Selected a new permitting system to replace the current Permits Plus system.
o Seamlessly transitioned from the 2006 Building Codes to the 2012 editions.
o Fiscal year Transit service ridership exceeded 40,000 passenger trips and increased
25% over prior year.
o Lambert Lane Phase I widening project completed.
o Conducted a market salary study of the Town’s benchmark classifications.
v
o Updated the Town’s classification plan by creating three schedules: general pay
structure, Police Department pay structure and part-time pay structure.
o Implemented phase 1 of phone system replacement/Voice over IP project.
o Upgraded all Town computers to Windows 7 and Office 2013 software.
o Implemented internet access to Town GIS maps.
o Implemented faster and less expensive web-based portal for Court payments,
reducing costs to constituents and the Court.
o Over 2,000 residents and visitors attended the 2013 4th of July Celebration at James
D. Kriegh Park and Aquatic Center.
o Launched the 2nd Saturdays at Steam Pump Ranch concert series.
o Erected shade structures and other improvements at Steam Pump Ranch, allowing for
the relocation of the Farmer’s Market to the property.
o Began work on the implementation of the Naranja Park Programming & Design
Master Plan Update.
o 162 active businesses in the Police Department’s Adopt-A-Business Program.
o Citizen Volunteer Assistants Program (CVAP) members contributed an estimated
27,664 volunteer hours.
o Full implementation of the Pima County Wireless Integrated Network system was
achieved on March 31, 2014.
o Oro Valley Police Department began beta testing a new Eticket, Ecrash and incident
reporting system, the first of its kind (http://www.thinbluereports.com/).
o Constructed and completed the Central Arizona Project (CAP) water delivery
connections at Northern & Hardy and at Countryside.
o Replaced 2,454 water meters under the Meter Replacement Program and Advanced
Metering Infrastructure 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 2013/14 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 76% of total General Fund revenue for FY 2013/14.
Most of the major local sales tax categories experienced year-over-year increases compared to
amounts collected in FY 2012/13 as discussed below:
Retail tax collections totaled $5.2 million for FY 13/14, up 1.7%, or $89,000 over last fiscal
year.
Restaurant and bar tax collections totaled $1.1 million for the fiscal year, up 9.2% over last
fiscal year.
Construction sales tax collections totaled $3.5 million for the fiscal year, up 22.6%, or
$650,000 over last fiscal year.
Utility tax collections totaled $2.8 million for the fiscal year, up 0.8%, or $23,000 over last
fiscal year.
The chart below is a look at the past five years’ local sales tax activity by category:
vi
In FY 2013/14, the Town received $9.6 million for state shared revenues in the General Fund, up
6.5%, or $589,000 over last fiscal year. The trend chart below depicts the expected upward
movement of both of these revenue categories for next fiscal year:
The demands of the organization continue to evolve as the Town sees significant signs of economic
recovery. Specifically, the recovery in the housing market is leading to challenges and opportunities.
Because the organization made significant staff reductions during the recession, this surge of activity
presents some unique staffing challenges, and we continue to monitor the activity closely. The below
chart depicts the local trends in single family residential (SFR) building permits issued and annual
vii
permit revenues from both residential and commercial construction activity from FY 2005/06
through FY 2015/16 projections.
Future Focus
A significant effort was undertaken during the FY 2014/15 budget process to identify and quantify
both one-time revenues derived from increased construction activity and recurring revenues derived
from such areas as local sales taxes and state-shared sources. The Town used this information to
dedicate one-time revenues to funding one-time expenditures in the budget, specifically for capital
improvement projects, while ensuring that sufficient recurring revenues existed to fund recurring
expenditures in the budget. With the expectation of this increased development activity continuing in
future years, it will be important to continue to analyze the budget in this manner to avoid future
reliance on one-time revenues to fund recurring costs.
For FY 2014/15, 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 assets and
technology, continued delivery of quality community services and new initiatives.
These strategies will be fulfilled in a number of different ways as highlighted below:
Employee performance merit and step increases have been budgeted for FY 2014/15, along
with funding to fully implement compensation plan adjustments based on the findings of the
salary market study that was performed during FY 2013/14.
The FY 2014/15 budget includes funding to open and operate an on-site health clinic for our
Town employees and covered dependents in further support of the Town’s robust health and
wellness program.
The FY 2014/15 budget includes more than $1.1 million for the Pavement Preservation
Program in the Highway Fund, which maintains the current condition of our streets and
roads.
Funding has also been included in the FY 2014/15 budget to build upon the $2.3 million
improvements at Naranja Park authorized during FY 2013/14 by adding $250,000 to build
restroom facilities at the park.
The FY 2014/15 budget has dedicated funding for a satellite location of a Children’s Museum
in partnership with the Tucson Children’s Museum to further efforts to provide arts and
culture amenities for all ages in the Town.
$‐
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
0
50
100
150
200
250
300
350
400
450
05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 Permit RevenueSFR PermitsFiscal Year
SFR Permits and Building Activity Revenue
SFR Permits Residential Permit Revenues Commercial Permit Revenues
viii
Additionally, annexation efforts will continue to be a top priority 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 $11.5 million, or 36% of FY 2014/15 adopted
expenditures of $32.3 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, 2013. This was the
twentieth 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.
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 DIRECTORS
Town Manager Greg Caton
Finance Director Stacey Lemos, CPA
Human Resources Director Vacant
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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Page 1
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, 2014, 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 entity’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 entity’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, 2014, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance
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. 65, Items Previously Reported as Assets and Liabilities, for the year ended
June 30, 2014, 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 November 26, 2014,
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
November 26, 2014
Page 3
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
(Required Supplementary Information)
Page 4
(This page intentionally left blank)
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2014
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, 2014. 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 2013-14 as follows.
The Town’s total net position of governmental activities decreased $443,413 to $156.7 million
and business-type activities increased $6.0 million to $74.3 million representing 68 percent and
32 percent respectively, of the total net position of $231.0 million.
General revenues from governmental activities accounted for $25.8 million in revenue, or 67
percent of all revenues from governmental activities. Program specific revenues in the form of
charges for services and grants and contributions accounted for $12.7 million or 33 percent of
total governmental activities revenues. The Town had $20.2 million of program revenues and
$111,816 in general revenues related to business-type activities.
The Town had $38.9 million in expenses related to governmental activities, an increase of 11
percent from the prior fiscal year. The Town had $14.3 million in expenses related to business-
type activities, an increase of 2 percent from the prior fiscal year.
Among major funds, the General Fund had $29.5 million in revenues, which primarily consisted
of sales taxes and intergovernmental revenues. The total expenditures of the General Fund were
$28.0 million. The General Fund’s fund balance decreased from $13.1 million to $11.5 million,
primarily due to $3.3 million in transfers to capital project funds for improvements to
Naranja Park in the amount of $2.3 million and $1.5 million for the establishment of a
General Government Capital Improvement Fund to account for governmental capital asset
projects.
The Highway User Revenue Fund had $4.2 million in revenues, which primarily consisted of
intergovernmental revenues. The total expenditures of the Highway User Revenue Fund were
$3.5 million.
The Water Fund operating revenues of $15.5 million exceeded operating expenses of $11.6
million. The increase in net position of $6.0 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, 2014
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, 2014
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 and Highway User Revenue (HURF) Funds, both 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 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 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, 2014
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 and deferred outflows exceeded liabilities and deferred outflows by
$231.0 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 outstanding 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, 2014 and June 30, 2013.
2014
Governmental
Activities
2013
Governmental
Activities
2014
Business-type
Activities
2013
Business-type
Activities 2014 Total 2013 Total
Current and other assets $ 28,033,668 $ 27,802,041 $ 25,162,539 $ 22,603,794 $ 53,196,207 $ 50,405,835
Capital assets, net 143,597,865 146,102,837 98,221,633 97,911,736 241,819,498 244,014,573
Total assets 171,631,533 173,904,878 123,384,172 120,515,530 295,015,705 294,420,408
Deferred outflows 135,085 2,153,646 2,288,731
Current and other liabilities 3,376,544 3,438,012 3,647,811 2,842,130 7,024,355 6,280,142
Long-term liabilities 11,689,969 13,323,348 47,573,244 49,369,457 59,263,213 62,692,805
Total liabilities 15,066,513 16,761,360 51,221,055 52,211,587 66,287,568 68,972,947
Net investment in capital assets 133,714,821 134,512,094 52,775,561 48,802,267 186,490,382 183,314,361
Restricted 4,555,138 3,730,312 4,555,138 3,730,312
Unrestricted 18,430,146 18,901,112 21,541,202 19,501,676 39,971,348 38,402,788
Total net position $ 156,700,105 $ 157,143,518 $ 74,316,763 $ 68,303,943 $ 231,016,868 $ 225,447,461
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 $3.4 million in business-type activities capital assets through
improvements to the existing water system.
The addition of $6.1 million in governmental activities capital assets, mostly consisting
of the completion of the Lambert Lane street improvement project for $10 million and
$1.4 million in improvements to Naranja Park.
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2014
Page 9
GOVERNMENT-WIDE FINANCIAL ANALYSIS (Cont’d)
The decrease of $1.8 million in business-type activities long-term debt was due mainly to
the issuance of a $1.1 million in Water Infrastructure Finance Authority (WIFA) loan and
annual debt service payments of $2.7 million.
The decrease of $1.6 million in governmental activities long-term debt was due mainly to
annual debt service payments of $704,000, and the early payoff of $1.1 million in special
assessment bonds.
Changes in net position. The Town’s total revenues for the current fiscal year were $58.8
million. The total cost of all programs and services was $53.2 million. The following table
presents a summary of the changes in net position for the fiscal years ended June 30, 2014 and
June 30, 2013.
2014
Governmental
Activities
2013
Governmental
Activities
2014
Business-type
Activities
2013
Business-type
Activities
2014
Total
2013
Total
Revenues:
Program revenues:
Charges for services $ 5,066,591 $ 5,007,938 $ 20,046,222 $ 17,546,000 $ 25,112,813 $ 22,553,938
Operating grants and contributions 4,706,844 5,318,097 4,706,844 5,318,097
Capital grants and contributions 2,919,641 2,920,335 179,675 48,871 3,099,316 2,969,206
General revenues:
Sales taxes 15,286,001 14,241,065 15,286,001 14,241,065
Franchise taxes 571,731 539,477 571,731 539,477
Unrestricted state shared revenues 9,636,906 9,048,365 9,636,906 9,048,365
Investment earnings 255,702 265,787 111,816 5,471 367,518 271,258
Total revenues 38,443,416 37,341,064 20,337,713 17,600,342 58,781,129 54,941,406
Expenses:
General government 10,990,007 9,861,131 10,990,007 9,861,131
Public safety 13,814,914 12,770,224 13,814,914 12,770,224
Highways and streets 10,029,203 9,255,004 10,029,203 9,255,004
Culture and recreation 3,399,623 2,783,633 3,399,623 2,783,633
Interest on long-term debt 656,260 522,917 656,260 522,917
Water 13,572,677 13,047,373 13,572,677 13,047,373
Stormwater drainage 749,038 983,975 749,038 983,975
Total expenses 38,890,007 35,192,909 14,321,715 14,031,348 53,211,722 49,224,257
Transfers 3,178 2,319 (3,178) (2,319)
Special item (2,606,804) (2,606,804)
Changes in net position (443,413) (456,330) 6,012,820 3,566,675 5,569,407 3,110,345
Net position, beginning 157,143,518 157,599,848 68,303,943 64,737,268 225,447,461 222,337,116
Net position, ending $ 156,700,105 $157,143,518 $ 74,316,763 $ 68,303,943 $ 231,016,868 $ 225,447,461
Total revenues increased $3.8 million, or 7 percent, primarily due to an increase in sales tax
revenue and state shared revenues. The increase of $1.0 million in sales tax was largely due to an
increase of $500,000 in collections from construction-related activity and $500,000 from the hotel
and lodging industry. Business-type activities charges for services increased by $2.5 million due to
an increase in water sales of $584,000 and $1.8 million in collections from water connection fees and
development impact fees.
