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Issued by:
Town of MaranaFinance Department
_____________________________
11555W. Civic Center Dr., A3
Marana, Arizona 85653
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TOWN OF MARANA, ARIZONA
TABLE OF CONTENTS
INTRODUCTORY SECTIONPage
Letter of Transmittal i
Certificate of Achievement for Excellence in Financial Reportingv
Principal Officials vi
Senior Staffvi
Organizational Chart vii
FINANCIAL SECTION
INDEPENDENT AUDITORS' REPORT1
MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)
(Required Supplementary Information)7
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements:
Statement of Net Position 25
Statement of Activities 26
Fund Financial Statements:
Balance Sheet – Governmental Funds 30
Reconciliation of the Balance Sheet –
Governmental Funds to the Statement of Net Position 33
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds 34
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances - Governmental Funds to the
Statement of Activities 37
TOWN OF MARANA, ARIZONA
TABLE OF CONTENTS(Cont’d)
FINANCIAL SECTION(Cont’d)Page
BASIC FINANCIAL STATEMENTS (Concl’d)
Statement of Revenues, Expenditures, and Changes in Fund Balances – 38
Budget and Actual – General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balances – 39
Budget and Actual – Highway User Revenue Fund
Statement of Net Position – Proprietary Funds 40
Statement of Revenues, Expenses and Changes in Fund Net Position –
Proprietary Funds 41
Statement of Cash Flows – Proprietary Funds 42
Notes to Financial Statements 43
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of the Town’s Proportionate Share of the Net Pension Liability -
Cost-Sharing Pension Plans 82
Schedule of Changes in the Town’s Net Pension Liability (Asset) and –
Related Ratios Agent Pension Plans 83
Schedule of Town Pension Contributions 85
Schedule of Agent OPEB Plans’ Funding Progress 89
Notes to Schedule of Agent OPEB Plans’ Funding Progress 91
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND
SCHEDULES
Other Major Governmental Funds Schedules of Revenues, Expenditures and
Changes in Fund Balances – Budget and Actual:
Tangerine Farms Road Improvement District Debt Fund 97
PAG/RTA Capital Fund 98
TOWN OF MARANA, ARIZONA
TABLE OF CONTENTS(Cont’d)
FINANCIAL SECTION(Concl’d)Page
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND
SCHEDULES (Concl’d)
Non-Major Governmental Funds:
Combining Balance Sheet – All Non-Major Governmental Funds –
By Fund Type 100
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances – All Non-Major Governmental Funds – By Fund Type101
Non-Major Special Revenue Funds:
Combining Balance Sheet 104
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 106
Combining Schedule of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual108
Non-Major Capital Projects Funds:
Combining Balance Sheet 116
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances120
Combining Schedule of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual123
Non-Major Debt Service Fund:
Combining Balance Sheet 136
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 138
Combining Schedule of Revenues, Expenditures and Changes in
Fund Balances – Budget and Actual 140
TOWN OF MARANA, ARIZONA
TABLE OF CONTENTS(Cont’d)
STATISTICAL SECTIONPage
FINANCIAL TRENDS
Net Positionby Component –Last Ten Fiscal Years148
Changes in Net Position – Last Ten Fiscal Years 150
Governmental Activities Tax Revenues by Source – Last Ten Years 154
Fund Balances of Governmental Funds – Last Ten Fiscal Years 155
Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years 156
REVENUE CAPACITY
Assessed Value, Estimated Actual Value and Assessment Ratios of Taxable 158
Property – Last Ten Years
Property Tax Rates – Direct and Overlapping Governments – Last Ten Years 159
Principal Property Taxpayers – Current Year and Eight Years Ago 160
Property Tax Levies and Collections – Last Ten Fiscal Years 161
Tangerine Farms Road Improvement District Assessments 162
DEBT CAPACITY
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years 170
Ratios of General Bonded DebtOutstanding – Last Ten Fiscal Years 171
Direct and Overlapping Governmental Activities Debt 172
Legal Debt Margin Information 173
Pledged-Revenue Coverage –Last Ten Fiscal Years 174
DEMOGRAPHIC AND ECONOMIC INFORMATION
Demographic and Economic Statistics – Last Ten Fiscal Years 175
TOWN OF MARANA, ARIZONA
TABLE OF CONTENTS(Concl’d)
STATISTICAL SECTION(Concl’d)Page
DEMOGRAPHIC AND ECONOMIC INFORMATION (Concl’d)
Principal Employers –Current Year and Eight Years Ago176
OPERATING INFORMATION
Full-time Equivalent City Government Employees by Function – Last 177
Ten Fiscal Years
OTHER INFORMATION
Sales Tax by Industry – Last Ten Years 178
Excise Tax Collections – Last Ten Years 179
Principal Retail and Contracting Sales Taxpayers – Current
and Nine Years Ago180
Single Family Residential Permits Issued –Last Ten Years181
Capital Assets Statistics by Function 182
AUDITORS’ SECTION
Independent auditors’ report on internal control over financial reporting
and on compliance and other matters based on an audit of financial
statements performed in accordance with government auditing standards 185
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December1, 2016
The Honorable Mayor and Town Council, and Citizens of the Town of Marana, Arizona:
State statutes require that cities and towns publish a complete set of financial statements presented in conformity
with accounting principles generally accepted in the United States of America and audited in accordance with
auditing standards generally accepted in the United States by a certified public accounting firm licensed in the State
of Arizona. Pursuant to that requirement, we hereby issue the annual financial report of the Town of Marana,
Arizona (Town) for the fiscal year ended June 30, 2016.
This report consists of senior management’s representations concerning the finances of the Town. Consequently,
senior management assumes full responsibility for the completeness and reliability of all of the information
presented in this report. To provide a reasonable basis for making these representations, management of the Town
has established a comprehensive internal control framework that is designed to protect both the Town’s assets from
loss, theft, or misuse and to compile sufficient reliable information for the preparation of the Town’sfinancial
statements in conformity with accounting principles generally accepted in the United States of America. Because
the cost of internal controls should not outweigh their benefits, the Town’s comprehensive framework of internal
controls has been designed to provide reasonable rather than absolute assurance that the financial statements will
be free 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’s financial statements have been audited by Henry & Horne, LLP, a certified public accounting firm. The
goal of the independent audit was to provide reasonable assurance that the financial statements of the Town for
the fiscal year ended June 30, 2016, 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’s financial statements for the fiscal year ended June 30,
2016, are fairly presented in conformity with accounting principles generally accepted in the United States of
America. The independent auditors’ report is presented as the first component of the financial section of this
report.
Accounting principles generally accepted in the United States of America require that management provide a
narrative introduction, overview, and analysis to accompany the basic financial statements in the form of
Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and
should be read in conjunction with it. The Town’s MD&A can be found immediately following the report of the
independent auditors.
i
The Town of Marana, incorporated in 1977, is located in northern Pima County andhas historically beenone of the
fastest growing communities in Arizona.Straddling Interstate 10, Marana is only 10 miles north of downtown
Tucson and 90 miles south of downtown Phoenix. Marana’s original incorporation covered approximately ten
square miles.TheTown’s planning area currently occupies over 120 square miles and serves a populationin excess
of40,000.
In its infancy, the Town was primarily a rural, agricultural community. However, throughannexations and planned
growth, the Town is now home to several residential, commercial and industrial developments, including
Continental Ranch, Continental Reserve, Sunflower, Heritage Highlands, Dove Mountain,Saguaro Ranch, Sky
Ranch,Saguaro Bloom,Continental Ranch Business Park,Arizona Pavilions, and the new Marana Center.
Legislative authority for the Town of Marana is vested in a seven-member Mayor and Council. Voters of the Town
directly elect the Mayor. Council-members serve four-year staggered terms.
The Council fixes the duties and compensation of Town officials and employees, and enacts ordinances and
resolutions relating to Town services, taxes, appropriating and borrowing monies, licensing and regulating
businesses and trades andother municipal purposes. The Town Council appoints the Town Manager who has full
responsibility for executing Council polices and administering Town operations. Town employees are hired under
personnel rules approved by the Council. A staff of approximately328employees isresponsible for the functions
and operations of the Town government.
The localeconomy continued to improve during the current fiscal year. Revenues in the General Fund grew by
approximately 4% overall with growth in intergovernmental revenues of 2.5%. Transaction privilege taxes grew by
$2.4million or 10.8% overall, whichdemonstrates continued growth and improvement in the economy. The Town
has seen improvements in economically sensitive revenuesover the past few years and the revenue forecast for
fiscal year 2016-17 anticipates a continuation of the recovery with estimated revenue growth of 13%. Expenditures
in the General Fund also grew by approximately6.2% overall. The Town was able to provide a market adjustment
and merit increase to employees whilemaintainingcosts in commodities and services received in order to stay
within budget. The General Fund expenditures were $5.6million under budget. The Town’s budget is structurally
balanced withongoing revenues supporting ongoing expenditures. One-time revenues like contracting transaction
privilege taxes and building permits support one-time expenditures. The budget maintains the investment planning,
which includes three investment priorities:current employees, resources and tools, and strategic positions.
As described above, key revenues including transaction privilege taxes and intergovernmental revenues were higher
from previous years. The Town established and maintains an investment plan as a way to guide decisions made
during future year’s budgetary processes. Even, as revenues grow in future years, the investment plan will serve as
a guide in the allocation of resources as they become available. Both the current and future programs are
measured for alignment with the Strategic Plan as well as the investment plan. Those programs that are more
precisely aligned with those plans and those that are sustainable are more likely to receive funding. The financial
performance of the Town as a whole is reflected in its governmental funds.
As ofJune 30, 2016, the Town’s governmental funds reported a combined fund balance of $70.8million, of which
$19.9million is unassigned and available for spending at the Town’s discretion.
The Town, like most municipalities, is significantly dependent upon transaction privilege tax revenues which are
subject to economic fluctuations. Transaction privilege tax revenues comprised61.3% of general fund revenues.
ii
Of thoserevenues, retail, construction and utilities comprised 76% of total transaction privilege tax revenues. Sales
taxes and revenues related to the residential and commercial construction industry continuedto improveduring the
fiscal year.The Council approved a temporary sales tax increase, which began on July 1, 2015, for the construction
of a new police facility.
