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Home My WebLink About1992 Financial Statement June 30� • Y • • � C;�: ; :-� - 'i • � � �� Oi �� ltarana, i�►riaona !'INA�TCIAL ST]1T81tS�1'PB Year Bnd�d Juna 30,,1992 • � • � � � TIilBLB OF CO�TEI�TTS ERHIBIT , PA68 IND�PBI�TD8�1T 71UDITOR� f R��ORT 1 i a��RAL PIIRP08E �'IN�tCIl�iL BT71TBl�tS�ITB: 1 Combined Balance Sheet, Al1 Fund Types and Account Groups 2 • 2 Combined Statement of Revenues, Expen- ditures and Changes in Fund Balances, All Goverrimental Fund Types 3 3 Combined Statement of Revenues, Expen- ditures and Changes in Fund Balances, � Budget and Actual, General and Spe- eial Revenue Fund Types 4 4 Combined State�ent of Revenues, Expenses and Changes in Deficit, Ali Proprietary Fund Types 5 • 5 Combined Statement of Cash Flows, All Proprietary Fund Types 5 Summary of Siqni�icant Accounting Policies 7-12 � Notes to Co�bined Financial Statements 13-22 • • • � � � � � • • r Clifton, Gunderson & Co. Certified Public Accountants & Consultants Honorable Mayor and Town Council Town of Marana Marana, Arizona independent Audito��s Report We have audited the accompanying general purpose financial statements of the Town of Marana, Arizqna, as of and for the year ended June 30, 1992. These general purpose financial statements are the responsibility of the Town's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted audit- ing standards, Gpvernment Auditina Standards, issued by the Comp- troller General of the United States, and the provisions of �ffice of Management and Budget (OMB) Circular A-128, Audits of State and Local Governme�t�. Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclasures in the general purpose 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 general purpose financial statements referred � to above present fairly, in all material respects, the financial position of the Town of Marana, Arizona, as of June 3U, 1992, and the results of its operations and cash flows of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. . • 4 � � • / Tucson, Arizona December 3, 1992 1 • MEMBERS Of AMERICAN INSTITUTE OF CERTIRED ARIZONA COLORADO ILLINOIS INDIANA IOWA MARYLAND MISSOURI NEW MEXICO OHIO WISCONSIN PUBLIC ACCOUNTANTS �t � I� I � I� • • • • � H H � H � � � H i�1 1� � ~ a �f�iN RC p� ch o► � U � � lai � � M A � � � Z � h H � � � E U � E � � a � M � Q � P � b • ~ Y � � _ � � M � J i t L � O t ` < X a v x � � ` y N � N • a A O� a � M M m h 0 � � � � N N L d �� N s��o�� M{+a1 �, � ��N�AMCQ�6D A� f �M�` Y`f � O � NtAN�NCfe�-�N � a A P � M N � � � M o� N .�- N60 � M � A t � d N � � r � .� � M ' N P � � ��s � �� p } � � N N O 1A � � N �f M �M a � I� 1� � M ~ O a- O a r � ti � N � g � � N N 1!1 V5 A � 00 M � � N N � � M1 N N � O � ^ M � � N if , � � � � p � 4 �� »� �� q � � O V � . O � .1�1 Y ..� � ` � � � C � Y � � . y �+ •.-� t L C! � L � a � �� .� _�` � 0�.� ��M tl�0 � O N W W�� a� i9 � tA � � � �7 � � W � 10 � � �•W .�•� a+ a � Y � O > u o� E t. ..- ��a.. a+ � !� I� C o�+ �. r x�1 a v- fp rr a+ 3 i9 M�� G. H L��O� /L 1� M 11 �1 J O Y� Q t� � � R O�C ~ � � Z �. � .• � Z u. � � M � < = O -� O � � � N �f � N M �� P s � v e- �? � N N A � ti S��T �O v N � � N M � � � N . � N N » � � N N 1+ 1� O .�t .! A � 3 � M .a a � � �O N � .- �O w v+ a� � m M � r+ � � �� r � E �' � W �.r � � w w H w 4r 'O J � � M ~ �.r N � � � � �Q �� • C y �� „ m 10 Y N y � � W � •� •3 C �� g C� �W � U N L � � � L � y u N � ,. „ C C �� U a+ y: w " c N � w �N • � W O C L w� � w s �- t • � � � r � S � Toxx o� M�u►, �tzsorr�, COMBINED STI�TTMENT O! RRVENQ88, �ZPENDITIIRES 71I�iD CHANG88 I'T Z'II�iD BALA�TC�B lILL �30VS��tI�1�lTAL FtT�iD TYPBB - EXHIBIT 2 Yqar Endod JuII� 30, 1992 REVEtSIES Taxec Sates - audit - Maruna Selea - Ma��na Sales - Ariacne U�b�► sharinp Auto lieu Lice�ses, fees and penaits Fines, forfeitures �d penalties Grants ard contributiw�s Highway �er fees - Ariz�a Public safety - Tucson Public aafety - ArizOn� Black grmts - Pia�a 6cunty LTAF funds • Arixrna' Parks - Pin�e Ctxnty Pubtic works - Arizo� Other Total reverx�es EXPENDITURES Ad�inistration Development and planniry services Town Attorney P�lic safety Magistrate court Pubtic works Capitel projects Parks Total experxlitures Excess tdeficier�y) of reverx�es over (urxier) expenditures Other fin�cing �a►rce, cornersion of accax�ts to rates psyable FND �11LANCES, �6IINIIM6 FUID BALANCES, EIDItl6' SpBC�i� General Rev� ! �i47, 429 132,507 135,516 36,21a a6,515 103,113 74,063 4o.��a 1.054.079 27a,581 57,46L 42,505 524,593 86,202 b0, 7� 74.Q63 f.424.456 S 155,262 33,685 103,2E5 ta,655 48.464 359"334 78, %0 19, 5� 173,99T 103,285 375,662 Totats fM@IROfa11� 011�Y) 1992 1991 S 447,429 132,507 135,516 34,218 86,815 103,113 155,262 33,688 103,285 15,655 74,063 88.862 1.413.413 S 450,016 310,326 »z,�a7 112, 735 38,793 110,276 124,802 �4a,s3s 27,832 20,000 207,180 18,6�5 18,636 43,150 78.395 1.821.a51 278,581 57,464 k2,805 603,553 105,702 234,665 103,285 T4.063 1.5�.118 (7t1,377> <16,328> t86,705) 163.89a 125.282 289.180 9 � t� �� 35T,996 56,185 37,475 563,942 86,838 210,523 203,085 18,636 1,534.680 287,171 70,730 C68.721) S 2� These tinancial stateiaents should be read onty in corx�ection with the accompanying suAnary of si�ificant accounting policies and rates to finencial statements. 