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2014
Page 10
GOVERNMENT-WIDE FINANCIAL ANALYSIS (Concl’d)
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.
2014 2013
Governmental Activities
Total
Expenses
Net (Expense)/
Revenue
Total
Expenses
Net (Expense)/
Revenue
General government $ 10,990,007 $ (6,790,678) $ 9,861,131 $ (5,938,649)
Public safety 13,814,914 (12,711,503) 12,770,224 (11,749,770)
Highways and streets 10,029,203 (3,106,178) 9,255,004 (1,552,733)
Culture and recreation 3,399,623 (2,932,312) 2,783,633 (2,182,470)
Interest on long-term debt 656,260 (656,260) 522,917 (522,917)
Total $ 38,890,007 $ (26,196,931) $ 35,192,909 $ (21,946,539)
Business-type Activities
Water $ 13,572,677 $ 5,893,792 $ 13,047,373 $ 3,726,231
Stormwater drainage 749,038 10,390 983,975 (162,708)
Total $ 14,321,715 $ 5,904,182 $ 14,031,348 $ 3,563,523
The cost of all governmental activities this year was $38.9 million. The increase of $3.7
million from the prior year was due primarily to improvements to Naranja Park of $1.3
million and the electric utility line undergrounding project in the amount of $970,000. In
addition, personnel costs increased due to the reinstatement of step and merit increases for all
Town employees.
The cost of all business-type activities this year was $14.3 million. The increase of $290,367
from the prior year was primarily due to increased personnel costs due to the reinstatement of
merit increases for all Town employees.
Federal and State governments, developer contributions, and charges for services subsidized
certain governmental programs and business-type programs with revenues of $32.9 million.
Net cost of governmental activities of $26.2 million was financed by general revenues, which
are made up of primarily sales taxes and state shared revenues of $24.9 million.
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.
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2014
Page 11
FINANCIAL ANALYSIS OF THE TOWN’S FUNDS (Concl’d)
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 $22.9
million, an increase of $1.9 million. This was primarily due to increases in construction sales tax
collections and funds received for the completion of the Lambert Lane street improvement
project.
The General Fund is the principal operating fund of the Town. The fund balance decreased by
$1.6 million in the General Fund to $11.5 million for the current fiscal year due to $3.3 million
in transfers to capital project funds of $2.3 million for Naranja Park improvements and $1.5
million for the establishment of a General Government Capital Improvement Fund to account for
governmental capital projects.
The fund balance of the Highway User Revenue Fund showed an increase of $657,396 to $4.2
million for the current fiscal year due to an increase in local sales tax revenues and operating
budget cost savings.
Proprietary funds. Net position of the Enterprise Funds at the end of the year amounted to
$74.3 million. The increase of $6.0 million from the prior fiscal year was primarily due to
increased operating income of $3.9 million and development impact fee revenues of $2.4 million
from the Water Utility Fund.
BUDGETARY HIGHLIGHTS
There were budget amendments to the Town of Oro Valley’s fiscal year 2013-14 operating and
capital budget. A total of $2 million was transferred to the Naranja Park Fund from the General
Fund for $1.6 million and the Bed Tax Fund for $400,000. In addition, $60,000 was transferred
from General Fund contingency to the Information Technology 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 $575,988 in licenses, fees & permits was a result of an increase
in local construction activity.
The favorable variance of $830,114 in public safety expenditures was a result of a result
of not expending funds allocated for the Police Evidence Facility and seizure and
forfeiture funds that were not expended.
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2014
Page 12
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. At year end, the Town had invested $241.8 million in capital assets (net of
accumulated depreciation), including buildings, facilities, vehicles, computers, equipment, and
infrastructure assets. This amount represents a net decrease of $2.2 million from last year. This
was primarily due to the completion of numerous street projects and expansion of the Town's
water system and depreciation expense of $11.2 million.
The following schedule presents capital asset balances for the fiscal years ended June 30, 2014
and June 30, 2013.
Governmental Activities
As of
June 30, 2014
As of
June 30, 2013
Land $ 18,878,468 $ 18,878,468
Infrastructure 165,954,674 153,945,765
Buildings and improvements 25,018,388 26,549,988
Machinery, equipment, and vehicles 12,853,856 11,500,475
Construction in progress 1,853,653 9,943,494
Less: Accumulated depreciation (80,961,174) (74,715,353)
Total $ 143,597,865 $146,102,837
Business-type Activities
As of
June 30, 2014
As of
June 30, 2013
Land $ 2,410,660 $ 2,410,660
Water rights 8,534,490 8,534,490
Water system 114,922,175 112,874,420
Stormwater system 2,779,503 2,779,503
Equipment and vehicles 4,467,875 4,387,633
Construction in progress 1,297,414
Less: Accumulated depreciation (36,190,485) (33,074,970)
Total $ 98,221,632 $ 97,911,736
Additional information on the Town’s capital assets can be found in Note 6.
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2014
Page 13
CAPITAL ASSETS AND DEBT ADMINISTRATION (Concl’d)
Debt Administration. At year end, the Town had $55.1 million in long-term debt outstanding,
$3.9 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, 2014 and June 30, 2013.
Governmental Activities
2014 2013
Revenue bonds $ 8,659,050 $ 9,103,050
Special assessment bonds 1,055,000 2,435,000
Total $ 9,714,050 $ 11,538,050
Business-type Activities
2014 2013
Revenue bonds $ 38,980,950 $ 41,386,950
Loan payable 6,376,774 5,575,041
Total $ 45,357,724 $ 46,961,991
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 7 through 11.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES
The unemployment rate for the Town of Oro Valley is currently 6.2%. Pima County’s
and the State of Arizona’s unemployment rates are 6.9% and 6.9%, respectively.
The Town’s secondary assessed valuation for the current year is $556,259,856.
Single family residential (SFR) building permits issued in this fiscal year totaled 136, as
compared to 217 SFR building permits issued last fiscal year. Projections for SFR
building permits are 200 for fiscal year 2014-15.
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2014
Page 14
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES (Concl’d)
The adopted combined operating and capital expenditure budget for fiscal year 2014-15 totals
$107.1 million, an increase of $13.2 million, or 14.1% over last year’s budget of $93.9 million.
This increase is primarily attributed to the implementation of the compensation plan for all Town
employees, replacement of fleet vehicles, capital improvement projects and improvements to the
Town’s technology. The budget for fiscal year 2014-15 continues to place emphasis on the
following: investing in our employees, investing in assets and technology, delivery of
community services, and investment in new initiatives 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
Page 16
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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:
Capital assets, non-depreciable
Capital assets, depreciable (net)
Total noncurrent assets
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refunding
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
$23,842,118
1,015,269
281,641
1,751,337
1,055,000
88,303
28,033,668
20,732,121
122,865,744
143,597,865
171,631,533
135,085
1,522,643
869,531
175,984
317,008
182,467
95,555
213,356
1,374,787
40,400
130,000
479,440
5,401,171
387,760
128,594
925,000
8,223,988
9,665,342
15,066,513
133,714,821
883,971
3,136,958
534,209
18,430,146
$156,700,105
Business-type
Activities
$22,955,521
2,205,018
2,000
25,162,539
12,242,564
85,979,069
98,221,633
123,384,172
2,153,646
1,101,458
116,024
1,203,779
807,570
418,980
152,889
93,593
290,521
2,995,560
7,180,374
138,745
6,086,253
37,815,683
44,040,681
51,221,055
52,775,561
21,541,202
$74,316,763
Total
$46,797,639
1,015,269
2,486,659
1,751,337
1,055,000
90,303
53,196,207
32,974,685
208,844,813
241,819,498
295,015,705
2,288,731
2,624,101
985,555
1,379,763
807,570
317,008
182,467
95,555
632,336
1,527,676
133,993
290,521
130,000
3,475,000
12,581,545
526,505
128,594
6,086,253
925,000
46,039,671
53,706,023
66,287,568
186,490,382
883,971
3,136,958
534,209
39,971,348
$231,016,868
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF NET POSITION
JUNE 30, 2014
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
$10,990,007
13,814,914
10,029,203
3,399,623
656,260
38,890,007
13,572,677
749,038
14,321,715
$53,211,722
Charges for
Services
$4,049,195
35,976
546,066
435,354
5,066,591
19,286,794
759,428
20,046,222
$25,112,813
Operating
Grants and
Contributions
$150,134
635,197
3,889,556
31,957
4,706,844
$4,706,844
Capital Grants
and
Contributions
$
432,238
2,487,403
2,919,641
179,675
179,675
$3,099,316
Governmental
Activities
$(6,790,678)
(12,711,503)
(3,106,178)
(2,932,312)
(656,260)
(26,196,931)
(26,196,931)
General revenues:
Taxes:
Sales taxes
Franchise taxes
Unrestricted state shared revenues
Investment earnings
Transfers
Total general revenues and transfers
Changes in net position
Net position, beginning of year
Net position, end of year
15,286,001
571,731
9,636,906
255,702
3,178
25,753,518
(443,413)
157,143,518
$156,700,105
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2014
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
$
5,893,792
10,390
5,904,182
5,904,182
Totals
$(6,790,678)
(12,711,503)
(3,106,178)
(2,932,312)
(656,260)
(26,196,931)
5,893,792
10,390
5,904,182
(20,292,749)
111,816
(3,178)
108,638
6,012,820
68,303,943
$74,316,763
15,286,001
571,731
9,636,906
367,518
25,862,156
5,569,407
225,447,461
$231,016,868
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
Prepaid items
Total assets
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable
Accrued wages and benefits
Intergovernmental payable
Sales tax payable
Unearned revenue
Customer deposits payable
Total liabilities
Deferred inflows of resources:
Unavailable revenues - special assessments
Fund balances:
Restricted
Committed
Assigned
Unassigned
Total fund balances
Total liabilities, deferred inflows of resources
and fund balances
General Fund
$12,002,823
1,015,269
281,641
435,777
84,249
$13,819,759
$592,472
804,449
175,984
317,008
182,467
213,356
2,285,736
1,608,035
9,925,988
11,534,023
$13,819,759
HURF
$4,058,787
251,581
$4,310,368
$70,125
65,082
135,207
4,175,161
4,175,161
$4,310,368
Non-Major
Governmental
Funds
$6,904,012
1,063,979
1,055,000
4,054
$9,027,045
$748,562
748,562
1,055,000
4,555,138
1,168,345
1,500,000
7,223,483
$9,027,045
TOWN OF ORO VALLEY, ARIZONA
BALANCE SHEET - GOVERNMENTAL FUNDS
JUNE 30, 2014
Page 24
The notes to the basic financial statements are an integral part of this statement.
Total
Governmental
Funds
$22,965,622
1,015,269
281,641
1,751,337
1,055,000
88,303
$27,157,172
$1,411,159
869,531
175,984
317,008
182,467
213,356
3,169,505
1,055,000
4,555,138
5,343,506
3,108,035
9,925,988
22,932,667
$27,157,172
Page 25
Page 26
(This page intentionally left blank)
Total governmental fund balances 22,932,667$
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 224,559,039$
Less accumulated depreciation (80,961,174) 143,597,865
Special assessments receivable are not available to pay for current period
expenditures and therefore are reported as unavailable revenue in the funds. 1,055,000
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 135,085
Deferred bond premium (44,378) 90,707
The Internal Service Funds are used by management to charge the cost of
services to the individual funds. The assets and liabilities of the Internal
Service Funds are included in the Statement of Net Position. 669,457
Long-term liabilities are not due and payable in the current period and therefore
are not reported in the funds.