The Town of Marana has recovered from the recession in several key areas including most transaction privilege tax
industry groups.The Town’s goal in managing budgets during the recession was to position the Town to take
advantage of the eventual economic recovery. The Town has been able to make strategic reinvestments in existing
programs and minor investments in new programs that provide the opportunity to further position the Town as the
place to live, work and play. In the past year, the new outlet mall development on a 46-acre site,wascompleted in
October2015. This developmenthasdrawnmore interest for development, which will enable the Town to maintain
a high level of service to the community.Currently developers are constructing the sites for Home Goods, TJ Maxx,
and Ross.The Town is also in the process of constructing a new 18-acre park, Tangerine Sky Park.
During fiscal year2016, the Town had several significant accomplishments.
Heritage Park Splash Pad
The Heritage Park Splash Pad is a 4,500 square foot splash pad, which includes water features with an agricultural
theme. The splash pad sits among other community facilities such as baseball fields, a playground, community
garden, walking trails, and grassy multiuse areas.
OnlineCourtPayments
In alignment with the Town’s Strategic Plan related to progress and innovation, the Town implemented an online
payment system to accept payment ofcourtpayments.The system was implemented in February 2016.
Approximately21percent ofpayments in fiscal 2015-2016 were received through the new online payment system.
All-America City Finalist
The Town of Marana was named one of the 16 finalists to be named an All-America City by the National Civic
League. The distinction is given to 10communities each year and the Town was a finalist in 2008. Though the
Town did not receive the All-America City Award this year, Marana’s delegation admirably represented this
community.
One June 30, 1980 Arizona voters approved general propositions amending the Arizona Constitution to establish
expenditure and revenue limitations for local governments. The purpose of the expenditure limitation is to control
expenditures and to limit future increases in spending to adjustments forinflation, deflation and population growth
of the Town.
On May 21, 2013, the voters of the Town approved an alternative expenditure limitation, the effect of which is that
the total budgeted expenditures of each yearly budget becomes the expenditure limitation for that year on a total
budget basis. This alternative expenditure limitation is effective for four years.Due to a change in the election time
frames, the Town had the option of including the expenditure limitation in the 2016 General Election orhaving a
special election in 2017. The Town chose to include the expenditure limitation in the 2016 General Election to avoid
the additional costs of a special election. On November 8, 2016, the voters of the Town approved an alternative
expenditure limitation for an additional four years.
iii
As a recipient of Federal, State and County financial assistance, the Town is responsible for ensuring that adequate
internal controls are in place to ensure compliance with applicable laws, regulations,contracts and grants related to
those programs. Internal control is subject to periodic evaluation by management.
The Office of Management and Budget (OMB) has raised the single audit (OMB Circular A-133) threshold for federal
awards from $500,000 to $750,000. As such, the Town did not meet the minimum threshold to have a single audit
performed.
The Government Finance Officers Association of the United States (GFOA) awarded a Certificate of Achievement for
Excellence in Financial Reporting to the Town of Marana for its Comprehensive Annual Financial Report (CAFR) for
the year endedJune 30, 2015. This was theeighthconsecutive year that the Town has achieved this prestigious
award. In order to be awarded the Certificate of Achievement, a governmental unit must publish an easily readable
and efficiently organized CAFR, whose contents conform to program standards. Such reports must satisfy both
generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a one-year period only. We believe our current report conforms to the
Certificate of Achievement program requirements, and we are submitting it toGFOA for consideration.
The preparation of this report would not have been possible without the efficient, effective and dedicated services
of the entire staff of the Finance Department and the assistance of personnel in the various departments. We
would like to express our appreciation to all members who assisted and contributed to the preparation of this
report.
We would also wish to express our sincere appreciation to the Mayor and Council for unfailing support in
maintaining the highest standards of professionalism in the management of the Town of Marana’s finances.
Respectfully submitted,
Gilbert DavidsonErik Montague, CPA
Town ManagerFinance Director
iv
v
Ed Honea, Mayor
Jon Post, Vice MayorHerb Kai, Councilmember
Carol McGorray, CouncilmemberRoxanne Ziegler, Councilmember
Dave Bowen, CouncilmemberPatti Comerford, Councilmember
Gilbert Davidson, Town Manager
Jamsheed Mehta,DeputyTown Manager
Ryan Mahoney,Development ServicesDirectorCurry C. Hale, Human Resources Director
Jocelyn Bronson, Town ClerkFrank Cassidy, Town Attorney
Keith Brann, Town EngineerErik Montague, Finance Director
Ryan Benavides, Public Works DirectorSteve Miller, AirportDirector
Terry Rozema, Police ChiefLaine Sklar, Town Magistrate
Lisa Shafer, Community DevelopmentandCarl Drescher, Technology Services Director
Neighborhood ServicesDirector
Cynthia Nemeth-Briehn, Parks and RecreationJohn Kmiec, Utilities Director
Director
Curt Woody, Director of Economic Development
vi
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INDEPENDENT AUDITORS’ REPORT
The Honorable Mayor and Town Council
Town of Marana, Arizona
Marana, Arizona
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of
Town of Marana, Arizona, as of and for the year ended June 30, 2016, and the related notes to
the financial statements, which collectively comprise the Town’s basic financial statements as
listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation, and maintenance of internal control relevant
to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors’
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the Town of Marana, Arizona, as of
June 30, 2016, and the respective changes in financial position and, where applicable, cash
flows thereof and the respective budgetary comparison for the General Fund and the Highway
User Revenue Fund for the year then ended in accordance with accounting principles generally
accepted in the United States of America.
Emphasis of Matter
Change in Accounting Principle
As discussed in Note 1 to the financial statements, the Governmental Accounting Standards
,
Board (GASB) issued Statement No. 72, Fair Value Measurement and Applicationthat could
have a material impact on the financial statements. For the Town of Marana, GASB Statement
No. 72 has not impacted the presentation of the financial statements. Our opinion is not
modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis and pension information on pages 7-20 and 82-91 be
presented to supplement the basic financial statements. Such information, although not a part of
the basic financial statements, is required by the Governmental Accounting Standards Board,
who considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Town of Marana, Arizona’s basic financial statements. The introductory
section, the combining and individual fund financial statements and schedules, and statistical
section are presented for purposes of additional analysis and are not a required part of the basic
financial statements.
2
The combining and individual fund financial statements and schedules are the responsibility of
management and were derived from and relate directly to the underlying accounting and other
records used to prepare the basic financial statements. Such information has been subjected to
the auditing procedures applied in the audit of the basic financial statements and certain
additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the basic financial statements or to the
basic financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the
combining and individual fund financial statements and schedules are fairly stated, in all
material respects, in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures
applied in the audit of the basic financial statements and, accordingly, we do not express an
opinion or provide any assurance on them.
Compliance Over the Use of Highway User Revenue Fund and Other Dedicated State
Transportation Revenue Monies
In connection with our audit, nothing came to our attention that caused us to believe that the
Town of Marana, Arizona failed to use highway user revenue fund monies received by the Town
pursuant to Arizona Revised Statutes Title 28, Chapter 18, Article 2, and any other dedicated
state transportation revenues received by the Town of Marana solely for the authorized
transportation purposes, insofar as they relate to accounting matters. However, our audit was
not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we
performed additional procedures, other matters may have come to our attention regarding the
Town of Marana’s noncompliance with the use of highway user revenue fund monies and other
dedicated state transportation revenues, insofar as they relate to accounting matters.
The communication related to compliance over the use of highway user revenue fund and other
dedicated state transportation revenue monies in the preceding paragraph is intended solely for
the information and use of the members of the Arizona State Legislature, the Board of
Supervisors, management, and other responsible parties with the Town and is not intended to
be and should not be used by anyone other than these specified parties.
Other Reporting Required by
Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 1, 2016 on our consideration of the Town’s internal control over financial reporting
and our tests of its compliance with certain provisions of laws, regulations, contracts and grant
agreements and other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the Town of Marana, Arizona’s, internal control over financial reporting
and compliance.
Casa Grande, Arizona
December 1, 2016
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As management of the Town of Marana, Arizona, (Town) we offer readers of the Town’s financial statements this
narrative overview and analysis of the financial activities of the Town for the fiscal yearendedJune 30, 2016. We
encourage readers to consider the information presented here in conjunction with additional information that we
have furnished in our letter of transmittal, which can be found in the introductory section of this report.
x
The Town’s total netpositionincreasedby $11.1millionor3.3percent fromthe previousfiscalyear2014-
15.Theincrease is primarily dueto an increase in the cash position related tosales tax,an increase in
capital assets,andan increase in funds due from other governments. A temporary half-cent sales tax
increase went into effect tofund theconstruction of a new police facility. Collections of the half-cent sales
tax were $4.8 million this fiscal year. Additionally, sales tax collections overall are up 26.3%.The increase in
funds due from other governments is related to the increase in capital assetprojectsthat are reimbursable
by other governments.
x
General revenues from governmental activities, excluding transfers,accounted for $46.4million in revenue,
or60.2percent of all revenues from governmental activities. Program specific revenues in the form of
charges for services and grants and contributions accounted for $30.6million or39.8percent of total
revenues fromgovernmental activities. The Town had $10.8million of program revenues related to
business-type activities.Overallrevenues have increased by 19.9 percent, which can be attributed primarily
to increased reimbursements for capital projects and the increase in sales taxes.
x
TheGeneral Fund had $39.8million in fiscal year2015-16revenues, which primarily consisted ofsales
taxes, intergovernmental revenueand licenses, feesand permits. The General fund had$35.2million of
expendituresand$6.3million inrequired transfersduring the year.The$1.7millionfund balancereduction
is attributed to a budgeted transferto the Wastewater fundfor the Tangerine/Downtown Sewer Conveyance
System project.
x
Highway User Revenue Fund revenuescontinue togrow slightlyin fiscal year 2015-16at $2.6million.
Expenditures were 19 percent lower thanthe previous yeardue to thestabilizationof the pavement
preservation program.Fund balancedecreased by $138,099and ended the fiscal year at $1.8million.
x
Tangerine Farms Road Improvement District Debt Service Fund, which accounts for special assessments,
had a $475,980fund balance attributable tothe accumulationofprepaid assessments andresources
required forthe July 2016debt service payment.
x
The PAG/RTA fund is reported as a major fund in FY2015-16 due to the increase in revenues and
expendituresprimarilyrelated to theTangerine Road Corridorproject. The revenues increased 205.99
percent and the expenditures increased 146.38 percent.
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.
