TO WN O F
PRESCOTT VALLEY,
ARIZONA
COMPREHENSIVE
ANNUAL
FINANCIAL REPORT
For Fiscal Year Ending June 30, 2005
COMPREHENSIVE ANNUAL FINANCIAL REPORT
of the
TOWN OF PRESCOTT VALLEY, ARIZONA
for the
FISCAL YEAR ENDED JUNE 30, 2005
Prepared by the Management Services Department
William E. Kauppi
Management Services Director
Valerie H. Fenske, CPA
Finance Manager
TOWN OF PRESCOTT VALLEY
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2005
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION
Letter of Transmittal.........................................................................................................................
GFOA Certificate of Achievement…...............................................................................................
Organizational Chart.........................................................................................................................
List of Elected and Appointed Officials...........................................................................................
FINANCIAL SECTION
Independent Auditor’s Report........................................................................................................
Management’s Discussion and Analysis..........................................................................................
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets.......................................................................................................
Statement of Activities........................................................................................................
Fund Financial Statements:
Balance Sheet – Governmental Funds.................................................................................
Reconciliation of the Balance Sheet to the Statement of Net Assets..................................
Statement of Revenues, Expenditures & Changes in Fund Balances – Governmental
Funds................................................................................................................................
Reconciliation of the Statement of Revenues, Expenditures & Changes in Fund
Balances of Governmental Funds to the Statement of Activities.....................................
Statement of Revenues, Expenditures & Changes in Fund Balances – Budget and
Actual – General Fund......................................................................................................
Statement of Revenues, Expenditures & Changes in Fund Balances – Budget and
Actual – Highway User Revenue Fund - Major Special Revenue Fund..........................
Statement of Net Assets – Proprietary Funds......................................................................
Statement of Revenues, Expenses & Changes in Fund Net Assets – Proprietary Funds....
Statement of Cash Flows – Proprietary Funds....................................................................
Notes to the Financial Statements..........................................................................................
Required Supplementary Information:
Schedule of Funding Progress – Public Safety Employees Retirement System....................
Combining and Individual Fund Statements and Schedules:
Non-major Governmental Funds-Descriptions……………………………………………..
Combining Balance Sheet – Non-major Governmental Funds..............................................
Combining Statement of Revenues, Expenditures & Changes in Fund Balances –
Non-major Governmental Funds.........................................................................................
Other Supplementary Information:
Schedules of Revenues, Expenditures & Changes in Fund Balances – Budget and Actual:
Local Transportation Assistance Fund...................................................................................
Grants Fund............................................................................................................................
Development Impact Fees Fund.............................................................................................
Replacement Fund..................................................................................................................
Maranda Donation Fund…………………………………………………………………
Library Building Fund………………………………………………………………………
Capital Projects Growth Fund……………………………………………………………..
Facilities Capital Projects Fund……………………………………………………………..
Streets Capital Improvement Fund………………………………………………………….
Special Assessment Bonded Debt Fund……………………………………………………
Municipal Property Corporation Debt Service Fund………………………………………..
1
5
6
7
8
10
26
27
29
31
32
36
37
40
41
43
44
46
69
70
71
73
75
76
77
78
79
80
81
82
83
84
85
STATISTICAL SECTION
Table
I
II
III
IV
V
VI
VII
VIII
IX
X
XI
XII
XIII
XIV
XV
XVI
XVII
Government-wide Information:
Government-wide Expenses by Function............................................................................
Government-wide Revenues................................................................................................
Fund Information:
General Governmental Expenditures by Function..............................................................
General Governmental Revenues by Source.......................................................................
General Governmental Tax Revenues by Source................................................................
Assessed and Estimated Actual Value of Property.............................................................
Property Tax Rates – Direct and Overlapping Governments..............................................
Special Assessment Billings and Collections......................................................................
Computation of Legal Debt Margin……………………..............................................
Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General
Obligation Bonded Debt Per Capita.................................................................................
Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to
Total General Governmental Expenditures......................................................................
Computation of Direct and Overlapping Bonded Debt – General Obligation Bonds…….
Revenue Bond Coverage:
Sewer Revenue Bonds.........................................................................................................
Water District Revenue Bonds............................................................................................
Miscellaneous Information:
Demographic Statistics........................................................................................................
Property Value, Construction and Bank Deposits...............................................................
Miscellaneous Statistics.......................................................................................................
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
INTRODUCTORY SECTION
October 7, 2005
To the Honorable Mayor, Town Council,
and the Citizens of the Town of Prescott Valley
Prescott Valley, Arizona 86314
The Comprehensive Annual Financial Report (CAFR) of the Town of Prescott Valley for the fiscal year
ended June 30, 2005 is submitted herewith. This report was prepared by the Town’s Management
Services Department, in conformity with U.S. generally accepted accounting principles (GAAP) and
audited in accordance with generally accepted auditing standards by a firm of licensed certified public
accountants.
This report consists of management’s representations concerning the finances of the Town of Prescott
Valley. 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 of Prescott Valley has established a comprehensive internal
control framework that is designed both to protect the government’s assets from loss, theft or misuse and
to compile sufficient reliable information for the preparation of the Town of Prescott Valley’s financial
statements in conformity with GAAP. Because the cost of internal controls should not outweigh their
benefits, the Town of Prescott Valley’s comprehensive framework of internal controls has been designed
to provide a reasonable rather than an absolute assurance that the financial statements will be free from
material misstatement. As management, we assert that, to the best of our knowledge and belief, this
financial report is complete and reliable in all material respects.
The Town of Prescott Valley’s financial statements have been audited by EideBailly, PC, a firm of
licensed certified public accountants. The goal of the independent audit was to provide reasonable
assurance that the financial statements of the Town of Prescott Valley for the fiscal year ended June 30,
2005, 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 auditor concluded, based upon the audit, that there was a
reasonable basis for rendering an unqualified opinion that the Town of Prescott Valley’s statements for
the fiscal year ended June 30, 2005, are presented fairly in conformity with GAAP. The independent
auditor’s report is presented as the first component of the financial section of this report.
GAAP requires that management provide a narrative introduction, overview and analysis to accompany
the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This
letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The
Town of Prescott Valley’s MD&A can be found immediately following the report of the independent
auditors.
Town of Prescott Valley profile
Prescott Valley, located in the heart of Yavapai County between State Route 69 and State Route 89A, is
situated at an elevation of 5,100 feet, approximately 80 miles northwest of Phoenix and nine miles east of
the City of Prescott.
The area on which the incorporated town is now situated was formerly grazing land owned by the Fain
family and was originally known as Jackass Flats or Lonesome Valley. The community of Prescott
Valley was founded by Prescott Valley, Inc., a private developer from Phoenix, in 1966. The Town of
Prescott Valley is in a cruciform shape. The original lots ranged in price from as low as $900 up to about
$6,500. It was incorporated on August 22, 1978 with a population of 1,520 people. As one of the fastest
growing communities in Arizona, Prescott Valley has a population of 34,000 per the most recent estimate
from the Arizona Department of Economic Security.
The Town operates under the Council-Manager form of government. Policy-making and legislative
authority are vested in the governing council consisting of the mayor and six other members. The
governing council is responsible, among other things, for passing ordinances, adopting the budget,
appointing committees and hiring both the government’s manager and attorney. The government’s
manager is responsible for carrying out the policies and ordinances of the governing council, for
overseeing the day-to-day operations of the government and for appointing the heads of the various
departments. Council members are elected at large on a nonpartisan ballot for staggered, four-year terms.
The mayor is elected at large on a nonpartisan ballot for a four-year term.
The Town of Prescott Valley provides a full range of services including police protection, the
construction and maintenance of highways, streets and other infrastructure, recreational activities, a
library facility and cultural events. Certain water services are provided through a legally separate Water
District, which functions, in essence, as a department of the Town of Prescott Valley and therefore has
been included as an integral part of the Town of Prescott Valley’s financial statements. Telephone
service is provided by Qwest, natural gas service by Unisource Energy Services and electric service by
Arizona Public Service.
The annual budget serves as the foundation for the Town of Prescott Valley’s financial planning and
control. All departments of the Town of Prescott Valley are required to submit a departmental budget
request package. The Management Services Director uses these requests as the starting point for
developing a proposed budget. The Town Manager then presents this proposed budget to the council for
review. The council is required to hold a public hearing on the proposed budget and historically adopts a
final budget on or before its first regularly scheduled council meeting in July. The appropriated budget is
prepared by fund, function (e.g., General Government), and department (e.g., Town Manager).
Department directors may make transfers of appropriations within a department. Transfers of
appropriations between funds or departments, however, require the approval of the governing council.
Budget-to-actual comparisons are provided in this report for each individual governmental fund for which
an appropriated annual budget has been adopted. For the General Fund, this comparison is presented on
page 37 as part of the basic financial statements for the governmental funds. For governmental funds,
other than the General Fund and the Highway User Revenue Fund, with appropriated annual budgets, this
comparison is presented starting on page 75 in the governmental fund subsection of this report.
Factors affecting the Town’s financial condition. The information presented in the financial statements
is best understood when it is considered from the broader perspective of the specific environment within
which the Town of Prescott Valley operates.
2
The national and state leading economic indicators have demonstrated increasing economic strength,
showing growth in the particular areas of retail sales, tourism and construction activities. From a longterm perspective, the nation’s economy may be significantly affected by rising interest rates, high levels
of national and consumer debt, high energy prices and the economic impact of natural disasters.
Local economy. On a local perspective, the Town of Prescott Valley continues to benefit from steady
area growth. A reflection of this steady growth is shown by a 22% increase in building permit activity
over the previous year, which represents 230 additional permits issued over the previous year. Building
activity is projected to continue its steady increase over the foreseeable future. This growth provides
economic and other advantages to Prescott Valley and its citizens, and also presents significant challenges
to properly manage that growth to ensure that Town services and infrastructure keep pace. Sales and usetax revenues are 40% of the Town’s General Fund revenues and are largely dependent upon consumer
confidence in the economy. These revenues, along with state shared revenues, are tremendously
susceptible to national, regional and local trends in the retail and construction markets.
Long-term financial planning. The Town council has adopted several goals specific to achieving a
long-term sustainable economic base. These goals include a plan to increase and diversify Prescott
Valley’s retail, commercial and industrial economic base through implementation of Prescott Valley
Focus Future II Strategic Plan for Economic Development. Plans are also in place to improve
infrastructure by upgrading and adding streets, utilities, drainage, parks and facilities. There are also
goals in place to maximize and diversify revenue resources.
Cash management policies and practices. Cash temporarily idle during the year was invested in the
State of Arizona’s Local Government Investment Pool (LGIP) and in U.S. Treasuries and agencies. The
earnings rates of the pool fluctuated during the year from a high of 2.7% to a low of 1.3% The Town’s
investment policy allows for investment in certificates of deposit, obligations of the U.S. Treasury,
corporate bonds, repurchase agreements, and the State Treasurer’s investment pool. Investment income
in the current year includes a recovery of an investment loss sustained by the LGIP during fiscal year
2002/03 due to the bankruptcy of a financing corporation in which treasury funds were invested. The
Town is a party in a class action lawsuit with the State of Arizona and other investors against the
financing corporation in an effort to recover lost funds and during fiscal year 2004/05 recovered 4% of its
loss.
Risk management. The Town participates in the Arizona Municipal Risk Pool (Pool) as an alternative to
escalating general liability insurance costs. The Pool is made up of various towns and cities within
Arizona that operate a common risk management and insurance program. The Pool is self-sustaining
through member premiums. The Town continues to carry commercial insurance for all other risks of loss,
including workers’ compensation and health and accident insurance.
Pension benefits. The Town of Prescott Valley has a defined contribution plan created in accordance
with Internal Revenue Code Section 401(a). This plan is in-lieu of participating in FICA and is available
to all full-time employees of the Town, except police personnel who are covered under the Arizona Public
Safety Personnel Retirement System (APSPRS). The Town also offers its employees a deferred
compensation plan created in accordance with Internal Revenue Code Section 457. The plan is available
to all Town employees and permits them to defer a portion of their salary until future years.
Additional information on the Town of Prescott Valley’s retirement and pension arrangements and
benefits can be found in Note IV, section D on page 67 in the notes to the financial statements.
3
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for
Excellence in Financial Reporting to the Town of Prescott Valley for its comprehensive annual financial
report (CAFR) for the fiscal year ended June 30, 2004. This was the eighth consecutive year that the
government has received this prestigious award. In order to be awarded a Certificate of Achievement, the
government published an easily readable and efficiently organized CAFR. This report satisfied both
GAAP and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR
continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the
GFOA to determine its eligibility for another certificate.
In addition, the government also received the GFOA’s Distinguished Budget Presentation Award for its
annual budget document dated June 30, 2005.
In order to qualify for the Distinguished Budget
Presentation Award, the government budget document was judged to be proficient in several categories,
including as a policy document, a financial plan, an operations guide and a communications device.
The preparation of this report would not have been possible without the efficient and dedicated services of
the entire staff of the Management Services Department. We would like to express our appreciation to all
members of the department who assisted and contributed to the preparation of this report. Credit must
also be given to the mayor and governing council for their interest and support in planning and
conducting the financial affairs of the Town of Prescott Valley in a responsible and progressive manner.
Respectfully submitted,
William E. Kauppi
Management Services Director
Valerie H. Fenske, CPA
Finance Manager
4
TOWN OF PRESCOTT VALLEY – CHART OF ORGANIZATION
Citizens of
Prescott Valley
Boards & Commissions
Town Clerk/Risk Manager
Diane Russell
Mayor Harvey Skoog &
Town Council
Town Attorney/Legal
Ivan Legler
Library Board
Town Manager
Library
Stuart Mattson
Magistrate
Judge Keith Carson
Larry Tarkowski
Community Development
Police Department
Public Works
Management Services
Parks & Recreation
Manager's
Richard Parker
Daniel Schatz
Norm Davis
William Kauppi
Patricia Evans
Office
Building
Animal
Engineering
Outdoor
Community Relations
Inspection
Control
Education
- PV 13
Finance
Planning &
Facilities
Information
Aquatics
Economic
Zoning
Maintenance
Technology
Athletics
Development
Utilities
Customer Service
Parks
Water
(Utilities)
Maintenance
Resources
Mail
Special
Human
Room
Events
Resources
Fleet
Streets
Capital Projects
TOWN COUNCIL
Harvey Skoog, Mayor
Michael Flannery, Vice Mayor
Bob Edwards
Fran Schumacher
Lora Lee Nye
Harold Wise
Angie Parker
TOWN MANAGER
Larry Tarkowski
MANAGEMENT SERVICES DEPARTMENT
William E. Kauppi
Management Services Director
Valerie H. Fenske, CPA
Finance Manager
7
FINANCIAL SECTION
INDEPENDENT AUDITOR’S REPORT
The Honorable Mayor and the Members of the Council
Town of Prescott Valley, Arizona
Prescott Valley, Arizona
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, the aggregate fund information, and the budgetary information of the Town of
Prescott Valley, Arizona as of and for the year ended June 30, 2005, which collectively comprise the Town’s
basic financial statements as listed in the table of contents. These financial statements are the responsibility of the
Town of Prescott Valley, Arizona management. Our responsibility is to express an opinion 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 reports 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 of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business-type activities, each major fund, and the aggregate
remaining fund information of the Town of Prescott Valley, Arizona at June 30, 2005, and the respective changes
in financial position and cash flows, where applicable, for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.
The Management’s Discussion and Analysis are not a required part of the basic financial statements but are
supplementary information required by accounting principles generally accepted in the United States of America.
We have applied certain limited procedures, which consisted principally of inquires of management regarding the
methods of measurement and presentation of the supplementary information. However, we did not audit the
information and express no opinion on it.
PEOPLE. PRINCIPLES. POSSIBILITIES.
www.eidebailly.com
1702 East Highland Avenue • Suite 100 • Phoenix, Arizona 85016 • Phone 602.264.5844 • Fax 602.277.4845 • EOE
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town of Prescott Valley, Arizona’s basic financial statements. The introductory section, combining
and individual nonmajor fund financial statements, and the statistical tables are presented for the purpose of
additional analysis and are not a required part of the basic financial statements. The combining and individual
nonmajor fund financial statements have been subjected to the auditing procedures applied in the audit of the
basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole. The introductory section and statistical tables have not been subjected to
the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no
opinion on them.
Phoenix, Arizona
October 7, 2005
MANAGEMENT’S DISCUSSION &
ANALYSIS
Town of Prescott Valley, Arizona
MANAGEMENT’S DISCUSSION AND ANALYSIS
This section of the Town of Prescott Valley’s (the Town) Comprehensive Annual Financial Report
presents a narrative overview and analysis of the financial activities of the Town for the fiscal year ended
June 30, 2005. We encourage readers to consider the information presented here in conjunction with
additional information that we have furnished in our letter of transmittal.
FINANCIAL HIGHLIGHTS
•
The assets of the Town exceeded its liabilities at the close of the most recent fiscal year by
$190,768,212 (net assets). Of this amount, $72,910,587 (unrestricted net assets) may be used to
meet the government’s ongoing obligations to citizens and creditors.
•
The government’s total net assets increased by $83,556,799 during the fiscal year. A majority of
this increase was attributed to infrastructure (i.e. roads, sidewalks, water and sewer lines, etc.)
contributed by developers.
•
As of June 30, 2005, the Town’s governmental funds reported combined ending fund balances of
$65,338,717, an increase of $17,764,523 over the prior year. Approximately 65% of this total
amount, $42,687,081, is unreserved fund balance available for spending at the government’s
discretion. Of this amount, $6,722,937 has been designated for specific Street capital
improvements. These are not considered restricted since a separate fund has been established to
account for these activities.
•
At the close of the current fiscal year, unreserved fund balance for the General Fund was
$18,838,057 or 104 percent of total General Fund expenditures of $18,101,482.
•
The General Fund reported revenues in excess of expenditures and other financial sources and
uses by $2,082,681.
•
During fiscal year 2005, the Town’s total bonded debt (not including Community Facilities
Districts) increased by approximately $13.075 million. The key factor was the issuance of $14.3
million of Municipal Property Corporation debt to acquire additional water supply through a
cooperative agreement with the City of Prescott.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the Town’s basic financial
statements. The Town’s basic financial statements comprise three components: (1) Government-wide
financial statements, (2) Fund financial statements, and (3) Notes to the financial statements. This report
also contains other supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the
Town’s finances, in a manner similar to a private-sector business.
The statement of net assets and the statement of activities provide information about the whole Town,
presenting an aggregate view of the Town’s finances and a longer-term view of those assets. Major fund
10
Town of Prescott Valley, Arizona
financial statements provide the next level of detail. For governmental funds, these statements reflect
how services were financed in the short term as well as what dollars remain for future spending.
The statement of net assets presents information on all of the Town’s assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets may
serve as a useful indicator of whether or not the financial position of the Town is improving or
deteriorating.
The statement of activities presents information showing how the Town’s net assets changed during the
most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise
to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are
reported in this statement for some items that will only result in cash flows in future fiscal periods, such
as revenues pertaining to uncollected taxes and expenses pertaining to earned but unused general leave.
Both of the government-wide financial statements distinguish functions of the Town that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are
intended to recover all or a significant portion of their costs through user fees and charges (business-type
activities). The governmental activities of the Town include general government, public safety, culture
and recreation, highways and streets and public works. The business-type activities of the Town include
water and sewer utilities.
The government-wide financial statements include not only the Town itself (known as the primary
government), but several component units. Among these is a legally separate nonprofit corporation, the
Prescott Valley Water District Company, for which the Town is financially accountable and which is
included in the business-type activities of the government-wide financial statements as a blended
component unit. Included within the governmental activities of the government-wide financial statements
are the operations of the Town of Prescott Valley Municipal Property Corporation, StoneRidge
Community Facilities District, Pronghorn Ranch Community Facilities District, Eastridge Community
Facilities District, Raven Ridge Community Facilities District and Quailwood Meadows Community
Facilities District. Although legally separate from the Town, these component units are blended with the
primary government because of their governance or financial relationships to the Town.
The government-wide financial statements can be found on pages 26-28 of this report.
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, like other state and local governments, uses
fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the
funds of the Town can be divided into the following 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 focus
on near-term inflows (revenues) and outflows (expenditures) 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 determining what financial resources are available in the near future to finance the
Town’s programs.
11
Town of Prescott Valley, Arizona
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 government’s near-term
financing decisions. 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.
The Town maintains several individual governmental funds organized according to their type
(special revenue, debt service and capital projects). 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 Fund, Highway Users Revenue Fund
(HURF), Debt Service Special Assessments, Street Capital Improvement Projects Fund,
Municipal Property Corporation Debt Service Fund, StoneRidge Community Facilities District
and Quailwood Meadows Community Facilities District, which are considered to be major funds.
Data from the remaining governmental funds are combined into a single, aggregated presentation.
Individual fund data for each of the non-major governmental funds is provided in the form of
combining statements elsewhere in this report.
A budgetary comparison statement has been provided for all governmental funds that adopt an
annual appropriated budget to demonstrate budgetary compliance.
The basic governmental fund financial statements can be found on pages 29-35 of this report.
Proprietary funds. Proprietary funds are generally used to account for services for which the
Town charges customers–either external customers, or internal units or departments of the Town.
Proprietary funds provide the same type of information as shown in the government-wide
financial statements, only in more detail. The Town maintains the following type of proprietary
funds:
ƒ
Enterprise funds are used to report the same functions presented as businesstype activities in the government-wide financial statements. The Town uses
Enterprise funds to account for the operations of the Water and Sewer operations
of the Town. All of the Enterprise funds are considered to be major funds of the
Town. The basic proprietary fund financial statements can be found on pages 4145 of this report.
Notes to the Financial Statements
The notes to the financial statements provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements. The notes can
be found beginning on page 46 of this report.
Required Supplementary Information
In addition to the basic financial statements and accompanying notes, this report presents certain required
supplementary information concerning the Town’s progress in funding its obligation to provide pension
benefits to its employees. Required supplementary information can be found on page 69 of this report.