Special assessment bonds (1,055,000)
Revenue bonds (8,659,050)
Capital leases (168,994)
Compensated absences (1,762,547) (11,645,591)
Net position of governmental activities 156,700,105$
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, 2014
Page 27
Revenues:
Sales taxes
Franchise taxes
Development impact fees
Special assessments
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
Debt service -
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Capital lease agreements
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
$13,044,990
571,731
11,544,290
2,069,443
198,084
1,720,689
197,753
165,119
29,512,099
10,127,193
13,393,183
1,275,093
2,445,131
798,852
28,039,452
1,472,647
185,000
(3,260,729)
(3,075,729)
(1,603,082)
13,137,105
$11,534,023
HURF
$1,227,468
2,714,257
47,257
129,492
38,666
20,345
4,177,485
2,435,484
1,084,605
3,520,089
657,396
657,396
3,517,765
$4,175,161
Non-Major
Governmental
Funds
$1,013,543
569,338
1,462,307
2,474,084
475,252
19,283
120,025
6,133,832
483,480
146,139
3,611,728
1,867,901
472,268
6,581,516
(447,684)
212,895
3,930,152
(851,245)
3,291,802
2,844,118
4,379,365
$7,223,483
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2014
Page 28
The notes to the basic financial statements are an integral part of this statement.
Total
Governmental
Funds
$15,286,001
571,731
569,338
1,462,307
16,732,631
2,116,700
673,336
1,850,181
255,702
305,489
39,823,416
10,610,673
13,539,322
3,710,577
2,445,131
5,495,185
1,867,901
472,268
38,141,057
1,682,359
212,895
4,115,152
(4,111,974)
216,073
1,898,432
21,034,235
$22,932,667
Page 29
Page 30
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Net changes in fund balances - total governmental funds 1,898,432$
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 6,072,386$
Less current year depreciation (8,109,927) (2,037,541)
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. (1,380,000)
Repayment of debt principal are expenditures in the governmental funds, but the repayment reduces
long-term liabilities in the Statement of Net Position.
Capital lease principal retirement 43,901
Revenue bond principal retirement 444,000
Special assessment bond principal retirement 1,380,000 1,867,901
Issuance of obligations under capital leases provide current financial resources to governmental
funds, but the issuance increases long term liabilities in the Statement of Net Position. (212,895)
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 premium on long-term debt 8,315
Amortization of deferred charge on refunded debt (192,307)
Loss on disposal of capital assets (467,431)
Compensated absences (29,942) (681,365)
The Internal Service Funds are used by management to charge the cost of services to the
individual funds. The changes in net position of the Internal Service Funds are reported with
governmental activities in the Statement of Activities. 102,055
Change in net position in governmental activities (443,413)$
YEAR ENDED JUNE 30, 2014
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
Prepaid items
Total current assets
Noncurrent assets:
Capital assets, non-depreciable
Capital assets, depreciable (net)
Total noncurrent assets
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refunding
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
Loans payable
Revenue bonds
Total noncurrent liabilities
Total liabilities
NET POSITION
Net investment in capital assets
Unrestricted
Total net position
Water
$22,438,781
2,116,916
2,000
24,557,697
12,196,307
82,858,178
95,054,485
119,612,182
2,153,646
1,082,055
102,758
1,203,779
807,570
418,980
144,093
290,521
2,995,560
7,045,316
117,257
6,086,253
37,815,683
44,019,193
51,064,509
49,702,006
20,999,313
$70,701,319
Non-Major
Enterprise Funds
$516,740
88,102
604,842
46,257
3,120,891
3,167,148
3,771,990
19,403
13,266
8,796
93,593
135,058
21,488
21,488
156,546
3,073,555
541,889
$3,615,444
Totals
$22,955,521
2,205,018
2,000
25,162,539
12,242,564
85,979,069
98,221,633
123,384,172
2,153,646
1,101,458
116,024
1,203,779
807,570
418,980
152,889
93,593
290,521
2,995,560
7,180,374
138,745
6,086,253
37,815,683
44,040,681
51,221,055
52,775,561
21,541,202
$74,316,763
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2014
Page 32
The notes to the basic financial statements are an integral part of this statement.
Governmental
Activities:
Internal Service
Funds
$876,496
876,496
876,496
111,484
95,555
207,039
207,039
669,457
$669,457
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 out
Changes in net position
Total net position, beginning of year
Total net position, end of year
Water
$15,485,234
11,831
15,497,065
8,459,541
3,120,762
11,580,303
3,916,762
2,376,682
1,413,047
110,615
(1,992,374)
1,907,970
5,824,732
179,675
(3,178)
6,001,229
64,700,090
$70,701,319
Non-Major
Enterprise Funds
$759,405
23
759,428
616,838
132,200
749,038
10,390
1,201
1,201
11,591
11,591
3,603,853
$3,615,444
Totals
$16,244,639
11,854
16,256,493
9,076,379
3,252,962
12,329,341
3,927,152
2,376,682
1,413,047
111,816
(1,992,374)
1,909,171
5,836,323
179,675
(3,178)
6,012,820
68,303,943
$74,316,763
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION -
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2014
Page 34
The notes to the basic financial statements are an integral part of this statement.
Governmental
Activities:
Internal Service
Funds
$1,268,842
81,000
2,193,293
3,543,135
1,280,321
1,679,860
57,000
423,899
3,441,080
102,055
102,055
102,055
567,402
$669,457
Page 35
Governmental
Activities
Water
Non-Major
Enterprise Funds Total
Internal Service
Funds
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities:
Cash received from customers 15,907,195$ 751,439$ 16,658,634$ 1,349,842$
Cash received from premiums 2,193,293
Cash payments to suppliers for goods and services (5,203,380) (72,744) (5,276,124) (1,620,494)
Cash payments to employees for services (2,634,312) (534,953) (3,169,265) (75,786)
Cash payments for claims (1,671,439)
Net cash provided by operating activities 8,069,503 143,742 8,213,245 175,416
Cash flows from noncapital and related financing activities:
Interfund transfers (3,178) (3,178)
Connection fees 1,413,047 1,413,047
Net cash provided by noncapital financing activities 1,409,869 1,409,869
Cash flows from capital and related financing activities:
Development impact fees 2,376,682 2,376,682
Acquisition of capital assets (3,142,189) (46,257) (3,188,446)
Proceeds from loans 1,078,442 1,078,442
Principal paid on long-term debt (2,682,709) (91,714) (2,774,423)
Interest on long-term debt (1,609,572) (1,609,572)
Net cash used for capital and related
financing activities (3,979,346) (137,971) (4,117,317)
Cash flows from investing activities:
Investment income 110,615 1,201 111,816
Net cash provided by investing activities 110,615 1,201 111,816
Net increase in cash and cash equivalents 5,610,641 6,972 5,617,613 175,416
Cash and cash equivalents, beginning of year 16,828,140 509,768 17,337,908 701,080
Cash and cash equivalents, end of year 22,438,781$ 516,740$ 22,955,521$ 876,496$
Reconciliation of Operating Income to
Net Cash Provided by Operating Activities
Operating income (loss)3,916,762$ 10,390$ 3,927,152$ 102,055$
Adjustments to reconcile operating income (loss)
to net cash provided by (used for) operating activities:
Depreciation and amortization 3,120,762 132,200 3,252,962
Change in assets and liabilities:
(Increase) decrease in accounts receivable 269,592 (7,989) 261,603
Increase in prepaid items (2,000) (2,000)
Increase in accounts payable 598,266 2,437 600,703 64,940
Increase in claims payable 8,421
Increase (decrease) in accrued payroll and employee benefits 6,349 (5,708) 641
Increase in compensated absences payable 19,234 12,412 31,646
Increase in deposits held for others 140,538 140,538
Total adjustments 4,152,741 133,352 4,286,093 73,361
Net cash provided by operating activities 8,069,503$ 143,742$ 8,213,245$ 175,416$
Non-cash capital and financing activities
Contribution of assets from developers 179,675$ 179,675$
Enterprise Funds
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2014
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, 2014
Page 37
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Town of Oro Valley, Arizona (Town) 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, 2014, the Town implemented the provisions of GASB
Statement No. 65, Items Previously Reported as Assets and Liabilities. GASB Statement
No. 65 establishes accounting and financial reporting standards that reclassify, as deferred
outflows of resources or deferred inflows of resources, certain items that were previously
reported as assets and liabilities and recognizes, as outflows of resources or inflows of
resources, certain items that were previously reported as 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, 2014
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 Excise Tax Refunding Bonds, Series 2007. The
activity of the 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 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, franchise 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, 2014
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. Unearned 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, 2014
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.
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.
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.
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.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 41
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
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 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.
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
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 42
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
I. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position may report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows
of resources, represents a consumption of net position that applies to a future period and so
will not be recognized as an outflow of resources (expense/expenditure) until then.
In addition to liabilities, the statement of financial position may report a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of
resources, represents an acquisition of net position that applies to a future period and so will
not be recognized as an inflow of resources (revenue) until that time.
J. 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.
K. 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.
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.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 43
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Concl’d)
L. 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.
M. Net Position Flow Assumption
In the government-wide and proprietary fund financial statements the Town applies restricted
resources first when outlays are incurred for purposes for which either restricted or
unrestricted amounts are available.
N. 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.
O. New Accounting Pronouncement
GASB Statement No. 68, Accounting and Financial Reporting for Pensions will be effective
for the Town’s June 30, 2015 fiscal year end. This Statement replaces the requirements of
prior GASB standards for pensions accounting and reporting. This Statement requires
governments providing defined benefit pensions to recognize the long-term obligation for
pension benefits as a liability, and to more comprehensively and comparably measure the
annual costs of pension benefits. Each employer participating in a multiple-employer defined
benefit pension plan will be required to record a liability representing their “proportionate
share” of the plan’s total net pension liability. This Statement also enhances accountability
and transparency through revised note disclosures and new required supplementary
information.
NOTE 2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Excess Expenditures Over Budget – At year end, the Town had expenditures in a fund that
exceeded the budget, however, this does not constitute a violation of any legal provisions.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 44
NOTE 3 – 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.
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. The committed fund balance
reported in the Townwide Facilities Projects Fund is used for improvements to Town parks.
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. The assigned fund balance in the General Government CIP Fund is to
be used for governmental capital asset projects.
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.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 45
NOTE 3 – FUND BALANCE CLASSIFICATIONS (Concl’d)
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.
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
Non-Major
Governmental
Funds
Fund Balances:
Restricted:
Debt service $ $ $ 534,209
Capital projects 3,136,958
Public safety 883,971
Committed 4,175,161 1,168,345
Assigned
Compensated absences 1,410,644
Unemployment claims 197,391
Townwide capital 1,500,000
Unassigned 9,925,988
Total fund balances $ 11,534,023 $ 4,175,161 $ 7,223,483
NOTE 4 – 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.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 46
NOTE 4 – CASH AND INVESTMENTS (Cont’d)
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.
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 $1,839,158 and the bank balance was $2,194,227. At year end $475,522 of the
Town’s deposits were uninsured and uncollateralized.
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 $ 4,707,028 $ 4,707,028 $
Municipal Securities 630,173 400,000 230,173
Commercial Paper 1,448,807 1,448,807
U.S. Treasury Bonds/Notes 27,104,562 2,741,985 24,362,577
U.S. Agencies Bonds/Notes 5,684,182 1,253,448 4,430,734
$ 10,551,268 $ 29,023,484
County Treasurer’s investment pool 1,091,239 268 days average maturities
State Treasurer’s investment pool 5 4,286,040 34 days average maturities
Total $44,952,031
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.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 47
NOTE 4 – CASH AND INVESTMENTS (Concl’d)
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.
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 FNMA notes, which
make up 9 percent of the Town’s total investments.