Thegovernment-wide financial statementsare designed to provide
readers with a broad overview of the Town’s finances, in a manner similar to a private-sector business.All of the
activities of the Town, except those of a fiduciary nature, are included in these statements.
7
The Town’s activities are presented in two columns on these statements; governmental activities and business-type
activities. A total column forthese activities is also provided.
x
The governmental activities include basic services of the Town including general government (administration),
public safety (police and building safety), highways and streets, health and welfare, economic and community
development,andculture and recreation. These activities are primarily supported by general taxes and
revenues.
x
The business-type activities include the private sector-type activities such as water utility, wastewater utility,
and airport operations. These activities are supported primarily through user charges and fees.
Thestatement ofnet positionpresents information on all of the Town’s assets, deferred outflows of resources,
liabilities, and deferred inflows of resourceswith the difference reported asnet positionThe focus onnet position
is important because increases and decreases innet positionmay serve as a useful indicator of how the financial
position of the Town may be changing. Increasesmay indicate an improved financial position.However, decreases
innet positionmay not necessarily indicate the Town’s financial position is deteriorating. Instead, it may reflect a
situation where the Town may have used previously accumulated funds (i.e., cash collected over time to fund
capitalprojects). As a result, other financial and non-financial indicators must also be considered to effectively
assess the Town’s overall financial health.
Thestatement of activitiespresents information showing how the Town’snet positionchanged during the most
recent fiscal year.Since economic resources measurement focus and accrual basis of accounting are used for the
government-wide financial statements, all changesinnet positionare reported as soon as the underlying event
giving rise to the changeoccurs,regardless of the timing of related cash flowsThus, revenues and expenses are
reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected
taxesand long-term debt that has not matured).This statement also focuses on both the gross and net costs of
various Town functions, based only on direct functional revenues and expenses. This is designed to show the
extent to which the various functions are dependent on general taxes and revenues for support.
In addition to the Town itself (primary government), the government-wide financial statements also include the
Marana Municipal Property Corporation, a legally separate entity, for which the Town is financially accountable.The
Corporation also has substantially the same governing board as the Town and provides services entirely to the
Town. Financial information for this component unit is blended into the Town’s financial statements.In addition,
the Gladden Farms Community Facilities District,Gladden Farms Community Facilities District II,Vanderbilt Farms
Community Facilities Districtand Saguaro Springs Community Facilities Districtareblendedcomponent units.
The government-wide financial statementscan be found on pages25-27ofthis report.
Also presented are the financial statements for governmental funds and proprietary
funds.Afundis a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The Town uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements. All of the funds of the Town can be divided into two
categories: governmental funds and proprietary funds.
Governmental fundsare used to account for essentially the same functions reported as
governmental activitiesin the government-wide financial statements.However, unlike the government-wide
financial statements, governmental fund financialstatements focus onnear-term inflowsand outflowsof spendable
resources,as well as onbalances ofspendable resourcesavailable at the end of the fiscal year. Such information
may be useful in evaluating the Town’s near-term financing requirementsanddetermining what financial resources
are available in the near future to fund Town programs.
8
Because the focus of governmental funds is narrower than that of the government-wide financial statements, itmay
beuseful to compare the information presented forgovernmental fundswith similar information presented for
governmental activitiesin the government-wide financial statements. By doing so, readers may better understand
the long-term impact of the Town’s near-term financing decision.To facilitate thiscomparison, reconciliations of
the differences between the governmental fund balance sheet and statement of revenues, expendituresand
changes in fund balancesand government-wide statement ofnet positionand statement of activities are provided
immediately following the respective governmental fund statements.
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 theGeneralFund,Highway User Revenue,
Tangerine Farms Road Improvement District Debt Service, and PAG/RTA Capitalall of which are considered to be
major funds. Data from the other governmental funds are combined into a single, aggregatedpresentation.
Individualfund datafor each of these non-major governmental funds is provided in the form of combining
statements and schedules.These statements are included as supplementary information after the basic financial
statementsstartingon page100.
The Town adopts an annual budget and legally allocates (or appropriates) available monies for theGeneral,
Highway User Revenue, Tangerine Farms Road Improvement District Debt Service,PAG/RTA Capitaland other non-
major governmental funds. Budgetary comparisonstatements are provided for the General Fund and Highway User
Revenue fund within the basic financial statementson pages38-39.Budgetary comparison scheduleshave been
presented for the Town’s majordebt and capitalfundsonpages97-98, and budgetary comparison schedules have
been presented for the Town’s non-major funds to demonstrate compliance with the annual budget.
The basic governmental fund financial statements can be foundon pages30-37of this report.
The Town maintains two different types ofproprietary funds. Enterprise funds are used to
report the same functions presented as business-type activities in the government-wide financial statements.The
Town uses enterprise funds to account for its water, wastewaterand airport services, which are primarily supported
by user charges and fees.Internal service funds are an accounting device used to accumulate and allocate costs
internallyamong the Town’s various functions. The Town uses an internal service fund to account for theemployee
healthanddentalbenefits.Because the services of internal service funds predominantly benefits governmental
rather than business-type functions, they have been included within governmental activities in the government-wide
financial statements.Proprietary funds provide the same type of information as the government-wide financial
statements, only in more detail.
The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements. The notes to the
financial statements can be found immediately following the basic financial statements.
In addition to the basic financial statements and
accompanying notes, this report also presents certainrequired supplementary informationconcerning the Town’s
progress in funding its obligation to provide pension and OPEB benefits to its employees.Governments are required
to disclose certain information about employee pension funds. These disclosures are included withinNote10
Employee Retirement Systemsbeginningon page61inaddition totheinformationon pages 82-91reportedas
required supplementary information.
9
As noted earlier, net positionmay serve over time as a useful indicator of a government’s financial position. In the
case of the Town, assetsand deferred outflows of resourcesexceeded liabilities by $344.5million as ofJune 30,
2016.Current and other assetsincreased$6.7million or7.1percentprimarily due toa highercashposition. This is
a result of increased revenues, such as sales tax andintergovernmental revenue,whichexceeded expenditures.
Thecurrent and otherliabilities increased by $2.5million or15.6 percent, which is attributable toan increase in
accounts payable as a result of timing of payments made for fiscal year 2015-2016 expenditures and an increasein
the current portion of the revenue bonds payable.
The majority of the Town’snet positionreflectsits investment in capital assets (land, building and
improvements,infrastructure,vehicles and equipment and construction in progress) net of accumulated
depreciation and any related outstanding debt used to acquire or construct those assets. The Town uses these
capital assets to provide services to itscitizens;consequently, these assets arenotavailable for future spending.
Althoughthe Town’s investment in its capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources, since the capital assets themselves
cannot be used to liquidate these liabilities.In addition, a portion of the Town’snet positionrepresents resources
that are subject to external restrictions on how they may be used.
The Town’s financial position is the product of several financial transactions including the net results of activities,
the acquisition and payment of debt, the acquisition and disposal of capital assets, and the depreciation of capital
assets.
The following table presents a summary of the Town’snet positionfor the fiscal years endedJune 30, 2016and
June 30, 2015.
Governmental ActivitiesBusiness-type ActivitiesTotal
201620152016201520162015
Current and other assets$95,526,859$89,847,517$6,256,381$5,221,340$101,783,240$95,068,857
Capital assets, net262,591,682263,196,479117,205,356114,832,949379,797,038378,029,428
358,118,541353,043,996123,461,737120,054,289481,580,278473,098,285
Deferred outflows
related to pensions6,280,1065,308,066312,937247,1866,593,0435,555,252
6,280,1065,308,066312,937247,1866,593,0435,555,252
Current and other
liabilities15,246,69313,526,5473,121,0562,163,53018,367,74915,690,077
Long-term liabilities116,451,409118,743,5486,451,4116,799,651122,902,820125,543,199
131,698,102132,270,0959,572,4678,963,181141,270,569141,233,276
Deferred inflows related
to pensions2,220,5813,650,692167,137339,7282,387,7183,990,420
2,220,5813,650,692167,137339,7282,387,7183,990,420
Netinvestment in capital
assets193,845,100190,296,792112,357,140109,648,718306,202,240299,945,510
Restricted43,127,19536,417,947365,485365,48543,492,68036,783,432
Unrestricted(6,492,331)(4,283,464)1,312,445984,363(5,179,886)(3,299,101)
$230,479,964$222,431,275$114,035,070$110,998,566$344,515,034$333,429,841
10
Net investment in capital assets of $306.2million or88.9percentrepresents the largest portion ofnet position.
This portionofnet positionincreasedby$6.3millionas of June 30,2016, whichisaresult ofdepreciation,
reduction ofrelatedoutstanding debt, andadditionsof capital assets.
The second portion ofnet positionof $43.5millionor12.6percent represents resources that are subject to external
restrictions on how they may be utilized. Theincrease of $6.7million or18.2percent is primarilyduetothe
reduction inexpendituresin the Transportation fund and a new half-cent sales tax in the Sales Tax Capital fund.
The third portion consistsofunrestrictednet positionof $(5.2) million.The unrestricted balancehasdecreased by
$1.9million and has a deficit balance primarily due to the net pension liability reported as a result of the
implementation of GASB 68 and GASB 71 related to pension reporting.
The Town’s total revenues for the fiscal year endedJune 30, 2016, were $87.8million.
A significant increase of $7.4million insales taxesis primarily attributable totheadditional half-cent sales tax,
which went intoeffect July 1, 2015.Sales tax revenues overall have also increased, which is largely due to new
commercial development, such as the Tucson Premium Outlet Mall.The total cost of all programs and services was
$76.7million.The increase in program costs is largely due tocost of living and merit increases, development
agreement reimbursements,andan Airport master plan.The following table presents a summary of the changes in
net positionfor the fiscal years endedJune 30, 2016andJune 30, 2015.