12
Town of Prescott Valley, Arizona
Combining Statements
The combining statements referred to earlier in connection with non-major governmental funds are
presented immediately following the required supplementary information on pensions. Combining and
individual fund statements and schedules can be found on pages 71-85 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
While this document contains information about the funds used by the Town to provide services to its
citizens, the Statement of Net Assets and the Statement of Activities serve to provide an answer to the
question of how the Town, as a whole, did financially throughout the year. These statements include all
assets and liabilities using the accrual basis of accounting similar to the accounting used by the private
sector. The basis for this accounting takes into account all of the current year’s revenues and expenses
regardless of when the cash is received or paid.
These two statements report the Town’s net assets and the changes in those assets. The change in assets
is important because it tells the reader whether the financial position of the Town as a whole has
improved or diminished. However, in evaluating the overall position of the Town, non-financial
information such as changes in the City’s tax base, the impact of development agreements on future
revenues and the condition of the Town’s capital assets will also need to be evaluated.
Analysis of Net Assets
As noted earlier, net assets may serve as a useful indicator of a government’s financial position. For the
Town, assets exceeded liabilities by $190,768,212 at the close of the current fiscal year. Net Assets
consist of three components: Invested in capital assets, net of related debt; Restricted and Unrestricted.
Town of Prescott Valley, Arizona
Statement of Net Assets
June 30, 2005 and 2004
Governmental Activities
2005
2004
Assets
Current and other assets
Capital Assets
Total Assets
Liabilities
Long-term liabilities outstanding
Other Liabilities
Total Liabilities
Net Assets
Invested in capital assets, net of related debt
Restricted
Unrestricted
Total Net Assets
Total Liabilities and Net Assets
$
78,836,928 $ 59,890,927
128,040,527
71,377,610
206,877,455
131,268,537
78,736,139
10,339,005
89,075,144
55,733,210
8,322,956
64,056,166
46,666,116
22,651,636
48,484,559
117,802,311
$ 206,877,455 $
13,550,128
8,111,272
45,550,971
67,212,371
131,268,537
13
Business Type Activities
2005
2004
$ 13,335,164 $ 22,520,736
91,015,100 $ 51,176,555
104,350,264 73,697,291
27,460,000
3,924,363
31,384,363
28,860,000
4,838,249
33,698,249
48,539,873 22,901,555
24,426,028 17,097,487
72,965,901 39,999,042
$ 104,350,264 $ 73,697,291
Total
2005
2004
$ 92,172,092 $ 82,411,663
219,055,627
122,554,165
311,227,719
204,965,828
106,196,139
14,263,368
120,459,507
84,593,210
13,161,205
97,754,415
95,205,989
36,451,683
22,651,636
8,111,272
72,910,587
62,648,458
190,768,212
107,211,413
$ 311,227,719 $ 204,965,828
Town of Prescott Valley, Arizona
A portion of the Town’s net assets (50 percent) reflects its investment of $95,205,989 in capital assets
(e.g. land, buildings and equipment); less any related outstanding debt used to acquire those assets. The
Town uses these capital assets to provide services to citizens; consequently, these assets are not available
for future spending and it is not the Town’s intention to sell these assets. Although the Town’s
investment in its capital assets is reported net of related debt, it should be noted that the resources needed
to repay this debt must be provided from other sources, since the capital assets themselves cannot be
liquidated for these liabilities.
An additional portion of the Town’s net assets, $22,651,636 (12 percent) represents resources that are
subject to external restrictions (i.e. debt service obligations) on how they may be used.
The remaining balance of unrestricted net assets, $72,910,587 (38 percent) may be used to meet the
government’s ongoing obligations to citizens and creditors. However, $6.7 million has been designated
for specific Street Improvements; these are not considered restricted since a separate fund has been
established to account for these activities.
At the end of the current fiscal year, the Town is able to report positive balances in all three categories of
net assets for the government as a whole, as well as for the business-type activities.
Analysis of Changes in Net Assets
For the current fiscal year, the Town’s net assets increased by $83,556,799. These increases are
explained in the government and business-type activities discussion below, and are primarily the result of
capital assets either being acquired or constructed during the year.
Governmental activities. Governmental activities increased the Town’s net assets by $50,589,940,
thereby accounting for 59 percent of the total growth in the net assets of the Town. Key factors of this
increase are as follows:
•
•
•
Construction in progress (Capital Assets) increased by $14,821,080 due to several major road
reconstruction projects, signal installations, Highway 69 Sewer Service Project, drainage projects,
economic development project (water main extension) and the Civic Center Remediation
Settlement Projects.
In FY 2005, the Town governmental funds recognized $42 million in infrastructure donations
from the planned communities (StoneRidge, Pronghorn, Granville).
Total revenues for the governmental funds increased by approximately $5,450,000, with the
majority of the increase being attributable to the increased collection of the Town’s transaction
privilege taxes (i.e. sales taxes) and infrastructure contributions from developers.
o The Town’s sales tax revenues continue to post positive growth in the 2004/05 fiscal
year. Fiscal year 2004/05 sales tax receipts increased approximately by $2,600,000, 27%
over the prior year. Sales taxes derived from construction and retail sales continue to
represent the majority of the increase in sales tax revenues. Construction sales taxes
increased by approximately 47% over the prior year. Construction sales taxes account for
approximately 30% of the total sales tax collections. Town staff is cautious to
continuously rely on construction sales tax revenues to fund ongoing operations.
o Building permits revenue for new homes issued continues to remain strong. For the
fiscal year 2005, 1,264 permits were issued compared to 1,034 the previous year; an
increase of 22%. As a result, building permit revenues increased by $435,000 over the
previous year.
14
Town of Prescott Valley, Arizona
o
o
One-time development impact fees are also directly attributable to new housing. For the
fiscal year 2004/05, impact fees collected were approximately $400,000 greater than the
previous year.
Investment earnings increased significantly over the previous year ($821,098).
In April, 2004, Council adopted a policy “Construction Sales Tax Revenue” to limit the Town’s reliance
on the Town’s construction sales tax revenues. Beginning in FY04-05, staff began transferring 10 percent
annually (increased 10 percent annually) to a capital project construction fund. These funds are solely
used to finance large one-time growth related capital expenditures.
Town of Prescott Valley, Arizona
Changes in Net Assets
June 30, 2005 and 2004
Governmental Activities
2005
2004
Revenues
Program revenues:
Charges for services
Operating grants and contributions
Capital grants and contributions
$
2,681,362 $
416,548
47,999,642
1,983,311
164,876
5,723,013
Business Type Activities
2005
2004
$ 9,160,895 $ 8,688,132
34,136,934
5,175,225
Total
2005
2004
$ 11,842,257 $ 10,671,443
416,548
164,876
82,136,576
10,898,238
General revenues:
Sales taxes and franchise fees
Intergovernmental
Interest and investment income
Total revenues
11,577,445
10,798,885
946,556
74,420,438
9,201,240
9,413,271
330,195
26,815,906
327,976
43,625,805
123,239
13,986,596
11,577,445
10,798,885
1,274,532
118,046,243
9,201,240
9,413,271
453,434
40,802,502
Expenses
General Government
Public Safety
Culture and Recreation
Public Works
Highway and Streets
Interest on Long-term Debt
Municipal Water
Sewer Utility
Water District
Total expenses
7,042,829
5,437,388
3,095,954
1,921,143
2,815,703
3,517,481
23,830,498
6,461,543
4,969,379
2,451,113
2,516,685
2,514,418
3,319,069
22,232,207
4,151,355
675,700
5,831,891
10,658,946
4,198,517
535,309
4,767,074
9,500,900
7,042,829
5,437,388
3,095,954
1,921,143
2,815,703
3,517,481
4,151,355
675,700
5,831,891
34,489,444
6,461,543
4,969,379
2,451,113
2,516,685
2,514,418
3,319,069
4,198,517
535,309
4,767,074
31,733,107
50,589,940
50,589,940
4,583,699
44,623
4,628,322
32,966,859
32,966,859
4,485,696
(44,623)
4,441,073
83,556,799
83,556,799
9,069,395
9,069,395
Increase in net assets before transfers
Transfers
Increase in net assets
Net assets at beginning of year
Net assets at end of year
67,212,371
62,584,049
$ 117,802,311 $ 67,212,371
39,999,042
35,557,969
$ 72,965,901 $ 39,999,042
107,211,413
98,142,018
$ 190,768,212 $ 107,211,413
Other significant increases in revenues over the previous year were:
•
•
Total infrastructure contributions (Capital Grants and Contributions) from developers equaled
approximately $71 million.
Sales taxes increased by approximately $2.6 million. Construction and retail sales taxes
increased by $1.568 million over the previous year. New businesses (i.e. Chili’s Grill and Bar,
15
Town of Prescott Valley, Arizona
•
•
•
Buffalo Wild Wings, etc.) continue to move into Prescott Valley. In addition, new housing
construction and sales increased by 22 percent over the previous year.
Additional transaction privilege taxes (“sales taxes”) designated for the Street capital
improvements totaled $1,585,991; an increase of $339,000 over the previous year.
Interest earnings increased by approximately $821,000. The Town had larger fund balances
available for investing and was more aggressive in investing the Town’s available funds. In
addition, investment earnings also include the change in the market value of the investments held.
Charges for services (Business type activities) increased by approximately $535,000. This is
primarily attributed to the increased number of utility customers and the approval of water and
wastewater rate increases effective January 1, 2005.
Total governmental activities expenditures increased by approximately $1,598,000 over the previous
year. This increase is accounted for by:
1. An increase in debt service related expenditures - $200,000 interest on long term debt
associated with the Municipal Property Corporation.
2. Public Works expenditures decreased by $595,000 over the previous year – Two major
consulting projects were completed in the prior fiscal year. The aerial mapping project
($275,000) and the Parkway Highway Redevelopment project ($246,000) were substantially
completed during 2004/05.
3. Highway and Streets increased by $300,000 over the previous year – Landscaping services
provided to the community facilities districts increased ($107,000) over the previous year and
vehicle related costs (i.e. gasoline, tires, etc) were accounted for in the Public Works
category. In addition, depreciation on assets acquired increased by $159,000 over the
previous year.
4. General Government increased by $581,000 over the previous year – Property and Liability
insurance increased by approximately $95,000 and sales taxes rebated per development
agreements increased by $133,000 over the previous year. Professional services in the
Management Services department increased $85,000 over the previous year. A consultant
was hired to assist staff in evaluating the Town’s retirement benefits ($45,000) and various
computer-related consulting services (i.e. designing the Town’s web page) were completed
during the year.
5. Public Safety increased by $468,000 over the previous year – Personnel services (salaries and
benefits) increased by $388,000 over the previous year as a result of adding four (4) more
officers.
6. Culture and recreation increased by $645,000 over the previous year - $283,000 in
community development grants were received in the current year. Additional library and
aquatics staff ($101,000) were added to cover the increased usage in the library and the
expanded pool hours. Additional arts and cultural related events ($100,000) were held during
the year.
Total business type activities expenditures increased by approximately $1,196,000 over the previous
year. This increase is primarily attributed to the increase in costs associated with operating the Water
District utility system. The Administrative Fee paid to the Town and the contract to provide
operations, maintenance and management services for the Water District increased by $630,000 over
the previous year. In addition, the District contracted with two consultants to provide a potable water
system model ($126,000) and SCADA improvements to the District Wells ($180,000).
16
Town of Prescott Valley, Arizona
Millions
Program Revenues and Expenses
Governmental Activities
$40
$35
$30
$25
$20
$15
$10
$5
$0
General
Government
Public Safety
Culture and
Recreation
Revenues
Public Works
Highway and
Streets
Expenses
The charts above illustrate the Town’s governmental expenses and revenues by function, and its revenues
by source. As shown, General Government (includes Town Council, Town Manager, Town Clerk,
Management Services, Legal, Court and other unclassified departments) is the largest function in expense
(35 percent), followed by public safety (27 percent) and Culture and Recreation (includes Channel 13,
Library, Recreation, Parks Maintenance and Aquatics) is 15 percent.
General revenues such as sales (i.e. transaction privilege taxes) and use taxes, franchise taxes and
intergovernmental are not shown by program, but are effectively used to support program activities
Town-wide. For governmental activities overall, without regard to program, capital contributions from
developers accounted for the largest revenue source (64 percent). Generally, transaction privilege taxes
(i.e. Town sales taxes) is the largest single source of funds and intergovernmental revenues (i.e. Stateshared, State revenue sharing, auto lieu) each account for 15 percent of the total.
Revenues by Source
Governmental Activities
Intergovrnmntl
Revenue
15%
Interest and
investment income
1%
Sales taxes and
franchise fees
16%
Charges for
services
4%
Capital grants and
contributions
64%
17
Town of Prescott Valley, Arizona
Business-type activities. Business-type activities increased the Town’s net assets by $32,966,859,
accounting for 49 percent of the total growth in the Town’s net assets. Key factors of this increase are as
follows:
•
•
•
•
The number of Water District customers increased by 911 (8.0 percent increase).
The number of municipal water customers increased by 281 (25 percent increase).
Due to the number of new housing permits issued, the development fees (i.e. water resource and
capacity fees) increased by $1,071,492 over the previous year.
Infrastructure contributions from developers equaled $27,865,960.
As shown in the charts below, the Water District utility, the largest of the Town’s business-type activities,
had expenses of approximately $5.87 million in fiscal year 2005, followed by Wastewater with expenses
of approximately $4.17 million. For the fiscal year, Municipal water and Prescott Valley Water District
operating revenues exceeded expenses by $1,038 and $407,429, respectively. In the Wastewater fund,
operating expenses exceeded operating revenues by $513,753. Charges for services (i.e. usage fees)
provide 20 percent of the revenues followed by water resource fees, water capacity fees and capital
contributions, which are fees paid by or assets donated by developers or individuals on new construction
or developments.
Total operating expenses for all utility funds increased by approximately $1,260,000 over the previous
year. The increases were primarily attributed to the following:
•
•
•
•
The Town’s management agreement with a private contractor increased by approximately
$630,000.
Depreciation expense increased by $277,000.
Consultant expenses used in preparing a sewer model cost $126,000.
Consulting services related to SCADA improvements equaled $180,000.
Electricity costs increased by $99,000.
Program Revenues and Expenses
Business Type Activities
Millions
•
$25
$20
$15
$10
$5
$0
Wastewater Utility
Municipal Water
Revenues
18
Expenses
Water District
Town of Prescott Valley, Arizona
Revenues by Source
Business Type Activities
Charges for
services
21%
Other
1%
Capital grants
and
contributions
78%
FINANCIAL ANALYSIS OF THE TOWN’S FUNDS
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements.
Governmental funds
The focus of the Town’s governmental funds is to provide information on near-term inflows (i.e.
revenues), outflows (i.e. expenditures) and balances of resources that are available for spending. Such
information is useful in assessing the Town’s financing requirements. In particular, unreserved fund
balance may serve as a useful measure of a government’s net resources available for spending at the end
of the fiscal year. Types of governmental funds reported by the Town include the General Fund, Special
Revenue Funds, Debt Service Funds and Capital Project Funds.
As of the end of the current fiscal year, the Town’s governmental funds reported combined ending fund
balances of $65,338,717, an increase of $17,764,523. Approximately $42.7 million of this total amount
constitutes unreserved fund balance, which is available for spending at the Town’s discretion. This
includes the $6.7 million designated for specific Street capital improvements. These funds are not
considered restricted since a separate fund has been established to account for the activity. The remainder
of fund balance is reserved to indicate that it is not available for new spending because it has already been
committed, (1) to pay debt service ($22,651,636) or (2) contractual obligations that have not been fulfilled
during the year.
Revenues for governmental functions overall totaled $33,535,162 in the fiscal year ended June 30, 2005,
which represents an increase of 19.4 percent or $5,448,810 from the fiscal year ended June 30, 2004.
Expenditures for governmental functions totaled $41,371,206, an increase of approximately 31.3 percent
($9,877,129) from the fiscal year ended June 30, 2004. In the fiscal year ended June 30, 2005,
expenditures for governmental functions exceeded revenues by approximately $7.8 million or
approximately 19 percent.
The General Fund is the chief operating fund of the Town. At the end of the current fiscal year, the
unreserved fund balance of the General Fund was $18,838,057. As a measure of the General Fund’s
liquidity, it may be useful to compare unreserved fund balance to total fund expenditures. Unreserved
19
Town of Prescott Valley, Arizona
fund balance represents 104 percent of total General Fund expenditures of $18,101,482. According to the
Town’s financial policy, the Town will maintain a General Fund balance that represents at least 15% of
the general government (General Fund and HURF) operating expenditures ($16,536,665). As of June 30,
2005, the Town had a fund balance equal to 114 percent of the general government operating
expenditures. In addition, Town policy states that the General Fund will maintain a year-to-year
carryover balance in an amount necessary to maintain adequate cash flow and to reduce the demand for
short-term borrowing. The carryover balance will equal at least 60 days of operating expenditures, and
not be less than $1,000,000. As of year end, the Town had a carryover balance equivalent to 418 days of
operating expenditures
As a result of the budget process (as approved by Council), the General Fund’s fund balance was
anticipated to decrease by $3,878,255. However, the actual results were significantly different. The
General Fund’s performance resulted in revenues over expenditures in the fiscal year ended June 30, 2005
of $2,082,681, a net difference of $5,715,936. The increase was primarily attributable to the following
reasons:
•
•
•
•
Revenues, primarily transaction privilege (sales) taxes, exceeded budget by approximately $2.0
million. Construction and retail sales taxes exceeded estimates by $1,138,500 and $1,030,000,
respectively.
Approximately $2.0 million of capital improvements were budgeted but not spent during the year.
General fund did not subsidize as many projects as anticipated ($356,000).
Additional funds were budgeted for increased costs related to market adjustments (2.5%),
reclassifications, performance increases (4%), increased health insurance (15%) and dental
insurance (3.0) and pay indexed benefits and additional staffing positions (primarily in the Police
Department). However, at year end, Personnel Services (salaries and benefits) had approximately
$706,000 remaining to be spent.
Proprietary funds
The Town’s proprietary funds provide the same type of information found in the government-wide
financial statements, but in more detail.
The total net assets for the Business Type activities (Enterprise funds) was $72,965,901, an increase of
$32,966,859.
At the end of the fiscal year, unrestricted net assets for the Water District, Municipal Water and
Wastewater Utility were $24,426,028, an increase of $7,328,541. The increase is primarily attributed to
the increase in the amount of infrastructure donated by developers to the Town/District. The account
increased by approximately $29.5 million.
According to the Town’s financial policy, the proprietary funds should maintain reserve funds equal to at
least 90 days operating expenditures. As of June 30, 2005, all utility funds had reserves equivalent to at
least 90 days of operating expenditures.
Utility rates will be set, at a minimum, to ensure the ratio of revenue to debt meets bond indenture
requirements of 1.2:1 ratio. The Town’s goal will be to maintain a minimum ratio of utility revenue to
debt service of 1.6:1 to ensure debt coverage in times of revenue fluctuations attributable to weather or
other causes and to ensure a balanced pay as you go Capital Improvement Plan. Currently, only the
Water District and the Wastewater Utility funds have incurred debt. As of June 30, 2005, both funds have
met the minimum 1.2:1 net revenues to debt ratio. Additional information is available in Tables XIII and
20
Town of Prescott Valley, Arizona
XIV in the Statistical section. The Town and District completed the process of revising their utility rates
and the new rates were effective January 1, 2005.
Other factors concerning the finances of these funds have been addressed previously in the Town’s
business type activities.
General Fund budgetary highlights
The Town’s final budget differs from the original budget due to budgetary transfers that were made
during the fiscal year. During the year there was a $245,000 decrease in appropriations between the
original and final budget. In fiscal year 2005, budgetary transfers in expenditure budgets were made for
the following reasons:
•
•
•
•
•
Additional costs associated with the Civic Center renovation project - $120,000 (Transfer to
Capital projects fund).
Additional funds designated for outside agencies - $55,906.
Transfer to Management Services Department to cover the cost of hiring a consultant to evaluate
the Town’s retirement benefits - $40,000.
Design and construction of the Granville Parkway/Glassford Hill Road Traffic Signal Light $115,000 (Transfer to Special Revenue fund).
Engineering costs for the design of the East Yavapai Drainage Project - $265,000.
Budgetary transfers between departments, funds, capital outlay and Personnel Services budgets and
General Fund Contingency, must have the approval of Town Council before the transfer can be made.
During the year, actual revenues exceeded the budgetary estimates by $1,968,340. The significant portion
of this amount ($2,031,776) is attributable to the Town’s local privilege transaction (i.e. sales) tax–
specifically in the area of construction and retail. New businesses continue to move into Prescott Valley
and residential housing construction continues at a record pace. Other areas that exceeded budgetary
estimates were state-shared revenues and building permits by $148,032 and $373,982, respectively.
Interest earnings and Court fees also exceeded the amount budgeted by $115,325 and $108,956,
respectively. During the year, the Town was more aggressive in diversifying its investments. At year
end, other intergovernmental revenue and light and power franchise did not exceed the amount budgeted
by $842,130 and $217,077, respectively.
The primary reason for the decrease in other intergovernmental revenues was that the Town was not
reimbursed for the cost associated with the design and construction of the Glassford Hill Interceptor since
the project had not begun. This project was re-budgeted in the next fiscal year. The light and power
franchise decrease was directly related to approval of the new franchise agreement with APS. Under the
new agreement, APS only collects sales taxes from the customer and no franchise fee.
Capital Assets and Debt Administration
Capital Assets
The Town’s capital assets for its governmental and business type activities as of June 30, 2005, amount to
$219,055,626 (net of accumulated depreciation).
Capital assets include land, buildings and
improvements, water and sewer systems, machinery and equipment, and construction in progress. The
total increase in the Town’s capital assets (net of accumulated depreciation) for the current fiscal year was
21
Town of Prescott Valley, Arizona
80 percent (a 79.4 percent increase for governmental activities and an 80.9 percent increase for businesstype activities) as shown in the table below.