NOTE 5 – 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
Non-Major
Governmental
Funds
Intergovernmental receivables:
Due from Federal government $ 132,685 $ $
Due from State government 303,092 251,581
Due from other governments 1,063,979
Net intergovernmental receivables $ 435,777 $ 251,581 $ 1,063,979
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 48
NOTE 6 – 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 9,943,494 1,659,225 9,749,066 1,853,653
Total capital assets, not being depreciated 28,821,962 1,659,225 9,749,066 20,732,121
Capital assets, being depreciated:
Infrastructure 153,945,765 12,008,909 165,954,674
Buildings and improvements 26,549,988 203,754 1,735,354 25,018,388
Machinery, equipment, and vehicles 11,500,475 1,949,564 596,183 12,853,856
Total capital assets being depreciated 191,996,228 14,162,227 2,331,537 203,826,918
Less accumulated depreciation for:
Infrastructure (61,125,798) (6,240,750) (67,366,548)
Buildings and improvements (5,541,885) (768,054) (1,323,446) (4,986,493)
Machinery, equipment, and vehicles (8,047,670) (1,101,123) (540,660) (8,608,133)
Total accumulated depreciation (74,715,353) (8,109,927) (1,864,106) (80,961,174)
Total capital assets, being depreciated, net 117,280,875 6,052,300 467,431 122,865,744
Governmental activities capital assets, net $ 146,102,837 $ 7,711,525 $ 10,216,497 $ 143,597,865
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 1,297,414 1,297,414
Total capital assets, not being depreciated 10,945,150 1,297,414 12,242,564
Capital assets, being depreciated:
Water system 112,874,420 2,047,755 114,922,175
Stormwater system 2,779,503 2,779,503
Equipment and vehicles 4,387,633 86,479 6,237 4,467,875
Total capital assets being depreciated 120,041,556 2,134,234 6,237 122,169,553
Less accumulated depreciation for:
Water system (30,037,158) (2,861,782) (32,898,940)
Stormwater system (191,936) (59,291) (251,227)
Equipment and vehicles (2,845,876) (197,280) (2,838) (3,040,318)
Total accumulated depreciation (33,074,970) (3,118,353) (2,838) (36,190,485)
Total capital assets, being depreciated, net 86,966,586 (984,119) 3,399 85,979,068
Business-type activities capital assets, net $ 97,911,736 $ 313,295 $ 3,399 $ 98,221,632
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 49
NOTE 6 – CAPITAL ASSETS (Concl’d)
Depreciation expense was charged to functions/programs as follows:
Governmental activities:
General government $ 616,787
Public Safety 428,787
Highways and streets 6,493,924
Culture and recreation 570,429
Total depreciation expense – governmental activities $8,109,927
Business-type activities:
Water $2,986,153
Stormwater 132,200
Total depreciation expense –business-type activities $3,118,353
Construction Commitments – As of year end, the Town was involved in several
construction projects. The estimated cost to complete the construction projects is $9.8
million.
NOTE 7 – LOANS PAYABLE
The Town has 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, 2014
Due
Within
One Year
WIFA Loan, 2007 2.04% 7/1/14-27 $ 3,429,474 $ 198,963
WIFA Loan, 2009 2.75% 7/1/14-29 1,868,858 91,558
WIFA Loan, 2014 2.65% 7/1/15-29 1,078,442
Total $ 6,376,774 $ 290,521
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 50
NOTE 7 – LOANS PAYABLE (Concl’d)
Principal and interest payments on the business-type activities loans payable at June 30, 2014
are summarized as follows.
Business-type Activities
Year ending June 30: Principal Interest
2015 $ 290,521 $ 175,372
2016 353,524 284,851
2017 366,032 270,791
2018 378,986 253,208
2019 392,403 234,966
2020-24 2,180,635 876,506
2025-29 2,170,568 317,943
2030 244,105 4,273
Total $ 6,376,774 $ 2,417,910
NOTE 8 – 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, 2014
Due Within
One Year
Governmental activities:
Revenue Bonds, 2005 $ 4,164,050 3.50-4.25% 7/1/14-25 $ 2,884,350 $ 194,300
Refunding Revenue Bonds, 2007 1,389,180 4.25-5.00% 7/1/14-26 1,259,700 10,140
Excise Tax Revenue Obligations, 2010 2,445,000 3.72-6.59% 7/1/14-27 2,050,000 135,000
Revenue Bonds, 2012 2,580,000 2.00-4.00% 7/1/14-27 2,465,000 140,000
Total $ 8,659,050 $ 479,440
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 51
NOTE 8 – 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
2015 $ 479,440 $ 367,991
2016 530,920 350,711
2017 539,960 330,665
2018 554,000 308,392
2019 581,390 283,392
2020-24 3,486,740 973,749
2025-28 2,486,600 199,465
Total $ 8,659,050 $ 2,814,365
Purpose
Original
Amount
Issued
Interest
Rates
Remaining
Maturities
Outstanding
Principal
June 30, 2014
Due Within
One Year
Business-type activities:
Revenue Bonds, 2005 $ 2,050,950 3.50-4.25% 7/1/14-25 $ 1,420,650 $ 95,700
Refunding Revenue Bonds, 2007 16,420,820 4.25-5.00% 7/1/14-26 14,890,300 119,860
Refunding Revenue Bonds, 2012 16,595,000 2.00-5.00% 7/1/14-28 16,315,000 1,360,000
Refunding Revenue Bonds, 2013 6,355,000 1.45% 7/1/14-19 6,355,000 1,420,000
Total $ 38,980,950 $ 2,995,560
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
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 3,323,610 1,047,297
2020-24 16,203,260 3,122,187
2025-29 7,018,400 631,658
Total $ 38,980,950 $ 9,913,344
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 52
NOTE 8 – BONDS PAYABLE (Concl’d)
Pledged revenues – governmental activities. The Town has pledged future sales (excise)
tax revenues to repay outstanding revenue bonds and refunding revenue bonds of $8.7
million as of June 30, 2014. 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
$11.5 million. The current total sales tax revenues were $14.3 million and the total principal
and interest paid on the bonds was $826,639, or 6% 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 $39.0 million as of
June 30, 2014. 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 $48.9 million. The current total customer
gross revenues were $19.3 million and the total principal and interest paid on the bonds was
$3.8 million or 20% of gross revenues.
NOTE 9 – 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, 2014
Due
Within
One Year
Governmental activities:
Special assessments debt $3,945,000 4.30-5.00% 1/1/14-21 $ 1,055,000 $ 130,000
Total $ 1,055,000 $ 130,000
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 53
NOTE 9 – SPECIAL ASSESSMENT BONDS (Concl’d)
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
2015 $ 130,000 $ 45,917
2016 135,000 40,152
2017 145,000 33,557
2018 150,000 26,520
2019 160,000 19,428
2020-21 335,000 15,948
Total $ 1,055,000 $ 181,522
NOTE 10 – OBLIGATIONS UNDER CAPITAL LEASES
The governmental activities of the Town have acquired police motorcycles under the
provisions of long-term lease agreements classified as 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 Federal Seizures and Forfeitures Fund are used to pay the capital lease obligations.
Governmental
Activities
Asset:
Vehicles $ 212,895
Less: Accumulated depreciation 4,435
Total $ 208,460
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
2015 $ 45,453
2016 45,453
2017 45,453
2018 45,453
Total minimum lease payments 181,812
Less: amount representing interest 12,818
Present value of minimum lease payments $ 168,994
Due within one year $ 40,400
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 54
NOTE 10 – OBLIGATIONS UNDER CAPITAL LEASES (Concl’d)
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 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:
Machinery, equipment, and vehicles $ 280,819
Less: Accumulated depreciation 35,210
Total $ 245,609
As of June 30, 2014, the future minimum lease obligation was $95,512, less the amount
representing interest of $1,919, resulting in a net present value of $93,593 to be paid during the
fiscal year ended June 30, 2015.
NOTE 11 – 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 $ 9,103,050 $ $ 444,000 $ 8,659,050 $ 479,440
Bond premium 52,693 8,315 44,378
Total bonds payable 9,155,743 452,315 8,703,428 479,440
Special assessments payable 2,435,000 1,380,000 1,055,000 130,000
Capital leases payable 212,895 43,901 168,994 40,400
Compensated absences payable 1,732,605 1,616,152 1,586,210 1,762,547 1,374,787
Governmental activity long-term
liabilities $ 13,323,348 $ 1,829,047 $ 3,462,426 $ 11,689,969 $ 2,024,627
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 55
NOTE 11 – CHANGES IN LONG-TERM LIABILITIES (Concl’d)
Beginning
Balance Additions Reductions
Ending
Balance
Due Within
One Year
Business-type activities:
Revenue bonds payable $ 41,386,950 $ $ 2,406,000 38,980,950 $ 2,995,560
Bond premium 1,962,171 131,878 1,830,293
Total bonds payable 43,349,121 2,537,878 40,811,243 2,995,560
Loan payable 5,575,041 1,078,442 276,709 6,376,774 290,521
Capital lease payable 185,307 91,714 93,593 93,593
Compensated absences payable 259,988 311,461 279,815 291,634 152,889
Business-type activities long-term
liabilities $ 49,369,457 $ 1,389,903 $ 3,186,116 $ 47,573,244 $ 3,532,563
NOTE 12 – INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
Interfund transfers:
Transfers in
Transfers out
General
Fund
Non-Major
Governmental
Funds Total
General Fund $ $ 3,260,729 $ 3,260,729
Non-Major Governmental Funds 185,000 666,245 851,245
Water Fund 3,178 3,178
Total $185,000 $ 3,930,152 $ 4,115,152
Transfers were made from the General, Bed Tax, Aquatic Center Project, and Water Funds to
the Municipal Debt Service Fund for debt service. In addition, transfers were made from the
General Fund and the Bed Tax Fund to the Townwide Facilities Projects Fund for Naranja
Park improvements and from the General Fund to the General Government CIP Fund to fund
capital projects for the upcoming fiscal year, 2014-15. 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 13 – 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, 2014
Page 56
NOTE 14 – 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 montly claims lag summary reports. 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
2013-14 $ 87,134 $ 1,592,726 $ 1,584,305 $ 95,555
2012-13 - 0 - 1,402,981 1,315,847 87,134
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 57
NOTE 15 – 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, 2014
Page 58
NOTE 15 – 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 11.54
percent (11.30 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 11.54 percent (10.70 percent for retirement, 0.60 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:
2014 $ 1,102,466 $ 61,821 $ 24,728
2013 1,089,376 69,082 25,507
2012 924,771 59,028 22,487
Agent plan – For the current fiscal year, active PSPRS and CORP members were required by
statute to contribute 10.35 and 7.96 percent of the members’ annual covered payroll, and the
Town was required to contribute at the actuarially determined rate of 20.33 and 16.29 percent.
The health insurance premium portion of the contribution rate was actuarially set at 1.14
percent of covered payroll for PSPRS and 0.91 percent for CORP.
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 59
NOTE 15 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS (Cont’d)
Actuarial methods and assumptions – The contribution requirements for the year ended
June 30, 2014 were established by the June 30, 2012 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 20.33% 16.29%
Plan members 10.35% 7.96%
Actuarial valuation date June 30, 2012 June 30, 2012
Actuarial cost method Entry age normal Entry age normal
Actuarial assumptions:
Investment rate of return 8.00% 8.00%
Projected salary increases 5.0% - 9.0% 5.0% - 8.25%
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 24 years for underfunded , 20
years for overfunded
24 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 $ 1,224,229 $ 72,727 $ 63,179 $ 3,738
Contributions made 1,224,229 72,727 63,179 3,738
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 60
NOTE 15– 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
2014 $1,224,229 100% -0-
2013 1,031,650 100% -0-
2012 914,787 100% -0-
Health Insurance
2014 $ 72,727 100% -0-
2013 79,540 100% -0-
2012 40,410 100% -0-
Oro Valley Dispatchers Plan (CORP):
Year Ended
June 30,
Annual Pension
Cost (APC)
Percentage of APC
Contributed
Net Pension
Obligation
Pension
2014 $63,179 100% -0-
2013 44,936 100% -0-
2012 40,512 100% -0-
Health Insurance
2014 $ 3,738 100% -0-
2013 3,849 100% -0-
2012 2,051 100% -0-
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2014
Page 61
NOTE 15 – 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):
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)
Pension
2013 $23,173,423 $30,759,243 $(7,585,820) 75.3% $6,048,143 125.42%
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%
Health Insurance
2013 $ -0- $ 896,558 $ (896,558) 0.0% $6,048,143 14.82%
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%
Oro Valley Dispatchers Plan (CORP):
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)
Pension
2013 $1,229,237 $1,974,876 $(745,639) 62.2% $ 405,564 183.85%
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%
Health Insurance
2013 $ -0- $ 66,776 $ (66,776) 0.0% $ 405,564 16.46%
2012 -0- 62,245 (62,245) 0.0% 451,808 13.78%
2011 -0- 61,474 (61,474) 0.0% 477,701 12.87%
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, beginning of year
Fund balances, end of year
Budgeted
Amounts
Original & Final
$12,623,382
500,000
11,775,357
1,493,455
190,000
1,443,437
62,275
114,000
28,201,906
10,378,686
14,223,297
1,243,575
2,536,955
765,000
29,147,513
(945,607)
185,000
(162,729)
22,271
(923,336)
923,336
$
Actual
$13,044,990
571,731
11,544,290
2,069,443
198,084
1,720,689
197,753
165,119
29,512,099
10,127,193
13,393,183
1,275,093
2,445,131
798,852
28,039,452
1,472,647
185,000
(3,260,729)
(3,075,729)
(1,603,082)
13,137,105
$11,534,023
Variance with
Final Budget
Positive
(Negative)
$421,608
71,731
(231,067)
575,988
8,084
277,252
135,478
51,119
1,310,193
251,493
830,114
(31,518)
91,824
(33,852)
1,108,061
2,418,254
(3,098,000)
(3,098,000)
(679,746)
12,213,769
$11,534,023
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND
YEAR ENDED JUNE 30, 2014
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
$1,077,197
2,535,000
48,000
129,493
7,000
10,000
3,806,690
6,573,318
6,573,318
(2,766,628)
2,766,628
$
Actual
$1,227,468
2,714,257
47,257
129,492
38,666
20,345
4,177,485
2,435,484
1,084,605
3,520,089
657,396
3,517,765
$4,175,161
Variance with
Final Budget
Positive
(Negative)
$150,271
179,257
(743)
(1)
31,666
10,345
370,795
4,137,834
(1,084,605)
3,053,229
3,424,024
751,137
$4,175,161
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
HURF
YEAR ENDED JUNE 30, 2014
Page 65
See accompanying notes to this schedule.