11
Governmental ActivitiesBusiness-type ActivitiesTotal
201620152016201520162015
Program Revenues:
Charges for services$ 8,942,646$ 9,380,637$ 5,506,685$ 5,318,443$ 14,449,331$ 14,699,080
Operating grants and
contributions4,507,5084,360,329--4,507,5084,360,329
Capital grants and
contributions17,157,37811,280,8605,213,8434,014,49422,371,22115,295,354
General revenues:
Sales taxes35,441,58528,058,823--35,441,58528,058,823
Property taxes481,368442,194--481,368442,194
Franchise taxes446,702400,812--446,702400,812
State shared revenues9,039,1308,819,940--9,039,1308,819,940
Investment income173,412148,57116,1699,157189,581157,728
Miscellaneous
revenues676,157812,70119,03019,184695,187831,885
Gain on sale of capital
assets135,972116,340--135,972116,340
77,001,85863,821,20710,755,7279,361,27887,757,58573,182,485
General government17,530,96714,707,294--17,530,96714,707,294
Public safety14,423,48314,324,387--14,423,48314,324,387
Highways and streets22,659,22618,522,102--22,659,22618,522,102
Economic and
community
development4,778,8754,796,343--4,778,8754,796,343
Culture and recreation3,422,2894,432,751--3,422,2894,432,751
Interest on long-term
debt3,961,6324,105,760--3,961,6324,105,760
Water--4,404,7674,149,9104,404,7674,149,910
Wastewater--3,662,5343,430,6663,662,5343,430,666
Airport--1,828,6191,289,2721,828,6191,289,272
66,776,47260,888,6379,895,9208,869,84876,672,39269,758,485
10,225,3862,932,570859,807491,43011,085,1933,424,000
Transfers(2,176,697)(403,728)2,176,697403,728--
8,048,6892,528,8423,036,504895,15811,085,1933,424,000
222,431,275219,902,433110,998,566110,103,408333,429,841330,005,841
$230,479,964$222,431,275$114,035,070$110,998,566$344,515,034$333,429,841
12
Governmentalactivitiesincreasednet positionby $8million for fiscal year endedJune
30, 2016.The capital grants and contributions increase of $5.9million is primarily due to the one time revenues
received in intergovernmental revenue for reimbursement of project expenditures in the PAG Capital Fund. The
sales tax revenue increased by $7.4million from the prior year, which is avastincreasefrom the prior year. $4.8
million of the sales tax revenue increase is due to the new half-cent sales tax. The additional increase of 9.3 percent
is due to additional sales tax revenue, whichindicatesan economic recovery in addition to new commercial
developments within the Town.
Transfers increased by$1.7 million from the prior year due to additional support from the General Fund to the
proprietary funds. Specifically, a budgeted operating transfer of $233,000 was processed from the General Fund to
the Airport Fund to cover grant match requirements andoperating costs. Also, a transfer was processed from the
General Fund to the Wastewater of $1.9 million to support the costs of the Tangerine/Downtown Sewer Conveyance
System.
The following table presents the cost of theninemajor Town functional activities. The table also shows each
function’s net cost (total cost less charges for services generated by the activities and intergovernmental aid
provided for specific programs). The net cost shows the financial burden that was placed on the State and Town’s
taxpayers by each of these functions.
Year Ended June 30, 2016Year Ended June 30, 2015
TotalNet (Expense)/TotalNet (Expense)/
ExpensesRevenueExpensesRevenue
General government$ 17,530,967$ (12,422,551)$ 14,707,294$ (9,904,545)
Public safety14,423,483(13,542,29514,324,387(13,222,147)
Highways and streets22,659,226(6,231,563)18,522,102(7,754,037)
Health and welfare-20,882-20,199
Economic and community
development4,778,8752,195,8994,796,3432,384,495
Culture and recreation3,422,289(2,091,618)4,432,751(3,285,016)
Interest on long-term debt3,961,632(3,961,6324,105,760(4,105,760)
$ 66,776,472$ (36,032,968)$ 60,888,637$ (35,866,811)
Water$ 4,404,767$ 3,597,051$4,149,910$ 2,528,203
Wastewater3,662,534(1,483,289)3,430,666(1,495,785)
Airport1,828,619(1,289,154)1,289,272(569,329)
$ 9,895,920$ 824,608$ 8,869,848$ 463,089
x
The cost of all governmental activities this year was $66.8million.The9.7percent increase in governmental
activities expenses is primarily due tocosts associated with the internal service fund of $4.1million, an
increase in expensesdue to development agreements of$1.3 million,andcost of livingand meritincreases
for employees.
x
Net cost of governmental activitiesof$36million waslargelyfinanced by general revenues, which are made
up of primarily sales taxes totaling $35.4million.
13
x
Thegeneral governmentexpenses increased $2.8million or19.2percent. This is primarily duecosts
associated with the internal service fund of $4.1 million, an increase in expenses due to development
agreements of $1.3 million, and cost of living and merit increases for employees.
x
Highway and streetsexpensesincreased $4.1million or22.3percent due toan increase in construction
projects of $1.3 million that was not eligible for capitalization, an increase in street maintenance and
pavement preservation costs, andcost of living and merit increases for employees.
The following graph shows the functional revenues and expenses of the governmental activities in order to
demonstrate the extent to which the governmental functions produce direct revenues to offset related program
costs. It should be noted that this graph is not intended to represent a full allocation to these functions.As
described above, expenses not covered by direct program revenues are covered by the Town’s general revenues
which consist primarily of taxes and unrestricted State shared revenues. In governmental activities, the functional
revenues of $30.6million are45.8percent of expenses for fiscal year2016,upfrom41percent a year earlier.As
described earlier, thisincreaseisattributable tohigher collectionsin the capital grants and contributions revenues
related to a one time reimbursementsof major capital projects.
Asseen on the following graphs, the largestrevenue source for the Town’s governmental activitiesis sales tax
revenuesat46.1percent followed bycapital grants and contributionsat22.3percent,State shared revenues at
11.8percent, and charges for services at 11.6 percent. The Town’s largest expense category ishighways and
streetsat33.9percent, followed bygeneral governmentat26.3percent andpublic safetyat21.6percent.
14
15
Business-type activities’net positionincreasedby $3million for fiscal yearendedJune 30, 2016.This increase is
largely related to the transfer of funds from the General Fund to support functions and projects within the Airport
andWastewater funds. Charges for services increasedslightlyduetonew water and wastewater customers.
Capital grants and contributionsincreased by$1.2million or29.9percent. This wasprimarilydue toan increase in
infrastructure contributed to the Town from developers largely for Water related infrastructureat the new Tucson
Premium Outlet mall in Marana.
Business-type activity expenses increasedby $1 million or 11.6 percent as a result of an Airport Master plan that is
being developed, a slight overall increase to operatingexpenses, andcost of living and merit increases for
employees.
The Town’s largestoverall business-type activity isthe WaterUtility with $4.4million in expenses and $8millionin
program revenues during the year. The second largest activity is theWastewater Utility with $3.7million in
expenses and $2.2millionin program revenues, followed by the Airport with $1.8million in expenses and $0.5
million in program revenues.
Asseen on the following graph, the largest revenue source for the Town’sbusiness-typeactivities ischarges for
servicesrevenues at51.2percent followed by capital grants and contributions at48.5percent.
16
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
The focus of the Town’s governmental funds is to provide information on near-term
inflows, outflows, and balances of spendableresources. Such information is useful in assessing the Town’s
financing requirements. In particular, unrestrictedfund balance may serve as a useful measure of the Town’s net
resources available for spending at the end of the fiscal year.
The financialperformance of the Town as a whole is reflected in its governmental funds. As ofJune 30, 2016, the
Town’s governmental funds reported a combined fund balance of $70.8million,ofwhich$19.9millionis unassigned
and undesignated and therefore available for spending at the Town’s discretion.
The General Fund, which is the principal operating fund of theTown,had a fund balanceof$22.8million.Revenues
and expendituresincreased slightly from the previous year.The primary increases in revenues were related to sales
taxes, intergovernmental,and licenses, fees and permits. The increase in expenditures relates to adevelopment
agreement to reimburse a portion of the sales tax collectedof $1.3millionin fiscal year 2015-2016and cost of
living and merit increases for employees.
The Highway User Revenue Fund had a fund balance of $1.8million which reflected a decrease of $138,099from a
year earlier.Revenues increased slightly over the prior year. Expendituresdecreaseddue to thestabilizationofthe
pavement preservation program.
17
The proprietary funds in the financial statements are prepared on the same measurement
focus and accounting basis as the government-wide financial statements, but they provide more detail since each
major enterprise fund is presented discretely. Of the total proprietary fundsnet positionof $114million, $112.4
million comprised the funds’netinvestment in capital assets.$0.4 millionis restricted for debt serviceand
unrestrictednet positionof $1.3million.The factors concerning the finances of these funds, as well as the changes
innet position, have been addressed previously in the discussion of the Town’s business-type activities.
The Town’s annual adopted budget established the legal level of expenditure control. Budgetary comparison
statements are required for the General Fund and all major special revenue funds. These statements compare the
original budget, the budget as amended throughout the year, and the actual revenues and expenditures.
Budgetary schedules for other governmental funds are also presented in this reportasothersupplementary
information.
Although agriculture remains a major force in Marana’s economy, a recent influx of residential and commercial
development has occurred due to the Town’s location between Phoenix and Tucson along I-10 and the Union Pacific
Railroad. The Town is also a business-friendly government, which does not impose a Marana property tax.General
Fund revenuesexceeded conservativebudgetprojectionsin several key revenue sources like sales taxes and
licenses, permits and fees.Departmentsmaintainedtheirconservative use of available resources. TheTown
allocated available resources for one-time projects, which resulted in a decrease in fund balance of $1.7 million.
The General Fund budget and actual variances are shown on page38.
Amendments to the adopted budget may occur throughout the year between departments within the General Fund
and between funds in all other funds in a legally permissible manner (see Note4–Budgetary Control). Budget
adjustments between departments in the General Fund did occur. However, none of the amendments were
significant.
. As ofJune 30, 2016the Town had invested $379.8million in governmental and business-type
capital assets (net of accumulated depreciation). Total depreciation expense for the year was $21.4million, with
$16.9million attributed to governmental activities and $4.5million to business-type activities.
The following schedule presents capital asset balances for the fiscal years endedJune 30, 2016andJune 30, 2015.
Additional information on the Town’s capital assets can be found in Note6.