3 �� i • � � � TOW�T OF MARAN71, ARIZONA COMBINRD STATEMENT OF REVSNIISB, SYPBNDITIIR88 AND CHANaEB IW FUND Bl�lL�lt�CBB - BIIDt3�T 71I+1D �CTIIAL t��NERAL 7lND SPECZIIL R�'V��TtTE FII�D TYP88 - EZHIBIT 3 Y•ar End�d June 3G, 1992 REVENUES ' Taxes Sates - MaP� Sates - Arizona urban shari�g Auto lieu licens�s, fees �nd pcnrits Fines, ferteit�es u�d penelties Gr�ts and corttributions Nighway �er fees - Arizone Pubtic safety - Tucson Btxk grants - Pima Canty LTAf furxls - Ariza�s Parks - Pisa County Other Totat reverx�s D�PEMDITUKES I Acininistration Devetopn�ent �d plaming services Town Attorney Public safety Mayiatrate ccurt Pubtic works c�itst projects Parks other Total expenditures Generat Soecfal Reverwe Actual eudoet (a) Veri�ce ct Budnet (a) Variance s ��,429 s a�,oa� s i 132,507 13i,823 135,51� 134,823 �c,2�a 3e,000 ab,a�s �s�,ss� 103,11� 164,440� S 155,262 f 160,2T1 f (5,009) 33,688 -0- 33,688 103,285 231,815 (128,530> 18,655 18,600 55 74,063 100,0� (25,937> b0,418 26t.4Q5 C220.98T) 48.444 433,400 C384.956) 1.054,OT9 1.423.022 (36d.943) 54 $46.Oa6 C4$4.752) 2T8,581 1a2,56T <%,014) 57,464 72,�i6 15,432 42,805 -0- t42,805) 52i,593 508,9�68 (45,605> !l6,202 92,12� 5,926 bfl,74a 107,153 4�,4fl5 74,063 60,474 (13,589) -0- 372.974 372.974 1.12+4_45b 1. 9� T•l80 272.724 78, 96(i 81, 000 19,500 -0- �r3,�� a,a�� o3,2es 23�,a�s -0- 3T1.900 375"6G2 563,586 2,040 (79,500) 4,954 128,530 371,400 487.924 Excess (deficiency) of reverwes over Eunder) , expenditures (70,377) 25,842 (96,219) t16�328) t19,500) 3,172 FUID BALANCES, �E6INNING 163.898 -0- 163.898 125.282 -0- 125.282 Fu+u snu�s, ewuiNC s� s 4 s�7,�,g� �4� �5�9 so � s �_ (a> The Town�s budget included an additional 565,412 for revenu�s ard f71,754 far experxlttures for water �� enterpriae activities that is nat included in this state�es�t becsuse these activitiee sre proprietary in netura ❑ These fin�cial state�nents shoutd be read only in corx�ection with the accc�npanying s�mary of significmt ucountinp peticies and notes to fina�cial statements. 4 �a,�z9 t2,316) 693 t3,7i2) (64,716> (66,327) � � TOWN OB ILARANA, ARIZONA CO�[BI�D STATBMENT OF RBVB�B, EBP$N888 AND C8ANQ88 IN DBFICIT - lILL PROPRIBTl�tY FII)iD TYPES - BBHIBIT 4 Year Ended Juns 3A, 1992 • C r OPSRATINt3 RSV�llTII88 � CURRBNT IISE CBARGS�B OPLRATINQr EYP�N8L8 Material, supplies and other expenses Depreciation expense Total operating expenses OPBRATINt# I�TCOMB NONOPBRATING REV8�8 ($YPENSTBj Interest income Lease income Bond interest expense Bond fees Lease expense .. - • �_4• �►�•- ,�-�. .�. � s , - :.�. : - .. .. � 33,753 12.537 .� (23.811) (23.811) (19, 07.0) (15.357) S (34,427) o �i�3 33,753 31,174 12.537 10.153 46.290 41,327 4,741 7,306 $ 926 926 2,875 23,811 23,811 21,039 (22,857) (22,857) (22,857) �s:,8so) (i,aso� (i,o5�� (23,811) (.21,039) -0- ,�23.811) (21.039) -0- (19,070) (13,733) -0- j� 5,357) �1,624) t,��('- s S(34,427) 5 357) NET LO88 • DEFICIT� BEG�INNINa DEFICIT, ENDIN�3' � � These financial statements should be read only in connection with the accolnpanying summary of significant accounting policies and not�s to financial statements. � � � TOWN OF ItARA�TA, �1ZtI �ON� COMBINED 8TllT8MFNT OF CASB FLOWS ALL BROP]xIBTARY FII�D TYPES - EgHIBIT 5 Ysar Ended Juns 30, 1992 � � � CASN FLOYi F�dl OPERIITIN6 11tTIYITIES Net l�s Adjuetaients to reccxicite net losa to net cash used in operatir� activitiec Dspreciation Decrease tincr�ase) in accax�ts recaivable I�rease (decrease) i� accounts p.y�le associated with operstiny �tivities Proprietary Fund Tvces Yater �ondlLease f (14,O10) 12,53T (472) ($.051) (15,056) Totsl� tMe�orar�du� Ontv) � 1991 fE19,070) SC13,733) 12,537 t0,153 (472) 656 ca,os� 458 (15.05b) (Z.�„6) (26,632) -523"316) 16,895 �,583 T,505 20,766 24"400 4d,349 t17,288) 20,367 20,485 118 s_ S 2�5 Cash �ed in operetit� �tivities G1SN FLd1S FI�1 IMYE8TIM6 11LTIYITIES Purchase of fixed �sets GSN FLOYS Filpl FINAMCIN6 ACTIYITIES Increase in clue to other fund Prxee� fra�n ton�-terai debt CasM prc�rided by fi�cirg activities NET INCREASE (DECREASE) IN CASM GSN, BE6INNIMC OF YEJ1R GSN, EID OF YEAR (a) Cash Cash with trustee/fisut sge�ts , Totat � (a) Ca�i► on the bal�ce sheet ca�sists of cash the Town cx� scceas ard cash on deposit with trustee/fiscal agents. Cash flows fro� cash with trustee/fi:cat age�►ts are not presantad sbova becwse these activities r�resent noncash transactions. (26-632� 16,895 7.505 24.k00 (17,288) 20.485 � f 3,19T t -0- -0- -� �� f 3,197 2.172 ��.c�.§� S 20,485 1.308 f 2i SUPPLEIENTAI SCN�IN.E OF NOMCASN /�TIVITIES CASN FL�YS YITN TRIiSTEE/FISCAi A6ENTi FRQI IMMEiTIMC A16 OTI�R I1C'tIYITIEY Interest a�d laase income Decrease in imrestment� Net irnesteier►t in tease and purchase of fixed assets f 24, 737 6,510 (7.505> f 24,73T S 23,914 6,510 21,178 (7.505) C 0"964) * Cash with truetee/fiscal a�ents �ovided by investiny and other activities CASN FLOYS YITN TRUSTEE/FISCAt. A6ENTS FROM FIMANCIMC AID OTI�R ACTIYITIES Interest and other obligatio�s Prxee� frc�u ta�g-ts� debt Increase in accc�unts psyabte y Cash with tnxteelfiscal e9ents u�ed i� tinencir� and other activiti�s -� NET INCREASE (DEI�EA$E) IM GSN YITN TRUSTEEiFtlCAL A�iEMI'S CASN YI7N T�TEE/FISGL ACENTS, �ECIIpLIMC OF YEAR • GSN YITN TRUSTEE/FISCAL A6EMTS, EID QF YE/1R � (24,737) 1.859 �� 864 1.3� f� 23.742 4 12 (24,737) (23,914) 10,099 1,859 3•072 (Z2.878> (1Q,8Q3> 864 <b,b75) � � � 1 08 These financiet ttat�ents should be read cnty in ca�nection with the acco�par►ying suamery of si�ificent accou�ti� poticies and notes to fin�cial statements. 