HomeMy WebLinkAboutFinancial Reports-Comprehensive Annual Financial Report (CAFR) - 6/30/2019COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Fiscal Year Ended June 30, 2019
Town of Oro Valley, Arizona
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
Prepared by:
Finance Department
Kevin Artz
Interim Finance Director
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
TABLE OF CONTENTS
INTRODUCTORY SECTION Page
Letter of Transmittal 1
Organizational Chart 8
List of Town Officials 9
GFOA Certificate of Achievement 10
FINANCIAL SECTION
INDEPENDENT AUDITOR’S REPORT 13
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) 17
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:
Statement of Net Position 31
Statement of Activities 32
Fund Financial Statements:
Balance Sheet – Governmental Funds 36
Reconciliation of the Balance Sheet –
Governmental Funds to the Statement of Net Position 39
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds 40
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances – Governmental Funds to the
Statement of Activities 43
Statement of Net Position – Proprietary Funds 44
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
TABLE OF CONTENTS
FINANCIAL SECTION Page
BASIC FINANCIAL STATEMENTS
Statement of Revenues, Expenses and Changes in Fund Net Position –
Proprietary Funds 46
Statement of Cash Flows – Proprietary Funds 48
Notes to Financial Statements 50
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues Expenditures and Changes in Fund Balances –
Budget and Actual:
General Fund 93
Community Center Fund 94
Pension Schedules 95
OPEB Schedules 102
Notes to Required Supplementary Information 107
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND
SCHEDULES
Governmental Funds:
Combining Balance Sheet – All Non-Major Governmental Funds –
By Fund Type 112
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances – All Non-Major Governmental Funds – By Fund Type 114
Special Revenue Funds:
Combining Balance Sheet 118
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 120
Combining Schedule of Revenues, Expenditures and
Changes in Fund Balances – Budget and Actual 122
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
TABLE OF CONTENTS
FINANCIAL SECTION Page
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND
SCHEDULES
Debt Service Fund:
Combining Balance Sheet 126
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 127
Combining Schedule of Revenues, Expenditures and
Changes in Fund Balance – Budget and Actual 128
Capital Projects Funds:
Combining Balance Sheet 132
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 134
Combining Schedule of Revenues, Expenditures and
Changes in Fund Balances – Budget and Actual 136
STATISTICAL SECTION
Financial Trends:
Net Position by Component 143
Changes in Net Position 144
Fund Balances of Governmental Funds 146
Changes in Fund Balances of Governmental Funds 147
Revenue Capacity:
Principal Sales Taxpayers 148
Taxable Sales by Category 149
TOWN OF ORO VALLEY, ARIZONA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
TABLE OF CONTENTS
STATISTICAL SECTION Page
Direct and Overlapping Sales Tax Rates 150
Net Limited and Full Cash Assessed Value of Taxable Property 151
Historical and Projected Excise Tax Collections 152
Debt Capacity:
Ratio of Outstanding Debt by Type 153
Direct and Overlapping Governmental Activities Debt 154
Legal Debt Margin Information 155
Calculation of Legal Debt Margin 156
Pledged-Revenue Coverage 157
Historical and Projected Water System Revenues, Expenses,
Debt Service and Coverage 158
Demographic and Economic Information:
Demographic and Economic Statistics 159
Principal Employers 160
Operating Information:
Full-Time Equivalent Town Employees by Function 161
Water Utility Revenues by User Type 162
Operating Indicators by Function 163
Water Rates 164
Capital Assets Statistics by Function 165
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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
December 19, 2019
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, 2019.
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, 2019, 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, 2019, 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.
Page 1
PROFILE OF THE TOWN
The Town of Oro Valley was incorporated in 1974. It is located in northeastern Pima County, three
miles north of Tucson and sits at an elevation of 2,620 feet. The Town currently occupies a land area
of more than 36 square miles and serves an estimated population of 45,184. The population of Oro
Valley has increased 52% since the 2000 population of 29,700.
Based on 2017 Census estimates, Oro Valley has a median household income of $79,458, compared
to the median household income for the state of Arizona of $53,510. Oro Valley residents enjoy a
comfortable hometown feel with a strong family orientation, excellent education system and abundant
opportunities in a safe environment.
The Town of Oro Valley operates under the Council-Manager form of government. Policymaking and
legislative authority is vested in the Town Council, which consists of a Mayor and six
Councilmembers. Councilmembers 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 directors 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; proper planning and economic development; the
provision of water and stormwater services; public transportation services; recreational activities and
cultural events.
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 2018.
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 June. 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.
Page 2
MAJOR INITIATIVES AND ACCOMPLISHMENTS FOR THE YEAR
The Council adopted Strategic Leadership Plan for fiscal years 2019-20 through 2020-21 is the
culmination of an extensive four-month process involving Town Council, Town staff, and the Oro
Valley community. Rooted deeply in the values and priorities of the Your Voice, Our Future 10-year
general plan, the two-year Strategic Leadership Plan provides organizational direction in seven focus
areas:
Economic Vitality
Culture and Recreation
Public Safety
Roads, Water and Town Assets
Land Use
Effective and Efficient Government
Town Finances
While the Strategic Leadership Plan guides short-term decision-making, the General Plan provides a
longer 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. Shown below are some of the Town’s accomplishments during FY
2018-19.
Received an upgrade by Standard and Poor’s of its long-term rating from AA- to AA+ for
excise tax obligations
Received the Certificate of Achievement for Excellence in Financial Reporting Award,
Distinguished Budget Presentation Award with special recognition for the Town’s Capital
Improvement Program and Popular Annual Financial Reporting Award from the Government
Finance Officers
Ended FY 2017-18 with a nearly $1.6 million increase in the General Fund ending fund
balance
Participated as a contributing partner in the ground breaking of the new University of
Arizona Center for Innovation at Oro Valley
Completed and obtained Council approval of a five-year Comprehensive Economic
Development Strategy
Developed the Police Community Assistance Program (CAP) which provides follow-up after
the initial 911 call to ensure our aging population has continued support
Established a fully functional back-up Emergency Communications Center at the Town of
Marana PD
Completed new Police Evidence Facility and Substation on budget
Increased Town’s capacity to deliver CAP water by 30% with the commissioning of the
Water Utility’s fourth CAP water interconnect, further offsetting the use of groundwater to
meet the community’s potable water needs
Transitioned the Town’s recreation software to CivicRec, providing a more user-friendly
application for citizens and greater visibility of parks and recreational activities, classes,
sports and youth leagues
Broke ground on $20 million La Cholla Blvd. widening project with partners from Pima
County and the Regional Transportation Authority
Completed the training of all full-time employees in foundational process improvement skills
as part of the Town’s Peak Performance initiative, resulting in 98 employee submittals and an
estimated $50,000 in savings for FY18/19
Page 3
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.
Healthy economic growth is being observed at both the local and state levels, which has impacted the
Town’s revenue collections for FY 2018-19 and is expected to continue into FY 2019-20. 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 revenue for its operating
and capital expenditures. These sources accounted for approximately 83% of total General Fund
revenue for FY 2018-19.
Major local sales tax categories that experienced year-over-year increases compared to amounts
collected in FY 2017-18, as discussed below:
Retail tax collections totaled $8.7 million for FY 18-19, up 3.1%, or nearly $260,000 over last
fiscal year.
Restaurant and bar tax collections totaled $2.4 million for the fiscal year, up 10.0%, or
$220,000 over last fiscal year.
Construction sales tax collections totaled $5.9 million for the fiscal year, up 7.2% or nearly
$400,000 from last fiscal year.
The chart below is a look at the past five years’ local sales tax activity by category:
In FY 2018-19, the Town received $11.9 million for state shared revenues in the General Fund, up
2.6%, or $300,000 over last fiscal year. The trend chart below depicts the performance of both of these
revenue categories since FY 2009-10:
$‐
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
Utility Taxes Retail Taxes Restaurant/Bar Taxes Construction TaxesMillionsSales Tax Activity by Sector ‐FY 14/15 through FY 18/19
FY 14/15 FY 15/16 FY 16/17 FY 17/18 FY 18/19
Page 4
Critical to our success in this area is the preparation of realistic growth assumptions that help guide the
Town’s revenue projections. There continues to be healthy economic growth in Oro Valley, the Tucson
metropolitan region and State-wide. Arizona remains well-positioned to outpace the nation and most
states in job, income and population. The Tucson Metropolitan Statistical Area (MSA-region) is on
pace for its fastest growth since 2006. With Oro Valley’s close proximity to the Tucson metro region,
it is likely that the Town’s local economy will continue to benefit with increased housing sales, retail
and tourism growth, and overall personal income growth.
April 1, 2020 will mark the day in which the U.S. takes its decennial census. The data collected in this
effort is a significant foundation for Oro Valley’s state-shared revenues, as well as other economic
considerations. The Town is actively participating in the regional census planning and marketing
efforts led by the Pima Association of Governments (PAG). For the upcoming fiscal year, 2019-20,
state-shared revenues are projected to remain relatively flat to collections in the current year.
In the near term, the projected residential development is strong over the next two to three-year period.
In FY 2018-19, the Town estimated that 306 single family residential (SFR) building permits would
be issued; a total of 296 were issued by year-end. The FY 2019-20 budget includes the assumption that
300 SFRs will be issued during the year as many developments have made their way through the
planning and approval process and are in the building phase.
Commercial development activity continues to be relatively strong in the community, supporting the
continued growth in construction sales taxes and healthy growth in utility, bed tax, retail and restaurant
tax collections projected in the FY 2019-20 budget.
The below chart depicts the local trends in single family residential (SFR) building permits issued and
annual permit revenues from both residential and commercial construction activity from FY 2009-10
through FY 2019-20 projections.
$‐
$5
$10
$15
$20
$25
09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20
BudgetMillionsFiscal Year
Local Sales Tax Collections and State Shared Revenues
Local Sales Tax State Shared Revenues
Page 5
Future Focus
During FY 2019-20, the Town will continue to identify and quantify both one-time revenues derived
from construction activity and recurring revenues derived from such areas as local sales taxes and state-
shared sources. The Town continues to dedicate one-time revenues to funding one-time expenditures
in the budget, specifically for capital improvement projects, while ensuring that sufficient recurring
revenues exist to fund recurring expenditures in the budget. With the expectation of sustained and
moderately increasing 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 2019-20, the Town will focus its efforts on supporting the elements of the Town Council
adopted Strategic Leadership Plan in the areas previously outlined earlier in this transmittal letter.
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 2019-20 to
maintain fair and competitive compensation to its employees.
The FY 2019-20 budget includes $500,000 for payment toward the Town’s Public Safety
Retirement System (PSPRS) unfunded liability.
The FY 2019-20 budget includes $1,450,000 for the Pavement Preservation Program in the
Highway Fund, which maintains the current condition of Town streets and roads and
$12,000,000 for the widening of La Cholla Boulevard.
The FY 2019-20 budget includes investments in Town facilities and infrastructure including
funding for enhancing the overall condition of parks and recreational facilities, a new
playground structure for Naranja Park, the completion of renovations at James D. Kriegh Park,
and renovations in the police station and public works building.
$‐
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20
Budget
0
50
100
150
200
250
300
350
400
Permit RevenueFiscal YearSFR PermitsSFR Permits and Building Activity Revenue
SFR Permits Residential Permit Revenues Commercial Permit Revenues
Page 6
The Town also continues to maintain strong investment grade ratings on its outstanding excise tax
bonds, rated “AA+” by Standard and Poor’s. 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 $19.6 million, or 46% of FY 2019-20 adopted expenditures of $42 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, 2018. This was the twenty-
fifth 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,
Mary Jacobs Kevin Artz
Town Manager Interim Finance Director
Page 7
Organizational Chart
Page 8
TOWN OF ORO VALLEY, ARIZONA
LIST OF TOWN OFFICIALS
ELECTED OFFICIALS
Mayor Joe Winfield
Vice-Mayor Ms. Melanie Barrett
Council Member Ms. Joyce Jones-Ivey
Council Member Mr. Josh Nicolson
Council Member Ms. Rhonda Piña
Council Member Mr. Bill Rodman
Council Member Mr. Steve Solomon
TOWN MANAGEMENT
Town Manager Mary Jacobs
Assistant Town Manager Chris Cornelison
Interim Finance Director Kevin Artz
Human Resources Director Chris Brady
Town Clerk Michael Standish
Magistrate George Dunscomb
Legal Services Director Tobin Sidles
Water Utility Director Peter Abraham
Chief of Police Daniel Sharp
Public Works Director/Town
Engineer
Paul Keesler
Community and Economic
Development Director
J.J. Johnston
Parks and Recreation Director Kristy Diaz-Trahan
Information Technology Director Chuck Boyer
Page 9
Page 10
FINANCIAL SECTION
Page 11
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Page 12
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, the business-type
activities, each major fund, and the aggregate remaining fund information of the Town of Oro Valley, Arizona
(the Town), as of and for the year ended June 30, 2019, 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, 2019, 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. No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct
Placements, for the year ended June 30, 2019, which represents a change in accounting principle. Our opinion
is not modified with respect to this matter.
Page 13
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis, budgetary comparison information, net pension liability information, and other
postemployment benefit plan information, as listed in the table of contents, 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 Section and Statistical Section 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 December 19, 2019,
on our consideration of the 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 solely 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 effectiveness of
the Town of Oro Valley, Arizona’s 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 the Town
of Oro Valley, Arizona’s internal control over financial reporting and compliance.
Heinfeld, Meech & Co., P.C.
Tucson, Arizona
December 19, 2019
Page 14
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
(Required Supplementary Information)
Page 15
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Page 16
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
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, 2019. The management’s discussion and analysis is presented as required
supplementary information to supplement the basic financial statements. 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 2018-19 as follows.
The Town’s total net position of governmental activities increased $4.9 million to $136.6 million
and business-type activities increased $6.2 million to $96.7 million representing 59 percent and 41
percent respectively, of the total net position of $233.3 million.
General revenues from governmental activities accounted for $36.6 million in revenue, or 60
percent of all current fiscal year governmental activities revenues. Program specific revenues in
the form of charges for services and grants and contributions accounted for $24.0 million or 40
percent of total current fiscal year governmental activities revenues. The Town had $21.8 million
of program revenues and $774,842 in general revenues related to business-type activities.
The Town had $55.7 million in expenses related to governmental activities, an increase of 12
percent from the prior fiscal year. The Town had $16.4 million in expenses related to business-
type activities, a decrease of two percent from the prior fiscal year.
Among major funds, the General Fund had $40.9 million in revenues, which primarily consisted
of sales taxes and intergovernmental revenues. The total expenditures of the General Fund were
$35.4 million. The General Fund’s fund balance increased from $18.1 million to $19.6 million.
The Community Center Fund had $6.8 million in revenues, which consisted primarily of sales
taxes and charges for services. The total expenditures of the Community Center Fund were $6.0
million.
The General Government CIP Fund had $1.1 million in revenues, which consisted primarily of
charges for services and intergovernmental revenues. The total expenditures of the General
Government CIP Fund were $6.3 million.
The PAG/RTA Fund had $6.4 million in revenues, which consisted primarily of intergovernmental
revenues. The total expenditures of the PAG/RTA Fund were $6.5 million.
The Water Fund operating revenues of $15.7 million exceeded operating expenses of $14.0 million.
Page 17
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
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 accrual basis of accounting is used for the government-wide financial statements.
The statement of net position presents information on all of the Town’s assets liabilities, and deferred
inflows/outflows of resources with the difference 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, transit, 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.
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 use the modified
accrual basis of accounting and 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.
Page 18
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
OVERVIEW OF FINANCIAL STATEMENTS
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, Community
Center, General Government CIP, and PAG/RTA Funds, all of which are considered to be major
funds. Data from the other governmental funds are combined into a single, aggregated presentation.
Individual fund data for each of these non-major governmental funds is provided in the form of
combining statements and schedules.
Proprietary funds. The Town 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 an internal service fund to finance its self-insured
employee health benefits. Because these services predominately benefit governmental rather than
business-type functions, the internal service fund has 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, and
pension and other postemployment benefit plans. 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 the major Special Revenue Fund as required
supplementary information. Schedules for the pension and other postemployment benefit plans have
been provided as required supplementary information.
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 inflows by $233.3 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, water
rights, 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.
Page 19
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
GOVERNMENT-WIDE FINANCIAL ANALYSIS
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. In addition, a portion of the Town’s net position represents resources that are subject to
external restrictions on how they may be used. The remaining balance is unrestricted and may be used
to meet the Town's ongoing obligations to its citizens and creditors.
The following table presents a summary of the Town’s net position for the fiscal years ended
June 30, 2019 and June 30, 2018.
2019
Governmental
Activities
2018
Governmental
Activities
2019
Business-type
Activities
2018
Business-type
Activities 2019 Total 2018 Total
Current and other assets $ 38,879,671 $ 32,737,844 $ 34,783,615 $ 29,838,278 $ 73,663,286 $ 62,576,122
Capital assets, net 152,100,943 147,049,468 106,448,047 103,479,996 258,548,990 250,529,464
Total assets 190,980,614 179,787,312 141,231,662 133,318,274 332,212,276 313,105,586
Deferred outflows 8,583,039 9,274,610 1,772,104 1,948,784 10,355,143 11,223,394
Current and other liabilities 7,913,936 5,974,146 4,436,971 4,350,139 12,350,907 10,324,285
Long-term liabilities 52,651,566 51,274,385 41,415,050 40,218,414 94,066,616 91,492,799
Total liabilities 60,565,502 57,248,531 45,852,021 44,568,553 106,417,523 101,817,084
Deferred inflows 2,358,904 1,660,960 482,647 265,122 2,841,551 1,926,082
Net investment in capital
assets 141,506,384 137,311,856 73,170,068 69,036,006 214,676,452 206,347,862
Restricted 5,752,355 4,424,244 5,752,355 4,424,244
Unrestricted (10,619,492) (11,583,669) 23,499,030 21,397,377 12,879,538 9,813,708
Total net position $ 136,639,247 $130,152,431 $ 96,669,098 $ 90,433,383 $ 233,308,345 $ 220,585,814
At the end of the current fiscal year the Town reported positive balances in all categories of net position,
except unrestricted governmental activities; this was due to pension liabilities. The same situation held
true for the prior fiscal year.
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 principal retirement of $ 917,722 in bonds and $8,315 in bond premium for governmental
activities, and the principal retirement of $3.9 million in bonds and $116,677 in bond premium
for business-type activities.
The issuance of $8.1 million of revenue bonds, $2.0 million in governmental activities, and
$6.1 million in business-type activities.
Page 20
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
GOVERNMENT-WIDE FINANCIAL ANALYSIS
The addition of $9.4 million and $3.6 million for governmental activities and business-type
activities, respectively, in accumulated depreciation due to depreciation expense.
The addition of $14.5 million and $6.6 million for governmental activities and business-type
activities, respectively, in capital assets related to buildings and improvements, infrastructure,
and water systems.
Changes in net position. The Town’s total revenues for the current fiscal year were $83.2 million.
The total cost of all programs and services was $72.0 million. The following table presents a summary
of the changes in net position for the fiscal years ended June 30, 2019 and June 30, 2018.
2019
Governmental
Activities
2018
Governmental
Activities
2019
Business-type
Activities
2018
Business-type
Activities
2019
Total
2018
Total
Revenues:
Program revenues:
Charges for services $ 11,000,151 $ 11,468,929 $ 18,945,404 $ 20,841,963 $ 29,945,555 $ 32,310,892
Operating grants and contributions 4,669,814 4,949,928 4,669,814 4,949,928
Capital grants and contributions 8,302,441 5,529,831 2,899,213 870,920 11,201,654 6,400,751
General revenues:
Sales taxes 22,924,400 21,664,398 22,924,400 21,664,398
Franchise taxes 635,494 656,664 635,494 656,664
Unrestricted state shared revenues 11,879,950 11,577,834 11,879,950 11,577,834
Investment income: 74,542 5,916 80,458
Interest 797,754 622,073 1,419,827
Net increase in the fair value of investments 334,461 152,769 487,230
Total revenues 60,544,465 55,922,126 22,619,459 21,718,799 83,163,924 77,640,925
Expenses:
General government 14,727,150 12,639,867 14,727,150 12,639,867
Public safety 18,958,436 17,683,197 18,958,436 17,683,197
Highways and streets 10,791,469 7,505,589 10,791,469 7,505,589
Transit 1,125,490 1,505,341 1,125,490 1,505,341
Culture and recreation 9,699,357 10,111,731 9,699,357 10,111,731
Interest on long-term debt 355,545 350,404 355,545 350,404
Water 15,089,673 15,568,288 15,089,673 15,568,288
Stormwater drainage 1,291,490 1,190,898 1,291,490 1,190,898
Total expenses 55,657,447 49,796,129 16,381,163 16,759,186 72,038,610 66,555,315
Excess (deficiency) before transfers 4,887,018 6,125,997 6,238,296 4,959,613 11,125,314 11,085,610
Transfers 2,581 2,847 (2,581) (2,847)
Changes in net position 4,889,599 6,128,844 6,235,715 4,956,766 11,125,314 11,085,610
Net position, beginning, restated 131,749,648 124,023,587 90,433,383 85,476,617 222,183,031 209,500,204
Net position, ending $ 136,639,247 $ 130,152,431 $ 96,669,098 $ 90,433,383 $ 233,308,345 $ 220,585,814
The following are significant current year transactions that have had an impact on the change in net
position.
Total expenses increased $5.5 million, or eight percent, primarily due to an increase in projects
for highways and streets.
Total revenues increased $5.5 million, or seven percent, primarily due to additional
intergovernmental revenues for road maintenance projects.
Page 21
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
GOVERNMENT-WIDE FINANCIAL ANALYSIS
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.
2019 2018
Governmental Activities
Total
Expenses
Net (Expense)/
Revenue
Total
Expenses
Net (Expense)/
Revenue
General government $ 14,727,150 $ (9,092,911) $ 12,639,867 $ (7,370,961)
Public safety 18,958,436 (18,236,602) 17,683,197 (16,620,321)
Highways and streets 10,791,469 423,912 7,505,589 1,542,310
Transit 1,125,490 235,760 1,505,341 (46,533)
Culture and recreation 9,699,357 (4,659,655) 10,111,731 (5,001,532)
Interest on long-term debt 355,545 (355,545) 350,404 (350,404)
Total $ 55,657,447 $ (31,685,041) $ 49,796,129 $ (27,847,441)
Business-type Activities
Water $ 15,089,673 $ 5,328,698 $ 15,568,288 $ 4,758,317
Stormwater drainage 1,291,490 134,756 1,190,898 195,380
Total $ 16,381,163 $ 5,463,454 $ 16,759,186 $ 4,953,697
The cost of all governmental activities this year was $55.7 million. The increase of $5.9 million
from the prior year was due primarily to an increase in highways and streets projects.