TOWN OF ORO VALLEY, ARIZONA
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2014
Page 66
NOTE 1 – BUDGETARY BASIS OF ACCOUNTING
The Town budget is prepared on a basis consistent with accounting principles generally
accepted in the United States of America.
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
Intergovernmental receivable
Special assessments
Prepaid items
Total assets
LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND
FUND BALANCES
Liabilities:
Accounts payable
Total liabilities
Deferred inflows of resources:
Unavailable revenues - special assessments
Fund balances:
Restricted
Committed
Assigned
Total fund balances
Total liabilities, deferred inflows of resources
and fund balances
Special Revenue
$ 1,367,443
4,054
$1,371,497
$62,427
62,427
883,971
425,099
1,309,070
$1,371,497
Debt Service
$ 586,968
1,055,000
$1,641,968
$52,759
52,759
1,055,000
534,209
534,209
$1,641,968
Capital Projects
$ 4,949,601
1,063,979
$6,013,580
$633,376
633,376
3,136,958
743,246
1,500,000
5,380,204
$6,013,580
TOWN OF ORO VALLEY, ARIZONA
COMBINING BALANCE SHEET - ALL NON-MAJOR GOVERNMENTAL FUNDS - BY FUND TYPE
JUNE 30, 2014
Page 70
Total Non-Major
Governmental
Fund
$ 6,904,012
1,063,979
1,055,000
4,054
$9,027,045
$748,562
748,562
1,055,000
4,555,138
1,168,345
1,500,000
7,223,483
$9,027,045
Page 71
Revenues:
Sales taxes
Development impact fees
Special assessments
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):
Capital lease agreements
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
$1,013,543
475,252
14,647
5,000
1,508,442
483,480
146,139
610,069
43,901
1,552
1,285,141
223,301
212,895
(790,669)
(577,774)
(354,473)
1,663,543
$1,309,070
Debt Service
$
1,462,307
68,988
40
92,375
1,623,710
1,824,000
470,716
2,294,716
(671,006)
430,152
430,152
(240,854)
775,063
$534,209
Capital Projects
$
569,338
2,405,096
4,596
22,650
3,001,680
3,001,659
3,001,659
21
3,500,000
(60,576)
3,439,424
3,439,445
1,940,759
$5,380,204
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, 2014
Page 72
Total Non-
Major
Governmental
Funds
$1,013,543
569,338
1,462,307
2,474,084
475,252
19,283
120,025
6,133,832
483,480
146,139
3,611,728
1,867,901
472,268
6,581,516
(447,684)
212,895
3,930,152
(851,245)
3,291,802
2,844,118
4,379,365
$7,223,483
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
Prepaid items
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
$532,733
$532,733
$5,832
5,832
526,901
526,901
$532,733
Federal Seizures
and Forfeitures
$349,724
$349,724
$
349,724
349,724
$349,724
Bed Tax
$477,631
4,054
$481,685
$56,586
56,586
425,099
425,099
$481,685
TOWN OF ORO VALLEY, ARIZONA
COMBINING BALANCE SHEET - NON-MAJOR SPECIAL REVENUE FUNDS
JUNE 30, 2014
Page 76
Impound Fee
$7,355
$7,355
$9
9
7,346
7,346
$7,355
Totals
$1,367,443
4,054
$1,371,497
$62,427
62,427
883,971
425,099
1,309,070
$1,371,497
Page 77
Revenues:
Sales taxes
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):
Capital lease agreements
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
$
129,362
3,352
132,714
63,023
37,627
100,650
32,064
32,064
494,837
$526,901
Federal Seizures
and Forfeitures
$
314,090
4,097
318,187
83,116
572,442
43,901
1,552
701,011
(382,824)
212,895
212,895
(169,929)
519,653
$349,724
Bed Tax
$1,013,543
7,198
5,000
1,025,741
459,026
459,026
566,715
(790,669)
(790,669)
(223,954)
649,053
$425,099
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NON-MAJOR SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2014
Page 78
Impound Fee
$
31,800
31,800
24,454
24,454
7,346
7,346
$7,346
Totals
$1,013,543
475,252
14,647
5,000
1,508,442
483,480
146,139
610,069
43,901
1,552
1,285,141
223,301
212,895
(790,669)
(577,774)
(354,473)
1,663,543
$1,309,070
Page 79
Total revenues
Revenues:
Sales taxes
Fines, forfeitures & penalties
Investment earnings
Other
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 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
525,354
525,354
(350,354)
(350,354)
350,354
$
Actual
$
129,362
3,352
132,714
63,023
37,627
100,650
32,064
32,064
494,837
$526,901
Variance -
Positive
(Negative)
$
(45,638)
3,352
(42,286)
462,331
(37,627)
424,704
382,418
382,418
144,483
$526,901
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, 2014
Page 80
Federal Seizures and Forfeitures
Budget
$
250,000
250,000
508,867
508,867
(258,867)
(258,867)
258,867
$
Non-GAAP
Actual
$
314,090
4,097
318,187
83,116
359,547
43,901
1,552
488,116
(169,929)
(169,929)
519,653
$349,724
Variance -
Positive
(Negative)
$
64,090
4,097
68,187
425,751
(359,547)
(43,901)
(1,552)
20,751
88,938
88,938
260,786
$349,724
Bed Tax
Budget
$789,000
3,975
792,975
997,807
997,807
(204,832)
(390,669)
(390,669)
(595,501)
595,501
$
Actual
$1,013,543
7,198
5,000
1,025,741
459,026
459,026
566,715
(790,669)
(790,669)
(223,954)
649,053
$425,099
Variance -
Positive
(Negative)
$224,543
3,223
5,000
232,766
538,781
538,781
771,547
(400,000)
(400,000)
371,547
53,552
$425,099
Page 81
(Continued)
Total revenues
Revenues:
Sales taxes
Fines, forfeitures & penalties
Investment earnings
Other
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 out
Total other financing sources (uses):
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Impound Fee
Budget
$
47,500
47,500
47,500
47,500
$
Actual
$
31,800
31,800
24,454
24,454
7,346
7,346
$7,346
Variance -
Positive
(Negative)
$
(15,700)
(15,700)
23,046
23,046
7,346
7,346
$7,346
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, 2014
Page 82
Totals
Budget
$789,000
472,500
3,975
1,265,475
1,045,307
1,034,221
2,079,528
(814,053)
(390,669)
(390,669)
(1,204,722)
1,204,722
$
Non-GAAP
Actual
$1,013,543
475,252
14,647
5,000
1,508,442
483,480
146,139
397,174
43,901
1,552
1,072,246
436,196
(790,669)
(790,669)
(354,473)
1,663,543
$1,309,070
Variance -
Positive
(Negative)
$224,543
2,752
10,672
5,000
242,967
561,827
888,082
(397,174)
(43,901)
(1,552)
1,007,282
1,250,249
(400,000)
(400,000)
850,249
458,821
$1,309,070
Page 83
Page 84
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Page 85
MUNICIPAL DEBT SERVICE FUNDS
Municipal Debt Service - to account for the payments of debt service on the Series 2005 Excise
Tax Revenue Obligations, the Series 2007 MPC Excise Tax Revenue Refunding Bonds, the
Series 2010 Excise Tax Revenue Clean Renewable Energy Bonds (CREBs), and the Series 2012
Excise Tax Revenue Obligations.
Oracle Road Debt Service – to account for the special assessment collections and payment of
the outstanding Oracle Road bond issue.
ASSETS
Cash and cash equivalents
Special assessments
Total assets
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable
Total liabilities
Deferred inflows of resources:
Unavailable revenues - special assessments
Fund balances:
Restricted
Total fund balances
Total liabilities, deferred inflows of resources
and fund balances
Municipal Debt
Service
$534,928
$534,928
$1,000
1,000
533,928
533,928
$534,928
Oracle Road
Debt Service
$52,040
1,055,000
$1,107,040
$51,759
51,759
1,055,000
281
281
$1,107,040
Totals
$586,968
1,055,000
$1,641,968
$52,759
52,759
1,055,000
534,209
534,209
$1,641,968
TOWN OF ORO VALLEY, ARIZONA
COMBINING BALANCE SHEET - NON-MAJOR DEBT SERVICE FUNDS
JUNE 30, 2014
Page 86
Revenues:
Special assessments
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
$
68,988
40
92,375
161,403
444,000
388,541
832,541
(671,138)
430,152
430,152
(240,986)
774,914
$533,928
Oracle Road
Debt Service
$1,462,307
1,462,307
1,380,000
82,175
1,462,175
132
132
149
$281
Totals
$1,462,307
68,988
40
92,375
1,623,710
1,824,000
470,716
2,294,716
(671,006)
430,152
430,152
(240,854)
775,063
$534,209
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NON-MAJOR DEBT SERVICE FUNDS
YEAR ENDED JUNE 30, 2014
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
$
70,677
83,000
153,677
444,000
929,416
1,373,416
(1,219,739)
369,576
369,576
(850,163)
850,163
$
Actual
$
68,988
40
92,375
161,403
444,000
388,541
832,541
(671,138)
430,152
430,152
(240,986)
774,914
$533,928
Variance -
Positive
(Negative)
$
(1,689)
40
9,375
7,726
540,875
540,875
548,601
60,576
60,576
609,177
(75,249)
$533,928
TOWN OF ORO VALLEY, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
NON-MAJOR DEBT SERVICE FUNDS
YEAR ENDED JUNE 30, 2014
Page 88
Oracle Road Debt Service
Budget
$365,868
365,868
368,740
368,740
(2,872)
2,000
2,000
(872)
872
$
Actual
$1,462,307
1,462,307
1,380,000
82,175
1,462,175
132
132
149
$281
Variance -
Positive
(Negative)
$1,096,439
1,096,439
(1,011,260)
(82,175)
(1,093,435)
3,004
(2,000)
(2,000)
1,004
(723)
$281
Totals
Budget
$365,868
70,677
83,000
519,545
812,740
929,416
1,742,156
(1,222,611)
371,576
371,576
(851,035)
851,035
$
Actual
$1,462,307
68,988
40
92,375
1,623,710
1,824,000
470,716
2,294,716
(671,006)
430,152
430,152
(240,854)
775,063
$534,209
Variance -
Positive
(Negative)
$1,096,439
(1,689)
40
9,375
1,104,165
(1,011,260)
458,700
(552,560)
551,605
58,576
58,576
610,181
(75,972)
$534,209
Page 89
Page 90
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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.