6 � TOWN Olr 1dARli1NA, ARZ ZODiA SUltMARY OF SI(��TIlICl�i'1' 71CCC1UNTI�tf,i POLICZBS JuDe 30, 1992 The Town of Marana was incorporated on March 21, 1977, under the provisions of the Constitution of Arizona and the Arizona Revised Statutes. The Town operates under a council-mayor form of govern- ment. A11 funds and entities related to the Town that are con- trolled by the Mayor and Council a�e included in this annual financial report. Thi� control is deter�ined on the bssis of budget adoption, taxinq authority and the ability to issue outstanding debt secured by rever�ue� or which is a qenersl obligation of the Town, as well a� selection of governing authority, designation of management, ability to siqnificantly influence operations and accountab�lity for fiscal matters. The Town provides a full range of services including general governmental administration, development and'planning, legal, public safety, public works, and parks serviees. The accounting policies of the Town conform to generally accepted aecountinq principles as applicable to governments. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing accounting and financial reportinq principles. The followinq is a summary of the more siqnificant policies: � FIIND lsiCCOIINTINQ The accounts of the Tawn are organiaed on the basis of funds and account groups, each of which i� considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures. Government resources are allocated to and accounted for in individual funds based upon the'purposes for which they are to be spent and the means by which spendinq activities are controlled. The various funds are grouged, in the financial statements in this report, into generic fund types and broad fund categories as follows: Governmental funds: General fund -'�his fund is the general operatinq fund of the Town. � It is used to account for all financial resources, except those required to be accounted for in another fund. Special revenu� �und� - These funds are used to account for the proceeds of specific revenue sourees that are legally restricted to expenditures for specified purposes. � Debt service fund - Although such a fund is normally used to account for the accumulation of resources for the payment of general lang-term debt principal, interest and related costs, the Town has not yet established such a fund. Most debt is funded directly from other funds with no amounta accumulatad. � 7 � � T011�T OB MARAN�I � ARI SO�i]1 StTlYIIdARY OF BIa�tIFICll�1T l�CCOIINTINa POLICIES June 30, 1992 i �urm xccoo�rr=x� Ecox�r�rruED) Proprietary fund�: Enterprise fund� - These funds are used to account for water utility and bond/lease operations that are financed and operated in a manner similar to private business enterprises. 'The intent of the � governing body is that the cost� (expenses, including depreciation) of providing water services to the qeneral public on a continuing basis be financed or recovered primarily through user charges. The bond/lease fund, which is s separate corporate entity under Town auspices, is to receive lease paynents funded by these user charges to retire the bonds and r�lated interest asaociated with the � acquisition of the water tacilities. Cash �nd investments in this fund are restrieted a� to their use under the tei�ns of the bond and lease agreement. MEASIIR81�I+1'I' 1POCII8 � FIYED ]188�T8 AND LONQ-TERM LIABZLITIES � The accounting and reportinq treatment �pplied to the fixed assets and long-term l'iabilities a�ssoeiated with a�und are determined by its measurement focus. A11 governmental funds are accounted for on a spending or pfinancial flowp measurement focus. This means that only current a�set� and current liabilities are generally included �, on their balance �heets. Their reported fund balance (net current assetr) ia considered a�easure of "available spendable resources." Governmental fund operating atatements present increases (revenues and other financial sources) and decreases {expenditures and other financial uses)'in net current assets, as appropriate. Accordingly, they are said to present a summary og sources and uses of � "available spendable resources" during a period. Fixed assets used in qovernmental fund type operations (general fixed assets) are accounted for in the general fixed assets group of accaunts, rather than in governmental funds. � Public domain ("ir�frastructure") general fixed assets consisting of certain'improvements other than building�, including road�, curbs and gutters, �treets and sidewalks, bridges and lighting systems, are not capita3ized. No depreciation is being provided on general fixed assets. � All general fixed as�ets are valued afi historical cost. Donated general fixed assets are valued at their estimated fair values on ' the dates of donation. Long-term liabilities expected to be financed fro� governmental funds are accaunted for in the general long-term debt group of ` account�, not in the governmental funds. 