The cost of all business-type activities this year was $16.4 million. The decrease of $378,023
from the prior year was primarily due to a reduction of costs in sales and services in the water
utility.
Federal and State government grants, developer contributions, and charges for services
subsidized certain governmental programs and business-type programs with revenues of $45.8
million.
Net cost of governmental activities of $31.7 million was financed by general revenues, which
are made up of primarily sales taxes and state shared revenues of $34.8 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.
Page 22
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
FINANCIAL ANALYSIS OF THE TOWN’S FUNDS
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 $29.4 million, an
increase of $2.5 million. This was primarily due to an increase in sales tax collections and
intergovernmental revenues.
The General Fund comprises 66 percent of the total governmental fund balance. Approximately $3.2
million, or 17 percent of the General’s Fund fund balance is unassigned. The General Fund is the
principal operating fund of the Town. The increase in fund balance of $1.4 million to $19.6 million as
of fiscal year end was a result of increased sales tax revenues. General Fund revenues increased $3.2
million as a result of increased sales taxes. General Fund expenditures increased $2.5 million as
primarily due to the consolidation of the operations for the Fleet and Bed Tax Funds into the General
Fund.
The Community Center Fund’s fund balance increased from a deficit of $10,912 to $495,932 as of
fiscal year end due to a decrease in contracted services expenditures.
The General Government CIP Fund’s fund balance increased from $3.4 million to $3.6 million as of
fiscal year end due to the consolidation of the fleet fund capital reserves into the General Government
CIP fund.
The PAG/RTA Fund’s fund balance decreased from $695,684 to $566,136 as of fiscal year end due to
a planned drawdown of fund balance to complete capital projects.
Proprietary funds. Net position of the Enterprise Funds at the end of the year amounted to $96.7
million. This increased by $6.2 million during the fiscal year to the extent that revenues exceeded
expenses in the fund and from capital contributions of water systems.
Net position of the Internal Service Fund at the end of the year amounted to $986,857. This increased
by $250,349 during the fiscal year to the extent that self-insurance premiums exceeded claim payments
and administrative expenses.
BUDGETARY HIGHLIGHTS
There were no amendments to the Town of Oro Valley’s fiscal year 2018-19 operating and capital
budget. A schedule showing the original and final budget amounts compared to the Town’s actual
financial activity for the General Fund is provided in this report as required supplementary information.
The significant variances are summarized as follows:
The favorable variance of $1.7 million in sales taxes was a result of an unexpected increase in
construction sales tax.
The favorable variance of $1.0 million in general government expenditures was a result of the
expiration of sales tax rebates, personnel savings from vacancies, and other operational savings
throughout the year.
Page 23
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. At year end, the Town had invested $258.5 million in capital assets (net of accumulated
depreciation), including buildings, facilities, vehicles, computers, equipment, and infrastructure assets.
This amount represents a net increase of $8.0 million from last year. This was primarily due to the
police and evidence facility project completion, road improvement projects, and expansion of the
Town’s water system, as well as depreciation expense of $13.1 million.
The following schedule presents capital asset balances for the fiscal years ended June 30, 2019 and
June 30, 2018.
Governmental Activities
As of
June 30, 2019
As of
June 30, 2018
Land $ 19,518,801 $ 19,518,801
Infrastructure 188,485,038 185,768,295
Buildings and improvements 40,261,741 34,019,586
Machinery, equipment, and vehicles 16,978,935 17,243,799
Construction in progress 9,473,241 5,426,591
Less: Accumulated depreciation (122,616,813) (114,927,604)
Total $ 152,100,943 $ 147,049,468
Business-type Activities
Land $ 2,410,660 $ 2,410,660
Water rights 8,534,490 8,534,490
Water system 136,565,936 133,215,431
Stormwater system 3,230,283 2,956,995
Equipment and vehicles 5,752,158 5,752,158
Construction in progress 3,286,193 310,223
Less: Accumulated depreciation (53,331,673) (49,699,961)
Total $ 106,448,047 $ 103,479,996
The estimated cost to complete current construction projects is $44.0 million. Additional information
on the Town’s capital assets can be found in Note 6.
Page 24
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
CAPITAL ASSETS AND DEBT ADMINISTRATION
Debt Administration. At year end, the Town had $46.8 million in long-term debt outstanding, $6.2
million due within one year. Long-term debt increased by $2.5 million due to the issuance of $8.1
million in revenue bonds. The following table presents a summary of the Town’s outstanding long-
term debt for the fiscal years ended June 30, 2019 and June 30, 2018.
Governmental Activities
As of
June 30, 2019
As of
June 30, 2018
Revenue bonds $ 10,049,064 $ 8,777,836
Special assessment bonds 335,000 490,000
Capital leases 254,070 458,744
Total $ 10,638,134 $ 9,726,580
Business-type Activities
Revenue bonds $ 29,084,936 $ 26,913,164
Loan payable 7,079,179 7,690,874
Total $ 36,164,115 $ 34,604,038
State statutes currently limit the amount of general obligation debt a Town may issue to 20 percent of
its net full cash assessed valuation for water, sewer, lights, open space preserves, parks, playgrounds
and recreational facilities. The current debt limitation for the Town is $136.8 million. State statutes
also currently limit the amount of general obligation debt a Town may issue to six percent of its net
full cash assessed valuation for all other purposes. The current debt limitation for the Town is $41.0
million. The Town does not have any general obligation debt.
The Town has a bond rating of “AA-” from both Standard & Poor’s and Fitch Ratings on outstanding
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
Many factors were considered by the Town’s administration during the process of developing the
fiscal year 2019-20 budget. Among them:
The unemployment rate for the Town of Oro Valley is currently 4.8 percent. Pima County’s
and the State of Arizona’s unemployment rates are 5.0 percent and 4.9 percent, respectively.
The Town’s net full cash assessed valuation for the current year is $683,985,966.
Single family residential (SFR) building permits issued in this fiscal year totaled 296, as
compared to 325 SFR building permits issued last fiscal year. Projections for SFR building
permits are 300 for fiscal year 2019-20.
Page 25
TOWN OF ORO VALLEY, ARIZONA
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
YEAR ENDED JUNE 30, 2019
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES
The adopted combined operating and capital expenditure budget for fiscal year 2019-20 totals $111.0
million, a decrease of $31.9 million, or 22 percent over last year’s budget of $142.9 million. This
decrease is primarily due to a decrease in budgeted expenditures for contingency reserves, various
capital projects, and decreased utility expenses. The budget for fiscal year 2019-20 continues to place
emphasis on achieving the goals identified in the Town’s adopted Strategic Plan, which was recently
updated in fiscal year 2016-17 and includes the following focus areas: economic development,
complete community, parks and recreation, public safety, Town assets, water resources and energy,
cultural resources, land use and design, transportation and cost of services.
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 26
BASIC FINANCIAL STATEMENTS
Page 27
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Page 28
GOVERNMENT-WIDE FINANCIAL STATEMENTS
Page 29
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Page 30
ASSETS
Current assets:
Cash and cash equivalents
Restricted cash and investments
Taxes receivable
Accounts receivable
Intergovernmental receivable
Special assessments
Inventories
Prepaid items
Total current assets
Noncurrent assets:
Capital assets, non-depreciable
Capital assets, depreciable (net)
Net other postemployment benefit assets
Total noncurrent assets
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refunding
Pension and other postemployment benefit plan items
Total deferred outflows of resources
LIABILITIES
Current liabilities:
Accounts payable
Accrued wages and benefits
Intergovernmental payable
Interest payable
Unearned revenue
Claims payable
Customer deposits payable
Other accrued liabilities
Compensated absences
Capital leases payable
Loans payable
Bonds payable
Total current liabilities
Noncurrent liabilities:
Non-current portion of long-term obligations
Total noncurrent liabilities
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Pension and other postemployment benefit plan items
NET POSITION
Net investment in capital assets
Restricted
Unrestricted
Total net position
Governmental
Activities
$ 28,605,010
3,088,463
618,509
5,800,619
335,000
88,806
146,101
38,682,508
28,992,042
123,108,901
197,163
152,298,106
190,980,614
8,583,039
8,583,039
3,716,635
1,235,598
188,606
1,017,648
333,423
601,302
820,724
1,813,015
207,874
1,042,352
10,977,177
49,588,325
49,588,325
60,565,502
2,358,904
141,506,384
5,752,355
(10,619,492)
$136,639,247
Business-type
Activities
$ 31,259,060
754,995
2,684,967
74,506
34,773,528
14,231,344
92,216,703
10,087
106,458,134
141,231,662
1,056,947
715,157
1,772,104
941,602
109,974
1,319,800
591,438
754,995
719,162
232,778
630,420
4,348,648
9,648,817
36,203,204
36,203,204
45,852,021
482,647
73,170,068
23,499,030
$96,669,098
Total
$ 59,864,070
754,995
3,088,463
3,303,476
5,800,619
335,000
88,806
220,607
73,456,036
43,223,386
215,325,604
207,250
258,756,240
332,212,276
1,056,947
9,298,196
10,355,143
4,658,237
1,345,572
1,508,406
591,438
1,772,643
333,423
1,320,464
820,724
2,045,793
207,874
630,420
5,391,000
20,625,994
85,791,529
85,791,529
106,417,523
2,841,551
214,676,452
5,752,355
12,879,538
$233,308,345
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF NET POSITION
JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.Page 31
Program Revenues
Net (Expense)
Revenue and
Changes in Net
Position
Functions/Programs
Primary Government
Governmental activities:
General government
Public safety
Highway and streets
Transit
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
$ 14,727,150
18,958,436
10,791,469
1,125,490
9,699,357
355,545
55,657,447
15,089,673
1,291,490
16,381,163
$72,038,610
Charges for
Services
$ 4,920,132
173,488
754,388
138,125
5,014,018
11,000,151
17,519,158
1,426,246
18,945,404
$29,945,555
Operating
Grants and
Contributions
$ 131,035
544,290
2,745,680
1,223,125
25,684
4,669,814
$4,669,814
Capital Grants
and
Contributions
$ 583,072
4,056
7,715,313
8,302,441
2,899,213
2,899,213
$11,201,654
Governmental
Activities
$ (9,092,911)
(18,236,602)
423,912
235,760
(4,659,655)
(355,545)
(31,685,041)
(31,685,041)
General revenues:
Taxes:
Sales taxes
Franchise taxes
Unrestricted state shared revenues
Investment income:
Interest
Net increase in the fair value of investments
Transfers
Total general revenues and transfers
Changes in net position
Net position, beginning of year, as restated
Net position, end of year
22,924,400
635,494
11,879,950
797,754
334,461
2,581
36,574,640
4,889,599
131,749,648
$136,639,247
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.
Page 32
Net (Expense) Revenue and
Changes in Net Position
Business-type
Activities
$
5,328,698
134,756
5,463,454
5,463,454
Totals
$ (9,092,911)
(18,236,602)
423,912
235,760
(4,659,655)
(355,545)
(31,685,041)
5,328,698
134,756
5,463,454
(26,221,587)
622,073
152,769
(2,581)
772,261
6,235,715
90,433,383
$96,669,098
22,924,400
635,494
11,879,950
1,419,827
487,230
37,346,901
11,125,314
222,183,031
$233,308,345
Page 33
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Page 34
FUND FINANCIAL STATEMENTS
Page 35
ASSETS
Cash and cash equivalents
Taxes receivable
Accounts receivable
Intergovernmental receivable
Special assessments
Due from other funds
Inventories
Prepaid items
Total assets
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCES
Liabilities:
Accounts payable
Accrued wages and benefits
Intergovernmental payable
Unearned revenue
Due to other funds
Customer deposits payable
Other accrued liabilities
Total liabilities
Deferred inflows of resources:
Unavailable revenues - special assessments
Fund balances:
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total fund balances
Total liabilities, deferred inflows of resources
and fund balances
General Fund
$ 16,536,681
2,902,495
455,480
363,642
3,213,984
129,504
$23,601,786
$ 1,060,458
1,170,330
188,606
410,056
597,430
603,241
4,030,121
129,504
13,608,565
2,584,994
3,248,602
19,571,665
$23,601,786
Community
Center
$ 822,778
185,968
102,988
88,806
16,597
$1,217,137
$ 195,130
304,720
3,872
217,483
721,205
105,403
390,529
495,932
$1,217,137
General
Government CIP
$ 4,337,639
$4,337,639
$ 726,594
726,594
3,611,045
3,611,045
$4,337,639
TOWN OF ORO VALLEY, ARIZONA
BALANCE SHEET - GOVERNMENTAL FUNDS
JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.
Page 36
PAG/RTA
$
5,114,893
$5,114,893
$ 1,334,773
3,213,984
4,548,757
566,136
566,136
$5,114,893
Non-Major
Governmental
Funds
$ 5,548,526
60,041
322,084
335,000
$6,265,651
$ 360,574
65,268
302,872
728,714
335,000
5,186,219
15,718
5,201,937
$6,265,651
Total
Governmental
Funds
$ 27,245,624
3,088,463
618,509
5,800,619
335,000
3,213,984
88,806
146,101
$40,537,106
$ 3,677,529
1,235,598
188,606
1,017,648
3,213,984
601,302
820,724
10,755,391
335,000
234,907
5,752,355
14,014,812
6,196,039
3,248,602
29,446,715
$40,537,106
Page 37
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Page 38
Total governmental fund balances 29,446,715$
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 274,717,756$
Less accumulated depreciation (122,616,813)152,100,943
Special assessments receivable are not available to pay for current
period expenditures and, therefore, are reported as unavailable
revenues in the funds.335,000
Deferred items related to the net cost of issuance of bonds
are amortized over the life of the associated bond issue
in the government-wide statements but not reported in the funds.(2,803)
Deferred outflows and inflows of resources related to
pensions/OPEB are applicable to future periods and,
therefore, are not reported in the funds.
Deferred outflows of resources related to pensions/OPEB 8,583,039
Deferred inflows of resources related to pensions/OPEB (2,358,904)6,224,135
The Net OPEB asset is not a current financial resource and,
therefore, is not reported in the funds.197,163
The Internal Service Fund is used by management to charge
the cost of insurance to the individual funds. The assets and
liabilities of the Internal Service Fund are included in the
Statement of Net Position.986,857
Long-term liabilities are not due and payable in the current
period and, therefore, are not reported in the funds.
Special assessment bonds (335,000)
Compensated absences payable (2,324,378)
Obligations under capital leases (254,070)
Net OPEB liability (54,017)
Net pension liability (39,632,234)
Revenue bonds payable (10,049,064)(52,648,763)
Net position of governmental activities 136,639,247$
TOWN OF ORO VALLEY, ARIZONA
RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.
Page 39
Revenues:
Sales taxes
Franchise taxes
Development impact fees
Special assessments
Intergovernmental
Licenses, fees & permits
Fines, forfeitures & penalties
Charges for services
Investment income:
Interest
Net increase in the fair value of investments
Other
Total revenues
Expenditures:
Current -
General government
Public safety
Highway and streets
Transit
Culture and recreation
Capital outlay
Debt service -
Principal retirement
Interest and fiscal charges
Bond issuance costs
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Issuance of revenue bonds
Transfers in
Transfers out
Total other financing sources (uses)
Changes in fund balances
Fund balances (deficits), beginning of year, as restated
Fund balances (deficits), end of year
General Fund
$ 20,454,936
635,494
13,773,704
2,356,619
165,669
2,519,565
519,300
128,946
370,120
40,924,353
14,424,463
16,050,890
1,150,322
3,251,463
570,914
35,448,052
5,476,301
120,000
(4,150,514)
(4,030,514)
1,445,787
18,125,878
$19,571,665
Community
Center
$ 2,469,464
4,266,744
7,601
8,580
6,752,389
5,629,148
125,987
206,113
30,298
5,991,546
760,843
(253,999)
(253,999)
506,844
(10,912)
$495,932
General
Government CIP
$
261,090
420,396
41,535
46,902
321,982
1,091,905
6,302,749
35,000
6,337,749
(5,245,844)
2,035,000
3,403,000
5,438,000
192,156
3,418,889
$3,611,045
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.
Page 40
PAG/RTA
$
6,344,349
29,513
6,373,862
6,503,410
6,503,410
(129,548)
(129,548)
695,684
$566,136
Non-Major
Governmental
Funds
$
1,039,763
174,066
3,996,849
31,213
81,614
229,318
150,033
119,496
5,822,352
199,608
2,999,923
1,790,266
918,772
297,123
6,205,692
(383,340)
884,180
(86)
884,094
500,754
4,701,183
$5,201,937
Total
Governmental
Funds
$ 22,924,400
635,494
1,039,763
174,066
24,375,992
2,387,832
247,283
7,206,705
797,754
334,461
841,111
60,964,861
14,424,463
16,250,498
2,999,923
1,150,322
8,880,611
15,293,326
1,124,885
327,421
35,000
60,486,449
478,412
2,035,000
4,407,180
(4,404,599)
2,037,581
2,515,993
26,930,722
$29,446,715
Page 41
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Page 42
Changes in fund balances - total governmental funds 2,515,993$
Amounts reported for governmental activities in the Statement of Activities are
different because:
Governmental funds report the portion of capital outlay for capitalized assets as expenditures.
However, in the Statement of Activities, the costs of those assets are allocated over their
estimated useful lives as depreciation expense.
Expenditures for capitalized assets 14,518,706$
Less current year depreciation (9,421,993) 5,096,713
Issuance of revenue bonds provides current financial resources to governmental funds,
but the issuance increases long term liabilities in the Statement of Net Position.(2,035,000)
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.(160,000)
Repayments of long-term 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 204,674
Revenue bond principal retirement 763,772
Special assessment bond principal retirement 155,000 1,123,446
Governmental funds report pension/OPEB contributions as expenditures. However,
they are reported as deferred outflows of resources in the Statement of Net Position.
The change in the net pension/OPEB liability, adjusted for deferred items, is reported
as pension/OPEB expense in the Statement of Activities.
Current year pension/OPEB contributions 3,966,746
Pension/OPEB expense (5,676,626) (1,709,880)
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.
Loss on disposal of assets (45,238)
Amortization of deferred bond items 8,315
Compensated absences (155,099) (192,022)
The Internal Service Fund is used by management to charge the cost of
insurance to the individual funds. The changes in net position of the Internal
Service Fund is reported with governmental activities in the Statement of Activities.250,349
Changes in net position in governmental activities 4,889,599$
TOWN OF ORO VALLEY, ARIZONA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.
Page 43
Enterprise Funds
ASSETS
Current assets:
Cash and cash equivalents
Restricted cash and investments
Accounts receivable
Prepaid items
Total current assets
Noncurrent assets:
Capital assets, non-depreciable
Capital assets, depreciable (net)
Net other postemployment benefit assets
Total noncurrent assets
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refunding
Pension and other postemployment benefit plan items
Total deferred outflows of resources
LIABILITIES
Current liabilities:
Accounts payable
Accrued wages and benefits
Intergovernmental payable
Interest payable
Unearned revenue
Customer deposits payable
Compensated absences
Loans payable
Bonds payable
Claims payable
Total current liabilities
Noncurrent liabilities:
Non-current portion of long-term obligations
Total noncurrent liabilities
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Pension and other postemployment benefit plan items
NET POSITION
Net investment in capital assets
Unrestricted
Total net position
Water
$ 30,295,163
754,995
2,487,774
74,506
33,612,438
14,231,344
89,064,977
8,317
103,304,638
136,917,076
1,056,947
581,153
1,638,100
661,220
89,323
1,319,800
591,438
754,995
719,162
219,570
630,420
4,348,648
9,334,576
35,793,747
35,793,747
45,128,323
392,210
70,018,342
23,016,301
$93,034,643
Non-Major
Enterprise Fund
$ 963,897
197,193
1,161,090
3,151,726
1,770
3,153,496
4,314,586
134,004
134,004
280,382
20,651
13,208
314,241
409,457
409,457
723,698
90,437
3,151,726
482,729
$3,634,455
Totals
$ 31,259,060
754,995
2,684,967
74,506
34,773,528
14,231,344
92,216,703
10,087
106,458,134
141,231,662
1,056,947
715,157
1,772,104
941,602
109,974
1,319,800
591,438
754,995
719,162
232,778
630,420
4,348,648
9,648,817
36,203,204
36,203,204
45,852,021
482,647
73,170,068
23,499,030
$96,669,098
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.
Page 44
Governmental
Activities:
Internal
Service Fund
$ 1,359,386
1,359,386
1,359,386
39,106
333,423
372,529
372,529
986,857
$986,857
Page 45
Enterprise Funds
Operating revenues:
Charges for services
Other
Self insurance premiums
Total operating revenues
Operating expenses:
Costs of sales and services
Contractual services
Depreciation and amortization
Claims payments
Administrative
Reinsurance premiums
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Development impact fees
Connection fees
Investment income:
Interest
Net increase in the fair value of investments
Interest expense
Total nonoperating revenues (expenses)
Income (loss) before transfers
Capital contributions
Transfers out
Changes in net position
Total net position, beginning of year
Total net position, end of year
Water
$ 15,475,961
175,253
15,651,214
10,357,647
18,586
3,617,288
13,993,521
1,657,693
1,246,838
621,106
613,728
144,719
(1,096,152)
1,530,239
3,187,932
2,899,213
(2,581)
6,084,564
86,950,079
$93,034,643
Non-Major
Enterprise Fund
$ 1,426,036
210
1,426,246
1,123,868
167,622
1,291,490
134,756
8,345
8,050
16,395
151,151
151,151
3,483,304
$3,634,455
Totals
$ 16,901,997
175,463
17,077,460
11,481,515
18,586
3,784,910
15,285,011
1,792,449
1,246,838
621,106
622,073
152,769
(1,096,152)
1,546,634
3,339,083
2,899,213
(2,581)
6,235,715
90,433,383
$96,669,098
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION -
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.