18
Governmental ActivitiesBusiness-type ActivitiesTotal
As ofAs ofAs ofAs ofAs ofAs of
June 30,June 30,
June 30, 2016June 30, 201520162015June 30, 2016June 30, 2015
Land$6,454,735$5,720,591$4,493,811$4,493,811$10,948,546$10,214,402
Water rights--3,910,5723,593,0153,910,5723,593,015
Construction in
progress16,645,53013,300,6745,125,4422,880,52121,770,97216,181,195
Buildings and
improvements45,328,90144,613,814128,848,242124,706,859174,177,143169,320,673
Machinery and
equipment19,664,15419,218,7191,288,3821,060,33120,952,53620,279,050
Infrastructure343,590,031333,053,064--343,590,031333,053,064
Less:
Accumulated
depreciation(169,091,669)(152,710,383)(26,461,093)(21,901,588)(195,552,762)(174,611,971)
$262,591,682$263,196,479$117,205,356$114,832,949$379,797,038$378,029,428
Major capital asset events during the current fiscal year included the following:
x
The Heritage Park Splash Pad was completed and placed into service during the current year at a total
cost of $1,706,420.
x
Completion of renovations to Heritage Park, Heritage Park Farm and Ora Mae Harn Park at a cost of
$1,071,734.
x
Various projects related to streets, sidewalks and storm drainage at a cost of $8,720,009. Major
projects included Marana Center Blvd, Saguaro Springs and the Luckett Road extension.
x
Various projects related to water and sewer lines at a cost of $2,671,014.
x
Various projects related to water wells and water plant upgrades at a cost of $1,470,369.
x
The purchase of various vehicles and equipmentat a total cost of $1,100,216.
x
Widening of Tangerine Road (construction in progress as of the close of the fiscal year had reached
$10,542,825).
Atyear-end, the Town had $96.5million in long-term obligations outstanding with $6.5
million due within one year.The Town did not issue any new debt in the current fiscal year.
The following table presents a summary of the Town’s outstanding debt for the fiscal years endedJune 30, 2016
andJune 30, 2015. Additional information on the Town’s long-term obligations can be found in Note7.
19
Governmental ActivitiesBusiness-type ActivitiesTotal
201620152016201520162015
General
obligation bonds$7,835,000$8,085,000$-$-$7,835,000$8,085,000
Revenue bonds64,090,00066,513,0001,214,0001,343,00065,304,00067,856,000
Special
assessment
bonds15,927,00017,246,000--15,927,00017,246,000
Loan payable--3,634,2163,841,2313,634,2163,841,231
Total$87,852,000$91,844,000$4,848,216$5,184,231$92,700,216$97,028,231
Our Towncontinuesto seepositive growth withan increase in residential and commercial development.The Town
is committed to provide exceptional services and programs to our citizens.As a result, the Town adopted a fiscal
year 2016-17budget focused on the Strategic Plan III principles and goals.The 2016-17budget increased by $25.1
million or17.3%. Themajority of this increaseis attributable to ourinvestmentin capital outlay for transportation,
park, water, and airport capital improvement projects.Several key revenues like sales taxes, State shared revenues,
building permits andplanning feesincreased modestly during the fiscal year.Thebudget is structurally balanced
with ongoing revenues supporting ongoing program expenditures.In order tohelp better guide future decisions,
the Town hasmaintainedtheinvestment planningconcept. This plan is based on economic analysis that projects a
slow, multi-year recovery.
This financial report is designed to provide our citizens, taxpayers, and investors and creditors with a general
overview of the Town’s finances and to demonstrate the Town’s accountability for the resources it receives. If you
have questions about this report or need additional information, contact the Finance Department, Town of Marana,
Arizona at 11555 West Civic Center Drive, Marana, Arizona 85653, or visitwww.MaranaAZ.gov.
20
BASIC FINANCIAL STATEMENTS
21
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22
GOVERNMENT-WIDE FINANCIAL STATEMENTS
23
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24
GovernmentalBusiness-type
ActivitiesActivitiesTotal
Current assets:
Cash and cash equivalents$61,703,087$7,188,879$68,891,966
Property taxes receivable1,471-1,471
Accounts receivable2,032,682866,8112,899,493
Interest receivable25,749-25,749
Due from other governments7,844,740103,9677,948,707
Internal balances150,000(150,000)-
Prepaid items287,38314,455301,838
Total current assets72,045,1128,024,11280,069,224
Noncurrent assets:
Assessment receivable14,216,837-14,216,837
Restricted cash and investments7,131,694365,4857,497,179
Internal balances2,133,216(2,133,216)-
Capital assets not depreciated23,100,26513,529,82536,630,090
Capital assets (net of depreciation)239,491,417103,675,531343,166,948
Total noncurrent assets286,073,429115,437,625401,511,054
358,118,541123,461,737481,580,278
Deferred outflows related to pensions6,280,106312,9376,593,043
6,280,106312,9376,593,043
Current liabilities:
Accounts payable4,132,3591,322,3195,454,678
Accrued payroll and employee benefits1,571,434126,4911,697,925
Unearned revenue314,653103,967418,620
Deposits held for others939,954660,3581,600,312
Due to other government110,919179,938290,857
Claims payable257,208-257,208
Accrued interest payable2,029,62869,2892,098,917
Compensated absences937,53886,2981,023,836
Loan payable-213,159213,159
General obligation bonds - CFD265,000-265,000
Special assessment bonds - TRFID1,328,000-1,328,000
Revenue bonds3,360,000136,0003,496,000
Total current liabilities15,246,6932,897,81918,144,512
Noncurrent liabilities:
Compensated absences104,1709,590113,760
Net pension liablity30,823,6572,166,00132,989,658
Loan payable-3,421,0573,421,057
General obligation bonds - CFD7,570,000-7,570,000
Special assessment bonds - TRFID14,599,000-14,599,000
Revenue bonds63,354,5821,078,00064,432,582
Total non-current liabilities116,451,4096,674,648123,126,057
131,698,1029,572,467141,270,569
Deferred inflows related to pensions2,220,581167,1372,387,718
2,220,581167,1372,387,718
Net investment in capital assets193,845,100112,357,140306,202,240
Restricted for:
Capital projects31,792,369-31,792,369
Debt service5,674,867365,4856,040,352
General government1,670,589-1,670,589
Public safety1,905,507-1,905,507
Highways and streets1,812,141-1,812,141
Economic and community development271,722-271,722
Unrestricted(6,492,331)1,312,445(5,179,886)
$230,479,964$114,035,070$344,515,034
25
Program Revenues
OperatingCapital Grants
Charges forGrants andand
ExpensesServicesContributionsContributions
Governmental activities:
General government$17,530,967$4,786,672$321,744$-
Public safety14,423,483-879,6461,542
Highways and streets22,659,226-2,628,68113,798,892
Health and welfare--20,882-
Economic and community
development
4,778,8754,026,991635,0192,312,764
Culture and recreation3,422,289264,95521,5361,044,180
Interest on long-term debt3,961,632---
Total governmental activities66,776,4729,078,6184,507,50817,157,378
Business-type activities:
Water4,404,7674,243,095-3,758,723
Wastewater3,662,5341,016,110-1,163,135
Airport1,828,619247,480-291,985
Total business-type activities9,895,9205,506,685-5,213,843
$76,672,392$14,585,303$4,507,508$22,371,221
Taxes:
Sales taxes
Property taxes
Franchise taxes
State shared revenues, unrestricted
Investment income
Miscellaneous
Transfers
26
Net (Expense) Revenue and Changes in Net Position
GovernmentalBusiness-type
ActivitiesActivitiesTotals
$(12,422,551)$-$(12,422,551)
(13,542,295)-(13,542,295)
(6,231,653)-(6,231,653)
20,882-20,882
2,195,899-2,195,899
(2,091,618)-(2,091,618)
(3,961,632)-(3,961,632)
(36,032,968)-(36,032,968)
-3,597,0513,597,051
-(1,483,289)(1,483,289)
-(1,289,154)(1,289,154)
-824,608824,608
(36,032,968)824,608(35,208,360)
35,441,585-35,441,585
481,368-481,368
446,702-446,702
9,039,130-9,039,130
173,41216,169189,581
676,15719,030695,187
(2,176,697)2,176,697-
44,081,6572,211,89646,293,553
8,048,6893,036,50411,085,193
222,431,275110,998,566333,429,841
$230,479,964$114,035,070$344,515,034
27
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28
29
Tangerine Farms
Improvement
Highway UserDistrict Debt
General FundRevenueService
Cash and cash equivalents$19,012,484$1,723,489$68,659
Property taxes receivable---
Accounts receivable208,854--
Special assessments receivable--15,865,618
Interest receivable---
Development agreement receivable---
Due from other governments3,424,522268,686-
Due from other funds3,733,492--
Prepaid items284,150--
Restricted cash and investments--407,321
$26,663,502$1,992,175$16,341,598
Accounts payable$1,670,014$155,666$-
Accrued payroll and employee benefits1,507,59924,368-
Due to other funds---
Due to other governments110,919--
Deposits held for others217,534--
Unearned revenue314,653--
3,820,719180,034-
Unavailable revenue--15,865,618
--15,865,618
Nonspendable2,417,366--
Restricted-1,812,141475,980
Unassigned20,425,417--
22,842,7831,812,141475,980
$26,663,502$1,992,175$16,341,598
30
Non-MajorTotal
PAG/RTAGovernmentalGovernmental
CapitalFundsFunds
$472,080$39,668,746$60,945,458
-1,4711,471
-3,683212,537
--15,865,618
-25,74925,749
-171,364171,364
1,612,0342,539,4987,844,740
--3,733,492
-3,233287,383
-6,724,3737,131,694
$2,084,114$49,138,117$96,219,506
$625,197$1,681,415$4,132,292
-39,4671,571,434
1,285,119165,1571,450,276
--110,919
-722,420939,954
--314,653
1,910,3162,608,4598,519,528
533,581493,68316,892,882
533,581493,68316,892,882
-3,2332,420,599
-46,197,89948,486,020
(359,783)(165,157)19,900,477
(359,783)46,035,97570,807,096
$2,084,114$49,138,117$96,219,506
31
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32
Amounts reported for governmental activities in the Statement of Net
Position are different because:
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported in the governmental funds:
Governmental capital assets$431,683,351
Less accumulated depreciation(169,091,669)262,591,682
Long-term liabilities, such as net pension liabilities and bonds payable, are
not due and payable in the current period and, therefore, are not reported
in the governmental funds:
Compensated absences(1,041,708)
Revenue bonds payable(64,090,000)
General obligation bonds payable(7,835,000)
Special assessment bonds(15,927,000)
Net pension liability(30,823,657)
Accrued interest payable(2,029,628)(121,746,993)
Internal Service Funds are used by management to charge the costs of
health and dental services. The assets and liabilities of the Internal
Service Fund are included in governmental activities in the Statement of
Net Position.