Townwide Roadway Development Impact Fees – to account for the collection and capital
expenditures of the Townwide Roadway Development Impact Fees.
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.
General Government CIP – to account for governmental capital asset projects.
ASSETS
Cash and cash equivalents
Intergovernmental receivable
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Total liabilities
Fund balances:
Restricted
Committed
Assigned
Total fund balances
Total liabilities and fund balances
Townwide
Roadway
Development
Impact Fees
$1,737,768
1,063,979
$2,801,747
$10,581
10,581
2,791,166
2,791,166
$2,801,747
General Impact
Fees
$345,792
$345,792
$
345,792
345,792
$345,792
Townwide
Facilities
Projects
$1,366,041
$1,366,041
$622,795
622,795
743,246
743,246
$1,366,041
TOWN OF ORO VALLEY, ARIZONA
COMBINING BALANCE SHEET - NON-MAJOR CAPITAL PROJECTS FUNDS
JUNE 30, 2014
Page 92
General
Government CIP
$1,500,000
$1,500,000
$
1,500,000
1,500,000
$1,500,000
Totals
$4,949,601
1,063,979
$6,013,580
$633,376
633,376
3,136,958
743,246
1,500,000
5,380,204
$6,013,580
Page 93
Revenues:
Development impact fees
Intergovernmental
Investment earnings
Other
Total revenues
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
$326,322
2,405,096
3,382
22,650
2,757,450
1,427,721
1,427,721
1,329,729
1,329,729
1,461,437
$2,791,166
General Impact
Fees
$243,016
1,039
244,055
295,937
295,937
(51,882)
(51,882)
397,674
$345,792
Townwide
Facilities
Projects
$
175
175
1,271,939
1,271,939
(1,271,764)
2,000,000
2,000,000
728,236
15,010
$743,246
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NON-MAJOR CAPITAL PROJECTS FUNDS
YEAR ENDED JUNE 30, 2014
Page 94
Aquatic Center
Project
$
6,062
6,062
(6,062)
(60,576)
(60,576)
(66,638)
66,638
$
General
Government CIP
$
1,500,000
1,500,000
1,500,000
$1,500,000
Totals
$569,338
2,405,096
4,596
22,650
3,001,680
3,001,659
3,001,659
21
3,500,000
(60,576)
3,439,424
3,439,445
1,940,759
$5,380,204
Page 95
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
$791,375
3,650,000
1,500
18,000
4,460,875
5,689,538
5,689,538
(1,228,663)
(1,228,663)
1,228,663
$
Actual
$326,322
2,405,096
3,382
22,650
2,757,450
1,427,721
1,427,721
1,329,729
1,329,729
1,461,437
$2,791,166
Variance -
Positive
(Negative)
$(465,053)
(1,244,904)
1,882
4,650
(1,703,425)
4,261,817
4,261,817
2,558,392
2,558,392
232,774
$2,791,166
TOWN OF ORO VALLEY, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
NON-MAJOR CAPITAL PROJECTS FUNDS
YEAR ENDED JUNE 30, 2014
Page 96
General Impact Fees
Budget
$308,689
308,689
638,349
638,349
(329,660)
(329,660)
329,660
$
Actual
$243,016
1,039
244,055
295,937
295,937
(51,882)
(51,882)
397,674
$345,792
Variance -
Positive
(Negative)
$(65,673)
1,039
(64,634)
342,412
342,412
277,778
277,778
68,014
$345,792
Townwide Facilities Projects
Budget
$
25,174
25,174
(25,174)
(25,174)
25,174
$
Actual
$
175
175
1,271,939
1,271,939
(1,271,764)
2,000,000
2,000,000
728,236
15,010
$743,246
Variance -
Positive
(Negative)
$
175
175
(1,246,765)
(1,246,765)
(1,246,590)
2,000,000
2,000,000
753,410
(10,164)
$743,246
Page 97
(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
$
30,000
30,000
42,114
42,114
(12,114)
(12,114)
12,114
$
Actual
$
6,062
6,062
(6,062)
(60,576)
(60,576)
(66,638)
66,638
$
Variance -
Positive
(Negative)
$
(30,000)
(30,000)
36,052
36,052
6,052
(60,576)
(60,576)
(54,524)
54,524
$
TOWN OF ORO VALLEY, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
NON-MAJOR CAPITAL PROJECTS FUNDS
YEAR ENDED JUNE 30, 2014
Page 98
General Government CIP
Budget
$
$
Actual
$
1,500,000
1,500,000
1,500,000
$1,500,000
Variance -
Positive
(Negative)
$
1,500,000
1,500,000
1,500,000
$1,500,000
Totals
Budget
$1,100,064
3,650,000
30,000
1,500
18,000
4,799,564
6,395,175
6,395,175
(1,595,611)
(1,595,611)
1,595,611
$
Actual
$569,338
2,405,096
4,596
22,650
3,001,680
3,001,659
3,001,659
21
3,500,000
(60,576)
3,439,424
3,439,445
1,940,759
$5,380,204
Variance -
Positive
(Negative)
$(530,726)
(1,244,904)
(30,000)
3,096
4,650
(1,797,884)
3,393,516
3,393,516
1,595,632
3,500,000
(60,576)
3,439,424
5,035,056
345,148
$5,380,204
Page 99
Page 100
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Page 101
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
$182,554
182,554
182,554
97,606
97,606
97,606
84,948
$84,948
Self Insurance
$693,942
693,942
693,942
13,878
95,555
109,433
109,433
584,509
$584,509
Totals
$876,496
876,496
876,496
111,484
95,555
207,039
207,039
669,457
$669,457
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF NET POSITION -
ALL INTERNAL SERVICE FUNDS
JUNE 30, 2014
Page 102
Operating revenues:
Charges for services
Other
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)
Changes in net position
Total net postion, beginning of year
Total net position, end of year
Fleet
Maintenance
$1,268,842
61,000
1,329,842
1,244,894
1,244,894
84,948
84,948
$84,948
Self Insurance
$
20,000
2,193,293
2,213,293
35,427
1,679,860
57,000
423,899
2,196,186
17,107
17,107
567,402
$584,509
Totals
$1,268,842
81,000
2,193,293
3,543,135
1,280,321
1,679,860
57,000
423,899
3,441,080
102,055
102,055
567,402
$669,457
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION -
ALL INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2014
Page 103
Fleet Maintenance Self Insurance Total
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities:
Cash received from customers 1,329,842$ 20,000$ 1,349,842$
Cash received from premiums 2,193,293 2,193,293
Cash payments to suppliers for goods and services (1,103,796) (516,698) (1,620,494)
Cash payments to employees for services (75,786) (75,786)
Cash payments for claims (1,671,439) (1,671,439)
Net cash provided by operating activities 150,260 25,156 175,416
Net increase in cash and cash equivalents 150,260 25,156 175,416
Cash and cash equivalents, beginning of year 32,294 668,786 701,080
Cash and cash equivalents, end of year 182,554$ 693,942$ 876,496$
Reconciliation of Operating Income to
Net Cash Provided by Operating Activities
Operating income 84,948$ 17,107$ 102,055$
Adjustments to reconcile operating income
to net cash provided by (used for) operating activities:
Change in assets and liabilities:
Increase (decrease ) in accounts payable 65,312 (372) 64,940
Increase in claims payable 8,421 8,421
Total adjustments 65,312 8,049 73,361
Net cash provided by operating activities 150,260$ 25,156$ 175,416$
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF CASH FLOWS
ALL INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2014
Page 104
Page 105
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 106
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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Governmental activities Net investment in capital assets 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$ 133,714,821$ Restricted 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 4,555,138 Unrestricted 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 18,430,146 Total governmental activities net position 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$ 156,700,105$ Business-type activities Net investment in capital assets 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$ 52,775,561$ Restricted 2,310,980 2,331,001 Unrestricted 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 21,541,202 Total business-type activities net position 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$ 74,316,763$ Primary government Net investment in capital assets 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$ 186,490,382$ Restricted 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 4,555,138 Unrestricted 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 39,971,348 Total primary government net position 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$ 231,016,868$ 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 107
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014ExpensesGovernmental activities:General government 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$ 10,990,007$ Public Safety 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 13,814,914 Highways and streets 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 10,029,203 Culture and recreation 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 3,399,623 Interest on long-term debt 653,331 805,123 996,336 987,074 954,645 1,767,155 430,570 654,262 522,917 656,260 Total governmental activities/expenses 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 38,890,007 Business-type activities:Water 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 13,572,677 Stormwater drainage 271,469 111,695 74,235 177,673 494,166 486,994 586,006 636,966 983,975 749,038 Total business-type activities expenses 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 14,321,715 Total primary government expenses 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$ 53,211,722$ Program RevenuesGovernmental activities:Fees, Fines and Charges for Services:General government 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$ 4,049,195$ Public Safety229,546 69,256 83,279 28,785 33,976 33,109 45,346 35,976 Highways and streets 396,602 183,842 122,124 211,088 119,847 137,436 400,977 329,420 1,052,581 546,066 Culture and recreation121,358 73,149 110,857 119,273 126,290 82,832 169,965 435,354 Operating grants and contributions 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 4,706,844 Capital grants and contributions 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 2,919,641 Total governmental activities program revenues 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 12,693,076 Business-type activities:Charges for services:Water 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 19,286,794 Stormwater Utility 14,710 21,401 125 357,602 746,655 927,238 888,391 752,212 813,400 759,428 Capital grants and contributions 2,934,747 628,501 3,066,170 3,567,083 3,697,229 362,273 1,655,307 245,607 48,871 179,675 Total business-type activities program revenues 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 20,225,897 Total primary government program revenues 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$ 32,918,973$ (ACCRUAL BASIS OF ACCOUNTING)(UNAUDITED)Fiscal YearTOWN OF ORO VALLEY, ARIZONACHANGES IN NET POSITIONLAST TEN FISCAL YEARSPage 108
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Net (Expense)/RevenuesGovernmental activities (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)$ (26,196,931)$ Business-type activities 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 5,904,182 Total primary government net expenses 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)$ (20,292,749)$ General Revenues and Other Changes in Net PositionGovernmental activities:Taxes:Sales taxes 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$ 15,286,001$ Franchise taxes 402,482 435,428 478,175 516,652 506,685 509,285 514,814 525,427 539,477 571,731 Impact fees* 1,547,819 1,098,977 1,038,217 910,741 441,020 584,113 Unrestricted state revenue sharing 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 9,636,906 Unrestricted state sales tax revenue sharing 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 1,395,094 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) 557,238 991,151 1,471,641 1,590,654 113,995 95,625 39,124 189,606 265,787 255,702 Special item - Capital asset conveyance(2,606,804) Transfers (91,194) (79,778) 69,813 1,600,000 2,319 3,178 Total governmental activities 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 25,753,518 Business-type activities:Investment earnings (loss) 591,932 956,189 1,163,837 864,494 128,083 72,244 39,745 167,106 5,471 111,816 Transfers 91,194 79,778 (69,813) (1,600,000) (2,319) (3,178) Total business-type activities 683,126 1,035,967 1,094,024 (735,506) 128,083 72,244 39,745 167,106 3,152 108,638 Total primary government 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$ 25,862,156$ Change in Net PositionGovernmental activities 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)$ (443,413)$ Business-type activities 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 6,012,820 Total primary government 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$ 5,569,407$ Source: Town of Oro Valley Finance Department* Impact fees in fiscal year 2011 are now presented in program revenues.Fiscal YearPage 109