8 C7 � TOWDi O? ll�R�NA, 1�1RI80NA BII�LMARY OF 8I�3�II!'ICll�l'1' ACCOII�TZ'INO gOLZCIL*8 June 30, 1992 ILEASIIR�ILBItT FOCIIS, FIYBD l�88BT8 71DTD LO�Tl3-TSRlt LIABILITISS ` (CONTINUED) Because of their spending �easurement focus, e�tpenditure recogni- tion of governmental fund types is limited to exclude amounts represented by nor3current liabilities. Since they do not �ffect net current assets, such long-term amounts are not recognized as � governmental fund typs expenditure� or fund liabilities. They are instead reported as liabilities in the general lang-term debt group of accounts. The aforementioned two account groupa are not funds. They are concerned only with the �easurement of financial position. They � are not invoived with measurement of re�ults of operations. All proprietary funds are accounted for in a cost of services or "capital maintenance" �eas�urement focu�. This means that ail assets and all liabili�ties, whether current or noncurrent, associated with their activity are included on their balance sheets. Their reparted �, fund equity, net total a�set�, i� segregated into contributed capital and retained earning� components. Proprietary fund operatinq statements present increases (revenues) and decreases (expenses) in net total assets. Water operatiorrs property is stated at cost or fair values on the *, dates of donation. Deprecia�tion (amortiz�tion) of all exhaustible fixed assets used by water operations is charged as an expense against its operations. Accumulated depreciation is reported on the water operatior�s balance sheet. Depreciation is provided over the estimated u�eft�i live� of such asset� using the straight-line method. These estimated usefui lives are as follows: I• Estimated �seful Lives (Years) Property under capital lease Organization cost� 20 40 • Expenditures for water repair� and maintenance are charged to income, Additions, �ajor renewals and replacements that increase the water properties' useful li�es are capitalized. The cost of property sold or retired, together with the related accumulated depreciation, is rs�oved from the appropriate accounts and � resulting gain or ioss is included in n�t inco�ae of the utility. I• The Town no lonqer carries any inventory. Supplies needed for operations are now being purchased on an as-needed basis. E� , I� � 'POW�i O!' ![ARJ1�Tl�, 71RI7�ONll SIIlII�tARY OF SIf3�tI?ICIl�t'I' ]1CCAO�ITI�It3 POLICI88 Jun� 30, 199Z BASIS OF ]1CCOIINTIN(� � - Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statex�ent� �aszs of accaunting relatea to the timing of the �ea�ure�ent� �ade, r�gazdle�s of the �easurement focus applied. The proprietary funds are maintained on an accrual basis of accountinq. The govern�ental funds are maintained on a�odified accrual basis. The modified �ccrual basis of accounting recognizes expenditures on an accrual basis, but revenu�s are recognized when received, except for �aterial revenues determined to be both measurable and "available." "l�ivailable" means collectibie within the current period or soon enough thereafter to be used to pay iiabiiities of the current period. Deferred revenue in the govern�ental fua�ds arises when grant �onies are received prior to the incurrence of qualifyinq expenditures. � BIIDC38T8 1�1ND BIIDQBTARY ACCOII�iTINs The budgets for�ally �dopted by the Mayor �nd Council are prepared on a purpose, nat object basis. All appropriations lapse at year end, and the budgetary information reflected on the financial statements represents the original adopted budget for fiscal 1992 with no auqmentations. Encumbrance accounting, under which purchase orders, contracts and other commit�e�t� for the expenditure of monies are recorded in order to reserve that portion o� the applicable appropriation, is not employed as an extension of formal budgetary integration in the general fund and special revenue funds. • RES$RV�B No reservations of fund balances have been established by the Mayor and Council at the end of fiscal 1992. C� • E� • TOW�i O!�' IIIAR1�iNA, ARI SONl� BIIMMARY OF 8I�3NIBIC71E1'P li►CCOU�TINQ� POLICIFB June 30, 199a NOTE �CLIVl�BI.� The Town grants com�aercial loans to bu�inesses in Marana, Arizona, from monie� rec�ived under its Community Development Block Grant Program. 1�it June 30, 1992, o�e sueh loan had been made to a local business in Maran�. � substantial portion of the debtor's ability to honor the terms of this logn is dependent upon the economic conditions in Arizona. The Town requires collateral for all notes receivable. The extent and type of collat�ral is determined on a case by case basis. INVESTM8NT8 Investments con�ist of U.S. Government fund obligations, a category 1 investment. Cateqory 1 investments are investments that are insured, regi�ctered or held by the Town's agent in the Town's name, or by the Town itaelf. Al1 investments are made through the Town's trustee/fiscal �gents. Investments are etated at cost, which equals market. NRT INVE�Tl�[BNT IIT LEl�SL As described in Note 2, the Town accounts for its water utility lease as a financing lease, in which the net investment in th8 lease represents the difference between the bonds and related ob- ligations over the cash and investaents in the bond/lease fund. This difference �epresents the minimu� lease payments to be made by the Town's water utility over the term of the lease. Interest on investments and lease inco�e earned is reeognized over the lease term in an amount egual to interest and other e�enses. Conse- quently, no unearned revenue has been