500,354
Deferred items related to the issuance of bonds and resources related to
pensions are applicable to future reporting periods and, therefore, are not
reported in the funds.
Bond premium(2,624,582)
Deferred inflows related to pensions(2,220,581)
Deferred outflows related to pensions6,280,1061,434,943
Other long-term assets are not available to pay for current period
expenditures and, therefore, are reported as unavailable revenue in the funds.
Intergovernmental revenue1,027,264
Special assessments revenue15,865,61816,892,882
33
Tangerine Farms
Improvement
Highway UserDistrict Debt
General Fund
RevenueService
Sales taxes$24,180,542$-$-
Property taxes---
Intergovernmental9,139,0272,623,454-
Licenses, fees & permits4,468,910--
Fines, forfeitures & penalties579,369--
Charges for services500,521--
Lease income89,710--
Special assessments--2,128,613
Contributions93,645--
Investment income49,0536,114-
Miscellaneous365,114--
39,465,8912,629,5682,128,613
Current -
General government11,055,112--
Public safety13,042,983--
Highways and streets3,073,9412,678,245-
Economic and community development3,806,723--
Culture and recreation3,546,904--
Capital outlay673,41789,422-
Debt service -
Principal retirement--1,319,000
Interest and fiscal charges--792,393
35,199,0802,767,6672,111,393
4,266,811(138,099)17,220
Proceeds from sale of capital assets320,596--
Transfers in---
Transfers out(6,335,075)--
(6,014,479)--
(1,747,668)(138,099)17,220
24,590,4511,950,240458,760
$22,842,783$1,812,141$475,980
34
Non-MajorTotal
GovernmentalGovernmental
PAG/RTA Capital
FundsFunds
$-$11,261,043$35,441,585
-489,269489,269
7,168,6971,605,62620,536,804
-1,774,4786,243,388
-170,624749,993
--500,521
--89,710
--2,128,613
-1,122,6721,216,317
-118,244173,411
10010,446375,660
7,168,79716,552,40267,945,271
-962,22012,017,332
-1,025,13014,068,113
-43,6515,795,837
-339,6344,146,357
-162,5403,709,444
6,934,1714,142,71811,839,728
-2,673,0003,992,000
-3,419,8454,212,238
6,934,17112,768,73859,781,049
234,6263,783,6648,164,222
--320,596
171,8466,326,6266,498,472
(78,390)(2,261,704)(8,675,169)
93,4564,064,922(1,856,101)
328,0827,848,5866,308,121
(687,865)38,187,38964,498,975
$(359,783)$46,035,975$70,807,096
35
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36
Amounts reported for governmental activities in the Statement of Activities
are different because
Governmental funds report the portion of capital outlay for capitalized assets
as expenditures. However, in the Statement of Activities, the costs of those
assets are allocated over their estimated useful lives depreciation
expense.
Expenditures for capitalized assets$10,151,832
Less current year depreciation(16,892,041)(6,740,209)
Debt proceeds provide current financial resources to governmental funds, but
issuing debt increases long-term liabilities in the Statement of Net Position.
Repayment of debt principal is an expenditure in the governmental funds, but
the repayment reduces long-term liabilities in the Statement of Net Position.
Special assessment bond retirement1,319,000
General obligation bond retirement250,000
Revenue bond principal retirement2,423,0003,992,000
Contributions of infrastructure assets are not recorded as revenues
in the governmental funds.6,320,036
Some revenues and expenses reported in the Statement of Activities do not
require the use of current financial resources and therefore are not reported
as revenues or expenditures in governmental funds.
Accrued interest81,816
Developer contributions200,146
Intergovernmental revenue(356,385)
Special assessments(1,341,155)
Compensated absences(77,173)
Proceeds from the sale of capital assets(320,596)
Gain on sale of assets135,972
Amortization of deferred charges161,105(1,516,270)
2,622,082
87,445
(2,992,521)(282,994)
Internal service funds are used by the Town to charge the costs of health
and dental services. The net revenue (expense) is reported with governmental
activities in the Statement of Activities.(31,995)
37
Variance -
Budgeted Amounts
Positive
OriginalFinalActual(Negative)
Sales taxes$22,674,325$22,674,325$24,180,542$1,506,217
Intergovernmental9,099,3429,099,3429,139,02739,685
Licenses, fees & permits3,553,0003,553,0004,468,910915,910
Fines, forfeitures & penalties630,000630,000579,369(50,631)
Charges for services413,100413,100500,52187,421
Lease income128,750128,75089,710(39,040)
Contributions46,00046,00093,64547,645
Investment income175,000175,00049,053(125,947)
Miscellaneous566,050566,050365,114(200,936)
37,285,56737,285,56739,465,8912,180,324
General government:
General government6,442,0535,724,0532,116,3953,607,658
Town council294,338294,338261,78332,555
Town clerk280,565280,565275,2815,284
Town manager1,503,1031,503,1031,477,33825,765
Human resources800,451800,451712,93087,521
Facilities1,021,6341,021,6341,000,43821,196
Finance1,092,3641,092,3641,024,31468,050
Legal800,357800,357747,53452,823
Technology services2,517,1512,517,1512,425,91391,238
Municipal courts1,031,5701,031,5701,013,18618,384
Public Safety:
Police11,683,98012,053,98012,050,7263,254
Building safety1,082,2671,082,267992,25790,010
Highways and streets
Public works2,951,7093,301,7093,073,941227,768
Economic and community development
Development services3,713,5243,713,5243,054,505659,019
Economic development and tourism192,356189,023156,80632,217
Community development596,728596,728595,4121,316
Culture and recreation
Parks and recreation3,811,4843,808,1503,546,904261,246
Capital outlay974,900974,900673,417301,483
40,790,53440,785,86735,199,0805,586,787
(3,504,967)(3,500,300)4,266,8117,767,111
Proceeds from the sale of capital assets50,00050,000320,596270,596
Transfers out(6,591,688)(6,591,688)(6,335,075)256,613
(6,541,688)(6,541,688)(6,014,479)527,209
(10,046,655)(10,041,988)(1,747,668)8,294,320
24,590,45124,590,451
$(10,046,655)$(10,041,988)$22,842,783$32,884,771
38
Budgeted Amounts
Variance -
Positive
OriginalFinalActual(Negative)
Intergovernmental$2,452,929$2,452,929$2,623,454$170,525
Investment income7,5007,5006,114(1,386)
2,460,4292,460,4292,629,568169,139
Current -
Highways and streets2,973,2173,109,5212,678,245431,276
Capital outlay795,461659,15789,422569,735
3,768,6783,768,6782,767,6671,001,011
(1,308,249)(1,308,249)(138,099)1,170,150
1,950,2401,950,240
$(1,308,249)$(1,308,249)$1,812,141$3,120,390
The notes to the financial statements are an integral part of this statement.
39
Governmental
Business-type ActivitiesActivities
Total EnterpriseInternal Service
WaterWastewaterAirportFundsFunds
Current assets:
Cash and cash equivalents$5,429,118$1,759,661$100$7,188,879$757,629
Accounts receivable711,507101,45953,845866,811-
Due from governments--103,967103,967-
Prepaid items12,6851,770-14,455-
Total current assets6,153,3101,862,890157,9128,174,112757,629
Noncurrent assets:
Restricted cash365,485--365,485-
Capital assets not depreciated6,079,0915,340,5382,110,19613,529,825-
Capital assets (net of depreciation)23,236,62764,784,68315,654,221103,675,531-
Total noncurrent assets29,681,20370,125,22117,764,417117,570,841-
35,834,51371,988,11117,922,329125,744,953757,629
Employer contributions125,37527,65416,918169,947-
Resources related to pensions111,59317,99213,405142,990-
236,96845,64630,323312,937-
Current liabilities:
Accounts payable708,597561,50852,2141,322,31967
Accrued payroll and employee benefits93,26519,28713,939126,491-
Claims payable----257,208
Compensated absences58,46017,11610,72386,299-
Due to other funds--150,000150,000-
Deposits held for others660,358--660,358-
Due to other governments179,938--179,938-
Bonds payable - current136,000--136,000-
Loan payable - current213,159--213,159-
Interest payable69,289--69,289-
Unearned revenue--103,967103,967-
Total current liabilities2,119,066597,911330,8433,047,820257,275
Noncurrent liabilities:
Due to other funds--2,133,2162,133,216-
Compensated absences6,4961,9021,1919,589-
Bonds payable1,078,000--1,078,000-
Loan payable3,421,057--3,421,057-
Net pension liability1,704,185256,052205,7642,166,001-
Total non-current liabilities6,209,738257,9542,340,1718,807,863-
8,328,804855,8652,671,01411,855,683257,275
Resources related to pensions141,2458,09417,798167,137-
141,2458,09417,798167,137-
Net investment in capital assets24,467,50270,125,22117,764,417112,357,140-
Restricted for debt service365,485--365,485-
Unrestricted2,768,4451,044,577(2,500,577)1,312,445500,354
$27,601,432$71,169,798$15,263,840$114,035,070$500,354
40
Governmental
Business-type ActivitiesActivities
Total EnterpriseInternal Service
WaterWastewaterAirportFundsFunds
Licenses, fees & permits$-$17,523$-$17,523$-
Charges for services4,243,095996,996247,4805,487,5714,076,651
Lease income-1,592-1,592-
Miscellaneous2-19,02819,030-
4,243,0971,016,111266,5085,525,7164,076,651
Personnel costs1,607,685402,712224,1132,234,510-
Contractual services91,880409,538543,4771,044,895747,274
Commodities846,146248,64931,6341,126,429-
Other830,7097,21695,151933,0763,361,372
Depreciation expense944,2832,594,419934,2444,472,946-
4,320,7033,662,5341,828,6199,811,8564,108,646
(77,606)(2,646,423)(1,562,111)(4,286,140)(31,995)
Investment income13,2752,894-16,169-
Interest expense(84,064)--(84,064)-
(70,789)2,894-(67,895)-
(148,395)(2,643,529)(1,562,111)(4,354,035)(31,995)
1,465,846784,997-2,250,843-
2,292,877378,138291,9852,963,000-
-1,996,938233,0692,230,007-
(53,310)--(53,310)-
3,557,018516,544(1,037,057)3,036,505(31,995)
24,044,41470,653,25416,300,897110,998,565532,349
$27,601,432$71,169,798$15,263,840$114,035,070$500,354
41
Governmental
Business-type ActivitiesActivities
Total EnterpriseInternal Service
Water WastewaterAirportFundsFunds
Received from customers$4,370,973$1,019,146$320,208$5,710,327$4,076,651
Payments to suppliers for goods and services(1,676,021)(214,249)(695,201)(2,585,471)(4,064,441)
Payments to employees for services(1,588,127)(398,144)(217,028)(2,203,299)-
Other receipts219,11519,02838,145-
Net cash provided by (used for) operating activities1,106,827425,868(572,993)959,70212,210
Interfund borrowing--49,82149,821-
Transfers in-1,996,938233,0692,230,007-
Transfers out(53,310)--(53,310)-
Net cash provided by (used for) non-capital activities(53,310)1,996,938282,8902,226,518-
Capital grants received--380,320380,320-
Development fees received1,465,846784,997-2,250,843-
Principal payments(336,015)--(336,015)-
Interest paid on debt(88,768)--(88,768)-
Acquisition and construction of capital assets(1,947,508)(2,136,612)(90,218)(4,174,338)-
Net cash provided by (used for) capital activities(906,445)(1,351,615)290,102(1,967,958)-
Interest on investments13,2752,894-16,169-
Net cash provided by investing activities13,2752,894-16,169-
160,3471,074,085(1)1,234,43112,210
5,634,256685,5761016,319,933745,419
$5,794,603$1,759,661$100$7,554,364$757,629
Operating (loss)$(77,606)$(2,646,423)$(1,562,111)$(4,286,140)$(31,995)
Depreciation944,2832,594,419934,2444,472,946-
Pension expense121,73718,47014,667154,874-
Employer pension contributions(125,399)(27,682)(16,898)(169,979)-
Expenses incurred but not reported----44,138
Changes in assets and liabilities:
Decrease in accounts receivable47,02523,92087871,823-
(Increase) in due from other governments--(81,786)(81,786)-
(Increase) decrease in prepaid items7,666(1,770)153,636159,532-
Increase (decrease) in accounts payable92,714451,154(24,939)518,92967.00
Increase in accrued payroll25,4615,2466,42837,135-
Increase (decrease) in compensated absences payable(2,241)8,5342,8889,181-
Increase in deposits held for others31,849-31,849-
Increase in due to other governments41,338-41,338-
Net cash provided (used) by operating activities$1,106,827$425,868$(572,993)$959,702$12,210
Capital contributions2,292,877378,138-2,671,015-
Transfer in (out) capital asset(53,310)53,310---
42
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Town have been prepared in conformity with accounting principles
generally accepted in the United States of America as applied to governments. The Governmental
Accounting Standards Board (GASB) is the accepted standard-setting body for establishing government
accounting and financial reporting principles.