Town of Prescott Valley, Arizona
Capital Assets
Land
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Construction in progress
Total
Governmental
activities:
$ 6,222,558
13,450,878
4,818,384
3,751,606
85,100,303
14,696,798
Business-type
activities:
$
921,617
1,918,690
28,040,286
3,239,172
41,151,956
15,743,379
Total
$ 7,144,175
15,369,568
32,858,670
6,990,778
126,252,259
30,440,177
$ 128,040,527
$ 91,015,100
$ 219,055,627
Major capital asset events during the current fiscal year included the following:
•
•
•
Infrastructure (both Governmental and Business-type activities) increased by $69,190,583
primarily due to the amount of contributions from the various developers within the various
master planned communities and the completion of the North Wells construction project.
Governmental activities construction in progress increased by $6,330,275 due to several major
Road Reconstruction Projects, Police Building Expansion Project, Signal Installations, Economic
Development Project (Highway 69 Sewer Project) and the Civic Center Remediation Settlement
Projects.
Business-type activities construction in progress increased by $8,490,805 due to progress on the
Agua Fria River Recharge Projects, the Water Resource Development Project, the Wastewater
Treatment Plant Expansion Project and the Big Chino Water Importation Project.
For government-wide financial statement presentation, all depreciable capital assets were depreciated
from acquisition date to the end of the current fiscal year. Fund financial statements record capital asset
purchases as expenditures.
See Section III.c in the Notes to the financial statements for further
information regarding capital assets.
The Town has recorded its infrastructure as part of the general fixed asset account group in past years and
has recorded infrastructure for the water and sewer funds in the appropriate funds as it was built or
donated. During fiscal year 2005, ongoing infrastructure projects are accounted for in construction in
progress.
Debt Administration
At the end of the current fiscal year, the Town (including component units) had total long-term
obligations outstanding of $110.945 million, an increase of $22.893 million over the previous year.
22
Town of Prescott Valley, Arizona
Governmental Activities:
In the Governmental Activities, Municipal Property Corporation (MPC) revenue bonds backed by the full
faith and credit of the Town (excise taxes) totals $43.695 million. Road and sewer collection system
improvement bonds represent $6.204 million and are paid through assessments collected from the
property owners.
Total general obligation bonds issued for the community facilities district equaled $31,115,000.
Although legally separate from the Town, the debt associated with the component units are blended with
the primary government because of their governance or financial relationships to the Town. During the
year, Pronghorn Ranch and Quailwood Meadows Community Facilities Districts issued bonds in the
amount of $4.0 million and $6.94 million, respectively. At the end of the year, StoneRidge and
Pronghorn Ranch Community Facilities Districts had outstanding general obligation bonds of $14.8
million and $7.0 million, respectively. The bonds issued for StoneRidge, Pronghorn and Quailwood
Meadows are payable from revenues generated through an ad valorem tax assessed against the properties
located within the boundaries of the district. The bonds issued for Eastridge are payable from
assessments collected from the property owners. The Water Infrastructure Financing Authority (WIFA)
loan used to finance the Raven Ridge project will be re-paid from assessments collected from the property
owners. No Town revenues are pledged toward these bonds/loan and the developers/property owners are
solely responsible for contributing any differences between the property taxes collected and the annual
debt service payment.
In August, 2004, the Pronghorn Ranch Community Facilities District issued $4,000,000 of bonds for the
purpose of financing certain public infrastructure improvements within the district. This represents the
remaining balance available by the developer for improvements within the district.
During the fiscal year, the MPC issued $14,300,000 of Revenue Bonds, Second Series 2004, dated
December 1, 2004, with an interest rate between 3.00% and 4.50% (an average of 4.16%). The Town has
been seeking additional water supplies for numerous years to support the continued growth and
development of the Town. An opportunity has arisen for the Town to gain access to additional water
supplies through a cooperative arrangement with the City of Prescott, Arizona (City). The City will
acquire certain water rights under the Arizona groundwater laws and through an intergovernmental
agreement with the Town; the Town will obtain from the City up to 4,000 acre feet of water per year. In
addition, a portion of the proceeds will be used to fund amounts payable by the Town pursuant to an
intergovernmental agreement for the Town to access the water supply. The acquired water supply will be
used for municipal purposes, including commitments to developers within the boundaries of the Town
and its water delivery system. These bonds are backed by the full faith and credit of the Town (excise
taxes). Since these improvements will ultimately benefit both the Prescott Valley Water District and the
Town, the Town has entered into an agreement with the District to be reimbursed by the District for a
portion of the annual debt service payments incurred by the Town.
Business-type activities:
Outstanding debt associated with business-type activities totaled $28.86 million. This represents $9.8
million in revenue bonds for the Town’s wastewater utility. In addition, the Prescott Valley Water
District had outstanding revenue bonds of $19.06 million. These bonds are payable through the collection
of user revenues.
23
Town of Prescott Valley, Arizona
Town of Prescott Valley, Arizona
Outstanding Debt
Municipal Property Corporation bonds
Revenue bonds
Special assessment bonds with
governmental commitment
Community facilities district general
obligation bonds
Less deferred amounts:
On refunding
Governmental
Activities
$
43,695,000
-
Business-type
Activities
$
28,860,000
Total
43,695,000
28,860,000
6,204,000
-
6,204,000
31,115,000
-
31,115,000
(518,763)
Total bonds payable
$
-
(518,763)
80,495,237
28,860,000
109,355,237
Community facilities district long-term
loan payable
879,174
-
879,174
Compensated absences
711,001
-
711,001
28,860,000
$ 110,945,412
Total long term liabilities
$
82,085,412
$
The State Constitution imposes certain debt limitations on the Town of six percent (6%) of secondary
assessed valuation of the taxable property for general municipal purposes and twenty percent (20%) of the
outstanding assessed valuation of the Town for Water, Light, Sewer, Open Space and Park purposes. The
Town’s available debt margin at June 30, 2005 is $10.951 million (an increase of 19% over the previous
year) in the 6% capacity and $36.503 million in the 20% capacity. Additional information on the debt
limitations and capacities may be found in Section III.f of the Notes to the financial statements and also in
Table IX in the statistical section of this report.
The Town’s bonded debt ratings as of June 30, 2005 were:
Municipal Property Corp (Series 2003)
Sewer Revenue Refunding bonds
Municipal Property Corp (Series 2004)
Moody’s
Investors
Service
A3
Aaa (1)
A3
Standard and
Poor’s
Rating Group
A
---
Fitch
Investors
Service, Inc.
AA-AA-
(1) Moody’s assigned the rating with the understanding that the bonds will be insured by a financial
guaranty insurance policy. MBIA Insurance Corporation characterizes it as an insured “AAA” rating.
Subsequent to June 30, 2005 the following events related to debt occurred:
The Town has entered into an agreement with WIFA ($9,317,000) to expand the Town’s current
wastewater treatment plant facility. The current treatment facility has a design capacity of 2.5 million
gallons per day and it is currently averaging 1.9 million gallons per day. The planned expansion will
increase the design capacity to 3.75 million gallons per day and will include regulatory required upgrades.
The loan represents the balance of its authorized but un-issued sewer revenue bonds capacity.
24
Town of Prescott Valley, Arizona
Additional information on the Town's long-term debt can be found in Section III.f of the Notes to the
financial statements.
Economic Factors and Next Year’s Budget and Rates
•
•
The 2004/05 fiscal year continued to remain strong for the Prescott-Prescott Valley area.
Unemployment rate as of June 2005 was 3.9% compared to 4.5% for Yavapai County and 4.4%
for the state.
o New businesses (i.e. Johnny Carino’s, Wendy’s, Chili’s Grill and Bar and Buffalo Wild
Wings) continue to move into the area.
o Lockheed Martin has entered into an agreement to relocate its operation to Prescott
Valley from the City of Prescott. At peak operation, the 50,000 square-foot facility is
expected to employ about 300 persons.
o New housing construction continues to remain strong (362 for the first three months). A
majority of the construction is occurring within the Town’s five planned housing
communities (Viewpoint, StoneRidge, Pronghorn Ranch, Quailwood Meadows and
Granville).
o The construction of a regional hospital is scheduled for completion in the spring of 2006.
o Numerous medical facilities are opening in the area around the new hospital.
All of the above factors were considered in preparing the Town’s budget for fiscal year 2006. The budget
for the 2005/06 year includes:
•
•
•
•
•
A conservative economic forecast and limited revenue growth.
A zero-based approach to the operating budget, leading to limited increases in department
budgets.
4.0 net full time equivalent positions (primarily police) were added and will be supported by
General Fund tax dollars.
Continued investment in the Town’s basic infrastructure and public facilities, combined with a
careful analysis of their operating costs.
Sustained funding of General Fund and economic investment reserves to ensure the Town can
provide basic services during economic downturns or major emergencies and make strategic
investments in the Town’s economic base.
The Water (both the Municipal and Water District) and Wastewater rates are scheduled to be revised
(effective January 1st, 2006) in the upcoming Fiscal year 2005-06 budget. Town staff finished updating a
utility rate study and presented the information to Council/Board. A public hearing for the Town’s water
and wastewater rates is scheduled for December 1, 2005.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the Town’s finances for all of those
with an interest in the government’s finances. If you have questions about this report or need additional
financial information, contact the Town of Prescott Valley, Management Services Department at 7501 E.
Civic Circle, Prescott Valley, AZ 86314.
25
Basic Financial Statements
Town of Prescott Valley, Arizona
Statement of Net Assets
June 30, 2005
Primary Government
Governmental
Activities
Business-Type
Activities
Total
ASSETS
Current Assets:
Cash and investments
Accounts receivable (net of uncollectible amounts)
Intergovernmental
Charges for services
Special assessments
Internal balances
Supplies inventory
Prepaid items
Total current assets
$
Noncurrent Assets:
Deferred charges
Restricted cash and cash equivalents:
Water and sewer system replacement
Streets and infrastructure replacement
Goodwill
Capital Assets:
Land, water rights, and construction in progress
Facilities, infrastructure, and equipment (net of depreciation)
Total noncurrent assets
Total assets
LIABILITIES
Current Liabilities:
Accounts payable
Accrued payroll
Unclaimed property
Due to other governments
Accrued compensated absences-due within one year
Bonds, loans, capital leases, and other payables-due within one year
Accrued interest payable
Deferred revenue
Other liabilities
Total current liabilities
Noncurrent Liabilities:
Customer advances and deposits
Deferred revenue
Accrued compensated absences
Bonds, loans, capital leases, and other payables-due in more than one year
Total noncurrent liabilities
Total liabilities
33,544,461
$
18,288,333
$
51,832,794
2,314,194
388,502
5,246,902
18,449,656
765
12,606
59,957,086
1,232,245
(18,449,656)
9,738
16,675
1,097,335
2,314,194
1,620,747
5,246,902
10,503
29,281
61,054,421
1,220,993
1,093,254
2,314,247
17,658,849
-
1,605,494
9,539,081
1,605,494
17,658,849
9,539,081
20,919,356
107,121,171
16,664,996
74,350,104
37,584,352
181,471,275
146,920,369
103,252,929
250,173,298
206,877,455
104,350,264
311,227,719
1,444,777
657,462
29,257
2,638,272
244,376
286,893
2,224
5,303,261
1,112,034
1,240
76,194
1,400,000
431,984
22,690
3,044,142
2,556,811
657,462
1,240
76,194
29,257
4,038,272
676,360
286,893
24,914
8,347,403
4,354,000
681,744
78,736,139
83,771,883
761,968
118,253
27,460,000
28,340,221
5,115,968
118,253
681,744
106,196,139
112,112,104
89,075,144
31,384,363
120,459,507
46,666,116
48,539,873
95,205,989
22,651,636
48,484,559
117,802,311
24,426,028
72,965,901
22,651,636
72,910,587
$ 190,768,212
NET ASSETS
Invested in capital assets, net of related debt
Restricted:
Debt service
Unrestricted
Total net assets
$
26
$
Town of Prescott Valley, Arizona
Statement of Activities
For the Year Ended June 30, 2005
Function/Programs
Primary government:
Governmental Activities:
General Government
Public Safety
Culture and Recreation
Public Works
Highway & Streets
Interest on long-term debt
Total governmental activities
Expenses
$
Business-type activities:
Wastewater Utility
Municipal Water
Water District
Total business-type activities
Total primary government
Program Revenues
Operating
Charges for
Grants and
Services
Contributions
$
7,042,829 $
5,437,388
3,095,954
1,921,143
2,815,703
3,517,481
23,830,498
2,512,462 $
35,017
133,883
2,681,362
4,151,355
675,700
5,831,891
10,658,946
3,259,626
676,738
5,224,531
9,160,895
34,489,444 $
11,842,257
32,562
115,566
268,420
416,548
$
416,548
General Revenues:
Taxes:
Sales and use taxes
Franchise taxes
Intergovernmental:
State shared sales tax
State revenue sharing
Highway user
Other
Interest and investment income
Total general revenues and transfers
Change in net assets
Net assets - beginning
Net assets - ending
The notes to the financial statements are an integral part of this statement.
27
Primary Government
Capital
Grants and
Contributions
$
$
321,568
390,219
1,183,478
9,863,327
36,241,050
47,999,642
Governmental
Activities
$
Business-type
Activities
(4,176,237) $
(4,896,586)
(1,510,173)
7,942,184
33,425,347
(3,517,481)
27,267,054
Total
- $
-
(4,176,237)
(4,896,586)
(1,510,173)
7,942,184
33,425,347
(3,517,481)
27,267,054
19,134,989
846,255
14,155,690
34,136,934
-
18,243,260
847,293
13,548,330
32,638,883
18,243,260
847,293
13,548,330
32,638,883
82,136,576
27,267,054
32,638,883
59,905,937
11,292,767
284,678
-
11,292,767
284,678
$
2,180,290
2,188,452
2,250,227
4,179,916
946,556
23,322,886
50,589,940
67,212,371
117,802,311 $
28
327,976
327,976
32,966,859
39,999,042
72,965,901 $
2,180,290
2,188,452
2,250,227
4,179,916
1,274,532
23,650,862
83,556,799
107,211,413
190,768,212
Town of Prescott Valley, Arizona
Balance Sheet
Governmental Funds
June 30, 2005
General
Fund
ASSETS
Cash and investments
Restricted assets
Receivables (net of allowance for
uncollectibles)
Intergovernmental
Special assessments
Miscellaneous
Due from other funds
Prepaid items
Supplies Inventory
Advances to Other Funds
Total assets
$
$
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
$
Accrued payroll
Bond interest payable
Deferred revenue:
Special assessments
Intergovernmental
Other
Advances from other funds
Guaranty and other deposits
Other
Total liabilities
Fund Balances:
Reserved for:
Debt service
Unreserved, reported in:
General fund
Capital Projects funds
Special Revenue funds
Total fund balances (deficit)
Total liabilities and fund balances
$
Debt
Service
Special
Assessments
Highway Users
Revenue Fund
15,532,860
68,619
1,485,285
358,287
972,353
12,606
765
2,000,000
20,430,775
667,026
612,529
-
$
$
$
1,123,420
-
319,995
1,835
1,445,250
281,404
38,326
-
$
$
$
1,505,308
-
5,246,902
6,752,210
562
244,376
Municipal
Property Corp
Debt
Service Fund
$
3,913,963
$
17,477,303
21,391,266
$
-
310,939
2,224
1,592,718
-
5,246,902
-
319,730
5,491,840
-
-
-
1,260,370
21,391,266
18,838,057
18,838,057
20,430,775
1,125,520
1,125,520
1,445,250
1,260,370
6,752,210
21,391,266
21,391,266
$
The notes to the financial statements are an integral part of this statement.
29
$
$
Streets Capital
Improvement
Fund
$
$
$
$
1,399,719
5,557,567
143,697
7,100,983
378,046
-
Quailwood
Meadows
Community
Facility District
StoneRidge
Community
Facility District
$
$
$
3,480,521
3,480,521
5,100
-
$
$
2,941,795
2,941,795
$
-
Total
Nonmajor
Governmental
Funds
$
$
$
10,069,191
5,610,347
365,217
28,380
16,073,135
112,639
6,607
-
Total
Governmental
Funds
$
$
$
33,544,461
17,658,849
2,314,194
5,246,902
388,502
972,353
12,606
765
19,477,303
79,615,935
1,444,777
657,462
244,376
378,046
2,960,000
2,965,100
694,000
694,000
16,538
2,000,000
700,000
2,835,784
5,246,902
16,538
310,939
2,000,000
4,354,000
2,224
14,277,218
-
-
-
-
22,651,636
6,722,937
6,722,937
7,100,983
515,421
515,421
3,480,521
2,247,795
2,247,795
2,941,795
(1,602,212)
14,839,563
13,237,351
16,073,135
18,838,057
5,120,725
18,728,299
65,338,717
79,615,935
$
$
30
$
$
TOWN OF PRESCOTT VALLEY, ARIZONA
RECONCILIATION OF THE BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
GOVERNMENTAL ACTIVITIES
JUNE 30, 2005
Fund balances - total governmental funds balance sheet
$
65,338,717
Amounts reported for governmental activities in the statements of
net assets are different because (also see note 2):
Capital assets used in governmental activities are not financial
resources and therefore are not reported in the governmental funds.
Governmental capital assets
Less: accumulated depreciation
140,852,725
(12,812,198)
128,040,527
Other assets used in governmental activities are not financial resources
and therefore are not reported in the governmental funds.
Deferred bond discount
Deferred bond issue costs
126,150
1,094,843
1,220,993
(81,374,411)
(711,001)
(82,085,412)
Long-term liabilities, including bonds payable, are not due and payable
in the current period and therefore are not reported in the governmental
funds.
Governmental bonds payable
Compensated absences
Certain revenues are not available to pay for current period expenditures
and, therefore, are deferred in the governmental funds.
Net assets of governmental activities - statement of net assets
The notes to the financial statements are an integral part of this statement.
31
5,287,486
$ 117,802,311
Town of Prescott Valley, Arizona
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2005
General
Fund
REVENUES
Taxes - Local:
Transaction privilege
Light and power franchise
Cable TV franchise
Taxes - Intergovernmental:
State-shared sales
State revenue sharing
Auto lieu tax
Highway user tax
Local transportation assistance fund
Other intergovernmental
Business and liquor licenses
Charges for Current Services:
Building and related permits
Recreation fees
Public safety reports and services
Fines and Forfeitures
Court fines
Library
Special assessments
Property rental
Interest earnings
Intergovernmental:
Federal grants
State grants
Contributions and donations
Other
Total revenues
$
Debt
Service
Special
Assessments
Highway Users
Revenue Fund
9,706,776
157,923
126,755
$
-
$
Municipal
Property Corp
Debt
Service Fund
-
$
-
2,180,290
2,188,452
1,578,183
2,052,758
150,919
2,250,227
-
-
166,053
-
1,736,982
133,883
35,017
-
-
-
279,731
12,288
153,493
319,325
-
1,705,903
234
96,133
19,150
179,049
21,010,974
217,105
2,467,332
56,388
1,762,525
262,186
32
Streets Capital
Improvement
Fund
StoneRidge
Community
Facility District
Quailwood
Meadows
Community
Facility District
$
$
$
1,585,991
-
-
-
Total
Nonmajor
Governmental
Funds
$
-
Total
Governmental
Funds
$
11,292,767
157,923
126,755
-
95,592
-
-
205,513
81,817
-
2,180,290
2,188,452
1,578,183
2,250,227
205,513
2,396,220
150,919
-
-
-
-
1,736,982
133,883
35,017
125,164
44,762
68,983
251,371
279,731
12,288
1,705,903
153,493
905,972
1,711,155
934,547
1,074,901
68,983
295,634
125,614
3,366,544
850,613
5,177,106
295,634
342,719
3,385,694
2,020,597
33,535,162
(continued)
33
Town of Prescott Valley, Arizona
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2005
General
Fund
EXPENDITURES
Current:
General government
Public safety
Culture & recreation
Public works
Highway & streets
Debt Service
Principal
Interest and fiscal charges
Bond issuance costs
Capital improvements
Total expenditures
Debt
Service
Special
Assessments
Highway Users
Revenue Fund
Municipal
Property Corp
Debt
Service Fund
6,244,923
5,162,362
2,299,773
1,160,936
-
1,668,671
-
-
3,233,488
18,101,482
1,606,895
3,275,566
698,000
534,605
1,232,605
1,225,000
1,317,750
403,790
2,946,540
Excess (deficiency) of revenues over
(under) expenditures
2,909,492
(808,234)
529,920
(2,684,354)
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Proceeds from bonds issued
Proceeds of long-term capital-related debt
Total other financing sources and uses
888,117
(1,714,928)
(826,811)
1,119,534
(38,901)
1,080,633
-
2,394,798
14,300,000
16,694,798
2,082,681
272,399
529,920
14,010,444
16,755,376
853,121
730,450
7,380,822
Net change in fund balances
Fund balances - beginning
Fund balances - ending
$
18,838,057
$
1,125,520
The notes to the financial statements are an integral part of this statement.
34
$
1,260,370
$
21,391,266
Streets Capital
Improvement
Fund
StoneRidge
Community
Facility District
Quailwood
Meadows
Community
Facility District
Total
Nonmajor
Governmental
Funds
-
-
-
94,911
113,793
289,618
261,370
-
6,339,834
5,276,155
2,589,391
1,422,306
1,668,671
6,993,377
6,993,377
1,035,021
1,035,021
4,500
341,856
4,414,832
4,761,188
171,272
584,971
240,870
1,268,622
3,025,427
2,094,272
3,476,847
986,516
17,517,214
41,371,206
(5,282,222)
39,880
(4,692,205)
2,151,679
(7,836,044)
(895,551)
(895,551)
-
6,940,000
6,940,000
557,141
(2,310,210)
4,000,000
360,567
2,607,498
4,959,590
(4,959,590)
25,240,000
360,567
25,600,567
(6,177,773)
39,880
2,247,795
4,759,177
17,764,523
12,900,710
475,541
-
8,478,174
47,574,194
$
6,722,937
$
515,421
$
2,247,795
35
$
13,237,351
Total
Governmental
Funds
$
65,338,717
TOWN OF PRESCOTT VALLEY, ARIZONA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2005
Net change in fund balances - total governmental funds
$ 17,764,523
Amounts reported for governmental activities in the statements of
activities are different because:
Government funds report capital outlays as expenditures. However, in the
statement of activities, the cost of those assets is allocated over their
estimated useful lives as depreciation expense.