recorded. Correspondingly, the lease obliqation recorded in long-term debt in the water fund equals the net inyestment in lease recorded in the bond/lease fund. COMPENSATED ABSENCEB In the qeneral long-term d+ebt group of accounts, e�sentially the entire aceumu].ated liability for compensated absences is reflected, since the liability at June 30, 1992, will nost likely not be paid within the current accounting cycle. Rather, in fiscal 1993 the Town will probably pay that year's accrual without utilizing amounts accrued from prior years. F�i_1. TOWlT Op �7►� 71AZSQ�T1\ SO�RY OF 82�3,TIFIC]l�IT 71CCOII�ITIIT�i FOLICi88 Juno 30, 199Z • � COI�IPARl�iTIVB DATl1 Comparative total data for the prior year is presented in the accompanying general purpose financial statements in order to provide an understanding of changes in the Town's financial position and operations. However, presentation of prior year totals by fund type have not been presented in each of the statements, since their inclu�ion would �ake the state�aents unduly compiex and difficult to read. TOTAL COLIII�NS O�T THS CO�BI�iED lI�T!lNCIAL 8TAT8MLR�iTB � Total coiumns on the combined financial statements are captioned "Memorandu�a Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns does not present financial position or result� of operations in conformity with generally accepted accountinq principles. Neither is such data comparable to a consolidation. Interfund eliffiinations have � not been made in the aggreqation of this data. 88ISED PROPERTY The Town Police have in their custody certain assets seized in � criminal proceedings. Until �ormal procedures have been finalized, the ownership of this property is nct determinable. In addition, legal requirements dictate that such assets not be reflected on the Town's financial records in an agency capacity until any Town ownership has �een determined. Con�equently, no such assets are recorded on these financial statements. � C� � This information is an integral part of the accompanying financial ctatements. 12 • 'POW1� O! ILARA�Tl1, ]�tI �OETA NOTES TO COILBI�D �I�i11�TCIlIL 8Tl1T$]L8�iT8 June 30� 1992 : NOTE 1 - IiOTE REC�IVABLE � , Note receivable (Community Development Block Grant Program), collateralized by a deed of trust, bear- ing intere�t at 4�, payabl� in �onthly iinstallments of principal and interesst of $553, due August 1995. • NOTS 2-�T INPESTILS�i'1' I'T LEl►88 • � � • • • $ 7,134 123,412. Concurrent witM the issuance of bonds (See Note 4), the Town entered into a lease aqreement with the Town of Marana's water municipal property corporation, which is an entity controlled by the Town and accounted for as the bond/lease fund. The agreement specifies that the Town lease from the bond/lease fund the water utility property. The lease requires the Town to pay lease payments equivalent to ali costs and charges relating to the leased property for a period of twenty years. Such costs and charges include the principal, interest and periodic cost� assoeiated with the bond issue. All rights, privileges and obligations related to the leased property inure to the Town, and at th� end of th� lease term, the leased property reverts to the Town. NOTE 3 11888T8 ��T OF 7�CCIIltIIL1i1T�D DBBItECIATIO�i The following is a summary of the changes in general fixed assets for fiscal 1992: Balance July 1, 1991 Land Land improvements Assets under capital lease Machinery, equipment and other as�ets Marana park S 20.142 $ 7,134 123,412 479,336 $ 50,639 $ (64,001) 465,974 413,960 115,62? (64,854) 464,733 15Q.000 150.OQ0 $1.173,842 13 Balance June 30, Additions Deletions 1992 � 16�6 S(128.855) $1.211.253 • TOW� Oa' ltARA�il1 � ARI SON!► N�T�B TO CO�II�D PINA�iCI71L STl1T8�ENT8 JuIIO 30, 1992 • � • • • [7 • NOT$ 3 FIYBD 1�888T8, 2TST OF �CCIIILIILATBD DBBR�CI71TIOlt {CONTINUED) A summary of water fund property, plant and equipment at June 30, 1992, is ss follows; Property under capital lease Organization costs Construction work-in-progress Less accumulated depreciation NOTL 4 - LONQ-TBR�[ DBBT $ 293,035 47,523 20.272 360,830 (24.310) $ 336,520 The water fund leases water utility assets under an agreement clas�ified as a capital'lease. As discussed in Note 2, the water fund has an obligation to pay lease payments equivalent to all costs and charges associated with the underlying bond issue in the bond/lease fund, which was issued to finance the purchase of the utility. The following is a schedule by years of the future minimum lease payarents required under this capital lease as of June 30, 1992: Years Endir�g June 30 1993 1994 1995 1996 1997 Thereafter Total net �ainimum lease payments Less amount representing interest and other costs Present value o€ net minimum lease payments 14 $ 22,858 22,858 32,858 32,103 31,338 393,178 535,193 �263.835) $ 271.358 � TOWN O� ILARAN�, ARIZONA NOTBS TO COlL8II�IFD FI�TCIAL BTATEMENTB Jtins 30, 199Z • NOTL 4 - LON{i-T�R1[ D�BT (CONTINUEDj The long-term debt in the bond/lease fund represents bond� payable as follows at June 30, 1992: Issue Year of Final Maturitv Lease Revenue Bonds - 1990 � F�eZ�� Original Issue :� oe� Currently outstandincr :� �� These 1990 Bonds consist of a series of issues with fixed interest rates ranginq fro� 7.55� to 8.30�, depending upon the maturity dates of the various issues. � The bond interest and