For the year ended June 30, 2016, the Town implemented the provisions of GASB Statement No. 72,
GASB Statement No. 72 establish standards for measuring fair value
and applying fair value to certain investments and disclosures related to all fair value measurements.
A.Reporting Entity
The Town of Marana, Arizona (the Town) was incorporated on March 21, 1977, under the provisions of the
Constitution of Arizona and the Arizona Revised Statutes. The Town operates under a separately elected
council-mayor form of government. All funds and entities related to the Town that are controlled by the
Mayor and Council are included in the annual financial report. Control is determined on the basis of
budget adoption, taxing authority, and the ability to significantly influence operations and accountability for
fiscal matters. The Town provides a full range of services including general government, development and
planning services, legal, public safety, public works, and parks and recreation services.
In accordance with generally accepted accounting principles, these financial statements present the Town
and its component units, the Town of Marana Municipal Property Corporation (MMPC), the Gladden Farms
Community Facilities District (GFCFD), Gladden Farms Community Facilities District II (GFCFD II), the
Vanderbilt Farms Community Facilities District (VFCFD), the Saguaro Springs Community Facilities District
(SSCFD) and the Tangerine Farms Road Improvement District (TFRID). The MMPC, GFCFD, GFCFD II,
VFCFD, SSCFD and TFRID are blended component units with the Town in these financial statements as all
five were established by the Town in order to fund the debt incurred to finance the purchase of the Town
hall, various capital projects, and capital assets used by the water fund. In addition, the MMPC only
provides services to the Town.
The MMPC, GFCFD, GFCFD II, VFCFD, SSCFD and TFRID component units each have a June 30 year-end
and are included in the 2004 Bond Debt Service Funds, and 2008 Bond Debt Service Funds, the Gladden
Farms Capital Projects and Debt Service Funds, the Vanderbilt Farms Capital Projects and Debt Service
Funds, the Saguaro Springs Capital Projects Fund, the Tangerine Farms Improvement District Debt Service
Fund, and the Other Capital Projects Funds, respectively. Separate financial statements of the MMPC, the
GFCFD, the GFCFD II, the VFCFD, the SSCFD and the TFRID are not prepared on a stand-alone basis.
B.Basis of Presentation
The basic financial statements include both government-wide statements and fund-based financial
statements. The government-wide statements focus on the Town as a whole, while the fund-based
statements focus on major funds. Each presentation provides valuable information that can be analyzed
and compared between years and between governments to enhance the usefulness of the information.
Government-wide Financial Statements
The government-wide financial statements (i.e. the statement of net position and the statement of
activities) present financial information about the Town as a whole. The reported information includes all
of the activities of the Town and its component units. For the most part, the effect of internal activity
has been removed from these statements.
43
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
These statements are to distinguish between the governmentaland business-type activities of the Town.
normally are supported by taxes and intergovernmental revenues, and are
Governmental activities
reported separately from business-type activities, which are financed in whole or part by fees charged to
external parties.
The statement of activities demonstrates the degree to which the direct expenses of a given function of
the Town’s governmental activities or segment of its business-type activities are offset by program
are those that are clearly identifiable with a specific function or segment. The
revenues. Direct expenses
Town does not currently have an indirect cost allocation system. However, the General Fund does allocate
administrative charges to the Enterprise funds to support general services used by those funds (like
purchasing, accounting, administration, etc.) These fees are included in the expense column on the
Statement of Activities. Program revenuesinclude 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, investment income, and other items not included among program
revenues are reported instead as general revenues.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating
revenues and expenses result from providing services and producing and delivering goods in connection
with a proprietary fund’s principal ongoing operations. The principal operating revenues of the Water
Utility, Wastewater Utility, and Airport funds are charges to customers for sales and services. Operating
expenses for enterprise funds include the cost of sales and services, administrative expenses, and
depreciation of capital assets. All revenues and expenses not meeting this definition are reported as non-
operating revenues and expenses.
Generally, the effect of interfund activity has been eliminated from the government-wide financial
statements to minimize the double counting of internal activities. However, charges for interfund services
provided and used are not eliminated if doing so would distort the direct costs and program revenues
reported by the departments concerned.
Fund Financial Statements
Fund statements provide information about the Town’s funds, including blended component units.
Separate statements are presented for the governmental and proprietary fund categories. The emphasis
of fund financial statements is on major governmental and enterprise funds, each displayed in a separate
column. All remaining governmental funds are aggregated and reported as non-major funds.
The Town reports the following major governmental funds:
General Fund – This fund is the general operating fund of the Town. It is used to account for all
financial resources, except those required to be accounted for in another fund.
Highway User Revenue Fund – This fund accounts for excise fuel taxes which are distributed to cities
and towns based on a formula. A constitutional restriction requires that these funds be used solely for
street and highway purposes.
Tangerine Farms Improvement District Debt Service Fund – This fund accounts for the accumulation of
resources and payment of principal and interest on the Tangerine Farms Road Improvement District
Special Assessment Bonds.
44
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
PAG/RTA Capital Fund – This fund accounts for proceeds from Pima Association of Governments and
Regional Transportation Authority which are used for road improvement projects.
The Town reports the following major proprietary funds:
Water Fund – This fund is used to account for the financing and operation of the Water Utility.
Wastewater Fund – This fund is used to account for the financing and operation of the Wastewater
Utility.
Airport Fund – This fund is used to account for the financing and operation of the Marana Airport.
Additionally, the Town reports the following fund types:
Internal service fund – This fund is used to account for the operating revenues and charges for health
and dental benefits.
C.Measurement Focus and Basis of Accounting
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are
recorded when earned, including unbilled water services which are accrued, and expenses are recorded
when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are
recognized as revenue as soon all eligibility requirements imposed by the grantor or provider have been
met.
Governmental fund financial statements are reported using the current financial resources measurement
focusand the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available. Revenues are considered to
be availablewhen they are collectible within the current period or soon thereafter to pay liabilities of the
current period. For this purpose, the Town considers revenues to be available if they are collected within
60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Debt service
resources are provided during the current year for payment of long-term debt principal and interest due
early in the following year. Compensated absences are recorded only when payment is due.
Sales taxes, licenses and permits, charges for services, and investment income 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. Grants and similar awards are recognized as revenue as soon as all eligibility
requirements imposed by the grantor or provider have been met. Miscellaneous revenue is not susceptible
to accrual because generally they are not measurable until received in cash.
Property taxes are levied by community facility districts, which are component units of the Town and
collected by the Pima County Treasurer and special assessment property taxes are levied and collected by
the Town. All property taxes are levied no later than the third Monday in August and are payable in two
installments due October 1 of the current year and March 1 of the subsequent year. Taxes become
delinquent after the first business day of November and May, respectively. Interest attaches on
installments after the delinquent date. Pursuant to ARS, a lien against assessed real and personal property
45
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
attaches on the first day of January preceding assessment and levy; however according to case law, an
enforceable legal claim to the asset does not arise.
Tangerine Farms Road Improvement District (a component unit) issued special assessment bonds for
infrastructure improvements. These bonds will be paid through assessments made to the property owners
within the Tangerine Farms Road Improvement District. The Town is responsible for the collection of the
assessments and the disbursement of funds to retire the bonds. If a delinquency on an assessment
occurs, the Town is required to cover the delinquency with other resources until foreclosure proceeds are
received.
Proceeds of long-term debt and acquisitions under capital lease agreements are reported as other
financing sources.
D.Cash and Cash Equivalents
For the purposes of the statement of cash flows, the Town considers all highly liquid investments
(including the funds' participation in the investment pool account, and appropriate restricted assets) to be
cash equivalents. Individual fund investments with a maturity of three months or less when purchased are
considered as cash equivalents.