Page 46
Governmental
Activities:
Internal
Service Fund
$
3,655,749
3,655,749
2,763,160
106,652
562,386
3,432,198
223,551
12,586
14,212
26,798
250,349
250,349
736,508
$986,857
Page 47
Water
Non-Major
Enterprise Fund Total
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities:
Cash received from customers 15,545,468$ 1,413,917$ 16,959,385$
Cash received from premiums
Cash payments to suppliers for goods and services (7,159,994) (232,537) (7,392,531)
Cash payments to employees for services (3,126,479) (741,336) (3,867,815)
Cash payments for claims
Net cash provided by (used for) operating activities 5,258,995 440,044 5,699,039
Cash flows from noncapital and related financing activities:
Interfund transfers (2,581) (2,581)
Connection fees 621,106 621,106
Net cash provided by (used for) noncapital financing activities 618,525 618,525
Cash flows from capital and related financing activities:
Development impact fees 1,246,838 1,246,838
Acquisition of capital assets (3,427,262) (273,289) (3,700,551)
Proceeds from sale of bonds 6,105,000 6,105,000
Principal paid on long-term debt (4,544,923) (4,544,923)
Interest on long-term debt (1,068,336) (1,068,336)
Net cash provided by (used for) capital and related
financing activities (1,688,683) (273,289) (1,961,972)
Cash flows from investing activities:
Investment income 758,447 16,395 774,842
Net cash provided by (used for) investing activities 758,447 16,395 774,842
Net increase (decrease) in cash and cash equivalents 4,947,284 183,150 5,130,434
Cash and cash equivalents, beginning of year 25,347,879 780,747 26,128,626
Cash and cash equivalents, end of year 30,295,163$ 963,897$ 31,259,060$
Reconciliation of Operating Income (Loss) to
Net Cash Provided by (Used for) Operating Activities
Operating income (loss)1,657,693$ 134,756$ 1,792,449$
Adjustments to reconcile operating income (loss)
to net cash provided by (used for) operating activities:
Depreciation and amortization 3,617,288 167,622 3,784,910
Change in assets and liabilities:
Accounts receivable 95,445 (12,329)83,116
Prepaid items (71,531)(71,531)
Accounts payable 51,088 173,584 224,672
Claims payable
Accrued wages and benefits 8,133 (53)8,080
Unearned revenue (169,005)(169,005)
Customer deposits payable (32,186)(32,186)
Pension/OPEB items 102,070 (23,536)78,534
Total adjustments 3,601,302 305,288 3,906,590
Net cash provided by (used for) operating activities 5,258,995$ 440,044$ 5,699,039$
5,258,995 440,044Non-cash capital and financing activities
Contribution of assets from developers 2,899,213$ 2,899,213$
Enterprise Funds
TOWN OF ORO VALLEY, ARIZONA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2019
The notes to the basic financial statements are an integral part of this statement.Page 48
Governmental
Activities
Internal Service
Fund
$
3,655,749
(636,849)
(2,717,066)
301,834
26,798
26,798
328,632
1,030,754
1,359,386$
223,551$
32,189
46,094
78,283
301,834$
301,834
Page 49
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
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, 2019, the Town implemented the provisions of GASB
Statement No. 88 Certain Disclosures Related to Debt, Including Direct Borrowings and
Direct Placements. This Statement requires enhanced note disclosures and clarifies which
liabilities governments should include when disclosing information related to debt.
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. 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, there are no component units combined with the Town for
financial statement presentation purposes, and the Town is 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.
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement
of activities) present financial information about the Town as a whole. The reported information
includes all of the nonfiduciary activities of the Town. 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.
Page 50
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
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. 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, development services, 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.
Page 51
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 internal service fund is presented in a single
column on the face of the proprietary fund statements.
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.
Community Center Fund – This fund accounts for the activity of the Oro Valley
Community Center, including golf, tennis, food and beverage and fitness revenues and
expenditures. This fund also accounts for the half cent sales taxes revenues dedicated to
these operations.
General Government CIP Fund – This fund accounts for governmental capital asset
projects.
PAG/RTA Fund – This fund accounts for revenues dedicated to Town improvements
funded through Pima Association of Governments and the Regional Transportation
Authority.
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.
The Proprietary Fund financial statements are reported using the economic resources
measurement focus and accrual basis of accounting. 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 is charges for health benefits. The principal operating revenues
of the Town’s enterprise funds 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. Cash and cash
equivalents at year end were cash on hand, cash in bank, and cash and investments held by
another governmental entity as the Town's fiscal agent.
Page 52
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Arizona statute requires a pooled collateral program for public deposits and a Statewide
Collateral Pool Administrator (Administrator) in the State Treasurer’s Office. The purpose of
the pooled collateral program is to ensure that governmental entities’ public deposits placed in
participating depositories are secured with collateral of 102 percent of the public deposits, less
any applicable deposit insurance. An eligible depository may not retain or accept any public
deposit unless it has deposited the required collateral with a qualified escrow agent or the
Administrator. The Administrator manages the pooled collateral program, including reporting
on each depository’s compliance with the program.
Certain resources set aside for the purchase of capital equipment are classified as restricted cash
and investments on the statement of proprietary net position because their use is limited for well
projects.
Nonparticipating interest-earning investment contracts are stated at cost. Money market
investments and participating interest investment contracts with a remaining maturity of one
year or less at time of purchase are stated at amortized cost. All other investments are stated at
fair value.
E. Investment Income
Investment income is composed of interest, dividends, and net changes in the fair value of
applicable investments.
F. Receivables and Payables
Activity between funds that is representative of lending/borrowing arrangements outstanding
at the end of the fiscal year is referred to as either “due to/from other funds” (i.e., the current
portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of
interfund loans). All other outstanding balances between funds are reported as “due to/from
other funds.” Interfund balances between governmental funds are eliminated on the Statement
of Net Position
All receivables are shown net of an allowance for uncollectibles.
G. Inventory
All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories consist
of expendable supplies held for consumption. Inventories are recorded as expenses when
consumed on the government-wide financial statements and the fund financial statements.
Page 53
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
H. 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.
I. Capital Assets
Capital assets, which include land, water rights, buildings and improvements, improvements
other than buildings, infrastructure, vehicles, machinery, equipment, and construction in
progress, 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.
Capital assets are recorded at historical cost if purchased or constructed. Donated capital assets
are recorded at acquisition 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.
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
J. 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.
Page 54
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
K. 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.
L. Pensions and Other Postemployment Benefits
For purposes of measuring the net pension and other postemployment benefit (OPEB) assets
and liabilities, related deferred outflows of resources and deferred inflows of resources, and
related expenses, information about the pension and OPEB plans’ fiduciary net position and
additions to/deductions from the plans’ fiduciary net position have been determined on the same
basis as they are reported by the plan. For this purpose, benefit payments (including refunds of
employee contributions) are recognized when due and payable in accordance with the benefit
terms. Investments are reported at fair value.
M. Long-term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities on the
statement of net position. Bond premiums and discounts are amortized over the life of the bonds
using the straight-line method. Deferred amounts on refunding result from the difference
between the carrying value of refunded debt and its reacquisition price. This amount is deferred
and amortized over the shorter of the life of the refunded or refunding debt.
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.
The Town's legal debt limit for water, sewer, lights, open space preserves, parks, playgrounds,
and recreational facilities is $136.8 million, and for all other purposes is $41.0 million. The
Town does not have any related debt.
Page 55
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
N. 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.
O. 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.
P. 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.
Page 56
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 2 – FUND BALANCE CLASSIFICATIONS
Fund balances of the governmental funds are reported separately within classifications based
on a hierarchy of the constraints placed on the use of those resources. The classifications are
based on the relative strength of the constraints that control how the specific amounts can be
spent. The classifications are nonspendable, restricted, and unrestricted, which includes
committed, assigned, and unassigned fund balance classifications.
Nonspendable. The nonspendable fund balance classification includes amounts that cannot
be spent because they are not in spendable form, or are 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
General Fund is to be used for local economic development purposes, the payout of
compensated absences, unemployment compensation claims, and contingency reserve. The
committed fund balance reported in the Townwide Facilities Projects Fund is used for
improvements to Town parks. The committed fund balance reported in the Community Center
Fund is used for the culture and recreation activity of the Community Center.
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 future budget deficits. 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.
Page 57
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 2 – FUND BALANCE CLASSIFICATIONS
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
Community
Center Fund
General
Government
CIP Fund
PAG/RTA
Fund
Non-Major
Governmental
Funds
Fund Balances:
Nonspendable:
Inventory $ $ 88,806 $ $ $
Prepaid items 129,504 16,597
Restricted:
Roadway maintenance 866,906
Debt service 192,109
Capital projects 566,136 3,897,841
Public safety 229,363
Committed:
Contingency reserve 10,496,139
Economic development 1,649,249
Culture and recreation 390,529
Park improvements 15,718
Compensated absences 1,244,470
Unemployment claims 218,707
Assigned:
Budget deficit 2,584,994
Townwide capital 3,611,045
Unassigned 3,248,602
Total fund balances $19,571,665 $ 495,932 $ 3,611,045 $ 566,136 $ 5,201,937
Page 58
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 3 – RESTRICTED NET POSITION
The table below provides detail of the major components of the Town’s restricted net position
at year end.
Governmental
Activities
Restricted Net Position:
Public safety $ 229,363
Roadway maintenance 866,906
Capital projects 4,463,977
Debt service 192,109
Total $ 5,752,355
NOTE 4 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Excess Expenditures Over Budget – At year end, the Town had expenditures in the Federal
Seizures and Forfeitures Fund that exceeded the budget, however, this does not constitute a
violation of legal provisions.
NOTE 5 – 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.
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
$2,654,534 and the bank balance was $2,349,296. At year end $487,425 of the Town’s deposits
was covered by collateral held by the pledging financial institution’s trust department or agent
but not in the Town’s name and $1,288,031 was uninsured and uncollateralized. Additionally,
the Town had cash on hand of $12,682.
Fair Value Measurements. The Town categorizes its fair value measurements within the fair
value hierarchy established by generally accepted accounting principles. The hierarchy is
based on the valuation inputs used to measure the fair value of the asset.
Level 1 inputs are quoted prices in active markets for identical assets
Level 2 inputs are significant other observable inputs
Level 3 inputs are significant unobservable inputs
Page 59
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 5 – CASH AND INVESTMENTS
Valuation Techniques. Equity and debt securities classified in Level 1 of the fair value
hierarchy are valued using prices quoted in active markets for those securities. Money markets
and certificates of deposit securities classified in Level 2 of the of the fair value hierarchy are
valued using a matrix pricing techniques. Matrix pricing is used to value securities based on
the securities’ relationship to benchmark quoted prices.
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 as an investment company 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. Participants in the pool
are not required to categorize the value of shares in accordance with the fair value hierarchy.
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. Participants in the pool are not required to
categorize the value of shares in accordance with the fair value hierarchy.
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.
Page 60
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 5 – CASH AND INVESTMENTS
All investments in which the fair value hierarchy is applicable are measured at fair value on a
recurring basis. At year end, the Town’s investments consisted of the following:
Investment Maturities
(in Years)
Investment Type Category Fair Value Less than 1 1-5
Moody's/
Standard & Poor's
Money Market Level 2 51,190$ 51,190$ $ N/A AAAm
Money Market Level 2 10,248,225 10,248,225 N/A N/A
Certificates of Deposit Level 2 453,129 453,129 Aa2 A+
Certificates of Deposit Level 2 913,874 913,874 A1 A
Certificates of Deposit Level 2 452,329 452,329 A1 A+
U.S. Treasuries Level 1 17,358,509 1,694,422 15,664,087 Aaa AA+
Supranational Agency Bonds Level 1 3,187,557 3,187,557 Aaa AAA
Collateralized Mortgage Obligation Level 1 1,380,196 449,544 930,652Aaa AA+
Asset-Backed Securities Level 1 3,766,395 3,766,395 Aaa AAA
Asset-Backed Securities Level 1 1,197,627 1,197,627 N/A AAA
Asset-Backed Securities Level 1 2,575,411 2,575,411 Aaa N/A
U.S. Agencies:
Fannie Mae Level 1 2,226,120 2,226,120 Aaa AA+
Federal Home Loan Banks Level 1 898,307 898,307 Aaa AA+
Federal National Mortgage Association Level 1 1,094,509 1,094,509 Aaa AA+
Corporate Securities Level 1 226,869 226,869 Aaa AA+
Corporate Securities Level 1 228,882 228,882 Aa1 AA+
Corporate Securities Level 1 769,778 453,014 316,764 Aa2 AA
Corporate Securities Level 1 683,251 683,251 Aa3 AA-
Corporate Securities Level 1 417,899 417,899 A1 AA
Corporate Securities Level 1 254,390 254,390 A1 AA-
Corporate Securities Level 1 1,209,655 1,209,655 A1 A+
Corporate Securities Level 1 226,243 226,243 A1 A
Corporate Securities Level 1 1,796,329 1,796,329 A2 A-
Corporate Securities Level 1 2,042,532 100,700 1,941,832 A2 A
Corporate Securities Level 1 383,815 383,815 A3 A
Corporate Securities Level 1 1,562,423 225,430 1,336,993 A3 BBB+
13,222,525$ 42,382,919$
County Treasurer’s investment pool Not applicable 377,588 312 days average maturities N/A N/A
State Treasurer’s investment pool 5 Not applicable 1,968,817 37 days average maturities N/A AAA/S1+
Total 57,951,849$
Page 61
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 5 – CASH AND INVESTMENTS
Interest Rate Risk. The Town has implemented an investment policy that will minimize
interest rate risk, which is the risk that the market value of securities in the portfolio will fall
due to changes in market interest rates by the following.
1. Structuring the investment portfolio so that securities mature to meet cash requirements
for ongoing operations, thereby avoiding the need to sell securities on the open market
prior to maturity; and
2. Investing operating funds primarily in shorter-term securities, money market mutual
funds, or similar investment pools limiting the average maturity in the portfolio in
accordance with this policy.
Credit Risk. The Town has implemented an investment policy that will minimize credit risk,
which is the risk of loss due to the failure of the security or backer by the following:
1. Limiting investments to the types of securities listed in Section 6 of 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.
Concentration of Credit Risk. The Town places no limit on the amount the Town may invest
in any one issuer. The investments in Money Markets, Certificates of Deposit, U.S. Treasuries,
Supranational Agency Bonds, Collateralized Mortgage Obligations, Asset-Back Securities,
U.S. Agencies, Corporate Securities, County Treasurer’s Investment Pool, and State
Treasurer's Investment Pool 5, represent 18%, 3%, 30%, 6%, 2%, 13%, 7%, 17%, 1%, and 3%
of the Town's total investments, respectively.
NOTE 6 – 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 and non-major governmental funds in the aggregate,
were as follows:
General
Fund
PAG/RTA
Fund
Non-Major
Governmental
Funds
Intergovernmental receivables:
Due from federal government $ 118,559 $ $
Due from state government 245,083 322,084
Due from other governments 5,114,893
Net intergovernmental receivables $ 363,642 $ 5,114,893 $ 322,084
Page 62
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 7 – 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 $ 19,518,801 $ $ $ 19,518,801
Construction in progress 5,426,591 10,826,662 6,780,012 9,473,241
Total capital assets, not being depreciated 24,945,392 10,826,662 6,780,012 28,992,042
Capital assets, being depreciated:
Infrastructure 185,768,295 2,716,743 188,485,038
Buildings and improvements 34,019,586 6,242,155 40,261,741
Machinery, equipment, and vehicles 17,243,799 1,513,158 1,778,022 16,978,935
Total capital assets being depreciated 237,031,680 10,472,056 1,778,022 245,725,714
Less accumulated depreciation for:
Infrastructure (93,714,585) (7,139,428)(100,854,013)
Buildings and improvements (8,092,850) (912,158)(9,005,008)
Machinery, equipment, and vehicles (13,120,169) (1,370,407) (1,732,784) (12,757,792)
Total accumulated depreciation (114,927,604) (9,421,993) (1,732,784) (122,616,813)
Total capital assets, being depreciated, net 122,104,076 1,050,063 45,238 123,108,901
Governmental activities capital assets, net $ 147,049,468 $ 11,876,725 $ 6,825,250 $ 152,100,943
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 310,223 3,360,280 384,310 3,286,193
Total capital assets, not being depreciated 11,255,373 3,360,280 384,310 14,231,343
Capital assets, being depreciated:
Water system 133,215,431 3,350,505 136,565,936
Stormwater system 2,956,995 273,288 3,230,283
Equipment and vehicles 5,752,158 5,752,158
Total capital assets being depreciated 141,924,584 3,623,793 145,548,377
Less accumulated depreciation for:
Water system (45,147,820) (3,238,613)(48,386,433)
Stormwater system (493,412) (63,297)(556,709)
Equipment and vehicles (4,058,729) (329,802)(4,388,531)
Total accumulated depreciation (49,699,961) (3,631,712)(53,331,673)
Total capital assets, being depreciated, net 92,224,623 (7,919) 92,216,704
Business-type activities capital assets, net $ 103,479,996 $ 3,352,361 $ 384,310 $ 106,448,047
Page 63
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 7 – CAPITAL ASSETS
Depreciation expense was charged to functions/programs as follows:
Governmental activities:
General government $ 635,912
Public Safety 617,972
Highways and streets 7,303,814
Culture and recreation 864,295
Total depreciation expense – governmental activities $ 9,421,993
Business-type activities:
Water $ 3,464,090
Stormwater 167,622
Total depreciation expense – business-type activities $ 3,631,712
Construction Commitments – As of year end, the Town had contractual commitments related
to road improvements and well construction. At year end the Town had spent $12.8 million on
the projects and had estimated remaining contractual commitments of $44.0 million.
NOTE 8 – 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, 2019
Due Within
One Year
WIFA Loan, 2007 2.04% 7/1/19-27 $ 2,390,918 $ 230,255
WIFA Loan, 2009 2.75% 7/1/19-29 1,381,098 107,025
WIFA Loan, 2014 2.65% 7/1/19-25 3,307,163 293,140
Total $ 7,079,179 $ 630,420
Page 64
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 8 – LOANS PAYABLE
Principal and interest payments on the business-type activities loans payable at June 30, 2019
are summarized as follows:
Business-type Activities
Year ending June 30: Principal Interest
2020 $ 630,420 $ 206,387
2021 649,730 186,780
2022 669,642 166,557
2023 690,175 145,705
2024 711,347 124,202
2025-29 3,583,395 279,778
2030 144,470 2,292
Total $ 7,079,179 $ 1,111,701
NOTE 9 – REVENUE 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,
water revenues, and impact fees are used to pay bonded debt.
Purpose
Original
Amount
Issued
Interest
Rates
Remaining
Maturities
Outstanding
Principal
June 30, 2019
Due Within
One Year
Governmental activities:
Revenue bonds:
Excise Tax Revenue Obligations, 2010 $ 2,445,000 5.39-6.59% 7/1/19-27 $ 1,370,000 $ 140,000
Revenue Bonds, 2012 2,580,000 3.50-4.00% 7/1/19-27 1,725,000 165,000
Private placement revenue bonds:
Refunding Excise Tax Revenue
Obligations, 2015 2,529,250 1.91% 7/1/19-25 2,001,290 271,350
Excise Tax Revenue Obligations, 2016 2,000,000 2.20% 7/1/19-31 1,909,000 108,000
Refunding Excise Tax Revenue
Obligations, 2017 1,115,556 2.43% 7/1/19-26 1,008,774 115,752
Excise Tax Revenue Obligations, 2018 2,035,000 3.02% 7/1/19-33 2,035,000 77,250
Total $ 10,049,064 $ 877,352
Page 65
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 9 – REVENUE BONDS PAYABLE
Annual debt service requirements to maturity on revenue and refunding bonds for governmental
activities at year end are summarized as follows:
Governmental Activities
Revenue Bonds
Private Placement
Revenue Bonds
Year ending June 30: Principal Interest Principal Interest
2020 $ 305,000 $ 141,425 $ 572,352 $ 171,449
2021 315,000 126,972 627,090 146,382
2022 320,000 111,967 651,586 131,891
2023 335,000 96,224 670,660 116,901
2024 340,000 79,739 688,242 101,490
2025-29 1,480,000 146,812 2,449,884 296,947
2030-34 1,294,250 78,053
Total $ 3,095,000 $ 703,139 $ 6,954,064 $ 1,043,113
Purpose
Original
Amount Issued
Interest
Rates
Remaining
Maturities
Outstanding
Principal
June 30, 2019
Due Within
One Year
Business-type activities:
Revenue bonds:
Refunding Revenue Bonds, 2012 $ 16,595,000 3.00-5.00% 7/1/19-28 $ 9,060,000 $ 1,605,000
Private placement revenue bonds:
Refunding Revenue Bonds, 2013 6,355,000 1.45% 7/1/19 1,010,000 1,010,000
Refunding Revenue Bonds, 2015 1,245,750 1.91% 7/1/19-25 985,710 133,650
Refunding Revenue Bonds, 2017 13,186,444 2.43% 7/1/19-26 11,924,226 1,368,248
Excise Tax Revenue Obligations, 2018 6,105,000 3.02% 7/1/19-33 6,105,000 231,750
Total $ 29,084,936 $ 4,348,648
Page 66
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 9 – REVENUE BONDS PAYABLE
Annual debt service requirements to maturity on revenue and refunding bonds for business-type
activities at year end are summarized as follows:
Governmental Activities
Revenue Bonds
Private Placement
Revenue Bonds
Year ending June 30: Principal Interest Principal Interest
2020 $ 1,605,000 $ 325,382 $ 2,743,648 $ 450,156
2021 1,665,000 258,782 1,879,910 403,148
2022 1,730,000 172,282 1,926,414 354,970
2023 1,815,000 81,532 1,975,340 305,550
2024 560,000 59,132 2,025,758 254,860
2025-29 1,685,000 116,314 7,091,116 607,491
2030-34 2,382,750 148,222
Total $ 9,060,000 $1,013,424 $20,024,936 $ 2,524,397
Pledged revenues – governmental activities. The Town has pledged future sales (excise) tax revenues
to repay outstanding revenue bonds and refunding revenue bonds of $10.0 million as of June 30, 2019.
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 2034. Total annual principal and interest payments for all sales tax revenue bonds
are expected to require less than seven percent of gross revenues. The total principal and interest to be
paid on the bonds is $11.8 million. The current total sales tax revenues were $22.9 million and the total
principal and interest paid on the bonds was $1.0 million or three percent 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 $29.1 million as of June 30, 2019. 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 2034. Total annual principal and interest payments
for all water revenue bond issuances are expected to require approximately 25 percent of gross revenues.
The total principal and interest to be paid on the bonds is $32.6 million. The current total customer gross
revenues were $17.5 million and the total principal and interest paid on the bonds was $4.8 million or 27
percent of gross revenues.