Expenditures for capital assets
Less current year depreciation
17,517,214
(2,837,682)
Donations of capital assets are not reflected on the governmental
fund statements but are shown in the statement of activities.
14,679,532
41,983,385
Some expenses reported in the statement of activities, such as
compensated absences do not require the use of current financial
resources, and therefore, are not reported as expenditures in
governmental funds
(134,191)
Some revenues in the statement of activities that do not provide current
financial resources are not reported as revenues in the funds.
40,584
Issuance and repayment of long-term debt is a revenue and expenditure
in the governmental funds, but the issuance and repayment reduces long-term
liabilities in the statement of net assets. In the current period, these amounts are:
Bond proceeds
Capital-related financing proceeds
Principal payments on debt
(25,240,000)
(360,567)
2,094,272
Bond issuance costs are recognized as debt service expenditures in the
governmental funds, however these costs are capitalized on the statement
of net assets and amortized in the statement of activities.
(23,506,295)
901,095
Certain revenues in the governmental funds that provide current financial
resources are not included in the statement of activities because they were
recognized in a prior period. However, other revenues that are deferred in
the governmental funds, because they do not provide current financial
resources due to unavailability, are recognized in the statement of activities.
Special assessments
(1,138,693)
Change in net assets of governmental activities - statement of activities
The notes to the financial statements are an integral part of this statement.
36
$ 50,589,940
Town of Prescott Valley, Arizona
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - GAAP Basis
Governmental Funds
For the Year Ended June 30, 2005
Budgeted Amounts
Original
REVENUES
Taxes - Local:
Transaction privilege
Light and power franchise
Cable TV franchise
Taxes - Intergovernmental:
State-shared sales
State revenue sharing
Auto lieu
Other intergovernmental
Business and liquor licenses
Charges for Current Services:
Building and related permits
Recreation fees
Public safety reports and services
Fines and Forfeitures
Court fines
Library
Property rental
Interest earnings
Contributions
Other
Total revenues
$
Final
7,675,000
375,000
110,000
$
7,675,000
375,000
110,000
Actual Amounts,
Budgetary Basis
$
9,706,776
157,923
126,755
Variance Between
Final Budget and
Actual Amounts
$
2,031,776
(217,077)
16,755
2,032,258
2,166,228
1,600,000
2,894,888
136,090
2,032,258
2,166,228
1,600,000
2,894,888
136,090
2,180,290
2,188,452
1,578,183
2,052,758
150,919
148,032
22,224
(21,817)
(842,130)
14,829
1,363,000
142,000
19,500
1,363,000
142,000
19,500
1,736,982
133,883
35,017
373,982
(8,117)
15,517
170,775
11,000
112,395
204,000
12,500
18,000
19,042,634
170,775
11,000
112,395
204,000
12,500
18,000
19,042,634
279,731
12,288
153,493
319,325
19,150
179,049
21,010,974
EXPENDITURES
Current:
General Government:
Council
Personnel Services
Operating Expenditures
Total Council
30,296
50,191
80,487
30,296
50,191
80,487
31,359
46,613
77,972
(1,063)
3,578
2,515
Town Manager
Personnel Services
Operating Expenditures
Other Expenditures
Total Town Manager
444,306
121,885
566,191
444,306
118,935
250
563,491
364,016
101,275
249
465,540
80,290
17,660
1
97,951
Town Clerk
Personnel Services
Operating Expenditures
Total Town Clerk
224,455
164,378
388,833
224,455
164,378
388,833
220,966
92,600
313,566
3,489
71,778
75,267
1,974,187
699,813
1,650
2,675,650
1,974,187
740,069
1,394
2,715,650
1,745,579
623,335
521
2,369,435
228,608
116,734
873
346,215
312,021
35,196
347,217
312,021
35,196
347,217
310,546
47,103
357,649
Management Services
Personnel Services
Operating Expenditures
Other Expenditures
Total Management Services
Legal
Personnel Services
Operating Expenditures
Total Legal
37
108,956
1,288
41,098
115,325
6,650
161,049
1,968,340
1,475
(11,907)
(10,432)
Town of Prescott Valley, Arizona
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - GAAP Basis
Governmental Funds
For the Year Ended June 30, 2005
Budgeted Amounts
Original
Final
Actual Amounts,
Budgetary Basis
Variance Between
Final Budget and
Actual Amounts
Magistrate Court
Personnel Services
Operating Expenditures
Other Expenditures
Total Magistrate Court
248,262
28,325
325
276,912
248,262
28,650
276,912
226,479
28,216
254,695
21,783
434
22,217
Facilities and Fleet Maintenance
Personnel Services
Operating Expenditures
Total Facilities and Fleet Maintenance
196,216
531,407
727,623
196,216
532,556
728,772
181,140
444,085
625,225
15,076
88,471
103,547
Other-Unclassified
Operating Expenditures
Other Expenditures
Total Other-Unclassified
1,535,052
1,117,000
2,652,052
1,730,958
310,270
2,041,228
1,709,988
70,853
1,780,841
20,970
239,417
260,387
Total General Government
7,714,965
7,142,590
6,244,923
897,667
Public Safety:
Building Inspection
Personnel Services
Operating Expenditures
Other Expenditures
Total Building Inspection
703,091
57,844
100
761,035
703,091
63,907
100
767,098
674,883
55,302
730,185
28,208
8,605
100
36,913
Police
Personnel Services
Operating Expenditures
Total Police
3,658,285
733,811
4,392,096
3,658,285
735,811
4,394,096
3,619,306
709,967
4,329,273
38,979
25,844
64,823
Animal Control
Personnel Services
Operating Expenditures
Total Animal Control
93,180
33,548
126,728
93,180
31,548
124,728
79,155
23,749
102,904
14,025
7,799
21,824
5,279,859
5,285,922
5,162,362
123,560
Culture and Recreation:
Channel 13
Personnel Services
Operating Expenditures
Total Channel 13
52,783
13,039
65,822
52,783
14,445
67,228
61,985
11,245
73,230
(9,202)
3,200
(6,002)
Library
Personnel Services
Operating Expenditures
Total Library
559,182
77,883
637,065
559,182
92,883
652,065
536,466
90,349
626,815
22,716
2,534
25,250
Recreation
Personnel Services
Operating Expenditures
Other Expenditures
Total Recreation
411,131
302,564
713,695
411,131
301,399
1,200
713,730
331,190
213,369
970
545,529
79,941
88,030
230
168,201
Total Public Safety
(continued)
38
Town of Prescott Valley, Arizona
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - GAAP Basis
Governmental Funds
For the Year Ended June 30, 2005
Budgeted Amounts
Original
Parks Maintenance
Personnel Services
Operating Expenditures
Total Parks Maintenance
Final
Variance Between
Final Budget and
Actual Amounts
Actual Amounts,
Budgetary Basis
343,214
461,730
804,944
343,214
478,683
821,897
317,069
454,746
771,815
26,145
23,937
50,082
230,694
146,552
377,246
2,598,772
230,694
129,564
360,258
2,615,178
177,048
105,336
282,384
2,299,773
53,646
24,228
77,874
315,405
Public Works:
Engineering
Personnel Services
Operating Expenditures
Total Engineering
526,951
531,386
1,058,337
526,951
530,237
1,057,188
483,123
175,800
658,923
43,828
354,437
398,265
Planning & Zoning
Personnel Services
Operating Expenditures
Other Expenditures
Total Planning & Zoning
384,836
473,931
100
858,867
384,836
479,994
100
864,930
326,761
175,252
502,013
58,075
304,742
100
362,917
1,917,204
1,922,118
1,160,936
761,182
4,986,408
22,497,208
5,285,576
22,251,384
3,233,488
18,101,482
2,052,088
2,097,814
Excess (deficiency) of revenues over
expenditures
(3,454,574)
(3,208,750)
2,909,492
6,118,242
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources and uses
1,244,795
(1,668,476)
(423,681)
1,244,795
(1,669,300)
(424,505)
888,117
(1,714,928)
(826,811)
(3,878,255)
(3,633,255)
2,082,681
5,715,936
16,755,376
16,755,376
16,755,376
-
Aquatics
Personnel Services
Operating Expenditures
Total Aquatics
Total Culture & Recreation
Total Public Works
Capital Improvements
Total Expenditures
Net change in fund balances
Fund balances - beginning
Fund balances - ending
$
12,877,121
$
The notes to the financial statements are an integral part of this statement.
39
13,122,121
$
18,838,057
(356,678)
(45,628)
(402,306)
$
5,715,936
Town of Prescott Valley, Arizona
Highway User Revenue Fund - Special Revenue Fund
Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - GAAP Basis
For the Year Ended June 30, 2005
Budgeted Amounts
Original
REVENUES
Taxes - Intergovernmental:
Highway user tax
State grants
Other
Total revenues
$
EXPENDITURES
Current:
Highway & streets
Personnel Services
Operating Expenditures
Total highway & streets
Capital outlay
Total expenditures
Final
2,184,821
500,000
267,500
2,952,321
$
Actual Amounts,
Budgetary Basis
2,184,821
500,000
267,500
2,952,321
$
2,250,227
217,105
2,467,332
Variance Between
Final Budget and
Actual Amounts
$
835,515
945,787
1,781,302
2,324,181
4,105,483
835,515
1,006,307
1,841,822
2,303,661
4,145,483
Excess (deficiency) of revenues over
expenditures
(1,153,162)
(1,193,162)
(808,234)
384,928
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources and uses
1,192,063
(38,901)
1,153,162
1,192,063
(38,901)
1,153,162
1,119,534
(38,901)
1,080,633
(72,529)
(72,529)
-
(40,000)
272,399
312,399
853,121
853,121
1,706,242
Net change in fund balances
Fund balances - beginning
Fund balances - ending
853,121
$
853,121
$
The notes to the financial statements are an integral part of this statement.
40
813,121
746,008
922,663
1,668,671
1,606,895
3,275,566
65,406
(282,895)
(267,500)
(484,989)
$
1,125,520
89,507
83,644
173,151
696,766
869,917
$
2,018,641
Town of Prescott Valley, Arizona
Statement of Net Assets
Proprietary Funds
June 30, 2005
Municipal
Water
Wastewater
Water
District
Total
ASSETS
Current Assets:
Cash and investments
Receivables (net of allowance for uncollectibles)
Inventories
Prepaid items
Total current assets
$
6,984,753
575,920
-
$
5,922,669
122,471
9,738
-
$
5,380,911
533,854
16,675
$
18,288,333
1,232,245
9,738
16,675
7,560,673
6,054,878
5,931,440
19,546,991
212,541
235,322
-
67,734
-
1,325,219
857,932
9,539,081
1,605,494
1,093,254
9,539,081
250,101
3,498,027
5,480,395
45,997,287
1,487,338
(11,373,603)
32,334
12,579
98,394
2,378,975
11,624,290
(252,028)
639,181
203,683
30,586,816
646,512
2,631,752
(2,926,933)
921,616
3,701,710
30,599,395
6,225,301
48,376,262
15,743,380
(14,552,564)
Total capital assets (net of
accumulated depreciation)
45,339,545
13,894,544
31,781,011
91,015,100
Total noncurrent assets
45,787,408
13,962,278
43,503,243
103,252,929
Total assets
53,348,081
20,017,156
49,434,683
122,799,920
Noncurrent assets:
Restricted cash, cash equivalents
Deferred charges
Goodwill
Capital Assets:
Land
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Construction in progress
Less accumulated depreciation
41
Town of Prescott Valley, Arizona
Statement of Net Assets
Proprietary Funds
June 30, 2005
Municipal
Water
Wastewater
Water
District
Total
LIABILITIES
Current Liabilities:
Accounts payable
Taxes payable
Due to other funds
Unclaimed property
Bond interest payable
Premium payable
Bonds payable - due within one year
Total current liabilities
Noncurrent Liabilities:
Customer advances and deposits
Deferred revenue
Bonds payable
Advance from other funds
Total noncurrent liabilities
Total liabilities
254,399
5,887
22,690
400,000
212,589
5,019
972,353
-
645,046
65,288
1,240
431,984
1,000,000
1,112,034
76,194
972,353
1,240
431,984
22,690
1,400,000
682,976
1,189,961
2,143,558
4,016,495
164,392
48,149
9,400,000
-
67,734
13,615,227
529,842
70,104
18,060,000
3,862,076
761,968
118,253
27,460,000
17,477,303
9,612,541
13,682,961
22,522,022
45,817,524
10,295,517
14,872,922
24,665,580
49,834,019
35,539,545
7,513,019
43,052,564
279,317
4,864,917
5,144,234
12,721,011
12,048,092
24,769,103
48,539,873
24,426,028
72,965,901
NET ASSETS
Invested in capital assets, net of related debt
Unrestricted
Total net assets
$
The notes to the financial statements are an integral part of this statement.
42
$
$
$
Town of Prescott Valley, Arizona
Statement of Revenues, Expenses, and Changes in Fund Net Assets
Proprietary Funds
For the Fiscal Year Ended June 30, 2005
Municipal
Water
Wastewater
Operating Revenues:
Charges for sales and services
Other
$
2,949,525
310,101
$
Water
District
676,738
-
$
4,714,614
509,917
Total
$
8,340,877
820,018
Total operating revenues
3,259,626
676,738
5,224,531
9,160,895
Operating Expenses:
Administration
Professional
Technical
Electricity
Repairs & maintenance
Supplies
Capital outlay
Depreciation and amortization
Payment to municipal reclaimed
Other
562,532
1,327,680
87,650
285,783
7,053
5,528
2,084
1,451,692
43,377
43,191
394,139
55,000
2,224
17,552
59,168
104,426
2,258,846
660,531
306
44,527
1,165,150
229,303
458,439
2,864,569
1,721,819
87,650
1,001,314
7,359
7,752
64,163
2,676,010
229,303
606,242
Total operating expenses
3,773,379
675,700
4,817,102
9,266,181
(513,753)
1,038
407,429
2,334,382
166,518
(394,280)
16,304
846,255
80,973
-
3,090,337
80,485
(1,053,302)
38,513
6,270,974
327,976
(1,447,582)
54,817
2,122,924
927,228
2,156,033
5,206,185
1,609,171
928,266
2,563,462
5,100,899
16,800,607
-
11,065,353
27,865,960
18,409,778
928,266
13,628,815
32,966,859
24,642,786
4,215,968
11,140,288
39,999,042
Operating income (loss)
Nonoperating revenues (expenses):
Water capacity & resource fee
Investment income
Interest expense
Other
Net nonoperating revenues (expenses)
Income before contributions
Capital contributions - donated infrastructure
Change in net assets
Total net assets - beginning
Total net assets - ending
$
43,052,564
The notes to the financial statements are an integral part of this statement.
43
$
5,144,234
$
24,769,103
(105,286)
$
72,965,901
Town of Prescott Valley, Arizona
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2005
Municipal
Water
Wastewater
Cash Flows from Operating Activities:
Cash received from customers
Cash paid to suppliers
Other operating revenues
$
2,574,163
(2,528,137)
339,600
Net cash provided by operating activities
Cash Flows from Non-Capital Financing Activities:
Increase (decrease) in payable to other funds
Net cash provided by (used for)
non-capital financing activities
Cash Flows from Capital and Related Financing Activities:
Capital contributions from other:
Water and sewer impact fees
Acquisition and construction of property and equipment
Principal payments on capital debt
Interest paid on capital debt
$
662,220
(503,315)
-
385,626
158,905
-
Water
District
$
5,111,487
(4,543,016)
38,513
Total
$
8,347,870
(7,574,468)
378,113
606,984
1,151,515
13,615,227
(240,000)
13,375,227
13,615,227
(240,000)
13,375,227
2,334,382
(745,520)
(390,000)
(394,280)
846,255
(11,259,603)
-
3,090,337
(2,220,413)
(975,000)
(1,071,583)
6,270,974
(14,225,536)
(1,365,000)
(1,465,863)
804,582
(10,413,348)
(1,176,659)
(10,785,425)
Net cash provided (used) by
capital and related financing activities
Cash Flows from Investing Activities:
Interest and dividends received
166,518
80,973
80,485
327,976
166,518
80,973
80,485
327,976
Net increase (decrease) in cash and cash equivalents
1,356,726
3,441,757
Cash and cash equivalents at beginning of year
5,840,568
2,548,646
Net cash provided by investing activities
Cash and cash equivalents at end of year
$
7,197,294
$
5,990,403
(729,190)
4,069,293
7,435,320
$
6,706,130
15,824,534
$
19,893,827
(continued)
44
Town of Prescott Valley, Arizona
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2005
Municipal
Water
Wastewater
Cash and cash equivalents
at end of year includes:
Cash and investments
Restricted cash and investments
Total cash and cash equivalents
Reconciliation of operating income to net cash
provided (used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating
income (loss) to net cash provided
by (used for) operating activities:
Depreciation and amortization
Changes in assets and liabilities
Sources (uses) of cash:
Accounts receivable
Accounts payable
Customer deposits
Deferred revenue
Other revenues
Water
District
Total
$
6,984,753
212,541
$
5,922,669
67,734
$
5,380,911
1,325,219
$
18,288,333
1,605,494
$
7,197,294
$
5,990,403
$
6,706,130
$
19,893,827
$
1,038
$
407,429
$
$
(513,753)
1,451,692
Total adjustments
59,168
1,165,150
(399,700)
(206,450)
30,329
23,508
-
(21,935)
113,217
9,349
(1,932)
-
(136,242)
(891,064)
23,198
38,513
899,379
157,867
199,555
(105,286)
2,676,010
(557,877)
(984,297)
62,876
21,576
38,513
1,256,801
Net cash provided by operating activities
$
385,626
$
158,905
$
606,984
$
1,151,515
Noncash investing, capital, and financing activities:
Additions to Property, Plant, and Equipment
Contributions from Developers
$
16,800,607
$
-
$
11,065,353
$
27,865,960
The notes to the financial statements are an integral part of this statement.
45
Town of Prescott Valley, Arizona
I. Summary of significant accounting policies
A. Financial Reporting Entity
The Town of Prescott Valley (Town) was incorporated in August 28, 1978 under the provisions of the
State of Arizona. The current Town Charter established the Council/Manager form of government. The
Town provides basic government services to its citizens including public safety, roads, water, sewer,
planning and zoning, parks and recreation facilities, library and general administrative services.
The accounting policies of the Town conform to U.S. generally accepted accounting principles (GAAP)
as applicable to governmental units. The following is a summary of the more significant policies.
The financial reporting entity presented in these financial statements consists of the Town of Prescott
Valley (the primary government) and its component units. The component units discussed below are
included in the Town’s reporting entity because of the significance of their operational or financial
relationships with the Town.
In accordance with the GASB Statement 39 – Determining Whether Certain Organizations are
Component Units; the Town includes in its financial statements all entities for which the Town’s Mayor
and Council are financially accountable. As the primary government, the Town is financially accountable
if it appoints a voting majority of an organization’s governing body and 1) it is able to impose its will on
that organization or 2) there is a potential for that organization to provide specific benefits to or impose
specific financial burdens on the primary government. Additionally, the primary government may be
financially accountable if an organization is fiscally dependent on the primary government.
Individual Component Units - Blended
The Town of Prescott Valley Municipal Property Corporation (MPC) is a not-for-profit corporation
organized under the laws of the state of Arizona to assist the Town in the acquisition and financing of
municipal projects and facilities. The MPC is governed by a board of directors who are responsible for
approving the corporation’s bond sales. The Town Council must also approve all bond sales. Although it
is legally separate from the Town, the MPC debt service liability is reported as a debt service fund
(blended component unit) in these financial statements. Additional information for the MPC can be
obtained from the Town of Prescott Valley, Management Services Department, located at 7501 E. Civic
Circle, Prescott Valley, AZ 86314.
The Prescott Valley Water District (District) is a community facilities district organized under the laws of
the State of Arizona. The District was formed to purchase a local privately owned water company. The
Town Council serves as the board of directors of the District. Therefore, the District is reported as a
blended component unit in the Enterprise funds for financial reporting purposes. Additional information
for the District can be obtained from the Town of Prescott Valley, Management Services Department,
located at 7501 E. Civic Circle, Prescott Valley, AZ 86314.
The Town of Prescott Valley has five (5) additional community facility districts; StoneRidge, Pronghorn
Ranch, Raven Ridge, Eastridge and Quailwood Meadows. These districts were created as a funding
mechanism for local subdivision developers. The purpose of these districts is to assist in financing the
necessary on and off-site infrastructure and public improvements. The developers initially build the
public infrastructure and the district sells bonds to buy the improvements from the developers. For
StoneRidge, Pronghorn Ranch and Quailwood Meadows, the bonds are repaid from revenues generated
through an ad valorem tax against property located only within the respective developments (districts).
For Raven Ridge and Eastridge, the bonds are repaid from assessments paid by the property owners
46
Town of Prescott Valley, Arizona
within the district. No Town revenues are pledged toward these bonds. For StoneRidge, Pronghorn
Ranch and Quailwood Meadows, the developers are solely responsible for repaying the bonds until
sufficient ad valorem taxes are collected from the property owners. The Town Council serves as the
board of directors for these districts. For financial reporting purposes, the districts are reported as blended
component units. StoneRidge Community Facilities District and Quailwood Meadows Community
Facilities District are reported as major funds and Pronghorn Ranch Community Facilities District, Raven
Ridge Community Facilities District and Eastridge Community Facilities District are reported as
nonmajor funds as if the districts were a part of the Town’s operation. Additional information for these
districts can be obtained from the Town of Prescott Valley, Management Services Department, located at
7501 E. Civic Circle, Prescott Valley, AZ 86314.
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net assets and the statement of
changes in net assets) report information on all of the non-fiduciary activities of the primary government
and its component units. For the most part, the effect of inter-fund activity has been removed from these
statements. Governmental activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business-type activities, which rely to a significant extent on fees
and charges for support. Likewise, the primary government is reported separately from certain legally
separate component units for which the primary government is financially accountable.
The statement of activities demonstrates the degree to which the direct expenses for a given function or
segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Program revenues include 1) charges to customers or applicants who
purchase, use or directly benefit from goods, services or privileges provided by a given function or
segment and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds,
even though the latter are excluded from the government-wide financial statements. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund
financial statements.