principal require�nent� are paid through the lease rentals received fro� the Town's water utility and earnings on investments from bond prc�ceeda. The bond� are collateralized by such lease pay�ents and investments, as well as a first lien against all excise,`transaction, privilege, franchise and income taxes which the Town collects. Periodic principal payments are due � July 1, 1995, through July 1, 2009, in amounts ranging from $10, 000 to $30,000 annually. • C � • All cash and securities are held on deposit with the trustee and are restr3.cted for retirement of indebtedness and paynnent of improvement costs. Fk� • To�r oa x�xA, aaa sorr�i NOTES TO COMBINED FINA�TCIAL STATEMI��i'1'S June 30, 1992 • • • ! • C: 1 G NOTL � - LO�T�i-TE�t1t D�BT (COIJTTNLTED) The following i� a�ummary of general long-tern� debt transactions for fiscai 1992: Capital Land Notes Leas�s (a) Contract(b) ��yable(c) Total Balances- July 1, i991 $ 388,367 $ 3,017 $ 70,?30 $462,114 Capital lea�es entered 50,639 50,639 Retirements (55,317) (236) (13,�96) (68.949) Balances- June 30, 1992 S 383.689 Long-term gortion of accrued vacatian and compensatory time, with an increase of $3,123 for fiscal 1992 �g� ,�i7 � 443,804 , 43,577 Total general long-ter�a debt 4 7 381 (a) The following is a schedule by years of the future �anninimum lease payments under capital leases as of June 30, 1992: (b) Years Ending Jun,� 3 0 1993 $ 80,539 1994 74,106 1995 � 68,362 1996 48,548 1997 40,697 Thereafter 735,000 Total net minimum lease payments 1,047,252 Les� amount representing interest (663.563) Present value of net minimum lease payments � 383.689 In 1979, the Town borrowed $7,134 at 7$ interest from the State of Arizona to purchase a 2.5 acre parcei of land. Principal-and interest is payable in yearly installments of approximately $575. E� • T01IN OF liA�tANA, ARIZONA IT�TBB TO COKBI2IED BI�TA�TCI!!L STATEMLNTS � June 30, 1992 NOTE 4 - LOITt;-T�R1[ DSBT ,(CONTIN[JED) (c) Durinq fiscal 1991, the Tow� negotiated th� following notes payable with vendors thereby converting outstanding accounts payable balances: Note payable, requirinq monthly installments of $583, inaluding interert at 9� per year, with the final payment due in April 1995. Note payabie, �equirinq interest at 10� per year, with the final balance due in October 1�93. Future maturities are as foilows: Years Ending June 30 1993 1994 1995 $ 17,427 - ' $ 57.334 $ 5,652 46,089 5,593 NOTE 5 - DEFBRRRD REVBNQB $ 57,334 During fiscal 1991, Fima County transferred the Marana Park to the Town. In consideration of this transfer, Pima County agreed to subsidize the Town with $25,0,000 for the maintenance and operation of the Marana Park. This $2'SO,OOO subsidy is being paid in $50,000 install�ents over a 2 1/2 year period. The Town received $100,D00 of this �ubsidy during fi�scal 1991, of which $81, 364 was recoqnized as deferred revenue at June 30, 1991. During fiscal 1992, the Town received an additional $100,000 of thi� subsidy and incurred $74,063 in expenditures for the maintenance and operation of the Marana Park. Th�refore, at June 30, 1992, there was $107,301 in deferred revenue from the �ub�idy received from Pima County. NOTB 6 - SUBSBQIILI�IT EVSNT On July 1, 1992, the bond/lease fund issued the 1992 Series Revenue + Bonds in the face amount of $315,000. These 1992 Bonds consist of a series of issues with fixed interest rates ranging from 6� to 8�, depending upon fihe maturity dates of the various issues. The principal payments are due Juiy 1, 1994, through July 1, 2018, in amounts ranging fron $5,000 to $25,000 annually. $255,750 of the proceeds from the 1992 Bonds were used to exercise an option to � purchase th� Tawn Hall, which has been included as a capital lease under the general long-term debt account group at June 30, 1992. Concurrent with the issuance of the 1992 Bonds, a lease agreement 17 • I� �� To�r oa �x�, �a=sorrr► �iOTLB T4 COl�iBINBD PINANCIAL STATEMSNTS Juaa 30, 1992 NOTE � - BIIBSBQII�1riZ' 8V8'1'1' ( CONTINUED) was executed b�tween the Town and the bond/iease fund. The terms ` of this lease are very �ti�ilar to the terms of the lease for the 1990 Bonds, as discussed further in Note 2. I• I• I• I• I• � I: I• NOTE 7 - ADDITIONAL DISCLOSIIR3�8 The Town does Mot budget on an object basis; therefore, the expenditures on the general purpose financial statements have been grouped by purpose, which is the Town'�s budgetary approach. Although this faciiitat�s budget to actual comparisons, the following analysis is necessary to analyze expenditures by current, capital and debt �ervice (capital lease payr�entsj categories: Purnose Administration Development and planning services Town Attorney Publie safety Magistrate court Public works Capital outlay/projects Parks Curr�nt onerations $ 234,329 57,464 #2,805 533,582 86,202 217,620 s. � � 52,959 10,282 �� Gapital Outlay $ 8,351 17,012 19,500 6,763 iO3,285 Debt Service $ 35,901 The Town budgets by purpose and not by fund; however, the budgeting by purpose closely correlates to what would be, in substance, budgetinq by fund. There were no excesses of e�enditures over appropriations for fisc�l 1992 by fund, considerinq the Town's contingency appropriations. NOTE 8.