Page 67
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 10 – 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, 2019
Due Within
One Year
Governmental activities:
Special assessments debt $3,945,000 4.65-4.75% 1/1/20-21 $ 335,000 $ 165,000
Annual debt service requirements to maturity on special assessment bonds at year end are
summarized as follows:
Governmental Activities
Year ending June 30: Principal Interest
2020 $ 165,000 $ 11,912
2021 170,000 4,038
Total $ 335,000 $ 15,950
NOTE 11 – OBLIGATIONS UNDER LEASES
Capital Leases – The governmental activities of the Town have acquired community center
utility vehicles 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 Community Center Fund are used to pay the capital lease obligations.
Amortization of assets recorded under capital leases is included with depreciation expense.
Governmental
Activities
Asset:
Machinery, equipment, and vehicles $ 1,128,663
Less: Accumulated depreciation 606,378
Total $ 522,285
Page 68
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 11 – OBLIGATIONS UNDER LEASES
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
2020 $ 213,008
2021 46,470
Total minimum lease payments 259,478
Less: amount representing interest 5,408
Present value of minimum lease payments $ 254,070
Due within one year $ 207,874
Operating Leases – The Town leases golf carts under the provisions of long-term lease
agreements classified as operating leases for accounting purposes. Rental expenditures under
the terms of the operating leases totaled $246,010 for the current fiscal year. The operating
leases have a remaining noncancelable lease terms of 2.6 years. The future minimum rental
payments required under the operating leases at year end were as follows:
Year Ending June 30:
2020 $ 190,678
2021 156,492
2022 91,287
Total minimum payments required $ 438,457
Page 69
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 12 – 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 $ 3,395,000 $ $ 300,000 $ 3,095,000 $ 305,000
Private placement revenue bonds 5,382,836 2,035,000 463,772 6,954,064 572,352
Premium 11,118 8,315 2,803
Special assessment bonds 490,000 155,000 335,000 165,000
Total bonds payable 9,278,954 2,035,000 927,087 10,386,867 1,042,352
Capital leases payable 458,744 204,674 254,070 207,874
Net pension liability 39,331,653 300,581 39,632,234
Net OPEB liability 35,755 18,262 54,017
Compensated absences payable 2,169,279 1,834,846 1,679,747 2,324,378 1,813,015
Governmental activity long-term
liabilities $ 51,274,385 $ 4,188,689 $ 2,811,508
$ 52,651,566 $ 3,063,241
Beginning
Balance Additions Reductions
Ending
Balance
Due Within
One Year
Business-type activities:
Revenue bonds $ 10,605,000 $ $ 1,545,000 $ 9,060,000 $ 1,605,000
Private placement revenue bonds 16,308,164 6,105,000 2,388,228 20,024,936 2,743,648
Premium 1,166,775 116,677 1,050,098
Total bonds payable 28,079,939 6,105,000 4,049,905 30,135,034 4,348,648
Loan payable 7,690,874 611,695 7,079,179 630,420
Net pension liability 4,092,953 259,241 3,833,712
Net OPEB liability 9,631 4,800 14,431
Compensated absences payable 345,017 245,302 237,625 352,694 232,778
Business-type activities long-term
liabilities $ 40,218,414 $ 6,355,102 $ 5,158,466 $ 41,415,050 $ 5,211,846
Page 70
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 13 – INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
At year end, interfund balances were as follows:
Due to/from other funds: At year end, the PAG/RTA Fund had a negative cash balance of
$3,213,984. Negative cash on deposit was reduced by interfund borrowing with the General
Fund. All interfund balances are expected to be paid within one year.
Interfund transfers:
Transfers in
Transfers out
General
Fund
General
Government
CIP Fund
Non-Major
Governmental
and Other
Funds
Total
General Fund $ $ 3,403,000 $ 747,514 $ 4,150,514
Community Center Fund 120,000 133,999 253,999
Non-Major Governmental Funds 86 86
Water Fund 2,581 2,581
Total $ 120,000 $ 3,403,000 $ 884,180 $ 4,407,180
Transfers were made from the General, Community Center, and Water Funds to the Municipal
Debt Service Fund, a non-major governmental fund, for debt service. In addition, transfers
were made from the General Fund to the General Government CIP Fund to fund capital
projects. Transfers were made from the Community Center Fund to the General Fund to repay
loaned amounts. Finally, transfers were made from the Energy Efficiency Project Fund to the
Municipal Debt Service Fund, both non-major governmental funds, to close out the fund.
NOTE 14 – 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.
Page 71
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 15 – PRIOR PERIOD ADJUSTMENT AND RECLASSIFICATION
The July 1, 2018, government-wide net position and the fund balances of the General,
Community Center, General Government CIP, Non-Major Governmental, and Internal Service
Funds do not agree to the prior year financial statements due to the reclassification of certain
funds, correction of sales tax revenues, and revenue recognition adjustments.
Governmental
Activities
General
Fund
Community
Center Fund
General
Government
CIP Fund
Non-Major
Governmental
and Other
Funds
Net position/fund balance, June 30, 2018,
as previously reported $ 130,152,431 $ 15,967,642 $ (71,563) $ 2,209,618 $ 7,173,470
Bed tax 617,856 (617,856)
Impound fee 3,814 (3,814)
Fleet maintenance 1,209,271 (1,114,109)
Fund balance, July 1, 2018, as reclassified 16,589,312 (71,563) $ 3,418,889 $ 5,437,691
Sales tax adjustment 1,716,104 1,536,566 179,538
Revenue recognition adjustment (118,887) (118,887)
Net position/fund balance, July 1, 2018, as
restated $ 131,749,648 $ 18,125,878 $ (10,912)
NOTE 16 – 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.
Page 72
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 16 – RISK MANAGEMENT
The Town has established a Self Insurance Fund to account for and finance its uninsured risks of
loss related to 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 $150,000 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 past three fiscal years.
Liabilities of the fund are reported when it is probable that a loss has occurred and the amount of
the loss can be reasonably estimated. Liabilities include an amount for claims that have been
incurred but not reported (IBNRs). The result of the process to estimate the claims liability is not
an exact amount as it depends on many complex factors, such as inflation, changes in legal
doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the
effects of inflation, recent claim settlement trends (including frequency and amount of pay-outs),
and other economic and social factors. The estimate of the claims liability also includes amounts
for incremental claim adjustment expenses related to specific claims and other claim adjustment
expenses regardless of whether allocated to specific claims. Estimated recoveries, for example from
salvage or subrogation, are another component of the claims liability estimate. Changes in the
balances of claims liabilities during the past two years are as follows.
Claims Payable
Beginning of
Year
Current Year Claims
and Changes in
Estimates
Claim
Payments
Claims Payable
at End of Year
2018-19 $ 287,329 $ 2,763,160 $ 2,717,066 $ 333,423
2017-18 323,077 1,985,456 2,021,204 287,329
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
The Town contributes to the plans described below. The plans are component units of the State of
Arizona.
Aggregate Amounts. At June 30, 2019, the Town reported the following aggregate amounts
related to pensions and other postemployement benefits (OPEB) for all plans to which it
contributes.
Governmental
Activities
Business-type
Activities Total
Net OPEB assets 197,163$ 10,087$ 207,250$
Net pension liability 39,632,234 3,833,712 43,465,946
Net OPEB liability 54,017 14,431 68,448
Pension deferred outflows of resources 8,403,227 674,249 9,077,476
OPEB deferred outflows of resources 179,812 40,908 220,720
Pension deferred inflows of resources 2,101,874 452,133 2,554,007
OPEB deferred inflows of resources 257,030 30,514 287,544
Pension expense 5,624,547 196,343 5,820,890
OPEB expense 52,079 15,317 67,396
Page 73
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
The Town reported $4.0 million of pension and OPEB contributions as expenditures in the
governmental funds related to all plans to which it contributes.
A. Arizona State Retirement System
Plan Description. Town employees participate in the Arizona State Retirement System
(ASRS). The ASRS administers a cost-sharing multiple-employer defined benefit pension
plan, a cost-sharing multiple-employer defined benefit health insurance premium benefit
(OPEB) plan, and a cost-sharing multiple-employer defined benefit long-term disability
(OPEB) plan. The Arizona State Retirement System Board governs the ASRS according to the
provisions of A.R.S. Title 38, Chapter 5, Articles 2 and 2.1. The ASRS issues a publicly
available financial report that includes its financial statements and required supplementary
information. The report is available on the ASRS website at www.azasrs.gov.
Benefits Provided. The ASRS provides retirement, health insurance premium supplement,
long-term disability, and survivor benefits. State statute establishes benefit terms. Retirement
benefits are calculated on the basis of age, average monthly compensation, and service credit
as follows:
Retirement Initial
Membership Date:
Before July 1, 2011 On or After July 1, 2011
Years of service and
age required to
receive benefit
Sum of years and age equals 80
10 years, age 62
5 years, age 50*
Any years, age 65
30 years, age 55
25 years, age 60
10 years, age 62
5 years, age 50*
Any years, age 65
Final average salary is
based on
Highest 36 months of last
120 months
Highest 60 months of last
120 months
Benefit percent per
year of service
2.1% to 2.3% 2.1% to 2.3%
*With actuarially reduced benefits
Retirement benefits for members who joined the ASRS prior to September 13, 2013, are
subject to automatic cost-of-living adjustments based on excess investment earnings. Members
with a membership date on or after September 13, 2013, are not eligible for cost-of-living
adjustments. Survivor benefits are payable upon a member’s death. For retired members, the
survivor benefit is determined by the retirement benefit option chosen. For all other members,
the beneficiary is entitled to the member’s account balance that includes the member’s
contributions and employer’s contributions, plus interest earned.
Page 74
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
Retired and disabled members, with at least five years of credited service, are eligible to receive
health insurance premium benefits. The benefits are payable only with respect to allowable
health insurance premiums for which the member is responsible. For members with 10 or
more years of service, benefits range from $100 per month to $260 per month depending on
the age of the member and dependents. For members with five to nine years of service, the
benefits are the same dollar amounts as above multiplied by a vesting fraction based on
completed years of service.
Active members are eligible for a long-term disability benefit in the event they become unable
to perform their work. The monthly benefit is equal to two-thirds of their monthly earnings.
Members receiving benefits continue to earn service credit up to their normal retirement dates.
Members with long-term disability commencement dates after June 30, 1999 are limited to 30
years of service or the service on record as of the effective disability date, if their service is
greater than 30 years.
Contributions. In accordance with state statutes, annual actuarial valuations determine active
member and employer contribution requirements. The combined active member and employer
contribution rates are expected to finance the costs of benefits employees earn during the year,
with an additional amount to finance any unfunded accrued liability. For the current fiscal
year, active ASRS members were required by statute to contribute at the actuarially determined
rate of 11.80 percent (11.64 percent for retirement and 0.16 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 11.80 percent (11.18 percent for retirement, 0.46 percent for
health insurance premium benefit, and 0.16 percent for long-term disability) of the active
members’ annual covered payroll. The Town’s contributions for the year ended June 30, 2019
were as follows:
Employers are also required to pay an Alternate Contribution Rate (ACR), for retired members
who return to work in positions that would typically be filled by an employee who contributes
to ASRS. The Town was required by statute to contribute at the actuarially determined rate of
10.53 percent (10.41 for retirement, 0.06 percent for health insurance premium benefit, and
0.06 percent for long-term disability). ACR contributions are included in employer
contributions presented above.
Contributions
Pension $ 1,523,859
Health Insurance Premium 62,699
Long-Term Disability 21,809
Page 75
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
The Town’s pension and OPEB contributions are paid by the same funds as the employee’s
salary, with the largest component coming from the General Fund.
Pension and OPEB Assets/Liability. The net pension and OPEB assets/liability were
measured as of June 30, 2018. The total liability used to calculate the net assets or net liability
was determined using update procedures to roll forward the total liability from an actuarial
valuation as of June 30, 2017, to the measurement date of June 30, 2018. The total liability as
of June 30, 2018 reflects changes in actuarial assumptions based on the results of an actuarial
experience study for the five-year period ended June 30, 2016, including decreasing the
discount rate from 8.0 percent to 7.5 percent, changing the projected salary increases from
3-6.75 percent to 2.7-7.2 percent, decreasing the inflation rate from 3 percent to 2.3 percent,
and changing the mortality rates. The Town’s proportion of the net assets/liability was based
on the Town’s actual contributions to the applicable plan relative to the total of all participating
employers’ contributions to the plan for the year ended June 30, 2018.
At June 30, 2019, the Town reported the following amounts for its proportionate share of the
ASRS plans net assets/liability. In addition, at June 30, 2018, the Town’s percentage proportion
for each plan and the related change from its proportion measured as of June 30, 2016 was:
Pension/OPEB Expense and Deferred Outflows/Inflows of Resources. The Town has
deferred outflows and inflows of resources related to the net pension and OPEB assets/liability.
Certain changes in the net pension and OPEB assets/liability are recognized as pension and
OPEB expense over a period of time rather than the year of occurrence. For the year ended
June 30, 2019, the Town recognized pension and OPEB expense as follows:
Net
(Assets) Liability
Town
% Proportion
Increase
(Decrease)
Pension $ 18,237,813 0.131 0.006
Health Insurance Premium (47,528)0.132 0.006
Long-Term Disability 68,448 0.131 0.006
Expense
Pension $ 936,331
Health Insurance Premium 47,967
Long-Term Disability 25,077
Page 76
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
The Town reported deferred outflows of resources and deferred inflows of resources related to
pensions and OPEB from the following sources:
Deferred Outflows of Resources
Pension
Health
Insurance
Premium
Long-Term
Disability
Differences between expected and actual experience $ 502,437 $ $ 1,750
Changes of assumptions or other inputs 482,606 91,659 14,826
Changes in proportion and differences between
contributions and proportionate share of contributions 706,486 258 2,078
Contributions subsequent to the measurement date 1,523,859 62,699 21,809
Total $ 3,215,388 $ 154,616 $ 40,463
Deferred Inflows of Resources
Pension
Health
Insurance
Premium
Long-Term
Disability
Differences between expected and actual experience $ 100,542 $ 43,867 $
Changes of assumptions or other inputs 1,617,033
Net difference between projected and actual earnings
on pension investments 438,576 94,945 6,630
Changes in proportion and differences between
contributions and proportionate share of contributions 65 5
Total $ 2,156,151 $ 138,877 $ 6,635
Page 77
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
The amounts of deferred outflows of resources resulting from contributions subsequent to the
measurement date as reported in the table above will be recognized as an adjustment of the net
pension and OPEB assets/liability in the year ended June 30, 2020. Other amounts reported as
deferred outflows of resources and deferred inflows of resources related to pensions and OPEB
will be recognized in pension and OPEB expense as follows:
Actuarial Assumptions. The significant actuarial assumptions used to measure the total
pension and OPEB liability are as follows:
Pension OPEB
Actuarial valuation date June 30, 2017 June 30, 2017
Actuarial roll forward date June 30, 2018 June 30, 2018
Actuarial cost method Entry age normal Entry age normal
Investment rate of return 7.5% 7.5%
Projected salary increases 2.7-7.2% Not applicable
Inflation 2.3% 2.3%
Permanent base increases Included Not applicable
Mortality rates 2017 SRA Scale U-MP Health Ins: 2017 SRA
Scale U-MP, LTD:
2012 GLDT
Healthcare cost trend rate Not applicable Not applicable
The actuarial assumptions used in the June 30, 2017 valuation were based on the results of an
actuarial experience study for the five-year period ended June 30, 2013. The purpose of the
experience study was to review actual experience in relation to the actuarial assumptions in
effect. The ASRS Board adopted the experience study recommended changes which were
applied to the June 30, 2017, actuarial valuation.
Pension
Health
Insurance
Premium
Long-Term
Disability
2020 $ 536,397 $ (18,365) $ 488
2021 (139,047)(18,364)489
2022 (665,288)(18,364)489
2023 (196,684)1,869 2,265
2024 6,234 2,590
Thereafter 5,698
Page 78
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
The long-term expected rate of return on ASRS plan investments was determined to be 7.5
percent using a building-block method in which best-estimate ranges of expected future real
rates of return (expected returns, net of investment expense and inflation) are developed for
each major asset class. These ranges are combined to produce the long-term expected rate of
return by weighting the expected future real rates of return by the target asset allocation
percentage excluding any expected inflation.
On June 29, 2018, the ASRS Board approved updated strategic asset allocation targets, to be
effective July 2018. The target allocation and best estimates of geometric real rates of return
for each major asset class for all ASRS plans are summarized in the following table:
Asset Class
Target
Allocation
Long-Term
Expected Real
Rate of Return
Equity 50% 5.50%
Fixed income 30% 3.83
Real estate 20% 5.85
Total 100%
Discount Rate. The discount rate used to measure the ASRS total pension and OPEB liability
was 7.5 percent, which was a decrease of 0.5 from the discount rate used as of June 30, 2017.
The projection of cash flows used to determine the discount rate assumed that contributions
from participating employers will be made based on the actuarially determined rates based on
the ASRS Board’s funding policy, which establishes the contractually required rate under
Arizona statute. Based on those assumptions, the plans’ fiduciary net position was projected to
be available to make all projected future benefit payments of current plan members. Therefore,
the long-term expected rate of return on investments was applied to all periods of projected
benefit payments to determine the total pension and OPEB liability.
Page 79
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
Sensitivity of the Proportionate Share of the Net Pension and OPEB Assets/Liability to
Changes in the Discount Rate. The following presents the Town’s proportionate share of the
net pension and OPEB assets/liability calculated using the discount rate of 7.5 percent, as well
as what the proportionate share of the net pension and OPEB assets/liability would be if it were
calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher
than the current rate:
Pension and OPEB Plan Fiduciary Net Position. Detailed information about the pension and
OPEB plan’s fiduciary net position is available in the separately issued ASRS financial report.
The report is available on the ASRS website at www.azasrs.gov.
B. Public Safety Personnel Retirement System and Corrections Officer Retirement Plan
Plan Descriptions. Town public safety employees who are regularly assigned hazardous duty
participate in the Public Safety Personnel Retirement System (PSPRS) or employees who
became members on or after July 1, 2017, may participate in the Public Safety Personnel
Defined Contribution Retirement Plan (PSDCRP).The PSPRS administers an agent multiple-
employer defined benefit pension plan and an agent multiple-employer defined benefit health
insurance premium benefit (OPEB) plan. A nine-member board known as the Board of
Trustees and the participating local boards govern the PSPRS according to the provisions of
A.R.S. Title 38, Chapter 5, Article 4.
Town dispatchers participate in the Corrections Officer Retirement Plan (CORP) or the Public
Safety Personnel Defined Contribution Retirement Plan. The CORP administers an agent
multiple-employer defined benefit pension plan and an agent multiple-employer defined
benefit health insurance premium benefit (OPEB) plan for dispatchers (agent plans), which
were closed to new members as of July 1, 2018. Employees who were CORP members before
July 1, 2018, participate in CORP. Dispatcher employees who became members on or after
July 1, 2018 participate in PSDCRP. The PSPRS Board of Trustees described above and the
participating local boards govern CORP according to the provisions of A.R.S. Title 38, Chapter
5, Article 6.
Proportionate share of the net (assets) liability
1% Decrease
Current
Discount Rate 1% Increase
Rate 6.5% 7.5% 8.5%
Pension $ 25,998,422 $ 18,237,813 $ 11,753,950
Health Insurance Premium 168,404 (47,528) (231,460)
Long-Term Disability 77,571 68,448 59,597
Page 80
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
The PSPRS and CORP issue a publicly available financial report that includes their financial
statements and required supplementary information. The report is available on the PSPRS
website at www.psprs.com.
Benefits Provided. The PSPRS and CORP provide retirement, health insurance premium
supplement, disability, and survivor benefits. State statute establishes benefits terms. Certain
retirement, disability, and survivor benefits are calculated on the basis of age, average monthly
compensation, and service credit as follows. See the publicly available PSPRS and CORP
financial report for additional benefits information.
Ranges of benefits based on
initial membership date:
Years of service and age
required to receive benefit
15 to 25 years of service, age 52.5 to 62
Final average salary is based on Highest 36 to 60 consecutive months, of last 15 to 20 years
Normal retirement % of per year credit services varies, not to exceed 80%
Accidental disability retirement 50% or normal retirement, whichever is greater
Survivor benefit:
Retired members 80% to 100% of retired member’s pension benefit
Active members 80% of accidental disability retirement benefit or 100% of average
monthly compensation if death was the result of injuries received
on the job
Retirement and survivor benefits are subject to automatic cost-of-living adjustments based on
inflation. PSPRS also provides temporary disability benefits of 50 percent of the member's
compensation for up to 12 months.
Health insurance premium benefits are available to retired or disabled members with 5 years of
credited service. The benefits are payable only with respect to allowable health insurance
premiums for which the member is responsible. Benefits range from $100 per month to $260 per
month depending on the age of the member and dependents.
Page 81
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
Employees Covered by Benefit Terms. At June 30, 2019, the following employees were
covered by the agent plan’s benefit terms:
Contributions. State statutes establish the pension contribution requirements for active PSPRS
and CORP employees. In accordance with state statutes, annual actuarial valuations determine
employer contribution requirements for PSPRS and CORP pension and health insurance
premium benefits. The combined active member and employer contribution rates are expected
to finance the costs of benefits employees earn during the year, with an additional amount to
finance any unfunded accrued liability. Contributions rates for the year ended June 30, 2019, are
indicated below. Rates are a percentage of active members’ annual covered payroll.
Employers are also required to pay an Alternate Contribution Rate (ACR), for retired members
who return to work in positions that would typically be filled by an employee who contributes
to PSPRS or CORP. The Town was required by statute to contribute at the actuarially determined
rate of 22.42 percent for the PSPRS and 54.36 percent for the CORP. ACR contributions are
included in employer contributions presented above.
PSPRS - Police CORP - Dispatchers
Pension
Health
Insurance Pension
Health
Insurance
Retirees and beneficiaries 37 37 5 5
Inactive, non-retired members 15 6 3 0
Active members 90 90 4 4
Total 142 133 12 9
PSPRS - Police
CORP -
Dispatchers
Active members – pension 7.65% to 11.65%7.96%
Town:
Pension 36.71%61.36%
Health insurance 0.33%
Page 82
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
The contributions to the pension and OPEB plans for the year ended were:
The Town’s pension and OPEB contributions are paid by the same funds as the employee’s
salary, with the largest component coming from the General Fund.
Pension and OPEB Assets/Liability. At June 30, 2019, the Town reported the following assets
and liabilities.
The net pension and OPEB assets/liability were measured as of June 30, 2018. The total liability
used to calculate the net asset or liability was determined by an actuarial valuation as of that date.