C. Measurement focus, basis of accounting and financial statement presentation
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements.
Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of
the timing of related cash flows. Property taxes, where applicable (i.e. Community Facilities Districts),
are recognized as revenues in the year for which they are levied. Grants and similar items are recognized
as revenue as soon as all eligibility requirements have been met.
47
Town of Prescott Valley, Arizona
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. The Town considers
revenues to be available if they are collected within 30 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 vacation, sick leave, claims and judgments
are recorded only when payment is due.
Property taxes, other local taxes, licenses and interest associated with the current fiscal period are all
considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal
period. All other revenue items are considered to be measurable and available only when the Town
receives cash.
The government reports the following major governmental funds:
The General Fund is the government’s primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in another fund.
The HURF (Highway Users Revenue Fund) accounts for the Town’s share of Arizona’s highway
user tax and associated expenditures.
The Debt Service Special Assessment Fund accounts for the accumulation of resources for, and
the payment of, general long-term debt principal, interest and related costs. The Town’s Debt
Service fund is used to account for the special assessment debt.
The Municipal Property Corporation (MPC) Debt Service Fund accounts for the payment of
general long-term debt principal, interest and related costs. The Town’s MPC Debt Service fund
is used to account for debt service related to the acquisition and financing of municipal projects
and facilities.
The Streets Capital Improvement Fund accounts for the resources used to acquire, construct and
improve major street projects, other than those financed by proprietary funds. The Capital
Projects fund allows the Town to compile project cost data and demonstrate that legal or
contractual requirements, regarding the use of the resources, are fully satisfied. In December
2002, the Town’s sales tax rate increased from 2.0% to 2.33%. The additional sales tax generated
by the .33% is accounted for in this fund.
The StoneRidge Community Facilities District fund accounts for the revenue and expenses
associated with the district. The purpose of the district is to assist in financing the necessary on
and off-site infrastructure and public improvements. The District’s bonds will be repaid from
revenues generated through an ad valorem tax against property located only within the respective
development.
The Quailwood Meadows Community Facilities District fund accounts for the revenue and
expenses associated with the district. The purpose of the district is to assist in financing the
necessary on and off-site infrastructure and public improvements. The District’s bonds will be
repaid from revenues generated through an ad valorem tax against property located only within
the respective development.
48
Town of Prescott Valley, Arizona
The government reports the following major proprietary funds:
The Wastewater, Prescott Valley Water District and the Municipal Water funds account for the
operating revenues and expenses of the Town’s water and sewer utility systems.
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally
are followed in both the government-wide and proprietary fund financial statements to the extent that
those standards do not conflict with or contradict guidance of the Governmental Accounting Standards
Board. Governments also have the option of following subsequent private-sector guidance for their
business-type activities and enterprise funds, subject to this same limitation. The Town has elected not to
follow subsequent private-sector guidance.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services in connection with the fund’s principal
ongoing operations. The principal operating revenues of the Town’s Enterprise funds are charges for
customer services which consist of: water and sewer charges. Operating expenses for Enterprise funds
include the cost of services, administrative expenses and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the Town’s policy to use
restricted resources first, then unrestricted resources as they are needed.
D. Implementation of New Accounting Principles
Governmental Accounting Standards Board Statement No. 40
The Town adopted the provisions of GASB Statement No. 40, Deposit and Investment Risk Disclosures
for the year ended June 30, 2005. This statement establishes and modifies disclosure requirements related
to investment and deposit risks; accordingly, the note disclosures on cash and investments are in
conformity with the provisions of GASB Statement No. 40.
E. Assets, liabilities, and net assets or equity
1. Deposits and Investments
Cash equivalents for purposes of the statements of cash flows are investments (including restricted assets)
in the State of Arizona Local Government Investment Pool, mutual funds, demand deposits, repurchase
agreements and U.S. Treasury bills and notes with maturities of three months or less at acquisition date.
GASB Statement No. 31 provides that governmental entities may report all investments at fair value or
they may elect to report certain money market investments and participating interest-earning investment
contracts at amortized cost. The Town has elected to report all investments at fair value. The Town’s
policy is to invest in certificates of deposit, repurchase agreements, direct U.S. Treasury debt, securities
guaranteed by the United States Government or any of its agencies and the State of Arizona Local
Government Investment Pool (“LGIP”). The LGIP is overseen by the State of Arizona. The fair value of
each share in the LGIP is $1.
49
Town of Prescott Valley, Arizona
2. Receivables and payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end
of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of inter-fund
loans) or “advances to/from other funds” (i.e., the non-current portion of inter-fund loans). All other
outstanding balances between funds are reported as “due to/from other funds.” Any residual balances
outstanding between the governmental activities and business-type activities are reported in the
government-wide financial statements as “internal balances.”
Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve
account in applicable governmental funds to indicate that they are not available for appropriation and are
not expendable available financial resources.
All accounts are shown net of an allowance for uncollectible. All receivables outstanding for greater than
one year comprise the allowance for uncollectible at June 30, 2005.
3. Inventories
Inventories of the governmental funds are recorded under the consumption method as expenditures when
consumed rather than when purchased. Inventories are valued at year-end based on cost, with cost
determined using an average cost method.
4. Restricted assets
Certain proceeds of the Town’s Enterprise fund revenue bonds, as well as certain resources set aside for
their repayment, are classified as restricted assets on the balance sheets because they are maintained in
separate bank accounts and their use is limited by applicable bond covenants. The revenue bond renewal
and replacement account is used to report resources set aside to meet unexpected contingencies or to fund
asset renewals and replacements.
5. Goodwill
The following is a summary of Goodwill recorded in the Enterprise Fund as of June 30, 2005.
Prescott Valley
Water District
Goodwill
Less accumulated amortization
$ 11,689,377
(2,150,296)
Total
$ 9,539,081
Goodwill is amortized over 35 years on a straight-line basis. Current year amortization expense is
$333,982.
6. Capital assets
Capital assets include property, plant, equipment and infrastructure assets (e.g., roads, sidewalks and
similar items) and are reported in the applicable governmental or business-type activities columns in the
government-wide financial statements. Capital assets are defined by the government as assets with an
initial, individual cost of more than $3,000 and an estimated useful life in excess of one year. Assets
50
Town of Prescott Valley, Arizona
contributed (donated) to those funds are recorded by reference to historical costs of the donor if recently
purchased or constructed, or if such records are not available, at estimated fair market value on the date of
receipt.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
asset lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest
incurred during the construction phase of capital assets of business-type activities is included as part of
the capitalized value of the assets constructed. No interest was capitalized for the fiscal year 2004/05.
Depreciation and amortization of all assets are recorded and calculated using the straight-line method over
the following estimated useful lives:
Infrastructure.................................................................................50 Years
Buildings and Improvements ...............................................25 to 40 Years
Land Improvements .............................................................10 to 20 Years
Machinery and Equipment............................................................10 Years
Motor Vehicles ...............................................................................5 Years
Furniture, Fixtures and Office Equipment .............................5 to 10 Years
The excess purchase price over fair market value of assets acquired in the Water District Enterprise Fund
is amortized on the straight-line method over 35 years.
When capital assets are disposed of, the cost and accumulated depreciation or amortization is removed
from the accounts, and any resultant gain or loss is recognized in the government-wide and proprietary
fund financial statements.
7. Compensated absences
Compensated absences consist of general leave and a prior balance of sick leave accumulated by
employees. Employees may accumulate up to a maximum number of hours of general leave depending
on years of service, but the Town has a policy that states any general leave hours in excess of the
maximum amount unused at year end may be forfeited. The Town’s policy is to pay employees for
unused accumulated general hours at termination or retirement. The Town’s policy is for both full-time
and part-time employees.
All general leave pay is accrued when incurred in the government-wide, proprietary and fiduciary fund
financial statements. A liability for the current amount of compensated absences is recorded as a current
liability at June 30 in the governmental and proprietary funds. The current compensated absences amount
in the governmental funds is combined with accrued payroll and other payroll related amounts in the
accrued payroll and benefits line item. The Town calculates this current amount based on general leave
taken and an actuarial valuation dated January 1, 2005. There is no long-term liability for compensated
absences in the governmental funds.
8. Long-term obligations
In the government-wide financial statements and the proprietary fund types in the fund financial
statements, long-term debt and other long-term obligations are reported as liabilities in the applicable
governmental activities, business-type activities or proprietary fund statement of net assets. Bond
premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds
51
Town of Prescott Valley, Arizona
using the straight-line method. Bond issuance costs are reported as deferred charges and amortized over
the term of the related 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.
9. Fund equity
In the fund financial statements, governmental funds report reservation of fund balance for amounts that
are not available for appropriation or are legally restricted by outside parties for use for a specific
purpose.
II. Stewardship, compliance and accountability
A.
Budget and budgetary accounting
The Town prepared an annual budget that covered fiscal year 2004/05. The Town, like other towns and
cities in the State of Arizona, is subject to numerous budget and related legal requirements. Article IX,
Section 20 (1) of the Arizona Constitution 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. This option must be authorized by the voters
every four years. It was last authorized by the citizens of Prescott Valley in March 2005. The 2004/05
budget appropriation is established and reflected in the financial statements as follows:
The Town Council formally adopts the budget and legally allocates, or appropriates, available monies for
the General Fund, certain Special Revenue Funds (Highway User Revenue Fund, Replacement Fund,
Local Transportation Assistance Fund, and Development Impact Fees, Library Building and Grants),
Debt Service Funds (except for the Community Facilities Districts Debt Service Fund), and Enterprise
Funds. Therefore, these funds have appropriated budgets and budget to actual information is presented
for governmental fund types. Budgets are adopted under the GAAP method using a modified accrual
basis.
Budgets for the Community Facilities Districts and Prescott Valley Water District are established in
accordance with Arizona Revised Statutes, which do not require their inclusion in the Town budget or
adoption by the Town Council. Budgets for Capital Projects Funds are established for individual projects
and unexpended funds are re-appropriated each year until the project is completed and capitalized.
On or before the second regular Council meeting in June, the Town Manager submits to the Town
Council a proposed budget for the fiscal year commencing the following July 1. The budget includes
proposed expenditures and the means of financing them.
One public hearing is held prior to the budget’s final adoption in order to obtain citizens’ comments.
52
Town of Prescott Valley, Arizona
On or before the first regular Council meeting in July, the budget is legally enacted through passage of a
resolution. The resolution sets the limit for expenditures during the fiscal year. Additional expenditures
may be authorized for expenditures directly necessitated by a natural or man-made disaster as prescribed
in the State Constitution, Article 9, Section 20. During 2004/05 fiscal year, there were no supplemental
budgetary appropriations to the original budget.
The expenditure appropriations in the adopted budget are by department. The maximum legal expenditure
permitted for the fiscal year is the total budget as adopted. Departmental appropriations may be amended
during the year.
Upon the recommendation of the Town Manager and with the approval of the Town Council: (1)
transfers may be made from the appropriations for contingencies to departments; (2) unexpended
appropriations may be transferred from one department to another; or (3) transfers from Salaries and
Benefit accounts or Capital Outlay.
Management control of budgets is further maintained at a line item level within the department.
B. Excess of expenditures over appropriations
In the General Fund, the following accounts exceeded the amounts budgeted.
Original
Actual
Amounts
Final
Deficit
Council
Personnel Services
30,296
30,296
31,359
(1,063)
Legal
Operating Expenditures
35,196
35,196
47,103
(11,907)
Channel 13
Personnel Services
52,783
52,783
61,985
(9,202)
These deficits were funded by available fund balance within the general fund.
The Personnel Services deficits in the above divisions are related to unbudgeted year-end accruals and
position upgrades from part-time to full-time. The Legal department had an Operating Expenditure
deficit due to unanticipated outside legal service expenditures.
C. Deficit fund equity
In 2005, the Facilities Capital Project Fund (non-major) had a deficit balance of $1,602,212. On August
25, 2005, Council approved the Release and Settlement Agreement with respect to the civic center
litigation. The Town received a cash settlement of $1,650,000 to recover a significant portion of the costs
incurred to repair the civic center. Any expenditure not covered by the settlement agreement will require
funding from the General Fund.
D. Net revenue and changes in net assets
The Statement of Activities shows a profit of $7,942,184 and $33,425,347 in governmental activities for
Public Works and Highways & Streets, respectively, due to capital contributions being recorded as
revenue.
53
Town of Prescott Valley, Arizona
III. Detailed notes on all funds
A. Cash and Investments
The Town maintains a cash and investment pool for use by all funds except the Municipal Property
Corporation and Community Facilities Districts Funds, which have investments held separately by a
trustee. The Town maintains petty cash funds in various departments which amount to $2,165 at June 30,
2005.
Deposits
At June 30, 2005, the carrying amount of the Town’s deposits was $10,134,055 and the bank balance was
$11,924,808. The $1,790,753 difference represents outstanding checks and other reconciling items.
Custodial Credit Risk – Deposits
Custodial credit risk is the risk that in the event of a bank failure, the government’s deposits may not be
returned to it. As of June 30, 2005, the Town’s deposits were covered by federal depository insurance or
by the collateral held by the Town’s agent or pledging financial institution’s trust department or agent in
the name of the Town, and thus had no deposits that were exposed to custodial credit risk.
Interest Rate Risk
As a means of limiting its exposure to fair value losses arising from rising interest rates, the Town’s
investment policy limits the Town’s investment portfolio to maturities of less than three years, unless
matched to a specific cash flow.
Credit Risk
Town Charter, Ordinance and Trust Agreements authorize the Town to invest in obligations of the U.S.
Treasury, U.S. Government agencies, Certificates of Deposit, bankers’ acceptances, repurchase
agreements, mutual funds consisting of the foregoing and the State of Arizona Local Government
Investment Pool (LGIP).
The Town’s investment in the bonds of U.S. agencies was rated AAA by Standard & Poor’s and Fitch
Ratings, and Aaa by Moody’s Investors Service.
Investments
The Town’s investments at June 30, 2005, are summarized below.
Investment Maturities (in years)
Investment Type
Fair Value
Less
Than 1
1-2
U.S. Treasuries
U.S. Agencies
Money Markets
Local Government Investment Pool
$
20,433,880
14,842,100
12,030,666
13,656,436
$ 20,433,880
14,842,100
12,030,666
13,656,436
-
Total Investments
$
60,963,082
$ 60,963,082
-
54
Town of Prescott Valley, Arizona
Total Town cash and investments at fair value are as follows:
Carrying amount of Town deposits
Investments
$ 10,134,055
60,963,082
Total Cash and Investments
$ 71,097,137
Total Town cash and investments are reported as follows:
Primary Government
Cash and Investments
Restricted Cash
$ 51,832,794
19,264,343
Total Cash and Investments
$ 71,097,137
The Town classifies its debt securities as held-to maturity. A debt security should be classified as held-tomaturity only if the reporting entity has both the positive intent and the ability to hold those securities to
maturity. In accordance with the Town’s Investment Policy, securities shall not be sold prior to maturity
with the following exceptions: 1) a security with declining credit may be sold early to minimize loss of
principal, 2) liquidity needs of the portfolio require that the security be sold, or 3) if market conditions
present an opportunity for the Town to benefit from the sale.
B. Receivables
Receivables as of year end for the government’s individual major and non-major funds in the aggregate,
as shown in the Statement of Net Assets, including the applicable allowances for uncollectible accounts,
are as follows:
General
Receivables:
Intergovernmental
Grants
Special assessments
Other
Gross receivables
Less: allowance for
uncollectibles
Net total receivables
Highway
Users
Fund
Assessments
Streets
Capital Fund
Wastewater
Municipal
Water
Water
District
Nonmajor
and Other
Funds
Total
$ 1,485,285 $ 319,995 $
358,287
1,835
1,843,572
321,830
- $
5,246,902
5,246,902
143,697 $
143,697
- $
- $
582,379
122,864
582,379
122,864
- $
- $ 1,948,977
365,217
365,217
5,246,902
562,359
28,380
1,656,104
562,359
393,597
9,217,200
$ 1,843,572 $ 321,830 $
5,246,902 $
143,697 $
(6,459)
(393)
575,920 $ 122,471 $
(28,505)
(35,357)
533,854 $ 393,597 $ 9,181,843
55
Town of Prescott Valley, Arizona
Governmental funds report deferred revenue in connection with receivables for revenues that are not
considered to be available to liquidate liabilities of the current period. Governmental funds also defer
revenue recognition in connection with resources that have been received, but not yet earned. At the end
of the fiscal year, the various components of deferred revenue and unearned revenue reported in the
governmental funds were as follows:
Special assessments not yet due (debt service fund)
Grant drawdowns prior to meeting all eligibility requirements
Developer financial assurance and advance payments
Total deferred/unearned revenue for governmental funds
56
Unavailable
$ 5,246,902
$ 5,246,902
Unearned
$
16,538
270,355
$ 286,893
Town of Prescott Valley, Arizona
C. Capital assets
Capital Asset activity for the year ended June 30, 2005 was as follows:
TOWN OF PRESCOTT VALLEY, ARIZONA
SCHEDULE OF ACTIVITY IN CAPITAL ASSETS
YEAR ENDED JUNE 30, 2005
Capital
Assets
July 1, 2004
Governmental activities:
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets, not being depreciated:
Increases
$ 5,847,846
8,366,523
14,214,369
Capital assets, being depreciated:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total capital assets, being depreciated:
$
374,801
11,354,255
11,729,056
Adjustments
$
(89)
(89)
15,697,150
4,723,544
6,413,562
40,347,067
67,181,323
841,042
449,190
49,045,428
50,335,660
(137,526)
(7,920)
(145,446)
(1,915,619)
(970,431)
(2,398,102)
(4,733,930)
(10,018,082)
(354,719)
(305,252)
(588,753)
(1,588,958)
(2,837,682)
43,565
43,565
Total capital assets, being depreciated, net
57,163,241
47,497,978
(101,881)
Governmental activities capital assets, net
$ 71,377,610
$ 59,227,034
$
Business-type activities:
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets, not being depreciated:
$
$
$
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total accumulated depreciation:
Capital assets, being depreciated:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total capital assets, being depreciated:
Less accumulated depreciation for:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total accumulated depreciation:
Total capital assets, being depreciated, net
Business-type activities capital assets, net
912,169
7,252,574
8,164,743
9,448
13,748,040
13,757,488
(101,970)
-
Transfers
$
(5,023,980)
(5,023,980)
Capital
Assets
June 30, 2005
$
24,066
529,481
(30,330)
2,038,616
2,561,833
6,222,558
14,696,798
20,919,356
15,721,216
6,094,067
6,694,896
91,423,191
119,933,370
-
(2,270,338)
(1,275,683)
(2,943,290)
(6,322,888)
(12,812,199)
2,561,833
107,121,171
$
(2,462,147)
$ 128,040,527
$
(5,257,235)
(5,257,235)
$
3,686,808
15,220,285
6,181,776
30,261,803
55,350,672
14,902
11,497,733
44,452
14,292,925
25,850,012
(17,399)
(17,399)
(1,602,239)
(1,904,626)
(2,531,825)
(6,300,170)
(12,338,860)
(180,781)
(654,482)
(470,408)
(930,604)
(2,236,275)
16,104
6,468
22,572
43,011,812
23,613,737
5,173
7,719,382
74,350,104
$ 51,176,555
$ 37,371,225
5,173
2,462,147
$ 91,015,100
57
$
3,881,376
16,472
3,821,534
7,719,382
921,617
15,743,379
16,664,996
-
3,701,710
30,599,394
6,225,301
48,376,262
88,902,667
(1,783,020)
(2,559,108)
(2,986,129)
(7,224,306)
(14,552,563)
Town of Prescott Valley, Arizona
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General Government
Public safety
Highways and Streets, including depreciation of infrastructure assets
Culture and Recreation
Public Works
$
530,154
161,233
1,140,895
506,563
498,837
Total depreciation expense - governmental activities
$ 2,837,682
Business-type activities:
Wastewater
Municipal Water
Water District
$ 1,452,952
59,168
724,155
Total depreciation expense - business-type activities
$ 2,236,275
D. Construction Commitments
The Town has active construction projects as of June 30, 2005.
commitments with contractors for specific projects are as follows:
Facilities
Engineering
Wastewater
At year-end the government’s
$ 154,840
805
796,357
All water and sewer system improvement projects are being financed through the use of water or sewer
development fees and water or sewer rates.
E. Inter-fund Balances and Inter-fund Transfers
“Due to” and “due from” balances have primarily been recorded when funds overdraw their share of
pooled cash. For the Municipal Water fund, this amount consists of an inter-fund short-term loan from the
General fund for capital construction of wells. The composition of inter-fund balances as of June 30, 2005
is as follows:
Due to/from other funds
Receivable Fund
General
Payable Fund
Municipal Water
Amount
$
972,353
$
972,353
In 2005, the General fund advanced an additional $1,000,000, for a total to date of $2,000,000 to the
Facilities Capital Project fund to pay for expenditures associated with the remediation of the Civic Center.
58
Town of Prescott Valley, Arizona
The Town has issued Municipal Property Corporation debt to fund capital project expenditures in the
Enterprise Funds. The payback period for the Enterprise Funds is over the life of the bonds as a means to
fund the future debt service principal and interest payments.
Advance to/from other funds
Receivable Fund
General fund
MPC Debt Service Fund
Payable Fund
Facilities Capital Project
Water District
Municipal Water
$
$
Amount
2,000,000
3,862,076
13,615,227
19,477,303
Transfers are used to fund capital projects, debt service and to reallocate special revenue funds to
operating centers or other operations.
Interfund Transfers:
Transfer out:
General Fund
Highway User Revenue Fund
Streets Capital Project Fund
Nonmajor Governmental Funds
Total
General
Fund
$
888,117
$ 888,117
Transfer In:
Municipal
Property Corp
Highway User Debt Service
Nonmajor
Fund
Total
Revenue Fund
Governmental
$
197,441 $
999,247 $
518,240 $ 1,714,928
38,901
38,901
895,551
895,551
922,093
500,000
2,310,210
$ 1,119,534 $ 2,394,798 $
557,141 $ 4,959,590
F. Bonds, Loans, Capital Leases and Other Payables
The following are brief descriptions of bonds outstanding at June 30, 2005. The totals shown are the
principal amount outstanding, net of the current portion due July 1, 2005. There are a number of
limitations and restrictions contained in the various bond indentures. The Town is in compliance with all
significant limitations and restrictions.