- PIIBLIC SAF�TY BBNSIO� BLl1�T All of the Town's full-ti�e police officers are covered by the Marana Marshal's Arizona�Public Safety Personnel Retirement System, which is a multiple-employer, public employee retirement system (PERS). The pension plan providea pension benefits, deferred allowances, death and disability benefits and health insurance benefits. A member is eligible if he is employed in a covered position prior to attaininq age 50 years, for at least 20 hours a week for more than 6 months a year. A member �►ay retire after reachinq the age of 62 and compietion of 15 years �ervice, or campletion of 20 years service with the Town. Benefits v�st after 10 years of credited service. Police officers who retire with 25 or more years of 18 I• TOWIt OF K7lRli1Tll � I1RI SONlI NOT88 'PO COM8IN8D BI�TCI,'!1L STATBI�I�ITB JuII• 30� 199Z � � NOT$ 8 PIIBLIC S7�iF8TY p�lTBIO'i PL7i�T {'CONTINUED) credited se�vice are entitled to monthly pension paym�nts for the remainder of thsir lives equal to 50� of average monthly compensation for the first 20 yesrs of cr�dited service with the Town, pius a i/2� of average �onthly compensation for each year of credited service above 20 years with the Tawn. Poli�e officers who retire with 20 years of credited service, but less than 25 years of credited �ervice, are entitled to monthly pension payments for the remainder of their lives equal to 50� o� average monthly compensation for the first 20 years of credited service with the Town, plus 2� of averaqe monthly compensation for each year of credited �ervice between 20 and 25 years with the �own. Police officers who retire� with lesa than 20 years of credited service with the Town are entitled to' monthiy pension payments for the remainder of their lives equal to at least 30� of the average monthly compensation for the entire service period increased at a rate of 4� a year for each s�rvice year above the minimu� 15 years of service. The maximum monthly p�nsion payment cannot exceed 80� of the average monthly con►pensation. Pension provisions include deferred allowances whereby a police officer may terminate his employment with the Town after accumulatinq 10 or mare years cr�dited service. Pen�ion benefits are then equal to twice the amount of pensior� benef�.ts based on the police officer''s accumulated contributions. If the police officer does not withdraw his accumulated contributions, the police officer is entitled to these pension benefits upon reaching the aqe of 62. Pension provi.sions include di�ability and death bsnefits. Disabled officers are entitled to monthly payments for life of 50� of their average monthly compensat3.on or normal pension amount, whichever is greater, if their disability is service connected, regardless of years of credited service. Averaqe monthly compensation (AMC) is one-thirty-sixth of total compene�ation paid a member durinq the 3 years, out of the last 10 years of credited service, in which the amount paid was highe�t. If the police officer's disability was not service connected, the disabled officer is entitled to monthly payments for life of 25� of AMC, if the credited service is less than 7 years, 50� of AMC, if the credited service is 7 through 13 years, or 75� of �MC, if the credited service is 14 through 19 years. If the police officer is only temporarily disabied, he is entitled to monthly payments equal to one-tweifth of 50� of com- pensation paid during the year preceding the date the disability was incurred. The pay�ents ter�inate after 12 months or prior recovery. Survivinq spouses are entitled to two-thirds of the monthly payments, or 100� if duty related, the deceased active police officer would have been paid for disability or, in the case of a retired police officer, two-thirds of the retired officer's monthly pension paym�nts. To qualify as a surviving spouse; the spouse must have been married to the deceased for at least 2 years . The'spouse's benefits terminate upon her death. Each dependent child of a deceased police officer is entitled to one-ninth of the 19 • TOW'T OB 1t11RA�i11, URIdO'U NOTEB TO COlLBi1TED lI�TANCIAL STATRM8NT8 ' June 30� 199Z I�iOT$ S- PIIBLIC B!lFBTY BBNSZO�T pL� (CONTINiJED) monthly payment� the deceased active pol ice of f icer would have been paid for disabil�.ty or, in the case of a retired police of€icer, one-ninth of the retired officer's monthly pension payments. When the dependent child reaches the age of 18 or 23, if the dependent is a full-time student, the monthly payments wi11 ter�inate. Pension provisions include health in�urance bene�its, whereby the retired police officer or hi� surviving spouse can elect to be covered by a health in�urance plan provided by the Town or State of Arizona. The retired police offic�r or hi� survivinq spouse pay for this coverage. However, they eannot be charged more than $60 per month plu� �n amount up to $25 per month for dependent coverage, if any. The Town's current year payroll for el'igible police officers amounted to approximately $261,000. Police officers of the Town are required to pay 7.65� of their gross earnings to the p'ension plan. The Town makes periodic contributions to the pension plan at actuarially determined rates that, e�ressed as percentages of annual covered payroll, are designed to accumulate sufficient assets to pay benefits when due. The normal cost and actuarial accrued liability are deter�ined using an entry age aetuarial