The total CORP pension liabilities as of June 30, 2018, reflect statutory changes in benefit terms
for automatic cost-of-living adjustments. The basis for cost-of-living adjustments was changed
from excess investment earnings to the change in the consumer price index, limited to a
maximum annual increase of two percent.
Contributions
PSPRS - Police
CORP -
Dispatchers
Pension $ 2,548,626 $ 124,108
Health insurance 22,911
Net (Assets) Liability
PSPRS - Police
CORP -
Dispatchers
Pension 23,592,498$ 1,635,635$
Health insurance (142,355) (17,367)
Page 83
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
Actuarial Assumptions. The significant actuarial assumptions used to measure the total
pension/OPEB liability for both the PSPRS and CORP are as follows:
Actuarial assumptions used in the June 30, 2018, valuation were based on the results of an
actuarial experience study for the 5-year period ended June 30, 2016.
The long-term expected rate of return on PSPRS and CORP plan investments was determined to
be 7.40 percent using a building-block method in which best-estimate ranges of expected future
real rates of return (expected returns, net of plan investment expenses and inflation) are
developed for each major asset class. The target allocation and best estimates of geometric real
rates of return for each major asset class are summarized in the following table:
Asset Class
Target
Allocation
Long-Term
Expected Real
Rate of Return
Short-term investments 2% 0.25%
Risk parity 4% 5.00%
Fixed income 5% 1.25%
Real assets 9% 4.52%
GTS 12% 3.96%
Private credit 16% 6.75%
Real estate 10% 3.75%
Private equity 12% 5.83%
Non-U.S. equity 14% 8.70%
U.S. equity 16% 7.60%
Total 100%
Pension OPEB
Actuarial valuation date June 30, 2018 June 30, 2018
Actuarial cost method Entry age normal Entry age normal
Investment rate of return 7.4%7.4%
Projected salary increases 3.5%Not applicable
Inflation 2.5%Not applicable
Cost-of-living adjustment Included Not applicable
Mortality rates RP-2014 tables using MP-2016
improvement scale with
adjustments to match current
experience
RP-2014 tables using MP-2016
improvement scale with
adjustments to match current
experience
Healthcare cost trend rate Not applicable Not applicable
Page 84
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
Changes in Net (Assets)/Liability
Pension
Increase (Decrease)
Health Insurance
Increase (Decrease)
PSPRS - Police
Total
(Assets)
Liability
Plan
Fiduciary
Net Position
Net
(Assets)
Liability
Total
(Assets)
Liability
Plan
Fiduciary
Net Position
Net
(Assets)
Liability
Balances at June 30, 2018 53,037,566$ 30,883,680$ 22,153,886$ 1,056,886$ 1,184,964$ (128,078)$
Changes for the year:
Service cost 1,515,028 1,515,028 22,788 22,788
Interest on the total liability 3,922,057 3,922,057 77,943 77,943
Differences between expected and
actual experience in the
measurement of the liability 136,020 136,020 (21,658) (21,658)
Contributions – employer 1,278,293 (1,278,293) 12,442 (12,442)
Contributions – employee 622,233 (622,233)
Net investment income 2,159,685 (2,159,685) 82,158 (82,158)
Benefit payments, including refunds
of employee contributions (1,588,615) (1,588,615) (29,984) (29,984)
Administrative expense (33,570) 33,570 (1,250) 1,250
Other changes 107,852 (107,852)
Net changes 3,984,490 2,545,878 1,438,612 49,089 63,366 (14,277)
Balances at June 30, 2019 57,022,056$ 33,429,558$ 23,592,498$ 1,105,975$ 1,248,330$ (142,355)$
CORP - Dispatchers
Balances at June 30, 2018 3,077,649$ 1,260,798$ 1,816,851$ 50,556$ 66,987$ (16,431)$
Changes for the year:
Service cost 34,542 34,542 254 254
Interest on the total liability 223,773 223,773 3,622 3,622
Changes of benefit terms (175,686) (175,686)
Differences between expected and
actual experience in the
measurement of the liability (73,061) (73,061) (160) (160)
Contributions – employer 87,566 (87,566)
Contributions – employee 15,976 (15,976)
Net investment income 89,317 (89,317) 4,724 (4,724)
Benefit payments, including refunds
of employee contributions (141,910) (141,910) (3,464) (3,464)
Administrative expense (2,051) 2,051 (71) 71
Other changes (24) 24 (1) 1
Net changes (132,342) 48,874 (181,216)252 1,188 (936)
Balances at June 30, 2019 2,945,307$ 1,309,672$ 1,635,635$ 50,808$ 68,175$ (17,367)$
Page 85
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
Discount Rate. At June 30, 2018, the discount rate used to measure the total pension and
OPEB liability was 7.4 percent, which was the same as the discount rate used as of
June 30, 2017.
The projection of cash flows used to determine the PSPRS and CORP discount rates assumed
that plan member contributions will be made at the current contribution rate and that employer
contributions will be made at rates equal to the difference between the actuarially determined
contribution rate and the member rate. Based on those assumptions, the plans’ fiduciary net
position was projected to be available to make all projected future benefit payments of current
plan members. Therefore, the long-term expected rate of return on plan investments was
applied to all periods of projected benefit payments for these plans to determine the total
pension and OPEB liability.
Sensitivity of the Net Pension and OPEB Assets (Liability) to Changes in the Discount
Rate. The following presents the Town’s net pension and OPEB assets (liability) calculated
using the discount rates noted above, as well as what the net assets (liability) would be if it
were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point
higher than the current rate:
Plan Fiduciary Net Position. Detailed information about the plans’ fiduciary net position is
available in the separately issued PSPRS and CORP financial report. The report is available
on the PSPRS website at www.psprs.com.
1% Decrease Current Discount Rate 1% Increase
PSPRS - Police:
Rate 6.40%7.40%8.40%
Net pension (assets) liability 32,257,499$ 23,592,498$ 16,614,957$
Net OPEB (assets) liability 4,133 (142,355) (263,531)
CORP - Dispatchers
Rate 6.40%7.40%8.40%
Net pension (assets) liability 1,999,169$ 1,635,635$ 1,335,714$
Net OPEB (assets) liability (12,337) (17,367) (21,649)
Page 86
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
Expense. For the year ended June 30, 2019, the Town recognized the following as pension and
OPEB expense:
Deferred Outflows/Inflows of Resources. At June 30, 2019, the Town reported deferred
outflows of resources and deferred inflows of resources related to pensions and OPEB from
the following sources:
Expense
PSPRS - Police
CORP -
Dispatchers
Pension $ 4,857,320 $ 27,241
Health insurance (4,711) (937)
Pension Health Insurance
PSPRS - Police:
Deferred
Outflows of
Resources
Deferred Inflows
of Resources
Deferred
Outflows of
Resources
Deferred Inflows
of Resources
Differences between expected
and actual experience $ 731,189 $ 346,502 $ 38,444$
Changes of assumptions or other inputs 2,044,933 76,692
Net difference between projected and
actual earnings on plan investments 368,494 23,399
Contributions subsequent to the
measurement date 2,548,626 22,911
Total 5,693,242$ 346,502$ 22,911$ 138,535$
CORP - Dispatchers
Differences between expected
and actual experience $ 426 $ 51,354 $ 2,730 $ 117
Changes of assumptions or other inputs 28,688 1,835
Net difference between projected and
actual earnings on plan investments 15,624 1,545
Contributions subsequent to the
measurement date 124,108
Total 168,846$ 51,354$ 2,730$ 3,497$
Page 87
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 17 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS
The amounts of deferred outflows of resources resulting from contributions subsequent to the
measurement date as reported in the table above will be recognized as an adjustment of the net
pension and OPEB assets/liability in the year ended June 30, 2020. Other amounts reported as
deferred outflows of resources and deferred inflows of resources related to pensions and OPEB
will be recognized in pension and OPEB expense as follows:
PSPDCRP Plan. Public safety employee who are not members of PSPRS or CORP participate
in the PSPDCRP. The PSPDCRP is a defined contribution pension plan. The PSPRS Board of
Trustees governs the PSPDCRP according to the provisions of A.R.S. Title 38, Chapter 5,
Article 4.1. Benefit terms, including contribution requirements, are established by State statute.
For the year ended June 30, 2019, active PSPDCRP members were required by statute to
contribute at nine percent of the members’ annual covered payroll, and the Town was required
by statute to contribute nine percent of active members’ annual covered payroll to an individual
employee account. Employees are immediately vested in their own contributions and the
earnings on those contributions. Employees vest in a portion of the Town’s contributions each
year as set forth in statute. The plan retains nonvested Town contributions when forfeited
because of employment terminations. For the year ended June 30, 2019, the Town recognized
pension expense of $43,893.
NOTE 18 – TAX ABATEMENTS
The Town enters into sales tax abatement agreements with local businesses under
A.R.S. §9-500.11. Under the statute, a city or town may enter into a retail development tax
incentive agreement for the purpose of economic development activities. To be eligible, the
tax incentive agreement must be expected to raise more revenue than the amount of the
incentive within the duration of the agreement, and in the absence of a tax incentive, the retail
business facility would not locate in the city or town in the same time, place or manner.
PSPRS - Police CORP - Dispatchers
Year Ending June 30:Pension
Health
Insurance Pension
Health
Insurance
2020 1,436,381$ (34,655)$ 15,525$ (59)$
2021 928,991 (34,655) (13,077) (178)
2022 243,000 (34,657) (9,562) (552)
2023 157,477 (25,568) 498 22
2024 20,751 (5,762)
Thereafter 11,514 (3,238)
Page 88
TOWN OF ORO VALLEY, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2019
NOTE 18 – TAX ABATEMENTS
For the fiscal year ended June 30, 2019, the Town abated sales taxes totaling $379,323. Of this
amount, $379,016 was a 45 percent sales tax abatement to a developer, for developing a
regional lifestyle and entertainment retail shopping center to create additional jobs, generate
additional sales tax revenue, and provide diverse commercial and retail service opportunities
to the Town’s residents.
Page 89
(This page intentionally left blank)
Page 90
REQUIRED SUPPLEMENTARY INFORMATION
Page 91
(This page intentionally left blank)
Page 92
Revenues:Sales taxes
Franchise taxes
Intergovernmental
Licenses, fees & permits
Fines, forfeitures & penalties
Charges for services
Investment income:
Interest
Net increase in the fair value of investments
Other
Total revenues
Expenditures:
Current -
General government
Public safety
Transit
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, as restated
Fund balances (deficits), end of year
Budgeted
Amounts
Original & Final
$ 18,752,418
685,000
14,229,437
2,136,096
120,000
2,408,862
150,000
306,750
38,788,563
15,459,739
16,404,325
1,185,316
3,480,286
754,375
37,284,041
1,504,522
120,000
(4,700,514)
(4,580,514)
(3,075,992)
$(3,075,992)
Actual
$ 20,454,936
635,494
13,773,704
2,356,619
165,669
2,519,565
519,300
128,946
370,120
40,924,353
14,424,463
16,050,890
1,150,322
3,251,463
570,914
35,448,052
5,476,301
120,000
(4,150,514)
(4,030,514)
1,445,787
18,125,878
$19,571,665
Variance with
Final Budget
Positive
(Negative)
$ 1,702,518
(49,506)
(455,733)
220,523
45,669
110,703
369,300
128,946
63,370
2,135,790
1,035,276
353,435
34,994
228,823
183,461
1,835,989
3,971,779
550,000
550,000
4,521,779
18,125,878
$22,647,657
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND
YEAR ENDED JUNE 30, 2019
See accompanying notes to this schedule.
Page 93
Revenues:Sales taxes
Charges for services
Investment income:
Interest
Net increase in the fair value of investments
Other
Total revenues
Expenditures:
Current -
Culture and recreation
Capital outlay
Debt service -
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfers out
Total other financing sources (uses)
Changes in fund balances
Fund balances (deficits), beginning of year, as
restated
Fund balances, end of year
Budgeted
Amounts
Original & Final
$ 2,384,558
4,253,088
19,502
6,657,148
6,057,701
50,950
206,113
30,298
6,345,062
312,086
(253,999)
(253,999)
58,087
$58,087
Actual
$ 2,469,464
4,266,744
7,601
8,580
6,752,389
5,629,148
125,987
206,113
30,298
5,991,546
760,843
(253,999)
(253,999)
506,844
(10,912)
$495,932
Variance with
Final Budget
Positive
(Negative)
$ 84,906
13,656
7,601
8,580
(19,502)
95,241
428,553
(75,037)
353,516
448,757
448,757
(10,912)
$437,845
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
COMMUNITY CENTER
YEAR ENDED JUNE 30, 2019
See accompanying notes to this schedule.
Page 94
2019 2018 2017 2016 2015
Measurement date June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014
Town's proportion of the net pension
(assets) liability 0.13% 0.12% 0.12% 0.12% 0.11%
Town's proportionate share of the net
pension (assets) liability 18,237,813$ 19,453,870$ 20,050,356$ 18,575,537$ 16,642,712$
Town's covered payroll 13,018,275$ 12,193,145$ 11,857,622$ 11,826,486$ 11,086,887$
Town's proportionate share of the net
pension (assets) liability as a percentage
of its covered payroll 140.09% 159.55% 169.09% 157.07% 150.11%
Plan fiduciary net position as a
percentage of the total pension liability 73.40% 69.92% 67.06% 68.35% 69.49%
2014 2013 2012 2011 2010
Measurement date 00000
Town's proportion of the net pension
(assets) liability 0.00% 0.00% 0.00% 0.00% 0.00%
Town's proportionate share of the net
pension (assets) liability $ $ $ $ $
Town's covered payroll $ $ $ $ $
Town's proportionate share of the net
pension (assets) liability as a percentage
of its covered payroll #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Plan fiduciary net position as a
percentage of the total pension liability 0.00% 0.00% 0.00% 0.00% 0.00%
NOTE:
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF THE PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
LAST FIVE FISCAL YEARS
ARIZONA STATE RETIREMENT SYSTEM
The pension and OPEB schedules in the required supplementary information are intended to show information for ten
years, and additional information will be displayed as it becomes available.
See accompanying notes to this schedule.
Page 95
2019 2018 2017 2016
Measurement date June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015
Total pension liability
Service cost $ 1,515,028 $ 1,638,736 $ 1,363,768 $ 1,224,807
Interest 3,922,057 3,615,210 3,185,633 2,842,514
Changes of benefit terms 435,327 3,164,555
136,020 247,905 (548,533) 1,312,293
Changes of assumptions or other inputs 747,786 1,902,904
(1,588,615) (2,061,668) (1,106,968) (1,049,346)
Net change in total pension liability 3,984,490 4,623,296 7,961,359 4,330,268
Total pension liability—beginning 53,037,566 48,414,270 40,452,911 36,122,643
Total pension liability—ending $ 57,022,056 $ 53,037,566 $ 48,414,270 $ 40,452,911
Plan fiduciary net position
Contributions—employer $ 1,278,293 $ 1,811,735 $ 1,505,274 $ 1,669,125
Contributions—employee 622,233 905,024 840,020 794,478
Net investment income 2,159,685 3,228,386 154,181 874,562
(1,588,615) (2,061,668) (1,106,968) (1,049,346)
Administrative expense (33,570) (28,966) (22,586) (21,722)
Other 107,852 19,066 38,225 93,803
Net change in plan fiduciary net position 2,545,878 3,873,577 1,408,146 2,360,900
Plan fiduciary net position—beginning 30,883,680 27,010,103 25,601,957 23,241,057
Plan fiduciary net position—ending $ 33,429,558 $ 30,883,680 $ 27,010,103 $ 25,601,957
Net pension (assets) liability—ending $ 23,592,498 $ 22,153,886 $ 21,404,167 $ 14,850,954
58.63% 58.23% 55.79% 63.29%
Covered payroll $ 7,209,721 $ 7,199,177 $ 7,355,092 $ 7,004,292
327.23%307.73%291.01%212.03%
NOTE:
See accompanying notes to this schedule.
Differences between expected and actual
experience
Benefit payments, including refunds of
employee contributions
Benefit payments, including refunds of
employee contributions
Plan fiduciary net position as a
percentage of the total pension liability
Net pension (assets) liability as a
percentage of covered payroll
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM - POLICE
LAST FIVE FISCAL YEARS
The pension and OPEB schedules in the required supplementary information are intended to show information for ten
years, and additional information will be displayed as it becomes available.
Page 96
2015 2014 2013 2012 2011 2010
June 30, 2014 00000
$ 1,157,832 $ $ $ $ $
2,408,825
444,387
(356,776)
3,014,125
(1,304,993)
5,363,400
30,759,243
$ 36,122,643 $ $ $ $ $
$ 1,211,218 $ $ $ $ $
698,036
2,774,126
(1,304,993)
(22,342)
(93,142)
3,262,903
19,978,154
$ 23,241,057 $ $ $ $ $
$ 12,881,586 $ $ $ $ $
64.34%#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!
$ 6,021,786 $ $ $ $ $
213.92%#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!
Page 97
2019 2018 2017 2016
Measurement date June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015
Total pension liability
Service cost $ 34,542 $ 32,541 $ 32,257 $ 52,754
Interest 223,773 185,568 182,053 174,403
Changes of benefit terms (175,686) 395,457 14,504
(73,061) (12,524) (12,392) 14,554
Changes of assumptions or other inputs 85,035 64,514
(141,910) (132,788) (119,180) (148,851)
Net change in total pension liability (132,342) 553,289 161,756 92,860
Total pension liability—beginning 3,077,649 2,524,360 2,362,604 2,269,744
Total pension liability—ending $ 2,945,307 $ 3,077,649 $ 2,524,360 $ 2,362,604
Plan fiduciary net position
Contributions—employer $ 87,566 $ 77,331 $ 52,583 $ 64,005
Contributions—employee 15,976 18,502 18,982 30,272
Net investment income 89,317 136,094 7,237 45,101
(141,910) (132,788) (119,180) (148,851)
Administrative expense (2,051) (1,591) (1,423) (1,490)
Other (24) (8) (8) (926)
Net change in plan fiduciary net position 48,874 97,540 (41,809) (11,889)
Plan fiduciary net position—beginning 1,260,798 1,163,258 1,205,067 1,216,956
Plan fiduciary net position—ending $ 1,309,672 $ 1,260,798 $ 1,163,258 $ 1,205,067
Net pension (assets) liability—ending $ 1,635,635 $ 1,816,851 $ 1,361,102 $ 1,157,537
44.47%40.97%46.08%51.01%
Covered payroll $ 201,687 $ 233,934 $ 245,274 $ 380,303
810.98%776.65%554.93%304.37%
NOTE:
See accompanying notes to this schedule.
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM - DISPATCHERS
LAST FIVE FISCAL YEARS
Differences between expected and actual
experience
The pension and OPEB schedules in the required supplementary information are intended to show information for ten
years, and additional information will be displayed as it becomes available.
Plan fiduciary net position as a
percentage of the total pension liability
Net pension (assets) liability as a
percentage of covered payroll
Benefit payments, including refunds of
employee contributions
Benefit payments, including refunds of
employee contributions
Page 98
2015 2014 2013 2012 2011 2010
June 30, 2014 00000
$ 53,985 $ $ $ $ $
154,443
29,545
(48,767)
174,536
(68,874)
294,868
1,974,876
$ 2,269,744 $ $ $ $ $
$ 63,179 $ $ $ $ $
32,699
146,441
(68,874)
(1,151)
172,294
1,044,662
$ 1,216,956 $ $ $ $ $
$ 1,052,788 $ $ $ $ $
53.62%#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!
$ 387,839 $ $ $ $ $
271.45%#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!
Page 99
2019 2018 2017 2016
Arizona State Retirement System:
Actuarially determined contribution 1,523,859$ 1,418,992$ 1,314,421$ 1,286,552$
Contributions in relation to the
actuarially determined contribution 1,523,859 1,418,992 1,314,421 1,286,552
Contribution deficiency (excess) $ $ $ $
Town's covered payroll 13,630,224$ 13,018,275$ 12,193,145$ 11,857,622$
Contributions as a percentage
of covered payroll 11.18%10.90%10.78%10.85%
Public Safety Personnel Retirement System - Police:
Actuarially determined contribution 2,548,626$ 2,485,191$ 1,679,568$ 1,554,131$
Contributions in relation to the
actuarially determined contribution 2,548,626 2,485,191 1,679,568 1,554,131
Contribution deficiency (excess) $ $ $ $
Town's covered payroll 6,942,593$ 7,209,721$ 7,199,177$ 7,355,092$
Contributions as a percentage
of covered payroll 36.71%34.47%23.33%21.13%
Public Safety Personnel Retirement System - Dispatchers:
Actuarially determined contribution 124,108$ 87,996$ 77,830$ 54,083$
Contributions in relation to the
actuarially determined contribution 124,108 87,996 77,830 54,083
Contribution deficiency (excess) $ $ $ $
Town's covered payroll 202,262$ 201,687$ 233,934$ 245,274$
Contributions as a percentage
of covered payroll 61.36%43.63%33.27%22.05%
NOTE:
See accompanying notes to this schedule.
ALL PENSION PLANS
LAST FIVE FISCAL YEARS
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF PENSION CONTRIBUTIONS
The pension and OPEB schedules in the required supplementary information are intended to show information for ten
years, and additional information will be displayed as it becomes available.
Page 100
2015 2014 2013 2012 2011 2010
1,207,362$ $ $ $ $ $
1,207,362
$ $ $ $ $ $
11,086,887$ $ $ $ $ $
10.89%#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!
1,354,630$ $ $ $ $ $
1,354,630
$ $ $ $ $ $
7,004,292$ $ $ $ $ $
19.34%#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!
64,005$ $ $ $ $ $
64,005
$ $ $ $ $ $
380,303$ $ $ $ $ $
16.83%#DIV/0!#DIV/0!#DIV/0!#DIV/0!#DIV/0!
Page 101
2019 2018 2017 2016 2015
Measurement date June 30, 2018 June 30, 2017 000
Town's proportion of the net OPEB
(assets) liability 0.13% 0.13%0.00% 0.00% 0.00%
Town's proportionate share of the net
OPEB (assets) liability (47,528)$ (68,769)$ $ $ $
Town's covered payroll 13,018,275$ 12,193,145$ $ $ $
Town's proportionate share of the net
OPEB (assets) liability as a percentage
of its covered payroll (0.37)% (0.56)%#DIV/0! #DIV/0! #DIV/0!