Page 110
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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014General FundRestricted$$$$$$$$$$CommittedAssigned1,769,333 1,608,035 1,608,035 1,608,035 Unassigned9,237,805 9,793,614 11,529,070 9,925,988 Reserved 112 7,267 Unreserved 11,744,160 14,356,224 18,477,706 16,666,388 15,940,438 11,904,429 Total general fund 11,744,272$ 14,363,491$ 18,477,706$ 16,666,388$ 15,940,438$ 11,904,429$ 11,007,138$ 11,401,649$ 13,137,105$ 11,534,023$ All Other Governmental FundsRestricted$$$$$$9,128,505$ 11,454,390$ 3,730,312$ 4,555,138$ Committed 840,704 622,919 4,166,818 5,343,506 Assigned1,500,000 UnassignedReserved 36,076 80,624 Unreserved, reported in:Special revenue funds 3,856,925 4,439,573 4,891,095 5,534,192 5,887,082 5,868,523 Capital projects funds 10,972,912 4,985,836 4,520,718 15,396,024 9,071,398 3,933,044 Debt service funds 403,332 280,055 245,208 263,478 158,816 1,929,635 Total all other governmental funds15,269,245$ 9,786,088$ 9,657,021$ 21,193,694$ 15,117,296$ 11,731,202$ 9,969,209$ 12,077,309$ 7,897,130$ 11,398,644$ 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 111
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014RevenuesTaxes 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$ 15,857,732$ Intergovernmental 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 16,732,631 Fines and forfeitures 326,427 462,246 429,458 391,921 413,720 612,031 560,941 895,820 551,962 673,336 Licenses and permits 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 2,116,700 Charges for services 880,582 942,676 1,026,921 1,040,694 1,066,376 965,455 926,135 1,209,814 1,630,238 1,850,181 Contributions and donations 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 1,462,307 Impact fees 1,488,301 1,098,977 1,038,217 910,741 441,020 584,113 481,619 417,742 988,342 569,338 Investment earnings 557,238 991,151 1,471,641 1,590,654 113,995 95,625 39,124 189,606 265,787 255,702 Other revenues 458,034 325,428 135,261 555,790 233,123 216,030 297,109 460,512 349,326 305,489 Total revenues 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$ 39,823,416$ ExpendituresGeneral government 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$ 10,610,673$ Public safety 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 13,539,322 Highways and streets 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 3,710,577 Culture and recreation 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 2,445,131 Capital Outlay10,662,190 13,090,313 11,332,914 3,189,765 7,014,659 6,929,834 11,053,739 5,495,185 Debt ServicePrincipal retirement 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 1,867,901 Interest and fiscal charges 589,725 731,358 921,205 907,658 1,034,061 831,580 470,578 554,274 498,729 472,268 Payment to bond escrow agent6,279,112 Bond Issuance costs 251,327 107,897 28,868 26,550 75,800 Total expenditures 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$ 38,141,057$ Excess of revenues (220,254)$ (6,840,313)$ 4,069,742$ 125,355$ (6,802,348)$ (7,395,553)$ (5,169,407)$ (191,224)$ (2,147,042)$ 1,682,359$ over (under) expendituresTOWN OF ORO VALLEY, ARIZONACHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDSLAST TEN FISCAL YEARS(MODIFIED ACCRUAL BASIS OF ACCOUNTING)(UNAUDITED)Fiscal YearPage 112
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Other Financing Sources (Uses)Premium on bonds issued $ $ 25,719$ $ $ $ $ 113,835$ $ $Proceeds from capital lease agreements212,895 Issuance of long-term loan payable 4,030,033 8,000,000 Issuance of refunding debt 1,389,180 Payment to bond escrow agent (1,540,438) Issuance of long-term debt 4,164,050 2,445,000 2,580,000 Transfers in 1,105,422 1,248,569 2,927,754 8,447,951 1,950,898 10,012,679 860,143 1,003,666 1,704,272 4,115,152 Transfers out (1,196,616) (1,328,347) (2,857,941) (6,847,951) (1,950,898) (10,012,679) (795,020) (1,003,666) (2,001,953) (4,111,974) Total other financing sources (uses) 3,938,839$ 4,084,272$ (81,445)$ 9,600,000$ -$ -$ 2,510,123$ 2,693,835$ (297,681)$ 216,073$ Net change in fund balances 3,718,585$ (2,756,041)$ 3,988,297$ 9,725,355$ (6,802,348)$ (7,395,553)$ (2,659,284)$ 2,502,611$ (2,444,723)$ 1,898,432$ Debt service as a percentage of 13.05% 13.02% 7.17% 12.51% 5.88% 10.60% 12.36% 11.55% 3.76% 7.30%noncapital expendituresSource: Town of Oro Valley Finance DepartmentFiscal YearPage 113
2014 2005Percentage Percentageof Total Town of Total TownEmployerEmployees Rank Employment Employees Rank EmploymentVentana Medical Systems 1,500 1 8.49% 550 2 3.16%Oro Valley Hospital 533 2 3.02% 600 1 3.44%Hilton El Conquistador Golf & Tennis Resort 475 4 2.69% 440 4 2.52%Amphitheater Public Schools 477 3 2.70% 500 3 2.87%Town of Oro Valley 433 5 2.45% 359 5 2.06%Walmart Supercenter 346 6 1.96%Fry's Food & Drug Store 243 7 1.37% 270 6 1.55%Securaplane 182 8 1.03%Splendido at Rancho Vistoso 175 9 0.99% 130 10 0.75%Target 128 10 0.72% 130 9 0.75%Hilton El Conquistador Country Club260 7 1.49%Home Depot160 8 0.01%Total 4,492 25.41% 3,399 18.60%Source: Principal Employers Arizona Workforce InformerTOWN OF ORO VALLEY, ARIZONAPRINCIPAL EMPLOYERS(UNAUDITED)CURRENT FISCAL YEAR AND FISCAL YEAR NINE YEARS PRIORPage 114
Fiscal Year 2014 Fiscal Year 2005Percentage of Percentage ofSales Tax Total Sales Sales Tax Total SalesTaxpayerBusiness TypePayments Rank Tax Payments Payments Rank Tax PaymentsTaxpayer A Utility 1,797,531$ 1 11.73%Taxpayer B Retail Trade 828,798 3 5.41%Taxpayer C Retail Trade 602,684 4 3.93% 584,705$ 3 6.27%Taxpayer D Utility 493,888 5 3.22%Taxpayer E Construction 341,502 8 2.23%Taxpayer F Utility 403,191 6 2.63%Taxpayer G Retail Trade 388,882 7 2.54% 532,775 4 5.72%Taxpayer H Retail Trade 312,409 9 2.04%Taxpayer I Accomodation 1,236,804 2 8.07% 1,086,800 1 11.66%Taxpayer J Construction 288,453 10 1.88%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 6,694,142$ 43.67% 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 NINE YEARS PRIOR(UNAUDITED)Page 115
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Construction 3,594$ 5,602$ 6,895$ 7,038$ 5,143$ 2,110$ 1,707$ 1,738$ 2,842$ 3,338$ Manufacturing 137 165 181 280 230 230 266 258 258 257 Transportation, Warehousing, Communications & Utilities 116 91 226 1,279 1,632 1,554 1,534 2,450 2,785 2,959 Wholesale Trade 54 56 58 69 54 75 93 106 110 103 Retail Trade 2,942 3,229 3,665 4,017 4,264 4,544 4,720 4,925 5,153 5,243 Restaurants, Bars & Lodging 1,888 2,392 2,720 2,775 2,333 2,283 2,314 2,314 2,164 2,761 Finance, Insurance & Real Estate 142 155 859 496 324 381 324 333 335 75 Services 379 262 313 312 322 378 417 456 456 529 All Other 68 197 167 337 896 627 102 103 75 60 Cable Franchise 402 435 478 517 507 509 515 525 540 572 Total 9,722$ 12,584$ 15,562$ 17,120$ 15,705$ 12,691$ 11,992$ 13,208$ 14,718$ 15,897$ 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)($000's)Page 116
Town of Oro
Town of Oro Town of Oro Valley Town of Oro
Fiscal Valley Valley Construction Valley
Year Sales Tax Bed Tax Sales Tax Utility Sales Tax Pima County
2005 2.00% 3.00% 4.00% 0.00% 5.60%
2006 2.00% 6.00% 4.00% 0.00% 6.10%
2007 2.00% 6.00% 4.00% 2.00% 6.10%
2008 2.00% 6.00% 4.00% 2.00% 6.10%
2009 2.00% 6.00% 4.00% 2.00% 6.10%
2010 2.00% 6.00% 4.00% 2.00% 7.10%
2011 2.00% 6.00% 4.00% 2.00% 7.10%
2012 2.00% 6.00% 4.00% 4.00% 7.10%
2013 2.00% 6.00% 4.00% 4.00% 6.10%
2014 2.00% 6.00% 4.00% 4.00% 6.10%
Source: Arizona Department of Revenue
TOWN OF ORO VALLEY, ARIZONA
DIRECT AND OVERLAPPING SALES TAX RATES
LAST TEN FISCAL YEARS
(UNAUDITED)
Page 117
Year
Primary Assessed
Valuation
Secondary
Assesed
Valuation
Estimated Full
Cash Value
Total
Outstanding
General
Obligation Bond
Debt
2006 440,110,880 463,211,743 4,043,665,781 0
2007 515,095,975 582,838,439 5,098,720,276 0
2008 582,236,657 686,707,506 6,141,419,229 0
2009 642,601,840 693,924,598 6,140,054,657 0
2010 649,015,575 672,309,638 6,041,904,306 0
2011 618,976,953 629,340,548 5,716,229,517 0
2012 589,160,533 592,761,968 5,461,131,133 0
2013 553,366,744 556,259,856 5,175,406,955 0
2014 556,566,167 560,863,509 5,252,917,489 0
Source: State of Arizona Department of Revenue Abstract of the Assessment Roll
TOWN OF ORO VALLEY, ARIZONA
PRIMARY & SECONDARY ASSESSED PROPERTY VALUES
LAST NINE FISCAL YEARS
(UNAUDITED)
Page 118
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal FiscalYear Year Year Year Year Year Year Year Year YearRevenue Source 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Town Sales and Franchise Taxes 17,351,805$ 17,685,650$ 15,883,093$ 13,480,150$ 12,086,962$ 13,325,106$ 14,780,543$ 15,857,732$ 16,612,476$ 17,276,975$ Licenses and Permits 2,368,851 2,792,684 1,507,930 1,108,411 1,059,309 1,185,862 1,813,947 2,116,700 1,857,547 1,931,849 Fines 215,500 249,762 285,628 202,144 195,933 200,672 180,875 172,232 180,000 187,200 State-Shared Sales Tax 3,744,864 3,621,016 3,134,789 2,891,386 3,024,857 3,204,612 3,356,826 3,569,711 3,705,688 3,853,916 State-Shared Income Tax 4,473,305 5,544,763 5,886,132 5,086,954 3,834,911 3,461,359 4,189,186 4,571,196 4,964,344 5,162,918 Total 28,154,325$ 29,893,875$ 26,697,572$ 22,769,045$ 20,201,972$ 21,377,611$ 24,321,377$ 26,287,571$ 27,320,055$ 28,412,857$ (a) All revenue sources are presented on a modified accrual basis of accounting except for Town sales taxes which are presented on the cash basis of accounting per the Arizona Department of Revenue Standard Industry Summary Local Taxes Collection Reports.Source: Oro Valley Finance DepartmentNote: The above information is provided for bond requirements only and the bond does not require ten years of data.TOWN OF ORO VALLEY, ARIZONAHISTORICAL AND PROJECTED EXCISE TAX COLLECTIONSJUNE 30, 2014(UNAUDITED)ProjectedAcutalPage 119
Governmental Activities Business-Type ActivitiesCertificates Special Total PercentageFiscal Capital ofLoan Excise TaxAssessmentRevenue Capital Loan Primary of Personal PerYear Leases Participation Payable Bonds Bonds Bonds Leases Payable Government Income Capita2005$ 420,000$ 4,803,100$ 9,413,909$ 3,945,000$ 64,222,360$ $ $ 82,804,369$ 5.67% 2,106$ 2006215,000 2,604,143 13,173,254 3,945,000 64,437,008 84,374,405 5.48% 2,098 20072,500,000 12,891,148 3,760,000 61,568,852 80,720,000 4.81% 1,897 20088,000,000 12,183,046 3,565,000 59,586,954 5,731,766 89,066,766 5.02% 2,040 20098,000,000 11,449,146 3,360,000 57,575,854 107,046 5,788,122 86,280,168 4.72% 1,975 20105,513,133 4,939,750 3,145,000 52,305,500 123,883 6,305,650 72,332,916 3.86% 1,662 20112,513,133 7,149,780 2,920,000 49,803,970 35,392 5,473,096 67,895,371 3.73% 1,656 20129,485,968 2,685,000 45,988,331 5,893,122 64,052,421 3.85% 1,550 20139,155,743 2,435,000 43,349,121 185,307 5,575,041 60,700,212 3.59% 1,409 2014168,994 8,703,428 1,055,000 40,811,243 93,593 6,371,529 57,203,787 3.41% 1,366 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 120
Estimated
Estimated Share of
Debt Percentage Overlapping
Governmental Unit Outstanding Applicable Debt
Pima County 1,348,889,696$ 7.25% 97,794,503$
Pima County Community College District 1,335,000 7.25% 96,788
Amphitheater Unified School District No. 10 114,670,000 18.15% 20,812,605
Total Overlapping 118,703,895
Town of Oro Valley 9,758,428 100.00% 9,758,428
Total Direct 9,758,428
Total direct and overlapping debt 128,462,323$
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 2013-14.