Municipal Property Corporation Bonds
The Municipal Property Corporation (MPC) is a nonprofit corporation created by the Town to finance the
construction or acquisition of certain capital improvement projects. The MPC issues its own bonds,
which are generally repaid through the Town’s excise tax collections and other unrestricted revenues (i.e.
impact fees). In 2004, the Town entered into an intergovernmental agreement with the Prescott Valley
Water District to repay the bonds issued to expand the water system located within the District. The use
of property taxes to repay these bonds is specifically prohibited by law. Most of these bonds are recorded
as general long-term debt. The Town has five MPC issues (i.e., Town Hall/Library, Street Improvements,
Water System Improvements, Municipal Facilities Revenue Refunding and Water Importation Project)
totaling $43,695,000.
MPC bond covenants requires that the Town’s excise taxes (all transaction privilege taxes, franchise,
licenses and permits, fines and forfeitures, excise and income taxes which the Town now collects)
collected in the preceding fiscal year shall have amounted to at least two and one-half (2 ½) times the
highest combined interest and principal requirements for any succeeding 12-month period for the bonds
then outstanding and any additional bonds so proposed to be secured by a pledge of the excise taxes. At
59
Town of Prescott Valley, Arizona
June 30, 2005, the Town’s debt service coverage ranges from 4.35 to 12.27 times the annual debt service
payments.
The Town issued $14.3 million in Municipal Property Corporation Bonds during the fiscal year to obtain
the rights to additional water resources. The Town has been seeking additional water supplies for
numerous years to support the continued growth and development of the Town. An opportunity has
arisen for the Town to gain access to additional water supplies through a cooperative arrangement with
the City of Prescott, Arizona (City). The City will acquire certain water rights under the Arizona
groundwater laws and through an intergovernmental agreement with the Town; the Town will obtain from
the City up to 4,000 acre feet of water per year.
Sewer Revenue Bonds
Sewer revenue bonds are issued as authorized by the voters for the construction, acquisition, furnishing
and equipping of water and sewer facilities and related systems. At June 30, 2005, the Town had
$9,317,000 authorized but unissued sewer revenue bonds. The Town plans to issue the remaining portion
of the unissued sewer revenue bonds authorized for an upcoming sewer expansion project. The sewer
revenue bonds are collateralized by revenue in excess of operating and maintenance expenses of the
Town’s wastewater utility system, and are repaid via user charges or fees for service. Property taxes
cannot be used to pay the debt service on these bonds.
Sewer revenue bond covenants require that the Town’s net revenues (revenues remaining after providing
sufficient funds for the wastewater system) are at least one and one-quarter (1 ¼) times the maximum
annual debt service payment. The Town has continued to meet this reserve requirement. At June 30, 2005,
the Town’s debt service coverage (net revenues) is 4.32 times the annual debt service payment (see Table
XIII on page 96).
Special Assessment Bonds
Special assessment bonds are issued by the Town on behalf of improvement districts created by property
owners for a specific purpose, such as to finance sewer improvements. Property owners in the designated
districts agree to be assessed for the principal and interest costs of repaying the bonds. As trustee for
improvement districts, the Town is responsible for collecting the assessments levied against the owners of
property within the improvement districts and for disbursing these amounts to retire the bonds issued to
finance the improvements. The receivables, revenues and debt service expenses related to these bonds are
recorded in the Special Assessments Debt Service Fund. At June 30, 2005, special assessments
receivable, together with amounts paid in advance and interest to be received over the life of the
assessment period, were adequate for the scheduled maturities of the bonds payable and the related
interest.
These bonds are secured by a lien on the property and improvements of all parcels within each district. In
the event of default by the property owner, the Town may force an auction sale to satisfy the debt service
requirements of the improvement bonds. The Town is contingently liable on special assessment bonds to
the extent that proceeds from auction sales are insufficient to retire outstanding bonds.
The Town Council’s adopted policy is that special assessment improvement debt is permitted only when
the ratio of the full cash value of the property (prior to improvements being installed) when compared to
debt is a minimum of 3 to 1 prior to issuance of debt, and 5 to 1 or higher after construction of
improvements. In addition, cumulative improvement district debt is not permitted to exceed 5 percent of
the Town’s secondary assessed valuation.
At June 30, 2005, there were two (2) separate series of special assessment improvement bonds
outstanding, each series issued as serial bonds to be repaid over various terms.
60
Town of Prescott Valley, Arizona
Community Facilities Districts General Obligation Bonds
Community Facilities District General Obligation Bonds are issued by community facilities districts
(CFDs), which are special purpose districts created specifically to acquire and improve public
infrastructure in specified land areas. At June 30, 2005, the StoneRidge CFD and Quailwood Meadows
CFD have respectively $18,200,000 and $18,060,000, of authorized but unissued general obligation
bonds. The StoneRidge CFD and Quailwood Meadows CFD have plans to issue the remaining portion of
the unissued general obligation bonds authorized once all of the projects related to the current
authorization have been completed. CFD bonds are repaid by ad valorem taxes levied directly by the
districts and collected by the county. Property owners in the districts are assessed for District taxes and
thus for all costs associated with the Districts.
In March, 2003, the Eastridge Community Facilities District was formed. On September 17, 2003, the
Raven Ridge CFD obtained funding authority from the Water Infrastructure Finance Authority of Arizona
in the amount of $925,446. On September 25, 2003, the Eastridge CFD issued bonds in the amount of
$2.5 million which are payable from assessments collected from the property owners within these
districts.
On August 12, 2004, Town Council approved the formation of the Quailwood Meadows Community
Facilities District with the intent of issuing general obligation bonds for the purpose of financing certain
public infrastructure improvements within the District. The District is authorized to issue $25,000,000 of
general obligation bonds. On December 23, 2004 the district issued $6,940,000 of their authorized bonds.
Similar to StoneRidge CFD and Pronghorn CFD, bonds are repaid by ad valorem taxes levied directly by
the district and collected by the county. The Town has no liability for community facilities district bonds.
CFDs are created only by petition to the Town Council by property owners within the district areas. As
board of directors for the CFDs, the Town Council has adopted a formal policy that CFD debt will be
permitted only when the ratio of the full cash value of the unimproved district property to the proposed
district debt is a minimum of 3 to 1, and 5 to 1 or higher after construction of improvements. These ratios
are verified by an appraisal paid for by the CFD and administered by the Town. In addition, cumulative
debt of all CFDs cannot exceed 5 percent of the Town’s secondary assessed valuation. Currently, the
Town’s cumulative debt exceeds 5 percent of the Town’s secondary assessed valuation. However,
developer agreements between the Town and StoneRidge and Pronghorn Ranch had been approved by
Town Council before the financial policy was approved. The debt associated with StoneRidge or
Pronghorn Ranch will not be included in the calculation of debt to secondary assessed valuation. Any
future debt issued for CFDs will be included in the calculation.
61
Town of Prescott Valley, Arizona
Changes in Long-Term Liabilities
The following is a summary of changes in long-term liabilities reported in the government-wide financial
statements for the year ended June 30, 2005.
Town of Prescott Valley, Arizona
General Long-Term Debt
Classified in Governmental activities on the government-wide financial statements:
Balance
6/30/2004
Increases
Decreases
MPC Revenue Bonds
Special Assessment bonds
Community Facilities District General obligation bonds
Long-term Loan payable
Less deferred amounts:
On refunding
$
Compensated Absences
Total Governmental Long-Term Debt
Due Within
One Year
30,620,000
6,902,000
$ 14,300,000
-
$ 1,225,000
698,000
$ 43,695,000
6,204,000
$ 1,885,000
582,000
20,300,000
564,879
10,940,000
360,567
125,000
46,272
31,115,000
879,174
125,000
396,944
-
40,634
57,827,482
25,600,567
2,134,906
81,374,411
2,988,944
576,810
169,197
35,006
711,001
29,257
58,404,292
25,769,764
2,169,912
82,085,412
3,018,201
(559,397)
Subtotal Long-Term Capital Debt
Balance
6/30/2005
(518,763)
-
Classified in Business Type activities on the government-wide financial statements:
Revenue Bonds
Total Debt
$
30,225,000
-
1,365,000
28,860,000
1,400,000
88,629,292
$ 25,769,764
$ 3,534,912
$ 110,945,412
$ 4,418,201
Details of bonded debt at June 30, 2005, are as follows:
Municipal Property Corporation (MPC) Revenue Bonds
$7,825,000 Municipal Property Corporation Facilities Revenue Bonds,
Series 1997, dated October 1, 1997, is due in annual installments of
$200,000 to $725,000 through January 1, 2018, with interest at 4.00 to
5.00% per annum. (Payable from General Fund – Town Hall/Library.)
$17,895,000 Municipal Property Corporation Facilities Revenue Bonds,
Series 2003, dated January 1, 2003, is due in annual installments of
$120,000 to $1,280,000 through January 1, 2023, with interest at 3.00% to
5.00% per annum. (Payable from .33% transaction privilege taxes and impact fees.)
$4,580,000 Municipal Property Corporation Facilities Revenue Bonds,
Second Series 2003, dated September 1, 2003, is due in annual installments of
$240,000 to $395,000 through January 1, 2019, with interest at 2.00% to 4.50%
per annum. (Payable from an intergovernmental agreement with the Prescott
Valley Water District.)
62
1,475,000
17,190,000
4,340,000
Town of Prescott Valley, Arizona
$6,420,000 Municipal Property Corporation Facilities Revenue Refunding
Bonds, Series 2004, dated March 1 2004, is due in annual installments of
$30,000 to $735,000 through January 1, 2018, with interest at 2.00% to 3.75%
per annum. (Payable from General Fund – Refunding Bonds.)
$14,300,000 Municipal Property Corporation Facilities Revenue Bonds,
Second Series 2004, dated December 1, 2004, is due in annual installments
of $500,000 to $1,025,000 through January 1, 2025, with interest at 3.00% to 4.50%
(Payable from water resource fees from both the Town and the Water District.)
Total MPC revenue bonds
6,390,000
14,300,000
$43,695,000
Special Assessment Debt
Details of special assessment debt payable at June 30, 2004, are as follows:
$8,570,000 Special Assessment debt payable for sewer construction is
due in annual payments of $250,000 to $840,000 through January 1, 2012,
with interest at 7.9% per annum. (Debt with governmental commitment.)
$3,474,000
$5,100,000 Special Assessment debt payable for sewer construction is
due in annual payments of $125,000 to $485,000 through January 1, 2015,
with interest at 7.85% per annum. (Debt with governmental commitment.)
2,730,000
Total special assessment debt
$6,204,000
Community Facilities District Debt
The Community Facility Districts issued debt for construction of on and off-site infrastructure and public
improvements. Details of these bonds and loans payable at June 30, 2005 are as follows:
$14,800,000 StoneRidge Community Facilities District General Obligation Bonds,
Series 2001, is due in annual payments of $420,000 to $1,310,000 through
January 15, 2026, with interest at 6.000 to 6.750% per annum. (Payable from
revenues generated through an ad valorem tax assessed against the properties
located within the boundaries of the district. No Town revenues are pledged
toward these bonds and the developers are solely responsible for repaying the
bonds.)
$14,800,000
$3,000,000 Pronghorn Ranch Community Facilities District General Obligation
Bonds, Series 2002, is due in annual payments of $70,000 to $260,000 through
January 15, 2027, with interest at 5.750 to 6.250% per annum. $4,000,000 General
Obligation Bonds, Series 2004, is due in annual payments of $90,000 to $575,000
through July 15, 2029. (Payable from revenues generated through an ad valorem
tax assessed against the properties located within the boundaries of the district.
No Town revenues are pledged toward these bonds and the developers are solely
responsible for repaying the bonds.)
7,000,000
63
Town of Prescott Valley, Arizona
$2,500,000 Eastridge Community Facilities District General Obligation Bonds,
Series 2003, is due in annual payments of $125,000 to $275,000 through
July 1, 2018, with interest at 6.00% to 7.25% per annum. (Payable from revenues
generated through an assessment against the properties located within the boundaries
of the district. No Town revenues are pledged toward these bonds and the
developers are solely responsible for repaying the bonds.)
Total Community Facilities District Bonded Debt
2,375,000
$31,115,000
$925,446 Raven Ridge Community Facilities District long-term loan. A loan
agreement was entered into on January 21, 2003 for a maximum principal
amount of $925,446, at an interest rate of 3.188%, the proceeds of which are
designated for capital construction within the identified District. The total loan
debt service will be determined at the completion of the project after final loan
drawdowns have been submitted for a payback period of twenty years with
annual principal and semi-annual interest payments.
Total Community Facilities District Long-Term Loan Payable
879,174
$
879,174
Classified in Business-type activities on the government-wide financial statements:
Proprietary Fund Debt
The Town issued revenue bonds payable to acquire and construct the Town’s sewer system and treatment
plant. Details of these bonds payable at June 30, 2004 are as follows:
$10,545,000 Town of Prescott Valley Sewer Revenue Refunding Bonds,
Series 2003, dated April 1st, 2003, is due in annual payments of $355,000
to $770,000 through January 1, 2023, with an interest rate at 2.00% to
5.00% per annum. (Payable from system revenue charges.)
The Prescott Valley Water District has the following long-term obligations:
$24,335,000 Prescott Valley Water District Revenue Bonds, Series 1999, is
due in annual payments of $800,000 to $1,800,000 through January 1, 2019,
with interest at 3.500 to 4.875% per annum. (Payable from the Prescott
Valley Water District revenue charges.)
Total Proprietary Fund Debt
$ 9,800,000
19,060,000
$ 28,860,000
64
Town of Prescott Valley, Arizona
Debt Service Requirements to Maturity
The following is a summary of debt service requirements to maturity for long-term liabilities at June 30,
2005. Deferred issuance costs and deferred amounts on refunding are not included.
G overnmental Activities
Fiscal Year
Ending
2006
2007
2008
2009
2010
2011-15
2016-20
2021-25
2026-29
Fiscal Year
Ending
2006
2007
2008
2009
2010
2011-15
2016-20
2021-25
2026-29
CFD Bonded Debt
M unicipal Property Corp
Revenue B ond
Principal
Interest
1,885,000
1,765,166
1,995,000
1,705,641
1,490,000
1,650,115
1,585,000
1,599,577
1,690,000
1,542,887
9,735,000
6,732,171
11,140,000
4,542,608
11,165,000
2,160,629
3,010,000
139,250
$ 43,695,000
$ 21,838,043
StoneRidge CFD
Principal
Interest
976,638
976,637
420,000
976,637
445,000
951,437
475,000
924,737
2,845,000
4,151,237
3,900,000
3,090,488
5,405,000
1,583,887
1,310,000
88,425
$ 14,800,000 $ 13,720,123
Special Assessments
Principal
Interest
582,000
465,810
626,000
418,193
674,000
366,950
726,000
311,763
788,000
252,083
2,808,000
431,179
$ 6,204,000
2,245,978
Governmental Activities (continued)
Community Facilities Districts
Pronghorn Ranch CFD
Eastridge CFD
Principal
Interest
Principal
Interest
450,232
125,000
163,938
70,000
450,231
125,000
156,436
75,000
446,207
125,000
148,938
170,000
441,782
150,000
141,438
175,000
432,888
150,000
132,436
1,045,000
2,003,620
950,000
484,938
1,415,000
1,633,766
750,000
112,376
1,955,000
1,095,940
2,095,000
350,480
$ 7,000,000 $ 7,305,146 $ 2,375,000 $ 1,340,500
RavenRidge CFD Long-term Loan
Total CFD Bonded and long-term debt
Fiscal Year
Ending
2006
2007
2008
2009
2010
2011-15
2016-20
2021-25
Town of Prescott Valley
Wastewater
Principal
Interest
400,000
386,380
405,000
377,318
420,000
365,955
430,000
352,668
445,000
337,893
2,485,000
1,419,375
3,030,000
863,688
2,185,000
166,150
$ 9,800,000
$ 4,269,425
Business Type Activities
Prescott Valley Water
District
Principal
Interest
1,000,000
844,968
1,100,000
803,968
1,100,000
759,418
1,150,000
712,430
1,175,000
663,024
6,810,000
2,451,783
6,725,000
675,797
$ 19,060,000
6,911,386
65
T otal D ebt
Primary Government
Principal
Interest
2,467,000
2,230,976
2,621,000
2,123,834
2,164,000
2,017,065
2,311,000
1,911,340
2,478,000
1,794,970
12,543,000
7,163,350
11,140,000
4,542,608
11,165,000
2,160,629
3,010,000
139,250
$ 49,899,000 $ 24,084,021
Quailwood Meadows CFD
Principal
Interest
408,002
408,002
135,000
408,002
160,000
402,267
165,000
394,907
1,085,000
1,827,251
1,445,000
1,475,850
1,940,000
984,470
2,010,000
316,970
$ 6,940,000 $ 6,625,721
Total Debt
Community Facilities District
Principal
Interest
125,000
1,998,810
195,000
1,991,306
755,000
1,979,784
925,000
1,936,924
965,000
1,884,968
5,925,000
8,467,046
7,510,000
6,312,480
9,300,000
3,664,297
5,415,000
755,875
$ 31,115,000 $ 28,991,490
879,174
299,905
$ 31,994,174
$ 29,291,395
Total Debt
Business Type Activities
Principal
Interest
1,400,000
1,231,348
1,505,000
1,181,285
1,520,000
1,125,373
1,580,000
1,065,098
1,620,000
1,000,916
9,295,000
3,871,158
9,755,000
1,539,484
2,185,000
166,150
$ 28,860,000 $ 11,180,811
Town of Prescott Valley, Arizona
Statutory Debt Limitation
Under the provisions of the Arizona Constitution, outstanding general obligation bonded debt issued for
water, sewer, light, parks and open space purposes may not exceed 20 percent of a Town’s net secondary
assessed valuation. Outstanding general obligation bonded debt for all other purposes may not exceed 6
percent of a Town’s net secondary assessed valuation. General obligation bonds of community facilities
districts also are not subject to or included in this calculation. The following summarizes the Town of
Prescott Valley’s legal general obligation bonded debt borrowing capacity at June 30, 2005:
General Obligation Bonds issued to provide
Water, Light, Sewer, Open Space and Parks
General Obligation Bonds issued for
all other purposes
20% Constitutional Limit
$43,600,558
6% Constitutional Limit
$13,080,167
Less Direct Bonded Debt
to be outstanding
$0
Less Direct Bonded Debt
to be outstanding
$0
Available 20% Limitation
Borrowing Capacity
$43,600,558
Available 6% Limitation
Borrowing Capacity
$13,080,167
IV. Other Information
A. Risk Management
The Town is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets;
errors and omission; injuries to employees and natural disasters. As of July 1, 1987, the Town joined the
Arizona Municipal Risk Pool (“Pool”) as an alternative to escalating general liability insurance costs.
The Pool is made up of various towns and cities within Arizona that operate a common risk management
and insurance program.
The agreement provides that the Pool will be self-sustaining through member premiums. The Town pays
an annual premium to the Pool for its general insurance coverage. If the Pool becomes insolvent or is
otherwise unable to discharge its legal obligations, the Town (and all other participants) may be assessed
an additional contribution based on the Town’s current year’s contribution divided by the current year’s
contributions of all participants times the deficiency. The assessment may not exceed the original
contribution to the Pool for the year in which the assessment is made.
At the end of the tenth year of the Pool’s existence and each year thereafter, any surplus fund in the Pool
shall be distributed among the then existing participants in the Pool who were participating during the
previous ten years. The allocation shall be based on the proportion of contributions made by each
participant.
The Town continues to carry commercial insurance for all other risks of loss, including workers’
compensation and health and accident insurance. Settled claims resulting from these risks have not
exceeded commercial insurance coverage in any of the past three fiscal years.
B. Contingent Liabilities
The Town is a party to several lawsuits incidental to its normal operations. Management, with
concurrence of the Town Attorney, is of the opinion that settlement of these lawsuits will not have a
66
Town of Prescott Valley, Arizona
material effect on the financial position of the Town. Therefore, no specific provision has been reflected
in the accompanying basic financial statements for these matters.
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 which
may be disallowed by the grantor, cannot be determined at this time, although the Town expects such
amounts, if any, to be immaterial.
C. Commitments and Subsequent Events
In March 2005 the Town entered into a loan agreement with the Water Infrastructure Financing Authority
for an amount up to $9,317,470 to expand and improve its wastewater treatment plant. Construction and
loan draw downs have not begun as of the issuance of this report. Loan repayment will consist of semiannual interest and principal payments over a twenty year period at an interest rate of 3.408%.
In October 2005 the Town took steps to partially defease $1,215,000 of its Special Assessment Debt. The
early bond call is scheduled for January 1, 2006 and will require $1,284,768 of cash outlay.
On June 9, 2005 the Town and Prescott Valley Water District amended its current contractual agreement
with OMI, Inc. in the amount of $4,903,006 for fiscal year 2005/06. The agreement stipulates that OMI,
Inc. will operate, maintain and manage the Town’s wastewater collection and treatment system, reclaimed
water system and the District’s domestic water system.
D. Retirement and Pension Plans
Defined Contribution Plans
In lieu of participating in FICA-Social Security, the Town has a defined contribution plan created in
accordance with Internal Revenue Code Section 401(a). The plan is available to all full-time employees of
the Town, except police personnel who are covered under the Arizona Public Safety Personnel
Retirement System (APSPRS). The plan requires participants to contribute five percent (5%) of their
earnings and the Town to contribute seven percent (7%). The plan is administered through ICMA
Retirement Corporation, and participants are allowed to choose from among various investment funds
offered by the company. Normal retirement age is 65 (59½ effective July 1, 2002). There are no
securities of the Town included in the plan assets.