Plan fiduciary net position as a
percentage of the total OPEB liability 102.20% 103.57%0.00% 0.00% 0.00%
2014 2013 2012 2011 2010
Measurement date 00000
Town's proportion of the net OPEB
(assets) liability 0.00% 0.00% 0.00% 0.00% 0.00%
Town's proportionate share of the net
OPEB (assets) liability $ $ $ $ $
Town's covered payroll $ $ $ $ $
Town's proportionate share of the net
OPEB (assets) liability as a percentage
of its covered payroll #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Plan fiduciary net position as a
percentage of the total OPEB liability 0.00% 0.00% 0.00% 0.00% 0.00%
NOTE:
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF THE PROPORTIONATE SHARE OF THE NET OPEB LIABILITY
LAST TWO FISCAL YEARS
ARIZONA STATE RETIREMENT SYSTEM - HEALTH INSURANCE PREMIUM
The pension and OPEB schedules in the required supplementary information are intended to show information for ten
years, and additional information will be displayed as it becomes available.
See accompanying notes to this schedule.
Page 102
2019 2018 2017 2016 2015
Measurement date June 30, 2018 June 30, 2017 000
Town's proportion of the net OPEB
(assets) liability 0.13% 0.13%0.00% 0.00% 0.00%
Town's proportionate share of the net
OPEB (assets) liability 68,448$ 45,386$ $ $ $
Town's covered payroll 13,018,275$ 12,193,145$ $ $ $
Town's proportionate share of the net
OPEB (assets) liability as a percentage
of its covered payroll 0.53% 0.37%#DIV/0! #DIV/0! #DIV/0!
Plan fiduciary net position as a
percentage of the total OPEB liability 77.83% 84.44%0.00% 0.00% 0.00%
2014 2013 2012 2011 2010
Measurement date 00000
Town's proportion of the net OPEB
(assets) liability 0.00% 0.00% 0.00% 0.00% 0.00%
Town's proportionate share of the net
OPEB (assets) liability $ $ $ $ $
Town's covered payroll $ $ $ $ $
Town's proportionate share of the net
OPEB (assets) liability as a percentage
of its covered payroll #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Plan fiduciary net position as a
percentage of the total OPEB liability 0.00% 0.00% 0.00% 0.00% 0.00%
NOTE:The pension and OPEB schedules in the required supplementary information are intended to show information for ten
years, and additional information will be displayed as it becomes available.
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF THE PROPORTIONATE SHARE OF THE NET OPEB LIABILITY
ARIZONA STATE RETIREMENT SYSTEM - LONG-TERM DISABILITY
LAST TWO FISCAL YEARS
See accompanying notes to this schedule.
Page 103
2019 2018 2017 2016
Measurement date June 30, 2018 June 30, 2017 00
Total OPEB liability
Service cost $ 22,788 $ 26,772 $ $
Interest 77,943 83,347
Changes of benefit terms 3,280
(21,658) (29,508)
Changes of assumptions or other inputs (113,968)
Benefit payments (29,984) (21,892)
Net change in total OPEB liability 49,089 (51,969)
Total OPEB liability—beginning 1,056,886 1,108,855
Total OPEB liability—ending $ 1,105,975 $ 1,056,886 $ $
Plan fiduciary net position
Contributions—employer $ 12,442 $ 25,271 $ $
Contributions—employee
Net investment income 82,158 124,864
Benefit payments (29,984) (21,892)
Administrative expense (1,250) (1,105)
Other
Net change in plan fiduciary net position 63,366 127,138
Plan fiduciary net position—beginning 1,184,964 1,057,826
Plan fiduciary net position—ending $ 1,248,330 $ 1,184,964 $ $
Net OPEB (assets) liability—ending $ (142,355) $ (128,078) $ $
112.87% 112.12%#DIV/0! #DIV/0!
Covered payroll $ 7,209,721 $ 7,199,177 $ $
(1.97)% (1.78)%#DIV/0! #DIV/0!
NOTE:
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS
PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM - POLICE - HEALTH INSURANCE PREMIUM
LAST TWO FISCAL YEARS
Net OPEB (assets) liability as a
percentage of covered payroll
The pension and OPEB schedules in the required supplementary information are intended to show information for ten
years, and additional information will be displayed as it becomes available.
Differences between expected and actual
experience
Plan fiduciary net position as a
percentage of the total OPEB liability
See accompanying notes to this schedule.
Page 104
2019 2018 2017 2016
Measurement date June 30, 2018 June 30, 2017 00
Total OPEB liability
Service cost $ 254 $ 372 $ $
Interest 3,622 3,505
Changes of benefit terms
(160) 5,830
Changes of assumptions or other inputs (3,921)
Benefit payments (3,464) (3,567)
Net change in total OPEB liability 252 2,219
Total OPEB liability—beginning 50,556 48,337
Total OPEB liability—ending $ 50,808 $ 50,556 $ $
Plan fiduciary net position
Contributions—employer $ $ $ $
Contributions—employee
Net investment income 4,724 7,324
Benefit payments (3,464) (3,567)
Administrative expense (71) (64)
Other (1)
Net change in plan fiduciary net position 1,188 3,693
Plan fiduciary net position—beginning 66,987 63,294
Plan fiduciary net position—ending $ 68,175 $ 66,987 $ $
Net OPEB (assets) liability—ending $ (17,367) $ (16,431) $ $
134.18% 132.50%#DIV/0! #DIV/0!
Covered payroll $ 201,687 $ 233,934 $ $
(8.61)% (7.02)%#DIV/0! #DIV/0!
NOTE:
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS
PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM - DISPATCHERS - HEALTH INSURANCE PREMIUM
LAST TWO FISCAL YEARS
The pension and OPEB schedules in the required supplementary information are intended to show information for ten
years, and additional information will be displayed as it becomes available.
Differences between expected and actual
experience
Plan fiduciary net position as a
percentage of the total OPEB liability
Net OPEB (assets) liability as a
percentage of covered payroll
See accompanying notes to this schedule.
Page 105
2019 2018 2017 2016
Arizona State Retirement System - Health Insurance Premium:
Actuarially determined contribution 62,699$ 57,280$ $ $
Contributions in relation to the
actuarially determined contribution 62,699 57,280
Contribution deficiency (excess) $ $ $ $
Town's covered payroll 13,630,224$ 13,018,275$ $ $
Contributions as a percentage
of covered payroll 0.46% 0.44%#DIV/0! #DIV/0!
Arizona State Retirement System - Long-Term Disability:
Actuarially determined contribution 21,809$ 20,829$ $ $
Contributions in relation to the
actuarially determined contribution 21,809 20,829
Contribution deficiency (excess) $ $ $ $
Town's covered payroll 13,630,224$ 13,018,275$ $ $
Contributions as a percentage
of covered payroll 0.16% 0.16%#DIV/0! #DIV/0!
Public Safety Personnel Retirement System - Police - Health Insurance Premium:
Actuarially determined contribution 22,911$ 27,397$ $ $
Contributions in relation to the
actuarially determined contribution 22,911 27,397
Contribution deficiency (excess) $ $ $ $
Town's covered payroll 6,942,593$ 7,209,721$ $ $
Contributions as a percentage
of covered payroll 0.33% 0.38%#DIV/0! #DIV/0!
Public Safety Personnel Retirement System - Dispatchers - Health Insurance Premium:
Actuarially determined contribution $ $ $ $
Contributions in relation to the
actuarially determined contribution
Contribution deficiency (excess) $ $ $ $
Town's covered payroll 202,262$ 201,687$ $ $
Contributions as a percentage
of covered payroll 0.00%0.00%#DIV/0!#DIV/0!
NOTE:
ALL OPEB PLANS
LAST TWO FISCAL YEARS
The pension and OPEB schedules in the required supplementary information are intended to show information for ten
years, and additional information will be displayed as it becomes available.
TOWN OF ORO VALLEY, ARIZONA
SCHEDULE OF OPEB CONTRIBUTIONS
See accompanying notes to this schedule.
Page 106
TOWN OF ORO VALLEY, ARIZONA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2019
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.
NOTE 2 – PENSION AND OPEB PLAN SCHEDULES
Actuarial Assumptions for Valuations Performed. The information presented in the
required supplementary schedules was determined as part of the actuarial valuations at the
dates indicated, which is the most recent actuarial valuation. The actuarial assumptions used
are disclosed in the notes to the financial statements.
Factors that Affect Trends. The actuarial assumptions used in the June 30, 2017, valuation
for ASRS were based on the results of an actuarial experience study for the five-year period
ended June 30, 2016. The purpose of the experience study was to review actual experience in
relation to the actuarial assumptions in effect. The ASRS Board adopted the experience study
recommended changes which were applied to the June 30, 2017, actuarial valuation.
The actuarial assumptions used in the June 30, 2018, valuation for PSPRS were based on the
results of an actuarial experience study for the 5-year period ended June 30, 2016. Several
actuarial assumptions were adjusted as a result of the study, including decreasing wage
inflation from 4.0% to 3.5%.
Arizona courts have ruled that provisions of a 2011 law that changed the mechanism for
funding permanent pension benefit increases and increased employee pension contribution
rates were unconstitutional. As a result, the PSPRS changed benefit terms to reflect the prior
mechanism for funding permanent benefit increases for those members and revised actuarial
assumptions to explicitly value future permanent benefit increases. These changes increased
the PSPRS-required contributions beginning in fiscal year 2019 for members who retired or
will retire after the law’s effective date.
In addition, the Town refunded excess employee contributions to PSPRS members. PSPRS
allowed the Town to reduce its actual employer contributions for the refund amounts. As a
result, the Town’s pension contributions were less than the actuarially or statutorily determined
contributions for 2018.
Page 107
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Page 108
COMBINING AND INDIVIDUAL
FUND FINANCIAL STATEMENTS
AND SCHEDULES
Page 109
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Page 110
GOVERNMENTAL FUNDS
Page 111
ASSETS
Cash and cash equivalents
Accounts receivable
Intergovernmental receivable
Special assessments
Total assets
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCES
Liabilities:
Accounts payable
Accrued wages and benefits
Unearned revenue
Total liabilities
Deferred inflows of resources:
Unavailable revenues - special assessments
Fund balances:
Restricted
Committed
Total fund balances
Total liabilities, deferred inflows of resources
and fund balances
Special Revenue
$ 1,107,475
60,041
322,084
$1,489,600
$ 328,063
65,268
393,331
1,096,269
1,096,269
$1,489,600
Debt Service
$ 193,359
335,000
$528,359
$ 1,250
1,250
335,000
192,109
192,109
$528,359
Capital Projects
$ 4,247,692
$4,247,692
$ 31,261
302,872
334,133
3,897,841
15,718
3,913,559
$4,247,692
TOWN OF ORO VALLEY, ARIZONA
COMBINING BALANCE SHEET - ALL NON-MAJOR GOVERNMENTAL FUNDS - BY FUND TYPE
JUNE 30, 2019
Page 112
Total Non-Major
Governmental
Funds
$ 5,548,526
60,041
322,084
335,000
$6,265,651
$ 360,574
65,268
302,872
728,714
335,000
5,186,219
15,718
5,201,937
$6,265,651
Page 113
Revenues:Development impact fees
Special assessments
Intergovernmental
Licenses, fees & permits
Fines, forfeitures & penalties
Investment income:
Interest
Net increase in the fair value of investments
Other
Total revenues
Expenditures:
Current -
Public safety
Highway and streets
Capital outlay
Debt service -
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Special Revenue
$
3,690,836
31,213
81,614
107,584
23,619
7,115
3,941,981
199,608
2,999,923
1,009,190
4,208,721
(266,740)
(266,740)
1,363,009
$1,096,269
Debt Service
$
174,066
56,013
85,152
112,381
427,612
918,772
297,123
1,215,895
(788,283)
884,180
884,180
95,897
96,212
$192,109
Capital Projects
$ 1,039,763
250,000
36,582
126,414
1,452,759
781,076
781,076
671,683
(86)
(86)
671,597
3,241,962
$3,913,559
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, 2019
Page 114
Total Non-Major
Governmental
Funds
$ 1,039,763
174,066
3,996,849
31,213
81,614
229,318
150,033
119,496
5,822,352
199,608
2,999,923
1,790,266
918,772
297,123
6,205,692
(383,340)
884,180
(86)
884,094
500,754
4,701,183
$5,201,937
Page 115
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Page 116
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.
Highway User Revenue – accounts for the Town’s share of motor fuel tax revenues.
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.
Page 117
ASSETS
Cash and cash equivalents
Accounts receivable
Intergovernmental receivable
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Accrued wages and benefits
Total liabilities
Fund balances:
Restricted
Total fund balances
Total liabilities and fund balances
HURF
$ 876,416
60,041
322,084
$1,258,541
$ 326,367
65,268
391,635
866,906
866,906
$1,258,541
State Seizures
and Forfeitures
$ 193,778
$193,778
$ 984
984
192,794
192,794
$193,778
Federal Seizures
and Forfeitures
$ 37,281
$37,281
$ 712
712
36,569
36,569
$37,281
TOWN OF ORO VALLEY, ARIZONA
COMBINING BALANCE SHEET - NON-MAJOR SPECIAL REVENUE FUNDS
JUNE 30, 2019
Page 118
Totals
$ 1,107,475
60,041
322,084
$1,489,600
$ 328,063
65,268
393,331
1,096,269
1,096,269
$1,489,600
Page 119
Revenues:Intergovernmental
Licenses, fees & permits
Fines, forfeitures & penalties
Investment income:
Interest
Net increase in the fair value of investments
Other
Total revenues
Expenditures:
Current -
Public safety
Highway and streets
Capital outlay
Total expenditures
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
HURF
$ 3,690,836
31,213
98,483
23,619
7,115
3,851,266
2,999,923
945,156
3,945,079
(93,813)
960,719
$866,906
State Seizures
and Forfeitures
$
58,825
5,320
64,145
96,523
4,056
100,579
(36,434)
229,228
$192,794
Federal Seizures
and Forfeitures
$
22,789
3,781
26,570
103,085
59,978
163,063
(136,493)
173,062
$36,569
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NON-MAJOR SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2019
Page 120
Totals
$ 3,690,836
31,213
81,614
107,584
23,619
7,115
3,941,981
199,608
2,999,923
1,009,190
4,208,721
(266,740)
1,363,009
$1,096,269
Page 121
Total revenues
Revenues:Intergovernmental
Licenses, fees & permits
Fines, forfeitures & penalties
Investment income: Interest Net increase in the fair value of investments
Other
Expenditures:
Current -
Public safety
Highway and streets
Capital outlay
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 (deficits), end of year
HURF
Budget
$ 3,456,659
48,700
50,000
3,000
3,558,359
3,417,395
1,495,500
4,912,895
(1,354,536)
550,000
550,000
(804,536)
$(804,536)
Actual
$ 3,690,836
31,213
98,483
23,619
7,115
3,851,266
2,999,923
945,156
3,945,079
(93,813)
(93,813)
960,719
$866,906
Variance -
Positive
(Negative)
$ 234,177
(17,487)
48,483
23,619
4,115
292,907
417,472
550,344
967,816
1,260,723
(550,000)
(550,000)
710,723
960,719
$1,671,442
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, 2019
Page 122
State Seizures and Forfeitures
Budget
$
325,000
325,000
604,393
604,393
(279,393)
(279,393)
$(279,393)
Actual
$
58,825
5,320
64,145
96,523
4,056
100,579
(36,434)
(36,434)
229,228
$192,794
Variance -
Positive
(Negative)
$
(266,175)
5,320
(260,855)
507,870
(4,056)
503,814
242,959
242,959
229,228
$472,187
Federal Seizures and Forfeitures
Budget
$
$
Actual
$
22,789
3,781
26,570
103,085
59,978
163,063
(136,493)
(136,493)
173,062
$36,569
Variance -
Positive
(Negative)
$
22,789
3,781
26,570
(103,085)
(59,978)
(163,063)
(136,493)
(136,493)
173,062
$36,569
(Continued)
Page 123
Total revenues
Revenues:Intergovernmental
Licenses, fees & permits
Fines, forfeitures & penalties
Investment income: Interest Net increase in the fair value of investments
Other
Expenditures:
Current -
Public safety
Highway and streets
Capital outlay
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 (deficits), end of year
Totals
Budget
$ 3,456,659
48,700
325,000
50,000
3,000
3,883,359
604,393
3,417,395
1,495,500
5,517,288
(1,633,929)
550,000
550,000
(1,083,929)
$(1,083,929)
Actual
$ 3,690,836
31,213
81,614
107,584
23,619
7,115
3,941,981
199,608
2,999,923
1,009,190
4,208,721
(266,740)
(266,740)
1,363,009
$1,096,269
Variance -
Positive
(Negative)
$ 234,177
(17,487)
(243,386)
57,584
23,619
4,115
58,622
404,785
417,472
486,310
1,308,567
1,367,189
(550,000)
(550,000)
817,189
1,363,009
$2,180,198
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, 2019
Page 124
MUNICIPAL DEBT SERVICE FUNDS
Municipal Debt Service - to account for the payments of debt service on the Series 2010 Excise
Tax Revenue Obligations, the Series 2012 Excise Tax Revenue Obligations, the Series 2015
Excise Tax Revenue Refunding Obligations, the Series 2016 Excise Tax Revenue Obligations, the
Series 2017 Refunding Excise Tax Revenue Obligations, and the Series 2018 Excise Tax Revenue
Obligations.
Oracle Road Debt Service – to account for the special assessment collections and payment of the
outstanding Oracle Road bond issue.
Page 125
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
$ 183,187
$183,187
$1,000
1,000
182,187
182,187
$183,187
Oracle Road
Debt Service
$ 10,172
335,000
$345,172
$250
250
335,000
9,922
9,922
$345,172
Totals
$ 193,359
335,000
$528,359
$1,250
1,250
335,000
192,109
192,109
$528,359
TOWN OF ORO VALLEY, ARIZONA
COMBINING BALANCE SHEET - NON-MAJOR DEBT SERVICE FUNDS
JUNE 30, 2019
Page 126
Revenues:Special assessments
Intergovernmental
Investment income:
I Interest
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
$
56,013
85,152
110,639
251,804
763,772
275,760
1,039,532
(787,728)
881,180
881,180
93,452
88,735
$182,187
Oracle Road
Debt Service
$ 174,066
1,742
175,808
155,000
21,363
176,363
(555)
3,000
3,000
2,445
7,477
$9,922
Totals
$ 174,066
56,013
85,152
112,381
427,612
918,772
297,123
1,215,895
(788,283)
884,180
884,180
95,897
96,212
$192,109
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NON-MAJOR DEBT SERVICE FUNDS
YEAR ENDED JUNE 30, 2019
Page 127
Total revenues
Revenues:Special assessments
Intergovernmental
Investment income:
I Interest
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 (deficits), end of year
Municipal Debt Service
Budget
$
47,578
100,000
147,578
763,772
357,727
1,121,499
(973,921)
881,094
881,094
(92,827)
$(92,827)
Actual
$
56,013
85,152
110,639
251,804
763,772
275,760
1,039,532
(787,728)
881,180
881,180
93,452
88,735
$182,187
Variance -
Positive
(Negative)
$
8,435
85,152
10,639
104,226
81,967
81,967
186,193
86
86
186,279
88,735
$275,014
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, 2019
Page 128
Oracle Road Debt Service
Budget
$ 184,428
184,428
155,000
39,165
194,165
(9,737)
3,000
3,000
(6,737)
$(6,737)
Actual
$ 174,066
1,742
175,808
155,000
21,363
176,363
(555)
3,000
3,000
2,445
7,477
$9,922
Variance -
Positive
(Negative)
$ (10,362)
1,742
(8,620)
17,802
17,802
9,182
9,182
7,477
$16,659
Totals
Budget
$ 184,428
47,578
100,000
332,006
918,772
396,892
1,315,664
(983,658)
884,094
884,094
(99,564)
$(99,564)
Actual
$ 174,066
56,013
85,152
112,381
427,612
918,772
297,123
1,215,895
(788,283)
884,180
884,180
95,897
96,212
$192,109
Variance -
Positive
(Negative)
$ (10,362)
8,435
85,152
12,381
95,606
99,769
99,769
195,375
86
86
195,461
96,212
$291,673
Page 129
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Page 130
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 improvements to Town parks.
General Government CIP – to account for governmental capital asset projects.
PAG/RTA - to account for revenues dedicated to Town improvements funded through Pima
Association of Governments and the Regional Transportation Authority.
Energy Efficiency Project – to account for bond proceeds to fund energy improvements at the
Oro Valley Community Center.