funding aethod. Unfunded actuarial accrued liabilities are being a�ortized as a level percent of payroll over a period of 40 years (from July l, 1978). During 1992, the Town was required to contribute 6.28$ of its poliae officers' covered payroll to the pl�n. Total contribution� made during fiscai 1992 were approximately $36,000, of which approximately $16,000 was made by the Town and approximate].y $20,000 was made by police officers. The contributed amounts were actuarially determined as described above and were based on an actuarial valuation as of June 30, 1990. The pension contributions repre�ent fundinq for normal cost ancl the amortization of the unfunded actuarial accrued liability Signifieant actuarial assumptions used to compute pension contri- bution requirements $re the same a� those used to determine the standardized measure of the pension obligation. The computation o � 1992 was based o sions, actuarial � used to determine . years. f th� pension contribution requirements for fiscal n the same actuarial assumptions, benefit provi- funding methad and other significant factors as pension contribution requirements in the previous Presented below is the total pension benefit obligation of the Town's PERS as of June 30, 1991, the date of the last available • report. The amount of the total gension benefit obligation is based on a standardized mea�urement established by GASB-5 that, .r�+ I• TOIPDT O? II� � lIRI SO1�iA �Ti0T88 TO C01[BIIISD FI'i!►�CIAL BTATS�LEZITB Juns 30, 1992 � • �TOTE i - I�IIBLIC 81�'STY P$DtBIO,T �LA�i (CONTINUED) with so�ne exceptions, must be used by a PERS. The standardized measurement is'the actuarial present value of credited projected benefits. This pension valuation meth�l reflects the present value of estimated pension benefits that wili be paid in future years as a result of p�olice officer services performed to date and is adjusted for the effects of projected salary increases. A stan- dardized measure of the pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess the Town's PERS funding status on a qoinq-concern basis, assess progress made in accumulatinq sufficient a�sets to pay benefits when due and make compari�on� a�ong �uch pl�n�. Because the sta�nnc�ardized aeasure as of June 30, 1991, is used only for disclosure purpo�es by the Town's FERS, the measurement is independe�t of the �ctuarial ca�putation made to determine contribution� to the PERS, as previously explained. A variety of'siqnificant actuarial assumption� are used as of June 30, 1991, to determine the standardiaed mea�ure of the pension benefit obliqation and these assumptions are summarized below: The present value of future pension payments is computed' by using a discount rate of 9�. The discount rate is equal to the esti- mated lonq-term rate of return on current and future investments of the pension plan. . Future pension payments reflect an assumption of 6.5� jcompounded annually) salary increases as a result of inflation. . Future pension gayments reflect an as�umption of additional projected salary increases ranqinq from 0.0� to 3.0� per year, depending on age, attributable to seniority/merit. The standardized measure of the assets in exc�ss of the pension benefit obliqation as of June 30, 1991, is �s followss Retirees and beneficiaries currently receiving ber�efits and terminated employees not yet reeeiving benefits Current employees Accumulated employee contributions including allocated investment incom� Employer-financed vested Employer-fina�nced nonvested Health insurance, Total pension benefit obligation Net assets available for benefits Assets in excess of the pension benefit obligation $ -0- 67,?80 -0- 59,122 2,030 128,932 1194,437) . � 21 • TOIiN OF ltA�71�T1�, 71RI SON]► �T�B TO �'A![BI'18D aIN71�TCI71L BTATSMBNTB Jun• 30, 199a I• C NOT$ 8- PIIBLIC 8AB'ETY BEDTBIO� PL�i (CONTINUED) No changes in actuarial assumptions or benefit provisions'that would sign3.ficantly affect th� valuation of the pension benefit obligation occt�rred durinq fiscal 1991. During fi�cal 1991 and as of June 30, 1991, the Marana Mar�hal's Arizona PERS held no securiti�s issued by the Town or other related parties. Historicai trend information as of Jun� 30, 1991 for the Town's PERS is presented below: ' Fiscal Year , ��9�� _ 91 90 1989 . Net assets avaiiable for benefits as a percentage of the pension benefit obligation applicable to the Town's police officer�. . Unfunded pension benefit obiiqation as a percentage of the Town's annual covered payroll for police officers. . Town�s contributions to the pension plan as a percentage of annual cov- ered payroll for palice officers. 150.8$ -0- � 5.85$ 118.3$ 117.8$ -0- $ -0- $ 6.89$ 5.85$ Historical trend inforution i� presented in order for a reader to assess the progress �ade in accumulatirtg sufficient'assets to pay pension benefits as they become payable. NOTL 9 - COM�[ITMENTS ]1ND CO�T'1'INaB'iCI88 The Town is continuously liable with respect to other claims incidental to the ordinary course of its operations. At June 30, 1992, it is the opinion of Town �anaqement, based on the advice of the Town Attorney, that any such claims would not have a material effect on the Town's financial position. �• This infor�ation should be read only in connection with the accompanying accountant's report. 22 I•