The employee’s contribution is one hundred percent (100%) vested at all times. The employer’s
contribution vests at the rate of twenty percent (20%) per year of service, thus employees are one hundred
percent (100%) after five years of service. The following describes the payroll and contribution
requirements for the year ended June 30, 2005:
Total Payroll
Employer
Employee
$ 8,145,972
N/A
Covered
Payroll
$ 5,286,012
5,286,012
% of Covered
Payroll
7%
5%
Required
Contribution
Actual
Contribution
$ 370,021
264,301
$ 370,021
264,301
Deferred Compensation Plans
The Town also offers its employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457. The plan is available to all Town employees and permits them to defer a
67
Town of Prescott Valley, Arizona
portion of their salary until future years. The deferred compensation is not available to employees until
termination, retirement, death or unforeseeable emergency. A 1996 federal law now requires all assets
and income of Internal Revenue Code Section 457 deferred compensation plans to be held in trust,
custodial accounts or annuity contracts for the exclusive benefit of the participants and their beneficiaries.
Assets of the Town’s plan are administered by a private corporation under contract with the Town.
Arizona Public Safety Personnel Retirement System
Plan description – The Town’s defined benefit pension plan provides retirement and disability benefits,
annual cost-of-living adjustments and death benefits to plan members and beneficiaries. The plan is part
of the Arizona Public Safety Personnel Retirement System, an agent multiple employer plan established
under Article 4, Chapter 5 of the Arizona Revised Statutes. The APSPRS issues a publicly available
financial report that includes financial statements and required supplementary information for APSPRS.
That report may be obtained by writing to Arizona Public Safety Personnel Retirement System, 1020 E.
Missouri, Phoenix, Arizona, 85014.
Funding Policy – APSPRS members are required to contribute 7.65% of their annual salary. The Town is
required to contribute at an actuarially determined rate. The rate for the year ended June 30, 2005 was
8.70% of annual covered payroll. The contribution requirements of plan members and the Town are
established according to State statutes.
Annual Pension Cost – For the year ended June 30, 2005, the Town’s annual pension cost of $207,653 for
APSPRS was equal to the Town’s required and actual contributions. The required contribution was
determined as part of the June 30, 2005 actuarial valuation using the entry age actuarial cost method. The
actuarial assumptions included (a) a rate of return on the investment of present and future assets of 8.75%
per year, compounded annually, (b) projected salary increases of 6.5% per year, compounded annually,
attributable to inflation and other across the board increases, and (c) projected salary increases ranging
from 0.00% to 3.0% per year attributable to seniority/merit.
The actuarial value of APSPRS assets was determined using techniques that smooth the effects of shortterm volatility in the market value of investments over a four-year period. APSPRS’s unfunded actuarial
accrued liability, calculated as of June 30, 2005, is being amortized at a level percentage of projected
payroll over a period of 40 years (from July 1, 1978). The remaining amortization period at June 30,
2005 was 13 years.
FIVE-YEAR TREND INFORMATION FOR APSPRS
Fiscal Year Ending
June 30, 2001
June 30, 2002
June 30, 2003
June 30, 2004
June 30, 2005
Pension Cost (APC)
$143,144
111,281
146,331
203,882
207,653
Percent Contributed
100.0%
100.0
100.0
100.0
100.0
68
Net Pension
Obligation
$
-0-0-0-0-0-
Town of Prescott Valley, Arizona
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Funding Progress for APSPRS
(1)
Actuarial
Valuation
Date
2001
2002
2003
2004
2005
Actuarial
Value of
Assets
$ 2,675,779
2,976,378
3,393,968
3,918,650
4,972,283
(2)
Actuarial
Accrued
Liability (AAL)
Entry Age
$ 2,186,886
2,638,806
3,196,802
3,867,382
5,378,443
(3)
(4)
Percent
Unfunded
Funded
AAL
(1)/(2)
(2) - (1)
122.36% $ (488,893)
112.79%
(337,572)
106.17%
(197,166)
101.33%
(51,268)
92.45%
406,160
(5)
Annual
Covered
Payroll
$ 1,350,639
1,557,554
1,793,332
2,148,670
2,390,794
(6) Unfunded
AAL as a
Percentage of
Covered
Payroll (4)/(5)
17.00%
One-time cost-of-living adjustments for retired members and survivors, effective July 1 were included in
this valuation. Future increases for retirees and their survivors are dependent upon excess earnings created
by the System.
69
Combining Statements
Nonmajor Governmental Funds
Special Revenue Funds
Special Revenue Funds are established to finance particular activities and are created out of receipts of
specific taxes or other earmarked revenue. Such funds are authorized by statutory or charter provisions to
pay for certain activities with some form of continuing revenue.
Local Transportation Assistance Fund – This fund is used to account for the Town’s share of State
lottery funds which are legally restricted to transportation capital purposes.
Grants Fund – This fund receives and expends the Town’s grant revenues. The amount of grants
received is generally based upon application to granting agencies by the Town and upon availability of
funding by the grantors. Grant revenues may be used only for the stated purpose in the approved grant
agreement and are subject to grantor expenditure guidelines.
Development Impact Fees Fund – This fund is used to account for impact fees collected by the Town.
Impact fees are collected from new residential or commercial development for the purpose of funding
future growth related capital improvements.
Replacement Fund – This fund is used to accumulate funds to be used for the future replacement of
vehicles or other major capital asset purchases.
Maranda Donation Fund – This fund was established to account for and accumulate funds that were
donated from the estate of Joseph R. Maranda for the purpose of founding a boys’ choir.
Library Building Fund – This fund was established to accumulate funds specifically for the purpose of
constructing a new library building.
Capital Project Funds
Capital projects funds are used to account for the acquisition and construction of major capital facilities
other than those financed by proprietary funds and trust funds.
Capital Projects Growth Fund – This fund was established to accumulate funds to be used for capital
project requirements due to growth.
Facilities Capital Project Fund – This fund was established to account for expenditures associated with
the remediation of the Civic Center.
Community Facilities Districts Funds
These funds account for the principal and interest of general obligation bonds issued by community
facilities districts. Although these bonds are not obligations of the Town, generally accepted accounting
principles indicate that the bonds should be disclosed herein.
Pronghorn Ranch Community Facilities District Fund
Eastridge Community Facilities District Fund
Raven Ridge Community Facilities District Fund
70
Town of Prescott Valley, Arizona
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2005
Special Revenue Funds
Local
Transportation
Assistance
Fund
ASSETS
Cash and investments
Restricted Assets
Receivables
Intergovernmental
Miscellaneous
Total Assets
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable
Accrued payroll
Deferred revenue:
Intergovernmental
Advances from other funds
Guaranty and other deposits
Total liabilities
$
$
$
Fund Balances:
Unreserved, undesignated
Total Fund Balances (Deficit)
Total liabilities and fund balances
$
Development
Impact Fees
Grants
- $
-
50,933
-
- $
365,217
416,150
- $
-
86,713
6,607
$
$
$
Maranda
Donation
Fund
Replacement
Fund
7,752,106
25,221
7,777,327
-
$
$
$
437,979
437,979
-
$
$
$
261,900
261,900
-
-
16,538
109,858
-
-
-
-
306,292
306,292
7,777,327
7,777,327
437,979
437,979
261,900
261,900
- $
416,150
71
$
7,777,327
$
437,979
$
261,900
Library
Building
Fund
Capital
Project
Growth
Fund
$ 1,035,778
-
$ 107,092
-
3,159
$ 1,038,937
$ 107,092
$
$
$
$
-
Facilities
Capital
Project
Fund
-
-
-
1,038,937
1,038,937
107,092
107,092
$ 1,038,937
$ 107,092
$
423,403
423,403
25,615
-
$
$
$
2,000,000
2,025,615
(1,602,212)
(1,602,212)
$
423,403
Total
Nonmajor
Governmental
Funds
Community Facilities Districts
Pronghorn
Ranch
Eastridge
Raven Ridge
$
- $
4,710,844
- $
515,567
383,936
4,710,844 $
515,567 $
383,936
311 $
-
- $
-
-
700,000
700,311
-
-
16,538
2,000,000
700,000
2,835,784
4,010,533
4,010,533
515,567
515,567
383,936
383,936
13,237,351
13,237,351
4,710,844
72
$
515,567
$
383,936
$
$
$
$
10,069,191
5,610,347
365,217
28,380
16,073,135
112,639
6,607
16,073,135
Town of Prescott Valley, Arizona
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2005
Special Revenue Funds
Local
Transportation
Assistance
Fund
REVENUES
Taxes - Intergovernmental:
Local transportation assistance fund
Taxes - Property
Interest earnings
Intergovernmental:
Federal grants
State grants
Contributions and donations
Other
Total revenues
$
EXPENDITURES
Current:
General government
Public safety
Culture & recreation
Public works
Debt Service
Principal
Interest and fiscal charges
Bond issuance costs
Capital improvements
Total expenditures
Excess (deficiency) of revenues over
expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Proceeds from bonds issued
Proceeds of long-term capital-related debt
Total other financing sources and uses
Net change in fund balances
Fund balances - beginning
Fund balances - ending
$
205,513
205,513
Development
Impact Fees
Grants
$
-
$
295,634
125,614
137,037
Maranda
Donation
Fund
Replacement
Fund
$
-
$
Library
Building
Fund
-
$
16,157
30,407
451,655
2,695,282
2,832,319
-
261,900
261,900
38,125
54,282
-
13,414
113,793
289,618
-
-
-
-
-
-
19,156
435,981
-
-
-
-
205,513
15,674
2,832,319
-
261,900
54,282
(1,699,265)
(1,699,265)
215,225
(171,432)
43,793
-
-
(205,513)
(205,513)
824
824
-
16,498
1,133,054
43,793
261,900
54,282
-
289,794
6,644,273
394,186
-
984,655
261,900
$ 1,038,937
-
$
306,292
73
$
7,777,327
$
437,979
$
Capital
Project
Growth
Fund
$
$
Facilities
Capital
Project
Fund
-
$
Total
Nonmajor
Governmental
Funds
Community Facilities Districts
Pronghorn
Ranch
Eastridge
Raven Ridge
-
$
81,817
60,494
$
5,919
$
-
$
31,764
205,513
81,817
251,371
-
-
371,237
513,548
452,517
458,436
367,689
399,453
295,634
125,614
3,366,544
850,613
5,177,106
-
261,370
80,244
-
1,253
-
-
94,911
113,793
289,618
261,370
-
489,949
751,319
286,266
240,870
607,380
125,000
261,877
207,714
595,844
46,272
36,828
551,803
634,903
171,272
584,971
240,870
1,268,622
3,025,427
-
(751,319)
(93,832)
(137,408)
(235,450)
2,151,679
341,092
(234,000)
107,092
-
4,000,000
4,000,000
-
360,567
360,567
557,141
(2,310,210)
4,000,000
360,567
2,607,498
107,092
(751,319)
3,906,168
(137,408)
125,117
4,759,177
-
(850,893)
104,365
652,975
258,819
8,478,174
107,092
$
(1,602,212)
$
4,010,533
$
74
515,567
$
383,936
$
13,237,351
OTHER SUPPLEMENTARY
INFORMATION
Town of Prescott Valley, Arizona
Local Transportation Assistance Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - GAAP Basis
Governmental Funds
For the Year Ended June 30, 2005
Actual Amounts,
Budgetary Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
$
$
Budgeted Amounts
Original
REVENUES
Taxes - Intergovernmental
Total revenues
$
EXPENDITURES
Current:
LTAF expenditures
Total expenditures
Final
140,215
140,215
$
140,215
140,215
205,513
205,513
65,298
65,298
-
-
-
-
Excess (deficiency) of revenues over
expenditures
140,215
140,215
205,513
65,298
OTHER FINANCING SOURCES (USES)
Transfers out
Total other financing sources
(140,215)
(140,215)
(140,215)
(140,215)
(205,513)
(205,513)
(65,298)
(65,298)
-
-
-
-
-
-
-
-
Net change in fund balances
Fund balances - beginning
Fund balances - ending
$
-
75
$
-
$
-
$
-
Town of Prescott Valley, Arizona
Grants Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - GAAP Basis
Governmental Funds
For the Year Ended June 30, 2005
Budgeted Amounts
Original
REVENUES
Intergovernmental:
Federal grants
State grants
Other
Total revenues
$
EXPENDITURES
Current:
General government
Public safety
Culture & recreation
Capital outlay
Total expenditures
Final
906,915
148,291
7,000
1,062,206
$
14,253
175,097
831,537
67,400
1,088,287
Actual Amounts,
Budgetary Basis
906,915
148,291
7,000
1,062,206
$
14,253
175,921
831,537
67,400
1,089,111
295,634
125,614
30,407
451,655
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
$
(611,281)
(22,677)
23,407
(633,958)
13,414
113,793
289,618
19,156
435,981
839
62,128
541,919
48,244
653,130
15,674
19,172
824
824
4,176
4,176
Excess (deficiency) of revenues over
expenditures
(26,081)
(26,905)
OTHER FINANCING SOURCES (USES)
Transfer in
Total other financing sources
5,000
5,000
5,000
5,000
(21,081)
(21,905)
16,498
23,348
289,794
289,794
289,794
-
Net change in fund balances
Fund balances - beginning
Fund balances - ending
$
268,713
76
$
267,889
$
306,292
$
23,348
Town of Prescott Valley, Arizona
Development Impact Fees Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - GAAP Basis
Governmental Funds
For the Year Ended June 30, 2005
Budgeted Amounts
Original
REVENUES
Interest earnings
Impact fees
Total revenues
$
EXPENDITURES
Current:
Capital expenditures
Total expenditures
Actual Amounts,
Budgetary Basis
Final
37,000
1,943,000
1,980,000
$
37,000
1,943,000
1,980,000
$
137,037
2,695,282
2,832,319
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
$
100,037
752,282
852,319
-
-
-
-
Excess (deficiency) of revenues over
expenditures
1,980,000
1,980,000
2,832,319
852,319
OTHER FINANCING SOURCES (USES)
Transfers out
Total other financing sources
(2,099,104)
(2,099,104)
(2,099,104)
(2,099,104)
(1,699,265)
(1,699,265)
399,839
399,839
(119,104)
(119,104)
Net change in fund balances
Fund balances - beginning
Fund balances - ending
6,644,273
$
6,525,169
77
6,644,273
$
6,525,169
$
1,133,054
1,252,158
6,644,273
-
7,777,327
$
1,252,158
Town of Prescott Valley, Arizona
Replacement Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - GAAP Basis
Governmental Funds
For the Year Ended June 30, 2005
Actual Amounts,
Budgetary Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
$
$
Budgeted Amounts
Original
REVENUES
Replacement revenues
Total revenues
$
EXPENDITURES
Current:
Replacement expenditures
Total expenditures
Excess (deficiency) of revenues over
expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources
Net change in fund balances
Fund balances - beginning
Fund balances - ending
$
Final
-
$
-
-
-
-
-
-
-
-
-
-
-
215,225
(209,634)
5,591
215,225
(209,634)
5,591
215,225
(171,432)
43,793
38,202
38,202
5,591
5,591
43,793
38,202
394,186
394,186
394,186
-
399,777
78
$
399,777
$
437,979
$
38,202
Town of Prescott Valley, Arizona
Maranda Donation Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Governmental Funds
For the Year Ended June 30, 2005
Budgeted Amounts
Original
REVENUES
Contributions & Donations
Total Revenues
$
EXPENDITURES
Current:
Operating expenditures
Total Expenditures
Actual Amounts,
Budgetary Basis
Final
-
$
-
$
261,900
261,900
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
$
261,900
261,900
-
-
-
-
Excess (deficiency) of revenues over
expenditures
-
-
261,900
261,900
Net change in fund balances
-
-
261,900
261,900
-
-
-
-
Fund balances - beginning
Fund balances - ending
$
-
79
$
-
$
261,900
$
261,900
Town of Prescott Valley, Arizona
Library Building Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Governmental Funds
For the Year Ended June 30, 2005
Budgeted Amounts
Original
REVENUES
Interest
Contributions & Donations
Total Revenues
$
EXPENDITURES
Capital Outlay
Capital expenditures
Total Expenditures
Actual Amounts,
Budgetary Basis
Final
20,000
20,000
$
20,000
20,000
$
16,157
38,125
54,282
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
$
(3,843)
38,125
34,282
-
-
-
-
Excess (deficiency) of revenues over
expenditures
20,000
20,000
54,282
34,282
Net change in fund balances
20,000
20,000
54,282
34,282
984,655
984,655
984,655
-
Fund balances - beginning
Fund balances - ending
$
1,004,655
80
$
1,004,655
$
1,038,937
$
34,282
Town of Prescott Valley, Arizona
Capital Project Growth Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - GAAP Basis
Governmental Funds
For the Year Ended June 30, 2005
Actual Amounts,
Budgetary Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
Budgeted Amounts
Original
Final
REVENUES
Total revenues
-
-
-
-
EXPENDITURES
Current:
Capital expenditures
Total expenditures
-
-
-
-
-
-
-
-
234,000
(234,000)
-
234,000
(234,000)
-
341,092
(234,000)
107,092
(107,092)
(107,092)
-
-
107,092
(107,092)
-
-
-
-
Excess (deficiency) of revenues over
expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources
Net change in fund balances
Fund balances - beginning
Fund balances - ending
$
-
81
$
-
$
107,092
$
(107,092)
Town of Prescott Valley, Arizona
Facilities Capital Project Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - GAAP Basis
Governmental Funds
For the Year Ended June 30, 2005
Budgeted Amounts
Original
REVENUES
Insurance claim proceeds
Total revenues
$
EXPENDITURES
Current:
Capital expenditures
Other expenditures
Total expenditures
Final
1,400,000
1,400,000
$
Actual Amounts,
Budgetary Basis
1,400,000
1,400,000
$
-
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
$
(1,400,000)
(1,400,000)
490,000
190,000
680,000
490,000
190,000
680,000
489,949
261,370
751,319
Excess (deficiency) of revenues over
expenditures
720,000
720,000
(751,319)
(1,471,319)
Net change in fund balances
720,000
720,000
(751,319)
(1,471,319)
(850,893)
(850,893)
(850,893)
-
Fund balances - beginning
Fund balances - ending
$
(130,893)
82
$
(130,893)
$
(1,602,212)
51
(71,370)
(71,319)
$
(1,471,319)
Town of Prescott Valley, Arizona
Streets Capital Improvement Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Governmental Funds
For the Year Ended June 30, 2005
Actual Amounts,
Budgetary Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
$
$
Budgeted Amounts
Original
REVENUES
Taxes
Interest
Total Revenues
$
EXPENDITURES
Capital Outlay
Engineering & design cost
Land
Improvements
Total Expenditures
Final
1,254,000
75,000
1,329,000
$
-
1,254,000
75,000
1,329,000
1,585,991
125,164
1,711,155
331,991
50,164
382,155
1,115,106
301,882
12,142,354
13,559,342
798,088
73,826
6,121,463
6,993,377
317,018
228,056
6,020,891
6,565,965
Excess (deficiency) of revenues over
expenditures
1,329,000
(12,230,342)
(5,282,222)
6,948,120
OTHER FINANCING SOURCES (USES)
Operating transfers in
Operating transfers out
Total other financing sources
929,228
(1,824,779)
(895,551)
929,228
(1,824,779)
(895,551)
(895,551)
(895,551)
929,228
929,228
1,858,456
(13,125,893)
(6,177,773)
8,806,576
12,900,710
12,900,710
Net change in fund balances
433,449
Fund balances - beginning
Fund balances - ending
12,900,710
$
13,334,159
$
83
(225,183)
$
6,722,937
$
8,806,576
Town of Prescott Valley, Arizona
Special Assessment Bond - Debt Service Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - GAAP Basis
Governmental Funds
For the Year Ended June 30, 2005
Budgeted Amounts
Original
REVENUES
Fines
Special assessments
Interest
Total revenues
$
EXPENDITURES
Debt Service
Principal
Interest and fiscal charges
Total expenditures
22,100
1,265,877
1,287,977
Final
$
22,100
1,265,877
1,287,977
Actual Amounts,
Budgetary Basis
$
56,388
1,705,903
234
1,762,525
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
$
34,288
440,026
234
440,260
698,000
538,079
1,236,079
698,000
538,079
1,236,079
698,000
534,605
1,232,605
3,474
3,474
Excess (deficiency) of revenues over
expenditures
51,898
51,898
529,920
(478,022)
Net change in fund balances
51,898
51,898
529,920
(478,022)
730,450
730,450
730,450
-
Fund balances - beginning
Fund balances - ending
$
782,348
$
84
782,348
$
1,260,370
$
(478,022)
Town of Prescott Valley, Arizona
Municipal Property Corporation Debt Service Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - GAAP Basis
Governmental Funds
For the Year Ended June 30, 2005
Budgeted Amounts
Original
REVENUES
Interest earnings
Intergovernmental
Total revenues
$
EXPENDITURES
Current:
Principal
Interest and fiscal charges
Bond issuance costs
Advance refunding escrow
Total expenditures
Actual Amounts,
Budgetary Basis
Final
410,040
410,040
$
410,040
410,040
$
96,133
166,053
262,186
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
$
96,133
(243,987)
(147,854)
1,225,000
1,579,838
2,804,838
1,225,000
1,579,838
2,804,838
1,225,000
1,317,750
403,790
2,946,540
262,088
(403,790)
(141,702)
Excess (deficiency) of revenues over
expenditures
(2,394,798)
(2,394,798)
(2,684,354)
(289,556)
OTHER FINANCING SOURCES (USES)
Proceeds from bonds issued
Transfers in
Total other financing sources
2,394,798
2,394,798
2,394,798
2,394,798
14,300,000
2,394,798
16,694,798
(14,300,000)
(14,300,000)
-
-
14,010,444
(14,589,556)
7,380,822
7,380,822
7,380,822
-
Net change in fund balances
Fund balances - beginning
Fund balances - ending
$
7,380,822
85
$
7,380,822
$
21,391,266
$
(14,589,556)
STATISTICAL SECTION
TOWN OF PRESCOTT VALLEY, ARIZONA
GOVERNMENT-WIDE EXPENSES BY FUNCTION
Current Fiscal Year
SUPPLEMENTAL INFORMATION
Fiscal
Year
General
Government
2002-03 $
2003-04
2004-05
7,039,716 $
6,461,543
7,042,829
Public
Safety
4,214,549 $
4,969,379
5,437,388
Highways
and
Streets
Culture
and
Recreation
1,840,839 $
2,514,418
2,815,703
2,751,520 $
2,451,113
3,095,954
Public
Works
1,684,209 $
2,516,685
1,921,143
Interest on
Long-term
Debt
1,628,654 $
3,319,069
3,517,481
Source:
Town of Prescott Valley Management Services Department
Note:
Amounts represent the results of operations for the primary government only.