Page 131
ASSETS
Cash and cash equivalents
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Unearned revenue
Total liabilities
Fund balances:
Restricted
Committed
Total fund balances
Total liabilities and fund balances
Townwide
Roadway
Development
Impact Fees
$3,588,151
$3,588,151
$ 27,335
302,872
330,207
3,257,944
3,257,944
$3,588,151
General Impact
Fees
$643,823
$643,823
$ 3,926
3,926
639,897
639,897
$643,823
Townwide
Facilities Projects
$15,718
$15,718
$
15,718
15,718
$15,718
TOWN OF ORO VALLEY, ARIZONA
COMBINING BALANCE SHEET - NON-MAJOR CAPITAL PROJECTS FUNDS
JUNE 30, 2019
Page 132
Totals
$4,247,692
$4,247,692
$ 31,261
302,872
334,133
3,897,841
15,718
3,913,559
$4,247,692
Page 133
Revenues:Development impact fees
Intergovernmental
Investment income:
Interest
Net increase in the fair value of investments
Total revenues
Expenditures:
Current -
Capital outlay
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Transfers out
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year
Fund balances, end of year
Townwide
Roadway
Development
Impact Fees
$ 686,547
250,000
28,838
119,296
1,084,681
123,271
123,271
961,410
961,410
2,296,534
$3,257,944
General Impact
Fees
$ 353,216
7,744
7,118
368,078
657,805
657,805
(289,727)
(289,727)
929,624
$639,897
Townwide
Facilities Projects
$
15,718
$15,718
TOWN OF ORO VALLEY, ARIZONA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
NON-MAJOR CAPITAL PROJECTS FUNDS
YEAR ENDED JUNE 30, 2019
Page 134
Energy
Efficiency
Project
$
(86)
(86)
(86)
86
$
Totals
$ 1,039,763
250,000
36,582
126,414
1,452,759
781,076
781,076
671,683
(86)
(86)
671,597
3,241,962
$3,913,559
Page 135
Total revenues
Revenues:Development impact fees
Intergovernmental
Charges for services
Investment income:
Interest
Net increase in the fair value of investments
Other
Expenditures:
Current -
Capital outlay
Debt service -
Bond issuance costs
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Issuance of revenue bonds
Transfers in
Transfers out
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year, as restated
Fund balances (deficits), end of year
Townwide Roadway Development Impact Fees
Budget
$ 510,964
250,000
10,000
770,964
3,152,090
3,152,090
(2,381,126)
(2,381,126)
$(2,381,126)
Actual
$ 686,547
250,000
28,838
119,296
1,084,681
123,271
123,271
961,410
961,410
2,296,534
$3,257,944
Variance -
Positive
(Negative)
$ 175,583
18,838
119,296
313,717
3,028,819
3,028,819
3,342,536
3,342,536
2,296,534
$5,639,070
TOWN OF ORO VALLEY, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
ALL CAPITAL PROJECTS FUNDS
YEAR ENDED JUNE 30, 2019
Page 136
General Impact Fees
Budget
$ 373,614
2,000
375,614
1,266,170
1,266,170
(890,556)
(890,556)
$(890,556)
Actual
$ 353,216
7,744
7,118
368,078
657,805
657,805
(289,727)
(289,727)
929,624
$639,897
Variance -
Positive
(Negative)
$ (20,398)
5,744
7,118
(7,536)
608,365
608,365
600,829
600,829
929,624
$1,530,453
Townwide Facilities Projects
Budget
$
15,718
15,718
(15,718)
(15,718)
$(15,718)
Actual
$
15,718
$15,718
Variance -
Positive
(Negative)
$
15,718
15,718
15,718
15,718
15,718
$31,436
(Continued)
Page 137
Total revenues
Revenues:Development impact fees
Intergovernmental
Charges for services
Investment income:
Interest
Net increase in the fair value of investments
Other
Expenditures:
Current -
Capital outlay
Debt service -
Bond issuance costs
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Issuance of revenue bonds
Transfers in
Transfers out
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year, as restated
Fund balances (deficits), end of year
General Government CIP
Budget
$
420,400
420,400
10,253,256
10,253,256
(9,832,856)
3,000,000
3,403,000
6,403,000
(3,429,856)
$(3,429,856)
Actual
$
261,090
420,396
41,535
46,902
321,982
1,091,905
6,302,749
35,000
6,337,749
(5,245,844)
2,035,000
3,403,000
5,438,000
192,156
3,418,889
$3,611,045
Variance -
Positive
(Negative)
$
261,090
420,396
41,535
46,902
(98,418)
671,505
3,950,507
(35,000)
3,915,507
4,587,012
(965,000)
(965,000)
3,622,012
3,418,889
$7,040,901
TOWN OF ORO VALLEY, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
ALL CAPITAL PROJECTS FUNDS
YEAR ENDED JUNE 30, 2019
Page 138
PAG/RTA
Budget
$
11,964,000
22,500
11,986,500
12,867,634
12,867,634
(881,134)
(881,134)
$(881,134)
Actual
$
6,344,349
29,513
6,373,862
6,503,410
6,503,410
(129,548)
(129,548)
695,684
$566,136
Variance -
Positive
(Negative)
$
(5,619,651)
7,013
(5,612,638)
6,364,224
6,364,224
751,586
751,586
695,684
$1,447,270
Energy Efficiency Project
Budget
$
$
Actual
$
(86)
(86)
(86)
86
$
Variance -
Positive
(Negative)
$
(86)
(86)
(86)
86
$
(Continued)
Page 139
Total revenues
Revenues:Development impact fees
Intergovernmental
Charges for services
Investment income:
Interest
Net increase in the fair value of investments
Other
Expenditures:
Current -
Capital outlay
Debt service -
Bond issuance costs
Total expenditures
Excess (deficiency) of revenues over expenditures
Other financing sources (uses):
Issuance of revenue bonds
Transfers in
Transfers out
Total other financing sources (uses)
Changes in fund balances
Fund balances, beginning of year, as restated
Fund balances (deficits), end of year
Totals
Budget
$ 884,578
12,214,000
12,000
442,900
13,553,478
27,554,868
27,554,868
(14,001,390)
3,000,000
3,403,000
6,403,000
(7,598,390)
$(7,598,390)
Actual
$ 1,039,763
6,855,439
420,396
78,117
173,316
351,495
8,918,526
13,587,235
35,000
13,622,235
(4,703,709)
2,035,000
3,403,000
(86)
5,437,914
734,205
7,356,535
$8,090,740
Variance -
Positive
(Negative)
$ 155,185
(5,358,561)
420,396
66,117
173,316
(91,405)
(4,634,952)
13,967,633
(35,000)
13,932,633
9,297,681
(965,000)
(86)
(965,086)
8,332,595
7,356,535
$15,689,130
TOWN OF ORO VALLEY, ARIZONA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
ALL CAPITAL PROJECTS FUNDS
YEAR ENDED JUNE 30, 2019
Page 140
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.
Note: For locally assessed property (i.e., excluding mines, utilities, etc.) Proposition 117, approved
by voters in 2012, amended the Arizona Constitution to require that all property taxes after fiscal
year 2014-15 be based upon property values limited to five percent in annual growth. The
aggregate assessed value of all taxable properties within a taxing jurisdiction (i.e., after applying
assessment ratios based on the use of a property), including property values with a growth limit,
is currently referred to as net limited assessed value and formerly as primary assessed value. In
accordance with Proposition 117, this value is used for all taxing purposes beginning fiscal year
2015-16. Aggregate assessed value without a growth limit is currently referred to as net full cash
assessed value and formerly as secondary assessed value. This remains the value utilized for
determining debt capacity limits.
Page 141
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Page 142
2015 2016 2017 2018 2019
Governmental activities
Net investment in capital assets 133,800,218$ 132,419,826$ 133,414,691$ 137,311,856$ 141,506,384$
Restricted 3,599,966 4,653,905 6,006,584 4,424,244 5,752,355
Unrestricted (9,493,907) (10,883,206) (15,397,688) (11,583,669) (10,619,492)
Total governmental activities net position 127,906,277$ 126,190,525$ 124,023,587$ 130,152,431$ 136,639,247$
Business-type activities
Net investment in capital assets 54,858,448$ 61,261,271$ 66,755,370$ 69,036,006$ 73,170,068$
Unrestricted 20,092,694 19,504,748 18,721,247 21,397,377 23,499,030
Total business-type activities net position 74,951,142$ 80,766,019$ 85,476,617$ 90,433,383$ 96,669,098$
Primary government
Net investment in capital assets 188,658,666$ 193,681,097$ 200,170,061$ 206,347,862$ 214,676,452$
Restricted 3,599,966 4,653,905 6,006,584 4,424,244 5,752,355
Unrestricted 10,598,787 8,621,542 3,323,559 9,813,708 12,879,538
Total primary government net position 202,857,419$ 206,956,544$ 209,500,204$ 220,585,814$ 233,308,345$
2010 2011 2012 2013 2014
Governmental activities
Net investment in capital assets 127,712,057$ 132,956,156$ 135,336,862$ 134,512,094$ 133,714,821$
Restricted 9,580,610 9,048,505 11,454,390 3,730,312 4,555,138
Unrestricted 15,979,093 10,588,160 10,808,596 18,901,112 18,430,146
Total governmental activities net position 153,271,760$ 152,592,821$ 157,599,848$ 157,143,518$ 156,700,105$
Business-type activities
Net investment in capital assets 31,383,715$ 40,005,568$ 45,669,488$ 48,802,267$ 52,775,561$
Unrestricted 24,404,427 20,371,225 19,067,780 19,501,676 21,541,202
Total business-type activities net position 55,788,142$ 60,376,793$ 64,737,268$ 68,303,943$ 74,316,763$
Primary government
Net investment in capital assets 159,095,772$ 172,961,724$ 181,006,350$ 183,314,361$ 186,490,382$
Restricted 9,580,610 9,048,505 11,454,390 3,730,312 4,555,138
Unrestricted 40,383,520 30,959,385 29,876,376 38,402,788 39,971,348
Total primary government net position 209,059,902$ 212,969,614$ 222,337,116$ 225,447,461$ 231,016,868$
Source: Town of Oro Valley Finance Department
TOWN OF ORO VALLEY, ARIZONA
NET POSITION BY COMPONENT
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(UNAUDITED)
Page 143
2010201120122013201420152016201720182019ExpensesGovernmental activities:General government9,950,053$ 9,887,523$ 9,961,376$ 9,861,131$ 10,990,007$ 11,533,702$ 11,888,794$ 12,130,905$ 12,639,867$ 14,727,150$ Public safety13,730,593 12,509,201 12,349,948 12,770,224 13,814,914 16,587,168 16,123,500 22,251,172 17,683,197 18,958,436 Highways and streets9,353,689 8,895,987 9,339,062 9,255,004 8,754,110 9,400,140 9,089,318 9,417,459 7,505,589 10,791,469 Transit1,275,093 1,404,646 1,432,910 1,533,258 1,505,341 1,125,490 Culture and recreation3,527,949 3,375,281 3,227,895 2,783,633 3,399,623 4,572,490 9,695,639 10,204,276 10,111,731 9,699,357 Interest on long-term debt1,767,155 430,570 654,262 522,917 656,260 439,027 494,732 511,502 350,404 355,545 Total governmental activities/expenses38,329,439 35,098,562 35,532,543 35,192,909 38,890,007 43,937,173 48,724,893 56,048,572 49,796,129 55,657,447 Business-type activities:Water12,830,137 12,527,851 11,984,829 13,047,373 13,572,677 13,608,931 14,406,074 14,753,418 15,568,288 15,089,673 Stormwater drainage486,994 586,006 636,966 983,975 749,038 854,510 917,898 1,115,494 1,190,898 1,291,490 Total business-type activities expenses13,317,131 13,113,857 12,621,795 14,031,348 14,321,715 14,463,441 15,323,972 15,868,912 16,759,186 16,381,163 Total primary government expenses51,646,570$ 48,212,419$ 48,154,338$ 49,224,257$ 53,211,722$ 58,400,614$ 64,048,865$ 71,917,484$ 66,555,315$ 72,038,610$ Program RevenuesGovernmental activities:Charges for services:General government2,261,815$ 2,455,182$ 3,079,526$ 3,740,046$ 3,978,117$ 3,516,359$ 4,096,927$ 4,901,504$ 5,084,396$ 4,920,132$ Public safety28,785 33,976 33,109 45,346 35,976 29,097 168,808 138,075 128,651 173,488 Highways and streets137,436 400,977 329,420 1,052,581 546,066 496,098 764,397 1,052,167 1,039,542 754,388 Transit71,078 72,783 88,684 100,052 119,536 138,125 Culture and recreation119,273 126,290 82,832 169,965 435,354 1,108,734 4,373,693 4,611,576 5,096,804 5,014,018 Operating grants and contributions4,728,050 4,887,283 5,247,844 5,318,097 4,706,844 5,070,396 5,503,530 4,664,197 4,949,928 4,669,814 Capital grants and contributions6,514,602 8,980,239 7,107,063 2,920,335 2,919,641 2,456,727 3,602,656 6,749,407 5,529,831 8,302,441 Total governmental activities program revenues13,789,961 16,883,947 15,879,794 13,246,370 12,693,076 12,750,194 18,598,695 22,216,978 21,948,688 23,972,406 Business-type activities:Charges for services:Water 15,136,784 15,119,065 15,817,345 16,732,600 19,286,794 16,088,681 16,739,580 18,158,385 19,455,685 17,519,158 Stormwater Utility927,238 888,391 752,212 813,400 759,428 771,594 828,258 1,314,787 1,386,278 1,426,246 Operating grants and contributions35,000 Capital grants and contributions362,273 1,655,307 245,607 48,871 179,675 1,979,037 3,334,372 1,097,285 870,920 2,899,213 Total business-type activities program revenues16,426,295 17,662,763 16,815,164 17,594,871 20,225,897 18,839,312 20,937,210 20,570,457 21,712,883 21,844,617 Total primary government program revenues30,216,256$ 34,546,710$ 32,694,958$ 30,841,241$ 32,918,973$ 31,589,506$ 39,535,905$ 42,787,435$ 43,661,571$ 45,817,023$ (ACCRUAL BASIS OF ACCOUNTING)(UNAUDITED)TOWN OF ORO VALLEY, ARIZONACHANGES IN NET POSITIONLAST TEN FISCAL YEARSFiscal YearPage 144
2010201120122013201420152016201720182019Net (Expense)/RevenuesGovernmental activities(24,539,478)$ (18,214,615)$ (19,652,749)$ (21,946,539)$ (26,196,931)$ 0 (31,186,979)$ (30,126,198)$ (33,831,594)$ (27,847,441)$ (31,685,041)$ Business-type activities3,109,164 4,548,906 4,193,369 3,563,523 5,904,182 0 4,375,871 5,613,238 4,701,545 4,953,697 5,463,454 Total primary government net expenses(21,430,314)$ (13,665,709)$ (15,459,380)$ (18,383,016)$ (20,292,749)$ (26,811,108)$ (24,512,960)$ (29,130,049)$ (22,893,744)$ (26,221,587)$ General Revenues and Other Changes in Net PositionGovernmental activities:Taxes:Sales taxes12,970,865$ 11,572,148$ 12,799,678$ 14,241,065$ 15,286,001$ 16,132,159$ 16,998,464$ 19,767,720$ 21,664,398$ 22,924,400$ Franchise taxes509,285 514,814 525,427 539,477 571,731 582,064 621,546 647,830 656,664 635,494 Impact fees*584,113 Unrestricted state revenue sharing5,086,953 4,520,935 3,461,359 9,048,365 9,636,906 10,413,464 10,549,196 11,177,729 11,577,834 11,879,950 Unrestricted state sales tax revenue sharing2,891,386 2,569,666 3,204,612 Unrestricted auto lieu tax revenue sharing1,484,125 1,318,989 1,479,094 Investment income95,625 39,124 189,606 265,787 255,702 216,175 238,210 68,435 74,542 1,132,215 Special item - Capital asset conveyance(2,606,804) Transfers2,319 3,178 3,119 3,030 2,942 2,847 2,581 Total governmental activities23,622,352 20,535,676 21,659,776 21,490,209 25,753,518 27,346,981 28,410,446 31,664,656 33,976,285 36,574,640 Business-type activities:Investment income72,244 39,745 167,106 5,471 111,816 124,887 204,669 11,995 5,916 774,842 Transfers(2,319) (3,178) (3,119) (3,030) (2,942) (2,847) (2,581) Total business-type activities72,244 39,745 167,106 3,152 108,638 121,768 201,639 9,053 3,069 772,261 Total primary government23,694,596$ 20,575,421$ 21,826,882$ 21,493,361$ 25,862,156$ 27,468,749$ 28,612,085$ 31,673,709$ 33,979,354$ 37,346,901$ Change in Net PositionGovernmental activities(917,126)$ 2,321,061$ 2,007,027$ (456,330)$ (443,413)$ (3,839,998)$ (1,715,752)$ (2,166,938)$ 6,128,844$ 4,889,599$ Business-type activities3,181,408 4,588,651 4,360,475 3,566,675 6,012,820 4,497,639 5,814,877 4,710,598 4,956,766 6,235,715 Total primary government2,264,282$ 6,909,712$ 6,367,502$ 3,110,345$ 5,569,407$ 657,641$ 4,099,125$ 2,543,660$ 11,085,610$ 11,125,314$ Source: Town of Oro Valley Finance Department* Impact fees in fiscal year 2011 are now presented in program revenues.Page 145
2010201120122013201420152016201720182019General FundNonspendable $$$$$ 31,278$ 97,269$ 130,030$ 141,676$ 129,504$ Committed13,608,565 Assigned1,769,333 1,608,035 1,608,035 1,608,035 1,553,999 1,441,862 1,441,862 1,441,862 2,584,994 Unassigned9,237,805 9,793,614 11,529,070 9,925,988 8,566,598 8,985,422 11,831,322 14,384,104 3,248,602 Unreserved11,904,429 Total general fund11,904,429$ 11,007,138$ 11,401,649$ 13,137,105$ 11,534,023$ 10,151,875$ 10,524,553$ 13,403,214$ 15,967,642$ 19,571,665$ All Other Governmental FundsNonspendable $$$$$149,348$ 127,600$ 132,538$ 130,202$ 105,403$ Restricted9,128,505 11,454,390 3,730,312 4,555,138 3,599,966 4,031,923 6,006,584 4,424,244 5,752,355 Committed 840,704 622,919 4,166,818 5,343,506 4,637,773 2,617,856 1,829,232 1,594,293 406,247 Assigned1,500,000 1,421,593 1,340,991 1,716,361 2,209,618 3,611,045 Unassigned(29,198) (237,769) (201,765) Unreserved, reported in:Special revenue funds5,868,523 Capital projects funds3,933,044 Debt service funds1,929,635 Total all other governmental funds11,731,202$ 9,969,209$ 12,077,309$ 7,897,130$ 11,398,644$ 9,808,680$ 8,089,172$ 9,446,946$ 8,156,592$ 9,875,050$ 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.TOWN OF ORO VALLEY, ARIZONAFUND BALANCES OF GOVERNMENTAL FUNDSLAST TEN FISCAL YEARSFiscal YearPage 146
2010201120122013201420152016201720182019RevenuesTaxes 13,480,150$ 12,086,962$ 13,325,105$ 14,780,542$ 15,857,732$ 16,714,223$ 17,620,010$ 20,415,550$ 22,321,062$ 23,559,894$ Intergovernmental17,940,749 18,040,619 19,723,086 16,817,756 16,732,631 17,714,991 19,488,066 22,118,633 21,634,143 24,375,992 Fines, forfeitures, & penalties612,031 560,941 895,820 551,962 673,336 221,571 283,470 558,692 529,687 247,283 Licenses, fees, & permits1,108,411 1,059,309 1,185,862 1,813,947 2,116,700 1,605,937 1,915,992 2,388,951 2,679,690 2,387,832 Charges for services965,455 926,135 1,209,814 1,630,238 1,850,181 2,991,826 5,956,058 6,226,578 6,599,847 7,206,705 Contributions and donations59 15,000 995 27,229 149,513 150,000 133,928 Special assessments368,152 365,811 366,028 365,935 1,462,307 178,078 189,525 175,539 175,854 174,066 Development impact fees584,113 481,619 417,742 988,342 569,338 439,637 795,471 1,348,528 1,346,402 1,039,763 Investment income95,625 39,124 189,606 265,787 255,702 216,175 238,210 68,435 74,542 1,132,215 Other revenues216,030 297,109 460,512 349,326 305,489 141,618 504,796 572,886 576,970 841,111 Total revenues35,370,775$ 33,872,629$ 37,774,570$ 37,591,064$ 39,823,416$ 40,224,056$ 47,141,111$ 54,023,792$ 56,072,125$ 60,964,861$ ExpendituresGeneral government9,452,778$ 9,848,393$ 9,212,866$ 9,289,771$ 10,610,673$ 10,862,553$ 11,426,687$ 11,098,844$ 11,998,586$ 14,424,463$ Public safety12,979,291 11,928,567 11,993,864 12,342,349 13,539,322 15,071,396 15,494,532 15,725,029 16,731,963 16,250,498 Highways and streets3,475,556 3,288,349 3,191,654 3,513,479 3,710,577 2,602,321 2,754,413 2,993,402 3,092,143 2,999,923 Transit1,404,646 1,432,910 1,528,654 1,536,294 1,150,322 Culture and recreation3,157,369 3,031,520 2,954,549 2,468,129 2,445,131 4,078,817 9,097,752 9,433,339 9,399,598 8,880,611 Capital outlay3,189,765 7,014,659 6,929,834 11,053,739 5,495,185 8,093,704 7,995,340 9,196,801 10,081,427 15,293,326 Debt servicePrincipal retirement3,400,877 3,459,970 3,052,953 571,910 1,867,901 649,840 897,637 1,075,466 1,304,226 1,124,885 Interest and fiscal charges831,580 470,578 554,274 498,729 472,268 436,010 336,510 314,914 356,661 327,421 Payment to bond escrow agent6,279,112 Bond Issuance costs26,550 75,800 104,533 67,959 35,000 Total expenditures42,792,878$ 39,042,036$ 37,965,794$ 39,738,106$ 38,141,057$ 43,199,287$ 49,540,314$ 51,434,408$ 54,500,898$ 60,486,449$ Excess of revenues(7,422,103)$ (5,169,407)$ (191,224)$ (2,147,042)$ 1,682,359$ (2,975,231)$ (2,399,203)$ 2,589,384$ 1,571,227$ 478,412$ over (under) expendituresOther Financing Sources (Uses)Premium on bonds issued$$113,835$ $$$$$$$Proceeds from capital lease agreements212,895 1,043,214 Payment to bond escrow agent(2,523,121) (1,171,447) Issuance of long-term debt2,445,000 2,580,000 2,529,250 3,115,556 2,035,000 Transfers in10,012,679 860,143 1,003,666 1,704,272 4,115,152 4,326,627 1,872,026 2,953,072 3,342,890 4,407,180 Transfers out(10,012,679) (795,020) (1,003,666) (2,001,953) (4,111,974) (4,323,508) (1,868,996) (3,250,130) (3,640,043) (4,404,599) Total other financing sources (uses)$ 2,510,123$ 2,693,835$ (297,681)$ 216,073$ 3,119$ 1,052,373$ 1,647,051$ (297,153)$ 2,037,581$ Net change in fund balances(7,422,103)$ (2,659,284)$ 2,502,611$ (2,444,723)$ 1,898,432$ (2,972,112)$ (1,346,830)$ 4,236,435$ 1,274,074$ 2,515,993$ Debt service as a percentage of10.60%12.36%11.55%3.76%7.30%3.17%3.00%3.32%3.66%3.16%noncapital expendituresSource: Town of Oro Valley Finance DepartmentLAST TEN FISCAL YEARS(MODIFIED ACCRUAL BASIS OF ACCOUNTING)(UNAUDITED)Fiscal YearTOWN OF ORO VALLEY, ARIZONACHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDSPage 147
Fiscal Year 2019Fiscal Year 2010Percentage ofPercentage ofSales TaxTotal SalesSales TaxTotal SalesTaxpayerPaymentsRankTax PaymentsPaymentsRankTax PaymentsTaxpayer A1,991,484 18.79%920,820 27.56%Taxpayer B1,570,409 26.93%1,046,296$ 18.59%Taxpayer C1,184,842 35.23%742,217 36.09%Taxpayer D1,077,631 44.76%Taxpayer E986,913 54.36%517,781 54.25%Taxpayer F914,626 64.04%Taxpayer G774,926 73.42%Taxpayer H566,633 82.50%Taxpayer I487,515 92.15%282,149 72.32%Taxpayer J483,740 102.14%432,374 63.55%Taxpayer K531,528 44.36%Taxpayer L263,176 82.16%Taxpayer M246,060 92.02%Taxpayer N243,979 102.00%Total10,038,719$ 44.32%5,226,380$ 42.91%Source: Arizona Department of RevenueTOWN OF ORO VALLEY, ARIZONAPRINCIPAL SALES TAXPAYERSCURRENT FISCAL YEAR AND FISCAL YEAR NINE YEARS PRIOR(UNAUDITED)Page 148
2010 2011 2012 2013 2014 2015 2016 201720182019Construction2,110$ 1,707$ 1,738$ 2,842$ 3,338$ 3,199$ 2,131$ 4,295$ 4,653$ 4,191$ Manufacturing230 266 258 258 257 141 156 137 140 173 Transportation, Warehousing, Communications & Utilities1,554 1,534 2,450 2,785 2,959 3,068 3,133 3,171 3,384 3,335 Wholesale Trade75 93 106 110 103 125 131 136 154 183 Retail Trade4,544 4,720 4,925 5,153 5,243 5,808 6,844 7,086 7,733 8,430 Restaurants, Bars & Lodging2,283 2,314 2,314 2,164 2,761 2,803 3,295 3,473 3,907 4,299 Finance, Insurance & Real Estate381 324 333 335 75 270 443 562 646 1,114 Services378 417 456 456 529 599 672 702 840 963 All Other 627 102 103 75 60 115 190 202 206 237 Cable Franchise509 515 525 540 572 582 622 648 657 635 Total12,691$ 11,992$ 13,208$ 14,718$ 15,897$ 16,710$ 17,617$ 20,412$ 22,321$ 23,560$ Town sales tax rate*2.00% 2.00%2.00% 2.00% 2.00% 2.00% 2.50% 2.50% 2.50% 2.50%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, 2011.5% Additional sales tax effective March 1, 2015Fiscal YearTOWN OF ORO VALLEY, ARIZONATAXABLE SALES BY CATEGORYLAST TEN FISCAL YEARS (UNAUDITED)($000's)Page 149
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
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%
2015* 2.50% 6.00% 4.00% 4.00% 6.10%
2016 2.50% 6.00% 4.00% 4.00% 6.10%
2017 2.50% 6.00% 4.00% 4.00% 6.10%
2018 2.50% 6.00% 4.00% 4.00% 6.10%
2019 2.50% 6.00% 4.00% 4.00% 6.10%
*.5% Additional sales tax effective March 1, 2015
Source: Arizona Department of Revenue
TOWN OF ORO VALLEY, ARIZONA
DIRECT AND OVERLAPPING SALES TAX RATES
LAST TEN FISCAL YEARS
(UNAUDITED)
Page 150
Year
Net Limited
Assessed Valuation
Net Full Cash
Assessed Valuation
Estimated Full Cash
Value
Total Outstanding
General
Obligation Bond
Debt
2010 642,601,840$ 693,924,598$ 6,140,054,657$ 0
2011 649,015,575 672,309,638 6,041,904,306 0
2012 618,976,953 629,340,548 5,716,229,517 0
2013 589,160,533 592,761,968 5,461,131,133 0
2014 553,366,744 556,259,856 5,175,406,955 0
2015 556,566,167 560,863,509 5,252,917,489 0
2016 572,696,599 593,299,222 5,616,655,680 0
2017 593,580,247 616,216,705 5,688,443,027 0
2018 612,684,205 633,479,221 6,058,189,523 0
2019 645,311,769 683,985,966 6,456,152,108 0
Source: State of Arizona Department of Revenue Abstract of the Assessment Roll
Note:
TOWN OF ORO VALLEY, ARIZONA
NET LIMITED & FULL CASH ASSESSED VALUE OF PROPERTY
LAST TEN FISCAL YEARS
(UNAUDITED)
On November 6, 2012, voters approved Proposition 117, an amendment to the Arizona Constitution. Beginning with
Tax Year 2015 (Fiscal Year 2016), both primary and secondary taxes are levied against the net limited assessed value.