TOWN OF ORO VALLEY, ARIZONA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
JUNE 30, 2014
(UNAUDITED)
Page 121
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Debt Limit 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$ 144,627,563$ Total net debt applicable to limitLegal debt margin 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$ 144,627,563$ 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 122
Net secondary assessed valuation 556,259,856$
Water, Sewer, Light, Parks, Open Space and
Recreational Facility Bonds
Debt limit - 20% of secondary net assessed valuation 111,251,971$
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 111,251,971$
All other general obligation bonds
Debt Limit - 6% of secondary net assessed valuation 33,375,591$
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 33,375,591$
Total legal debt margin 144,627,563$
Source: Pima County Assessor's Office
TOWN OF ORO VALLEY
CALCULATION OF LEGAL DEBT MARGIN
JUNE 30, 2014
(UNAUDITED)
Page 123
Water Utility Revenue Bonds
Fiscal Gross
Year Revenues Principal Interest Total Coverage
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
2014 19,397,409 2,406,000 1,429,538 3,835,538 5.06
Governmental Revenue Bonds
Fiscal Gross
Year Revenues Principal Interest Total Coverage
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
2014 29,512,099 444,000 382,639 826,639 35.70
Certificates of Participation
Fiscal Gross
Year Revenues Principal Interest Total Coverage
2005 19,837,894$ 180,000$ 15,768$ 195,768$ 101.33
2006 21,011,720 190,000 26,690 216,690 96.97
2007 25,018,727 205,000 16,566 221,566 112.92
2008 29,200,152 0.00
2009 30,629,130 0.00
2010 28,084,482 0.00
2011 25,695,598 0.00
2012 23,921,715 0.00
2013 28,135,868 0.00
2014 29,512,099 0.00
Special Assessment
Fiscal Gross
Year Revenues Principal Interest Total Coverage
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
2014 1,462,307 1,380,000 80,020 1,460,020 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 124
Historical Historical Historical Historical Historical Historical Historical Actual2006/072007/082008/09 2009/10 2010/11 2011/12 2012/13 2013/14Revenues: Water revenues 11,021,820$ 11,686,598$ 11,424,787$ 12,071,031$ 12,038,482$ 11,578,981$ 11,585,181$ 12,169,375$ Water connection fees 1,050,471 1,925,656 1,588,084 293,607 244,376 462,762 706,159 1,413,047 Alternative water connection fees 148,200 512,543 812,740 475,973 400,988 759,958 1,253,055 2,376,682 Groundwater preservation fees 767,993 1,092,778 1,632,549 1,769,142 2,096,093 2,315,277 2,527,524 2,599,718 Other revenues 663,852 1,586,375 639,926 527,031 541,299 557,222 660,681 727,972 Interest income 1,157,837 864,262 125,458 70,329 38,445 166,654 - 110,615 Total revenues 14,810,173 17,668,212 16,223,544 15,207,113 15,359,683 15,840,854 16,732,600 19,397,409 Expenses: Personnel 2,167,957 2,324,921 2,447,642 2,514,595 2,418,118 2,497,865 2,537,150 2,659,895 Operations & maintenance 3,230,334 5,836,698 5,415,423 4,505,751 3,721,167 3,559,807 4,564,894 4,303,230 CAP water costs 472,638 602,682 185,490 154,575 903,855 636,519 1,093,105 1,499,594 Total expenses 5,870,929 8,764,301 8,048,555 7,174,921 7,043,140 6,694,191 8,195,149 8,462,719 Net water system revenues 8,939,244 8,903,911 8,174,989 8,032,192 8,316,544 9,146,662 8,537,452 10,934,690 Water supported debt service: 2007 WIFA Loan - - 308,406 369,627 316,983 316,875 316,763 311,494 2009 WIFA Loan - - - - 161,554 182,268 186,817 150,471 2003 Revenue Bonds 2,548,923 2,542,673 2,544,423 2,544,973 2,545,935 2,545,435 980,000 - 2003 Refunding Revenue Bonds 647,569 648,512 648,674 647,374 1,152,546 1,238,996 1,243,058 - 2012 Refunding Bonds - - - - - - 956,975 1,968,281 2013 Refunding Bonds1,513,427 Total water supported debt service 3,196,492$ 3,191,184$ 3,501,503$ 3,561,973$ 4,177,017$ 4,283,574$ 3,683,613$ 3,943,673 Net water system revenuesdebt service coverage 2.80 2.79 2.33 2.25 1.99 2.14 2.32 2.77Source: Oro Valley Finance DepartmentTOWN OF ORO VALLEY, ARIZONAHISTORICAL AND PROJECTED WATER SYSTEM REVENUES, EXPENSES, DEBT SERVICE AND COVERAGE(UNAUDITED)JUNE 30, 2014Page 125
Personal Per
Income Capita
(thousands Personal Unemployment
Year Population of dollars) Income Rate
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%
2014 41,887 1,679,965,408 40,107 6.2%
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 126
2014201320122011201020092008200720062005Function/ProgramAdministrationTown Clerk 4.90 4.54 4.44 4.60 4.00 4.60 4.60 4.60 4.50 4.50Town Manager 7.00 7.00 7.10 7.10 8.10 8.50 8.10 6.00 6.00 5.00Human Resources 2.00 5.00 5.00 5.00 4.00 4.00 4.00 4.00 3.00 3.00Economic Development 2.00 3.00 1.00 1.00 1.40 1.40 2.25 2.25 2.00 2.00Finance 7.00 7.00 7.00 7.00 7.00 9.00 9.00 8.00 7.50 7.50Information Systems 7.30 6.50 6.50 8.00 8.00 7.00 8.00 5.00 4.00 4.00Legal 6.00 6.00 8.00 8.00 7.00 10.00 10.25 10.25 10.25 6.25Community DevelopmentBuilding Safety 0.00 0.00 0.00 0.00 13.00 16.00 18.00 17.00 16.00 16.00Community Development Admin. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.00 4.00Planning & Zoning 0.00 0.00 0.00 0.00 13.00 16.00 16.00 14.00 13.50 13.50Development & Infrastructure Services78.84 77.22 73.38 73.10 0.00 0.00 0.00 0.00 0.00 0.00Parks and Recreation37.61 27.26 20.62 22.70 27.50 27.60 28.10 27.00 20.80 20.80Cultural Resources0.00 1.35 1.30 1.30 0.00 0.00 0.00 0.00 0.00 0.00Library0.00 0.00 18.55 18.40 18.50 18.70 19.40 19.30 19.43 14.00PoliceCivilians 25.93 30.25 30.25 29.70 30.70 33.00 34.00 34.00 29.00 28.00Officers 101.91 101.44 97.96 95.00 97.90 102.40 108.00 105.00 96.00 92.00Magistrate Court8.70 8.00 8.00 9.00 9.00 9.00 8.50 8.50 8.50 8.50Public Works0.00 0.00 0.00 0.00 47.70 52.90 56.10 53.13 54.00 51.50Water Utility37.00 36.00 36.00 34.00 35.00 36.30 35.50 35.50 34.00 34.00Total326.19 320.56 325.10 323.90 331.80 356.4 369.80 353.53 332.48 314.55TOWN OF ORO VALLEY, ARIZONAFULL-TIME EQUIVALENT EMPLOYEES BY FUNCTIONLAST TEN FISCAL YEARS(UNAUDITED)Full-time Equivalent Employees as of June 30Page 127
Fiscal Irrigation Construction Turf Wholesale/YearResidential Commercial Irrigation Reclaimed Construction Reclaimed Turf Reclaimed Unmetered Total2005 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 2014 7,881,436 886,712 1,169,067 187,622 283,632 816 121,108 1,638,981 12,169,374 Source: Town of Oro Valley Water Utility DepartmentWATER UTILITY REVENUES BY USER TYPELAST TEN FISCAL YEARS(UNAUDITED)TOWN OF ORO VALLEY, ARIZONAPage 128
2005200620072008200920102011201220132014Function/ProgramPoliceBurglaries 124 97 112 125 125 120 100 134 105 75Citations (traffic) 8,660 8,203 8,183 7,497 9,256 6,736 5,244 5,084 5,456 4,668Investigations 4,216 5,106 6,656 6,892 917 732 746 711 681 765Total Arrests 2,076 2,053 2,236 2,254 2,478 2,176 1,932 1,716 1,564 1,679Thefts 580 568 575 577 528 567 656 571 563 561Development & Infrastructure ServicesStreet resurfacing (miles) 17.3 5.4 7.7 10.5 53.4 14.8 13.9 22.4 30.5 73.4Parks and RecreationRecreation Programs Held Annually 30 38 42 46 46 40 47 37 35 30Months of Public Pool Operations 10 10 10 10 10 12 12 12 10 12Parks Maintenance Man-Hours Worked 13,520 13,520 15,600 17,472 16,288 16,120 18,680 16,016 17,000 20,000LibraryCollection volume 80,000 86,000 90,000 96,000 95,750 100,142 100,652 97,364 0 0WaterNew connections 377 508 367 346 196 68 61 97 213 165Total connections 16,955 17,463 17,830 18,177 18,373 18,441 18,502 18,599 18,812 18,977TransitTotal route miles 190,609 165,202 165,202 175,841 163,964 138,752 138,333 200,058 353,936 439,512Passengers 15,937 14,387 14,858 16,908 17,101 15,573 14,873 20,119 32,442 39,196Source: 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 129
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
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
2014 14.19 2.23 3.01 4.07 5.49 0.95
Source: Town of Oro Valley Water Utility
TOWN OF ORO VALLEY, ARIZONA
WATER RATES
LAST TEN FISCAL YEARS
(UNAUDITED)
Page 130
2005200620072008200920102011201220132014Function/ProgramPoliceStations 1111111111Substations 3322233333Patrol units 103 105 105 113 109 108 53 67 66 64Other fleet 00000055424342Development & Infrastructure ServicesStreets (miles) 188.0 191.3 201.9 220.1 220.1 214.0 203.8 203.8 205.1 221.0Streetlights 93939393939393939595Traffic signals 10 10 15 16 16 18 16 17 19 19Parks and recreationAcreage 87 300 300 300 300 374 374 436 436 457Playgrounds2222222222Baseball/softball diamonds7777777777WaterWells 22 22 22 19 22 18 22 22 22 18Storage capacity (MG) 17 17 17.5 18 19 19 20 20 20 13Booster capacity 28 28 28 27 27 26 25 25 25 26TransitTransit vans 9999995559Transit mini buses 0000005101217Source: Town of Oro Valley Finance DepartmentTOWN OF ORO VALLEY, ARIZONACAPITAL ASSETS STATISTICS BY FUNCTIONLAST TEN FISCAL YEARS(UNAUDITED)Page 131
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