These amounts are presented on the accrual basis of accounting and include depreciation expense.
86
Wastewater
Utility
2,884,531 $
4,198,517
4,151,355
Table I
Municipal
Water
707,310 $
535,309
675,700
Water
District
Total
4,854,985 $ 27,606,313
4,767,074
31,733,107
5,831,891
34,489,444
TOWN OF PRESCOTT VALLEY, ARIZONA
GOVERNMENT-WIDE REVENUES
Current Fiscal Year
SUPPLEMENTAL INFORMATION
Fiscal
Year
2002-03
2003-04
2004-05
Program Revenues
Operating
Capital
Charges for
Grants and
Grants and
Services
Contributions Contributions
$ 9,184,171 $ 138,198 $10,951,861
10,671,443
164,876
10,898,238
11,842,257
416,548
82,136,576
Table II
General Revenues
Taxes
Intergovernmental
$ 8,071,801 $
9,797,102
9,201,240
6,318,685
11,577,445
6,618,969
Source:
Town of Prescott Valley Management Services Department
Note:
Amounts represent the results of operations for the primary government only.
These amounts are presented on the accrual basis of accounting.
87
Investment
Earnings Miscellaneous
Total
$ (195,568) $ 950,317 $ 18,623,652
453,434
3,094,586
19,067,945
1,274,532
4,179,916
23,650,862
TOWN OF PRESCOTT VALLEY, ARIZONA
GENERAL GOVERNMENT EXPENDITURES BY FUNCTION
LAST TEN FISCAL YEARS
SUPPLEMENTAL INFORMATION
Fiscal
Year
General
Government
1995-96 $ 1,047,774
1996-97
1,319,928
1997-98
1,539,313
1998-99
2,807,785
1999-00
4,514,187
2000-01
4,889,769
2001-02
5,226,998
2002-03
6,485,575
2003-04
5,909,498
2004-05
6,339,834
Public
Safety
Highways
and
Streets
Culture
and
Recreation
$ 1,839,307
1,924,468
2,130,957
2,484,217
3,276,244
3,256,782
3,641,518
3,936,263
4,666,637
5,276,155
$ 2,440,680
875,833
817,543
1,439,417
4,598,923
1,524,732
1,610,613
1,218,494
1,526,534
1,668,671
$ 1,225,296
891,386
1,126,200
1,381,149
1,402,286
1,992,620
2,328,457
2,330,490
2,019,564
2,589,391
Source: Town of Prescott Valley Management Services Department
88
Public
Works
$
281,521
306,714
334,449
393,460
571,957
678,191
1,222,968
1,336,566
1,497,516
1,422,306
Table III
Total
$ 6,834,578
5,318,329
5,948,462
8,506,028
14,363,597
12,342,094
14,030,554
15,307,388
15,619,749
17,296,357
TOWN OF PRESCOTT VALLEY, ARIZONA
GENERAL GOVERNMENT REVENUES BY SOURCE
LAST TEN FISCAL YEARS
SUPPLEMENTAL INFORMATION
Fiscal
Year
Local
Sales
Taxes
Intergovernmental
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
$ 2,889,055
3,516,671
3,643,910
3,820,228
4,383,727
4,979,450
5,619,420
6,414,758
8,071,801
9,084,550
11,450,690
$ 2,944,401
3,283,728
4,886,135
5,190,879
5,686,104
7,647,817
7,059,951
9,005,469
9,797,102
9,458,632
10,798,885
Fines
and
Forfeitures
$
99,105
109,414
147,039
145,343
170,159
224,656
167,429
194,056
162,947
213,937
292,019
Licenses
and
Permits
$
784,855
593,382
667,168
745,985
680,903
1,601,225
1,683,401
2,062,500
1,125,920
1,436,932
1,887,901
Source: Town of Prescott Valley Management Services Department
89
Table IV
Charges
for
Services
$
215,954
461,165
212,618
214,477
284,046
424,216
635,507
1,436,200
1,972,758
1,902,345
1,874,803
Other
$
367,742
693,090
963,993
1,498,030
1,266,859
1,298,053
2,254,696
1,478,984
1,342,027
1,954,808
2,865,861
Total
$ 7,301,112
8,657,450
10,520,863
11,614,942
12,471,798
16,175,417
17,420,404
20,591,967
22,472,555
24,051,204
29,170,159
TOWN OF PRESCOTT VALLEY, ARIZONA
TAX REVENUES BY SOURCE
LAST TEN FISCAL YEARS
SUPPLEMENTAL INFORMATION
Local
Sales
Tax (1)
Fiscal
Year
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
$
2,889,055
3,516,671
3,643,910
3,820,228
4,059,520
4,211,973
5,166,779
5,933,119
7,602,800
8,665,348
11,292,767
State
Sales
Tax (2)
$
685,873
757,828
1,132,354
1,195,965
1,282,013
1,285,464
1,501,349
1,813,617
1,840,621
1,980,004
2,180,290
Motor Vehicle
Lieu Tax (2)
$
338,642
404,735
465,473
496,594
644,130
746,348
910,713
1,582,723
1,570,471
1,520,915
1,578,183
Franchise
Taxes
$
215,954
232,141
259,820
331,180
324,207
347,429
452,640
481,639
469,001
419,202
284,678
Source:
Town of Prescott Valley Management Services Department
Notes:
(1) Considered part of tax revenue on the financial statements
(2) Considered part of intergovernmental revenue on the financial statements
Includes Governmental Fund Types only
90
Table V
Total
(2) $
(2)
(2)
(2)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
4,129,524
4,911,375
5,501,557
5,843,967
6,309,870
6,591,214
8,031,481
9,811,098
11,482,893
12,585,468
15,335,918
TOWN OF PRESCOTT VALLEY, ARIZONA
ASSESSED AND ESTIMATED ACTUAL VALUE OF PROPERTY
LAST TEN FISCAL YEARS
SUPPLEMENTAL INFORMATION
Fiscal
Year
Primary Tax
Limited
Net
Property
Assessed
Value (3)
Value (1)
1994-95 $ 472,119,450
1995-96
548,046,869
1996-97
631,920,587
1997-98
690,077,932
1998-99
758,625,517
1999-00
810,922,509
2000-01
905,664,956
2001-02
1,021,107,753
2002-03
1,132,160,583
2003-04
1,325,283,133
2004-05
1,578,181,045
Notes:
(1)
$ 64,916,214
73,951,493
84,537,206
92,979,139
101,711,002
105,500,887
118,424,552
133,820,619
150,298,428
170,887,793
201,229,477
Ratio of Net
Assessed Value
to Limited
Property Value
Full
Cash
Value (3)
Centrally
Valued (2)
13.75%
13.49%
13.38%
13.47%
13.41%
13.01%
13.08%
13.11%
13.28%
12.89%
12.75%
$ 524,774,841
569,429,496
698,051,346
730,422,909
801,561,983
841,005,257
953,093,575
1,038,653,357
1,149,392,679
1,404,411,385
1,720,821,649
$ 5,561,601
6,168,193
6,168,193
6,211,089
5,297,763
4,837,644
6,288,738
6,870,030
8,148,888
7,186,713
7,927,126
Table VI
Secondary Tax
Real
Property (1)
Personal
Property (1)
$ 64,494,078 $ 1,697,016
68,366,247
2,456,523
86,474,579
2,456,523
90,393,111
2,779,229
97,076,595
5,692,034
98,132,737
6,585,821
101,686,347 10,449,467
123,570,828
5,539,381
139,540,223
5,112,997
169,959,437
5,368,121
186,820,145
6,482,206
Assessed values are based on property use:
Residential Owner Occupied
Rental Residential
Agricultural/Vacant Land
Commercial
10%
10%
16%
25%
(2)
Utilities and Railroads
(3)
Limited value relates to primary taxes and annual changes are restricted by statute. Full Cash Value relates to secondary
taxes and is an Assessor's approximation of market value.
91
Total
Secondary
Ratio of Net
Assessed Value
to Full
Cash Value
$ 71,752,695
76,990,963
95,099,295
99,383,429
108,066,392
109,556,202
118,424,552
135,980,239
152,802,108
182,514,271
218,002,790
13.67%
13.52%
13.62%
13.61%
13.48%
13.03%
12.43%
13.09%
13.29%
13.00%
12.67%
TOWN OF PRESCOTT VALLEY, ARIZONA
PROPERTY TAX RATES - ALL OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
SUPPLEMENTAL INFORMATION
Fiscal
Year
Town
1994-95
-
1995-96
-
1996-97
-
1997-98
-
1998-99
-
1999-00
-
2000-01
-
2001-02
-
2002-03
-
2003-04
-
2004-05 -
Yavapai
County
2.4813
0.3992
2.4713
0.4784
2.5108
0.4278
2.3363
0.4097
2.2768
0.4354
2.2370
0.4452
2.1040
0.4286
2.0961
0.4297
2.1525
0.4307
2.1568
0.4069
2.1366
0.4034
State of
Arizona
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
0.47
Humboldt
USD
P
0.47
P
0.00
P
0.00
P
0.00
P
0.00
P
0.00
P
0.00
P
0.00
P
0.00
P
0.00
P
5.0110
1.6153
5.0026
1.8206
4.2896
1.7306
4.5557
1.9732
4.5858
1.8068
4.5119
1.5729
4.5233
1.5713
4.7865
1.3285
4.0335
1.2670
4.0900
1.0831
3.4477
0.9278
Central
Yavapai
Fire District
Community
College
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
1.4730
0.1347
1.5448
0.1223
1.5537
0.1223
1.4589
0.1055
1.4631
0.1058
1.5294
0.0956
1.5325
0.4163
1.5835
0.3954
1.5672
0.3106
1.5626
0.2888
1.4900
0.2614
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
P
S
Notes:
P - Primary
S - Secondary
The basis for property tax rate calculation is per $100 of net assessed value.
92
Table VII
Special
District
Total
1.7109
S
1.8434
S
1.7157
S
0.6180
S
1.6916
S
0.5501
S
1.6639
S
0.0000
S
1.6601
S
0.0000
S
1.6540
S
0.0000
S
1.7063
S
0.0000
S
1.7409
S
0.0000
S
1.7992
S
0.0000
S
1.7996
S
0.0000
S
2.0072
S
0.0000
S
9.4353
5.7035
9.4887
4.7550
8.3541
4.5224
8.3509
4.1523
8.3257
4.0081
8.3257
4.0081
8.1598
4.1225
8.4661
3.8945
7.7532
3.8075
7.8094
3.5784
7.0743
3.5998
TOWN OF PRESCOTT VALLEY, ARIZONA
SPECIAL ASSESSMENT BILLINGS AND COLLECTIONS
LAST TEN FISCAL YEARS
SUPPLEMENTAL INFORMATION
Fiscal
Year
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
Special
Assessment
Billings (1)
$
340,000
495,000
530,000
532,503
555,749
585,416
618,088
627,229
1,138,977
1,159,394
Special
Assessment
Collected (2)
$
505,594
898,220
614,217
889,083
1,001,761
832,120
1,024,577
1,884,826
1,732,368
1,762,525
Notes:
(1) Billings are less than collections due to a refund to the property
owners because the project came in under budget. Payments made
with bond funds not spent.
(2) Includes prepayments and foreclosures. For the year ended
June 30, 2005 this figure includes 295 assessment payoffs.
93
Table VIII
TOWN OF PRESCOTT VALLEY, ARIZONA
COMPUTATION OF LEGAL DEBT MARGIN
JUNE 30, 2005
SUPPLEMENTAL INFORMATION
Table IX
General Obligation Bonds
All Others
Water & Sewer
6% (1)
20% (1) (2)
Legal Debt Limitation
2005 net secondary assessed valuation - $218,002,790
$
Outstanding Debt
Total outstanding debt (3)
13,080,167
$
43,600,558
-
Total Debt Margin Available
$
13,080,167
$
43,600,558
(1) Under Arizona law, cities can issue general obligation bonds for the purposes of water, sewer, lighting,
parks and open space purposes, but outstanding bonds issued for such purposes may not exceed 20
percent of the Town's secondary assessed valuation. Outstanding general obligation bonded debt for all
other purposes may not exceed 6 percent of the Town's secondary assessed valuation.
(2) General obligation bonds of community facilities districts are not subject to or included in this computation
since they are not bonds of the Town of Prescott Valley.
(3) For Statutory purposes, the Town's outstanding bonds are not considered general obligation bonds
subject to the statutory limits listed above because the Town's bonds outstanding at June 30, 2005,
were secured by sales taxes instead of property taxes.
Source: Town of Prescott Valley Management Services Department
94
TOWN OF PRESCOTT VALLEY, ARIZONA
Table X
RATIO OF NET GENERAL OBLIGATION BONDED DEBT TO GROSS TAXABLE SALES
AND NET GENERAL OBLIGATION BONDED DEBT PER CAPITA
LAST TEN FISCAL YEARS
Fiscal
Year
1993-94
1994-95*
1995-96
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
Gross
Taxable
Sales
Estimated
Population (1)
$
13,095
16,043
16,120
20,268
22,008
23,390
25,889
26,066
27,500
29,655
34,000
$
Gross
Bonded
Debt
(2)
129,220,340
151,279,792
163,823,750
190,873,800
206,565,750
230,607,850
255,973,809
291,416,145
364,801,200
440,335,550
480,603,433
$
Debt
Service
Fund
(3)
-
$
Notes:
(1) Prescott Valley Economic
Development Foundation
(2) Arizona Department of Revenue Transaction
Privilege Tax Report for Prescott Valley
(3) The Town has no general obligation debt.
95
Less Net
Bonded
Debt
-
$
Bonded
Debt To Gross
Taxable Sales
-
-
Ratio of Net
Bonded
Debt Per
Capita
-
TOWN OF PRESCOTT VALLEY, ARIZONA
Table XI
RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL
OBLIGATION BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES
LAST TEN FISCAL YEARS
Fiscal
Year
Principal
1995-96 $
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
Total
Debt
Service
Interest
-
$
-
$
Total General
Government
Expenditures
-
$
Notes:
(1) The Town has no General Obligation debt.
96
6,834,578
5,318,329
5,948,462
8,506,028
14,363,597
12,342,094
14,030,554
15,307,388
15,619,749
17,296,357
Ratio of Debt
Service To General
Government
Expenditures
-
TOWN OF PRESCOTT VALLEY, ARIZONA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
JUNE 30, 2005
SUPPLEMENTAL INFORMATION
Table XII
Percentage
Applicable to
Prescott Valley
Net Debt
Outstanding
Prescott
Valley's
Share of Debt
Direct Debt
General Obligation Bonds payable
from property tax
Overlapping Debt
Yavapai Community College District
Humboldt Unified School District
Total overlapping debt
$
-
$
61,725,000
20,160,000
81,885,000
100.00% $
12.21%
84.89%
Total direct and overlapping debt
-
7,537,762
17,114,091
24,651,854
$
24,651,854
Debt allocation is based on distribution of assessed valuation within overlapping tax districts.
Total
Assessed
Valuation
Taxing District
Yavapai Community College District
Humboldt Unified School District
$
1,785,174,684
256,802,195
97
Valuation
in
Prescott Valley
$
$
218,002,790
218,002,790
Percentage
in
Prescott Valley
12.21%
84.89%
TOWN OF PRESCOTT VALLEY, ARIZONA
SEWER FUND REVENUE BOND COVERAGE
LAST TEN FISCAL YEARS
SUPPLEMENTAL INFORMATION
Fiscal
Year
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
Gross
Revenues (1)
$
1,669,258
1,997,888
2,386,886
2,309,209
2,505,104
2,505,218
2,799,910
3,841,562
4,644,156
5,710,025
Operating
Expenses (2)
$
600,311
805,229
969,445
978,475
1,033,312
1,165,931
1,718,333
1,334,338
2,261,587
2,321,687
Net Revenue
Available for
Debt Service
$
1,068,947
1,192,659
1,417,441
1,330,734
1,471,792
1,339,287
1,081,577
2,507,224
2,382,569
3,388,338
Principal
$
130,000
140,000
220,530
235,000
243,000
258,000
273,000
262,788
355,000
390,000
Table XIII
Debt Service Requirements (3)
Interest
Total
$
693,574
546,492
734,564
597,453
585,007
571,963
558,135
620,684
503,050
394,280
$
Source: Town of Prescott Valley Management Services Department
Notes:
(1) Total operating revenues (including nonoperating charges of interest and wastewater capacity fees).
(2) Total operating expenses exclusive of depreciation.
(3) Includes principal and interest of revenue bonds only.
98
823,574
686,492
955,094
832,453
828,007
829,963
831,135
883,472
858,050
784,280
Coverage
1.30
1.74
1.48
1.60
1.78
1.61
1.30
2.84
2.78
4.32
TOWN OF PRESCOTT VALLEY, ARIZONA
WATER DISTRICT FUND REVENUE BOND COVERAGE
LAST TEN FISCAL YEARS
SUPPLEMENTAL INFORMATION
Fiscal
Year
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
Net Revenue
Gross
Operating Available for
Revenues (1) Expenses (2) Debt Service
$
Table XIV
Debt Service Requirements (3)
Principal
Interest
Total
Coverage
- $
- $
- $
1,727,426
738,579
988,847
3,762,924
1,790,371
1,972,553
4,193,138
2,037,137
2,156,001
4,533,754
2,227,913
2,305,841
5,250,894
2,890,179
2,360,715
5,288,794
2,761,944
2,526,849
5,342,921
3,651,952
1,690,969
- $
- $
475,288
475,288
800,000
1,057,149
1,857,149
825,000
1,010,505
1,835,505
850,000
984,974
1,834,974
900,000
972,373
1,872,373
925,000
936,374
1,861,374
975,000
900,530
1,875,530
Source: Town of Prescott Valley Management Services Department
Notes:
(1) Total revenues (including interest) exclusive of water resource fees (nonoperating charges).
(2) Total operating expenses exclusive of depreciation.
(3) Includes principal and interest of revenue bonds only.
99
N/A
N/A
N/A
N/A
2.08
1.06
1.17
1.26
1.26
1.36
0.90
TOWN OF PRESCOTT VALLEY, ARIZONA
DEMOGRAPHIC STATISTICS
LAST TEN FISCAL YEARS
SUPPLEMENTAL INFORMATION
Fiscal
Year
Estimated
Population (1)
1994-95*
1995-96
1996-97
1997-98
1998-99**
1999-00
2000-01
2001-02
2002-03***
2003-04
2004-05
16,043
16,120
19,211
20,268
22,008
23,390
25,889
26,066
27,500
29,655
34,000
Median
Family
Income (2)
$34,690
Table XV
Unemployment
Percentage
Rate (3)
Public
School
Enrollment (4)
4.2
4.2
3.7
3.5
2.9
3.0
2.4
3.2
3.4
3.0
3.2
3,889
4,189
4,275
4,468
4,819
5,021
5,336
5,084
5,281
5,296
5,648
Notes:
(1) Arizona Department of Economic Security
*U. S. Bureau of the Census
**Prescott Valley Chamber of Commerce
(2) Information for Prescott Valley, Arizona is only available in the year of the
U.S. census.
(3) Prescott Valley Economic Development Foundation
(4) Humboldt Unified School District #22
100
TOWN OF PRESCOTT VALLEY, ARIZONA
CONSTRUCTION, BANK DEPOSITS AND PROPERTY VALUES
LAST TEN FISCAL YEARS
SUPPLEMENTAL INFORMATION
Fiscal
Year
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
Commercial
Construction (1)
Number
of Permits
Value
162
156
180
149
249
226
223
60
301
246
Residential
Construction (1)
Number
of Permits
Value
$ 92,347
105,346
79,103
52,380
78,046
127,373
177,475
133,435
169,188
208,899
1,553 $ 386,114
1,648
317,221
984
319,007
956
412,500
3,872
521,168
1,209
414,215
918
371,032
771
653,522
1,696
844,689
1,629
1,234,454
Notes:
(1) Prescott Valley Building Department Activity Report
(2) Arizona Banking Association
101
Estimated
Actual
Value (1)
$ 52,225,009
50,763,026
45,531,442
49,727,642
56,496,658
55,476,306
69,856,196
99,043,917
132,514,358
132,722,938
Table XVI
Bank Deposits
Yavapai County (2)
Calendar
Amount
Year
(in thousands)
1994
1995
1997
1998
1999
2000
2001
2002
2003
2004
$
1,170,203
1,216,223
1,214,233
1,634,967
1,352,075
1,437,398
1,695,337
1,769,579
2,090,748
2,857,000
TOWN OF PRESCOTT VALLEY, ARIZONA
MISCELLANEOUS STATISTICAL DATA
JUNE 30, 2005
SUPPLEMENTAL INFORMATION
EDUCATION
Schools
Grades K - 5
Grades Pre-K - 8
Grades 6 - 8
Grades 9 - 12
4
1
2
2
Students
PRE - K
Grades K - 8
Grades 9 - 12
71
4,233
1,415
Total Students
TOWN EMPLOYEES
Permanent employees
Seasonal employees
Table XVII
5,648
(Full time equivalent)
(Full time equivalent)
192
74
PAVED STREETS
Center line miles
213.9
UNPAVED STREETS
Center line miles
4.5
AREA OF TOWN
Square miles
35.8
MAJOR EMPLOYERS
Employer
Humboldt Unified School Dist.
M.I Better Bilt
Ace Hardware, Inc.
Town of Prescott Valley
Asphalt Paving Services
Safeway
Printpak, Inc.
Fry's
K-Mart
Product/Service
Education
Manufacture aluminum products
Regional distribution center
Municipality
Construction
Retail grocery
Manufacture packaging
Retail grocery
Retail
102
Approximate
Employment
635
459
238
266
105
140
125
127
95