The net full cash assessed value is used for determining the Town's bonding capacity and as the ceiling for net limited
assessed value.
Page 151
FiscalFiscalFiscalFiscalFiscalFiscalFiscalFiscalFiscalFiscalYearYearYearYearYearYearYearYearYearYearRevenue Source2012201320142015201620172018201920202021Town Sales and Franchise Taxes13,325,106$ 14,780,543$ 15,857,732$ 16,714,223$ 17,620,010$ 20,415,550$ 22,321,148$ 23,559,894$ 21,789,758$ 21,468,548$ Licenses and Permits1,185,862 1,813,947 2,116,700 1,605,937 1,915,992 2,313,504 2,679,690 2,387,832 1,984,118 1,852,864 Fines200,672 180,875 172,232 148,050 159,154 131,637 131,393 165,669 120,000 123,600 State-Shared Sales Tax3,204,612 3,356,826 3,569,711 3,747,944 3,887,673 3,989,179 4,210,168 4,469,774 4,660,650 4,814,451 State-Shared Income Tax3,461,359 4,189,186 4,571,196 4,964,635 4,937,719 5,329,864 5,422,693 5,370,779 5,870,065 6,310,320 Total21,377,611$ 24,321,377$ 26,287,571$ 27,180,789$ 28,520,548$ 32,179,734$ 34,765,092$ 35,953,948$ 34,424,591$ 34,569,783$ (a) All revenue sources are presented on a modified accrual basis of accounting except for Town sales taxeswhich are presented on the cash basis of accounting per the Arizona Department of Revenue StandardIndustry 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.ProjectedActualTOWN OF ORO VALLEY, ARIZONAHISTORICAL AND PROJECTED EXCISE TAX COLLECTIONSJUNE 30, 2019(UNAUDITED)Page 152
SpecialTotal PercentageFiscal Capital Note Loan Excise Tax Assessment RevenueCapital Loan Primary of Personal PerYear Leases Payable Payable BondsBondsBondsLeases Payable Government Income Capita2010$$5,513,133$ 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 2015128,594 1,000,000 8,215,673 925,000 37,683,805 118,862 8,169,765 56,241,699 3.25% 1,331 2016966,962 700,000 7,716,638 780,000 34,517,647 80,423 8,879,907 53,641,577 2.95% 1,231 2017716,622 350,000 9,341,559 640,000 30,804,327 40,814 8,284,407 50,177,729 2.69% 1,146 2018458,744 8,788,954 490,000 28,079,939 7,690,874 45,508,511 2.35% 1,022 2019204,674 10,051,867 335,000 30,135,034 7,079,179 47,805,754 2.37% 1,058 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)Governmental ActivitiesBusiness-Type ActivitiesPage 153
Estimated
Estimated Share of
Debt Percentage Overlapping
Governmental Unit Outstanding Applicable Debt
Pima County 275,990,000$ 7.57% 20,892,443$
Amphitheater Unified School District No. 10 82,070,000 41.38% 33,960,566
Total Overlapping 54,853,009
Town of Oro Valley 10,591,541 100% 10,591,541
Total Direct 10,591,541
Total direct and overlapping debt 65,444,550$
Source: Pima County, Pima County Community College District and Amphitheater Unified School District No. 10.
(1)
(2) Outstanding debt as of June 30, 2018 is presented for the overlapping governments as this is the most recent available information.
TOWN OF ORO VALLEY, ARIZONA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
JUNE 30, 2019
(UNAUDITED)
Estimated percentage of debt outstanding applicable to the Town is calculated based on a portion of the Town's net limited
assessed valuation as a percentage of the net limited assessed valuation of the overlapping jurisdiction.
Page 154
2010201120122013201420152016201720182019Debt Limit180,420,396$ 174,800,436$ 163,628,543$ 154,118,112$ 144,627,563$ 145,824,512$ 154,257,798$ 160,216,343$ 164,704,598$ 177,836,351$ Total net debt applicable to limitLegal debt margin180,420,396$ 174,800,436$ 163,628,543$ 154,118,112$ 144,627,563$ 145,824,512$ 154,257,798$ 160,216,343$ 164,704,598$ 177,836,351$ Total net debt applicable to the limitas a percentage of debt limit0.00%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 155
Net full cash assessed valuation 683,985,966$
Water, Sewer, Light, Parks, Open Space and
Recreational Facility Bonds
Debt limit - 20% of net full cash assessed valuation 136,797,193$
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 136,797,193$
All other general obligation bonds
Debt Limit - 6% of net full cash assessed valuation 41,039,158$
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 41,039,158$
Total legal debt margin 177,836,351$
Source: Pima County Assessor's Office
TOWN OF ORO VALLEY
CALCULATION OF LEGAL DEBT MARGIN
JUNE 30, 2019
(UNAUDITED)
Page 156
Water Utility Revenue Bonds
Fiscal Gross
Year Revenues Principal Interest Total Coverage
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
2015 16,213,273 2,995,560 1,372,024 4,367,584 3.71
2016 16,943,615 3,054,080 1,239,488 4,293,568 3.95
2017 18,169,402 3,054,060 870,547 3,924,607 4.63
2018 19,455,685 2,607,710 897,871 3,505,581 5.55
2019 17,519,158 3,933,228 839,823 4,773,051 3.67
Governmental Revenue Bonds
Fiscal Gross
Year Revenues Principal Interest Total Coverage
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
2015 31,739,256 479,440 367,991 847,431 37.45
2016 31,883,978 530,920 289,630 820,550 38.86
2017 31,739,256 334,940 281,475 616,415 51.49
2018 34,262,128 544,290 280,170 824,460 41.56
2019 36,414,803 763,772 284,213 1,047,985 34.75
Special Assessment
Fiscal Gross
Year Revenues Principal Interest Total Coverage
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
2015 178,078 130,000 45,917 175,917 1.01
2016 189,525 145,000 58,189 203,189 0.93
2017 175,539 140,000 33,203 173,203 1.01
2018 175,854 150,000 26,290 176,290 1.00
2019 174,066 155,000 21,363 176,363 0.99
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
Page 157
2010201120122013201420152016201720182019Revenues:Water revenues12,071,031$ 12,038,482$ 11,578,981$ 11,585,181$ 12,169,375$ 11,280,269$ 12,018,429$ 12,493,557$ 13,586,667$ 12,413,502$ Water connection fees293,607 244,376 462,762 706,159 1,413,047 591,045 544,852 816,353 816,045 621,106 Alternative water connection fees475,973 400,988 759,958 1,253,055 2,376,682 1,172,170 1,094,460 1,638,792 1,638,175 1,246,838 Groundwater preservation fees1,769,142 2,096,093 2,315,277 2,527,524 2,599,718 2,330,231 2,371,100 2,440,045 2,611,075 2,213,303 Other revenues527,031 541,299 557,222 660,681 727,972 714,965 710,740 769,638 803,723 1,024,407 Interest income70,329 38,445 166,654 110,615 124,593 203,857 11,020 758,457 Total revenues15,207,113 15,359,683 15,840,854 16,732,600 19,397,409 16,213,273 16,943,438 18,169,405 19,455,685 18,277,613 Expenses:Personnel2,514,595 2,418,118 2,497,865 2,537,150 2,659,895 2,767,143 2,952,249 3,021,915 3,155,109 3,236,682 Operations & maintenance4,505,751 3,721,167 3,559,807 4,564,894 4,303,230 4,530,436 5,059,998 4,719,579 3,838,409 3,445,511 CAP water costs154,575 903,855 636,519 1,093,105 1,499,594 1,570,793 1,952,117 2,892,392 3,523,052 3,393,317 Total expenses7,174,921 7,043,140 6,694,191 8,195,149 8,462,719 8,868,372 9,964,364 10,633,886 10,516,570 10,075,510 Net water system revenues8,032,192 8,316,544 9,146,662 8,537,452 10,934,690 7,344,901 6,979,074 7,535,519 8,939,114 8,202,103 Water supported debt service:2007 WIFA Loan369,627 316,983 316,875 316,763 311,494 311,377 311,256 311,130 311,000 310,866 2009 WIFA Loan161,554 182,268 186,817 150,471 149,367 149,322 149,275 149,226 149,175 2014 WIFA Loan296,972 361,059 395,534 377,158 377,060 2003 Revenue Bonds2,544,973 2,545,935 2,545,435 980,000 2003 Refunding Revenue Bonds647,374 1,152,546 1,238,996 1,243,058 2005 Excise Tax Bonds152,672 151,744 152,099 151,245 152,565 152,516 2007 Excise Tax Bonds1,516,494 791,099 791,203 791,111 790,822 1,255,948 1,197,678 1,245,403 2012 Refunding Bonds956,975 1,968,281 1,971,082 1,995,481 1,980,781 1,963,731 1,996,381 2013 Refunding Bonds1,513,427 1,046,558 1,022,420 1,033,428 1,024,073 1,024,645 2015 Refunding Revenue Obligations17,116 25,101 150,259 152,339 2017 Refunding Revenue Obligations235,873 1,658,306 Total water supported debt service5,231,139$ 5,119,861$ 5,226,876$ 4,625,969$ 4,887,060$ 5,183,820$ 5,054,333$ 5,140,652$ 3,975,446$ 5,668,772$ Debt service coverage1.541.621.751.852.241.421.381.472.251.45Source: Oro Valley Finance DepartmentTOWN OF ORO VALLEY, ARIZONAHISTORICAL AND PROJECTED WATER SYSTEM REVENUES, EXPENSES, DEBT SERVICE AND COVERAGELAST TEN FISCAL YEARS(UNAUDITED)Fiscal YearPage 158
Personal Per
Income Capita
(thousands Personal Unemployment
Year Population of dollars)Income Rate
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%
2015 42,259 1,728,773,431 40,909 5.2%
2016 43,565 1,817,844,597 41,727 5.3%
2017 43,781 1,863,394,821 42,562 4.6%
2018 44,517 1,932,614,654 43,413 4.8%
2019 45,184 2,014,980,480 44,595 4.9%
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 159
20192010PercentagePercentageof Total Townof Total TownEmployerEmployees Rank Employment Employees Rank EmploymentRoche Tissue Diagnostics 1,300 1 6.78% 803 1 5.26%Honeywell Aerospace 650 2 3.39%Oro Valley Hospital 605 3 3.15% 549 3 3.60%Amphitheater Public Schools 502 4 2.62% 577 2 3.78%Town of Oro Valley 302 5 1.57% 367 5 2.40%Casa de la Luz Hospice 272 6 1.42%El Conquistador Tucson, A Hilton Resort 250 7 1.30% 400 4 2.62%Simpleview 213 8 1.11%Splendido at Rancho Vistoso 204 9 1.06%Meggitt Securaplane 157 10 0.82%Wal-Mart Supercenter321 6 2.10%Fry's Food & Drug Store279 7 1.83%Home Depot140 8 0.92%Long Realty126 9 0.83%Target121 10 0.79%Total 4,455 23.22% 3,683 24.13%Source: Town of Oro Valley Department of Economic Development. 2010 Information is from the Principal Employers Arizona Workforce InformerTOWN OF ORO VALLEY, ARIZONAPRINCIPAL EMPLOYERS(UNAUDITED)CURRENT FISCAL YEAR AND FISCAL YEAR NINE YEARS PRIORPage 160
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Function/Program
Administration
Town Clerk 4.73 4.69 4.54 4.56 4.56 4.90 4.54 4.44 4.60 4.00
Town Manager 10.38 7.38 7.38 7.38 8.00 7.00 7.00 7.10 7.10 8.10
Human Resources 4.00 3.48 3.48 3.50 3.50 2.00 5.00 5.00 5.00 4.00
Economic Development 1.00 3.00 3.00 3.00 2.00 2.00 3.00 1.00 1.00 1.40
Finance 8.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00
Information Systems 9.00 8.00 7.00 7.00 7.00 7.30 6.50 6.50 8.00 8.00
Legal 6.00 6.00 6.00 6.00 6.00 6.00 6.00 8.00 8.00 7.00
Community Development
Building Safety 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 13.00
Community Development Admin. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Planning & Zoning 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 13.00
Development & Infrastructure Services 27.38 26.88 103.63 83.76 81.45 78.84 77.22 73.38 73.10 0.00
Parks and Recreation 63.10 60.78 48.02 49.36 36.20 37.61 27.26 20.62 22.70 27.50
Cultural Resources 0.00 0.00 0.00 0.20 0.00 0.00 1.35 1.30 1.30 0.00
Library 0.00 0.00 0.00 0.00 0.00 0.00 0.00 18.55 18.40 18.50
Police
Civilians 31.25 30.25 31.25 30.25 30.25 25.93 30.25 30.25 29.70 30.70
Officers 101.88 104.88 101.88 102.88 102.88 101.91 101.44 97.96 95.00 97.90
Magistrate Court 8.00 8.00 8.00 8.00 8.00 8.70 8.00 8.00 9.00 9.00
Public Works 70.29 65.79 0.00 0.00 0.00 0.00 0.00 0.00 0.00 47.70
Water Utility 39.48 39.48 39.48 38.48 37.48 37.00 36.00 36.00 34.00 35.00
Total 384.49 375.61 370.66 351.37 334.32 326.19 320.56 325.10 323.90 331.80
Source: Town of Oro Valley Finance Department
TOWN OF ORO VALLEY, ARIZONA
FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
(UNAUDITED)
Full-time Equivalent Employees as of June 30
Page 161
FiscalIrrigationConstructionTurfYear Residential Commercial Irrigation Reclaimed Construction Reclaimed TurfReclaimedTotal20108,040,762$ 902,432$ 1,152,529$ 14,240$ 222,447$ 720$ 354,308$ 1,383,592$ 12,071,030$ 20118,043,658 921,825 1,166,921 13,258 92,257 814 130,704 1,669,045 12,038,482 20127,761,639 954,472 1,050,602 13,466 120,830 653 115,568 1,561,750 11,578,980 20137,752,934 962,824 1,040,793 19,000 196,354 884 135,720 1,507,574 11,616,083 20147,881,436 886,712 1,169,067 187,622 283,632 816 121,108 1,638,981 12,169,374 20157,649,136 779,877 981,545 214,848 271,815 115,955 1,267,093 11,280,269 20168,103,644 778,915 1,129,741 50,479 310,609 114,427 1,530,107 12,017,922 20178,416,714 814,041 1,170,946 51,373 224,532 8,733 104,880 1,702,338 12,493,557 20188,990,121 860,124 1,371,555 61,504 520,324 13,735 103,126 1,666,178 13,586,667 20198,849,732 856,941 1,087,648 69,363 302,780 9,627 69,091 1,168,322 12,413,504 Source: Town of Oro Valley Water Utility DepartmentWATER UTILITY REVENUES BY USER TYPELAST TEN FISCAL YEARS(UNAUDITED)TOWN OF ORO VALLEY, ARIZONAPage 162
2010201120122013201420152016201720182019Function/ProgramPoliceBurglaries120 100 134 105 75 77 85 71 77 50Citations (traffic)6,736 5,244 5,084 5,456 4,668 4,486 3,890 3,446 2,992 3,117Investigations732 746 711 681 765 832 824 818 915 963Total Arrests2,176 1,932 1,716 1,564 1,679 1,721 1,598 1,458 1,786 1,488Thefts567 656 571 563 561 500 586 493 567 504Development & Infrastructure ServicesStreet resurfacing (miles)14.8 13.9 22.4 30.5 73.4 101.0 92.0 89.0 44.088.0Parks and RecreationRecreation Programs Held Annually40 47 37 35 30 38 52 55 73 96Months of Public Pool Operations12 12 12 10 12 12 12 12 12 12Parks Maintenance Man-Hours Worked16,120 18,680 16,016 17,000 20,000 16,255 15,083 15,463 17,842 18,311LibraryCollection volume100,142 100,652 97,3640000000WaterNew connections68 61 97 213 165 202 176 340 331 267Total connections18,441 18,502 18,599 18,812 18,977 19,179 19,355 19,588 19,924 20,217TransitTotal route miles138,752 138,333 200,058 353,936 439,512 392,071 529,170 568,657 468,346 454,277Passengers15,573 14,873 20,119 32,442 39,196 39,102 45,202 51,131 49,474 47,847Source: 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 163
Reclaimed
Water
Base Rate Tier 1 Tier 2 Tier 3 Tier 4 GPF Base Rate
Year monthly per 1,000 per 1,000 per 1,000 per 1,000 per 1,000 monthly
2010 14.19$ 2.20$ 2.99$ 4.03$ 5.38$ 0.75$ 14.19$
2011 14.19 2.20 2.99 4.03 5.38 0.75 14.19
2012 14.19 2.20 2.99 4.03 5.38 0.95 14.19
2013 14.19 2.20 2.99 4.03 5.38 0.95 14.19
2014 14.19 2.23 3.01 4.07 5.49 0.95 14.19
2015 14.19 2.27 3.10 4.23 5.76 0.90 14.19
2016 14.19 2.32 3.19 4.40 6.05 0.90 14.19
2017 14.62 2.34 3.25 4.53 6.29 0.90 14.62
2018 16.45 2.34 3.25 4.53 6.29 0.90 14.62
2019 18.26 2.34 3.25 4.53 6.29 0.90 14.62
Source: Town of Oro Valley Water Utility
Note: The rate for all reclaimed water is $2.27 per 1,000 gallons.
Potable Water
TOWN OF ORO VALLEY, ARIZONA
WATER RATES
LAST TEN FISCAL YEARS
(UNAUDITED)
Page 164
2010201120122013201420152016201720182019Function/ProgramPoliceStations1111111111Substations3333333333Patrol units108 53 67 66 64 74 77 72 78 78Other fleet0 55 42 43 42 45 44 67 65 46Development & Infrastructure ServicesStreets (miles)214.0 203.8 203.8 205.1 421.0 421.0 421.0 421.0 421.0 421.0Streetlights93 93 93 95 95 95 95 95 95 95Traffic signals18 16 17 19 19 19 19 19 22 22Parks and recreationAcreage374 374 436 436 457 448 448 448 449 449Playgrounds2222222222Baseball/softball diamonds7777777777Community centers0000011111Golf course holes000004545454545Tennis courts111113232323232Swimming pools1122244443WaterWells18 22 22 22 18 20 20 20 19 18Storage capacity (MG)19 20 20 20 13 12 12 12 10 12Booster capacity26 25 25 25 26 27 27 27 46 33TransitTransit vans9555974477Transit mini buses0 5 10 12 17 19 22 22 21 21Source: Town of Oro Valley Finance DepartmentTOWN OF ORO VALLEY, ARIZONACAPITAL ASSETS STATISTICS BY FUNCTIONLAST TEN FISCAL YEARS(UNAUDITED)Page 165
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