E.Investments
Arizona Revised Statutes authorize the Town to invest public monies in the State Treasurer’s Local
Government Investment Pool, interest-bearing savings accounts, certificates of deposit, and repurchase
agreements in eligible depositories; bonds or other obligations of the U.S. government that are guaranteed
as to principal and interest by the U.S. government; and bonds of the State of Arizona counties, cities,
towns, school districts, and special districts as specified by statue.
The State Board of Investment provides oversight for the State Treasurer’s pools. The fair value of a
participant’s position in the pool approximates the value of that participant’s pool shares
Nonparticipating interest-earning investment contracts are stated at cost. Money market investments and
participating interest contracts with a remaining maturity of one year or less at time of purchase are stated
at amortized cost. All investments are stated at fair value.
F.Pensions
For purposes of measuring the net pension (asset and) liability, deferred outflows of resources and
deferred inflows of resources related to pensions, and pension expense, information about the pension
plans’ fiduciary net position and additions to/deductions from the plans’ fiduciary net position have been
determined on the same basis as they are reported by the plans. For this purpose, benefit payments
(including refunds of employee contributions) are recognized when due and payable in accordance with
the benefit terms. Investments are reported at fair value.
G.Restricted Assets
The trust indentures executed for the entire bond series issued require all cash and investments for each
bond series to be held on deposit by the trustee/fiscal agents. These assets are restricted for payment of
interest and trustee fees associated with the bond issues, retirement of principal balances, and to finance
various capital projects.
46
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
In addition, the State of Arizona required that assets obtained at the completion of criminal proceedings by
the Town's police department be given to Pima County for custodial purposes. These assets are restricted
for expenses that will enhance the Town's ability to conduct police investigations.
H.Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both the government-wide and fund financial statements. Prepaid items are recorded as
expenses when consumed in the government-wide financial statements. Prepaid items are recorded as
expenditures when purchased in the fund financial statements and are offset by a reserve of fund balance.
I.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 interfund loans) or “advances to/from other funds” (i.e., the non-current
portion of interfund loans). All trade and other receivables are shown net of an allowance for uncollectible
amounts.
J.Interfund Activity
Flows of cash from one fund to another without a requirement for repayment are reported as interfund
transfers. Interfund transfers between governmental funds are eliminated in the Statement of Activities.
Interfund transfers in the fund statements are reported as other financing sources/uses in governmental
funds and after non-operating revenues/expenses in proprietary funds.
K.Capital Assets
Capital assets, including public domain infrastructure such as roads, bridges, curbs and sidewalks, lighting
system, water distribution system and other assets that are immovable and of value to the Town, are
defined as assets with an initial individual cost of $5,000 or more and an estimated useful life of more than
one year. Such assets are recorded at actual cost or historical cost (or estimated historical cost if historical
records are not available). Donated capital assets are reported at acquisition value. Capital assets are
reported in the applicable governmental or business-type activities columns in the government-wide
financial statements. No long-term assets or depreciation are shown in the governmental funds financial
statements.
The Town has chosen not to apply the modified approach to any network, system, or subsystem of
infrastructure assets.
The cost of normal maintenance and repairs that do not significantly add to the value of the asset or
materially extend the life of the asset are not capitalized. Major improvements are capitalized and
depreciated over the remaining useful life of the related capital assets.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest
incurred during the construction phase of capital assets is included as part of the capitalized value of the
assets constructed.
47
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Depreciation is provided over the estimated useful lives of such assets using the straight-line method.
These estimated useful lives are as follows.
Years
Buildin
s 15-40
g
Buildin imrovements10-15
gp
Pump stations, distribution systems,
equipment and improvements20-75
Public domain infrastructure20-50
Machinery, equipment, and assets
under capital lease5-10
L.Long-term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial statements,
long-term debt and other long-term obligations are reported as liabilities in the applicable business-type
activities and proprietary fund type statement of net position. Bond related charges and credits, such as
premium discounts and issuance costs, are deferred and amortized over the life of the bonds using the
straight-line method.
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 in the period incurred.
M.Compensated Absences
The Town's employee vacation and sick leave policies generally provide for granting vacation and sick
leave with pay. Vacation leave vests with the employee as it is earned. The current and long-term
liabilities for accumulated vacation, including related benefits, are reported on the government-wide
financial statements. A liability for these amounts is reported in governmental funds only if they have
matured, for example, as a result of employee leave, resignations, and retirements. Sick leave benefits
provided for ordinary sick pay are not vested with the employees. Generally, resources from the General
Fund are used to pay for compensated absences.
N.Transactions Between Funds
Transactions that would be treated as revenue or expenses if they involved organizations external to the
governmental unit are accounted for as revenue or expenses in the funds involved. Transactions which
constitute reimbursements of a fund for expenses initially made from that fund which are properly
applicable to another fund are recorded as expenses in the reimbursing fund and as reductions of the
expense in the fund that is reimbursed.
Interfund transfers between governmental funds are eliminated in the Statement of Activities. Interfund
transfers in the fund statements are reported as other financing sources/uses in governmental funds and
after non-operating revenues/expenses in proprietary funds.
48
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
O.Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
accepted in the United States of America requires management to make estimates and assumptions. This
will affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements, and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from these estimates.
P.Seized Property
The Town Police have in their custody certain assets seized in criminal proceedings. Until formal
procedures have been finalized, the ownership of this property is not determinable. In addition, legal
requirements dictate that such assets not be reflected on the Town's financial records in an agency
capacity until Town ownership has been determined. Consequently, no such assets are recorded on these
financial statements.
Q.Deferred Outflows/Inflows of Resources
The statement of net position and balance sheet include separate sections for deferred outflows of
resources and deferred inflows of resources. Deferred outflows of resources represent a consumption of
net position that applies to future periods that will be recognized as an expense or expenditure in future
periods. Deferred inflows of resources represent an acquisition of net position or fund balance that applies
to future periods and will be recognized as revenue in future periods.
R.Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted
resources (the total of committed, assigned, and unassigned fund balance).
In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund
balance in the governmental fund financial statements a flow assumption must be made about the order in
which the resources are considered to be applied. 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. Additionally, the Town funds certain programs by a combination of grants and general
revenues. The Town applies grant resources to such programs before using general revenues.
NOTE 2 – FUND BALANCE CLASSIFICATIONS
In the fund financial statements, fund balance is reported in classifications that comprise a hierarchy based
on the extent to which the Town is bound to honor constraints on the specific purposes for which amounts
in those funds can be spent. The classifications of fund balance are Nonspendable, Restricted, Committed,
Assigned, and Unassigned. Nonspendable and Restricted fund balances represent the restricted
classifications and Committed, Assigned, and Unassigned represent the unrestricted classifications.
Committed fund balance can be used only for specific purposes determined by formal action of Town
Council. Town Council is the highest level of decision-making authority for the town. Commitments may be
established, modified, or rescinded only through resolutions approved by Town Council.
49
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Nonspendable Fund Balance consists of funds that are not in a spendable form, such as inventories and
prepaids, or can be legally or contractually required to be maintained intact.
Restricted Fund Balance consists of funds that are externally imposed by creditors, grantors, contributors,
law or regulations of other governments, or by law imposed through constitutional provisions or enabling
legislation. Committed Fund Balance consists of funds that can only be used for specific purposes
pursuant to constraints imposed by formal action of the Town’s highest level of decision-making authority.
Assigned Fund Balance consists of funds constrained by the Town’s intent to be used for specific purposes,
but are neither restricted nor committed, should be reported as assigned fund balance. This classification
of fund balance must be designated by the Town’s highest level of decision making authority or a Town
official that has been delegated the authority to assign funds. Unassigned Fund Balance consists of the
residual classification for the general fund. This classification represents fund balance that has not been
assigned to other funds and that has not been restricted, committed, or assigned to specific purposes
within the general fund. The General Fund is the only fund that can report a positive unassigned fund
balance and any other governmental fund can report a negative fund balance. When both restricted and
unrestricted resources are available for specific expenditures, restricted resources are considered spent
before unrestricted resources.
As of June 30, 2016, the fund balance details by classification are listed below:
Tangerine
Farms
Highway Improvement Non-Major
General User District Debt PAG/RTA Governmental
Fund RevenueService Capital Fund Funds
Fund Balances:
Nonspendable:
Prepaid expenditures $ 284,150 $ - $ - $ - $ 3,233
Long-term due from
other funds2,133,216 - - - -
Restricted:
Courts - - - - 1,062,099
Tourism promotion----606,864
Police----1,905,619
Highways and streets- 1,812,141 - - -
Housing programs - - - - 271,722
Capital projects- - - - 32,308,894
Debt service - - 475,980 - 10,042,701
Unassigned:20,425,417 - - (359,783) (165,157)
Total fund balances: $22,842,783 $1,812,141 $ 475,980 $ (359,783) $ 46,035,975
NOTE 3 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Individual Deficit Fund Balance – At June 30, 2016, the Pima County Bond Capital Fund a non-major
governmental fund, reported a deficit in fund balance of $165,157.
50
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
NOTE 4 - BUDGETARY CONTROL
Excess Expenditures Over Budget – At June 30, 2016, the Town had expenditures in funds that
exceeded the budget; however, this does not constitute a violation of any legal provisions.
The voters of the State of Arizona, on June 3, 1980, approved an expenditure limitation that is applicable
to all local governments. This limitation, based on expenditures of the 1979-80 fiscal year, restricts the
growth of expenditures based on a factor of increases in population and inflation. Certain expenditures are
held to be excludable. The limitation is set by the State Economic Estimates Commission prior to April 1 of
each year for the following fiscal year. As allowed, the voters of the Town of Marana, on May 21, 2013,
approved an alternative expenditure limitation - home rule option to be applicable to the Town.
This alternative expenditure limitation is free from any ties to the state imposed limitations and is in effect
for four consecutive years beginning with the fiscal year ended June 30, 2014. This limitation provides for
the Town to allow the Mayor and Council to adopt an annual expenditure limitation each year with no
expenditures held to be excludable. Therefore, the annual expenditure limitation equals the adopted
budget.
The Town establishes its fiscal year as the twelve-month period beginning July 1. The departments submit
to the Town manager a budget of estimated expenditures for the ensuing fiscal year. The Town manager
and each department head meet to discuss mutually acceptable changes for the estimated expenditures
for that department after which the Town manager subsequently submits a budget of estimated
expenditures and revenues to the Town Council.
Upon receipt of the budget estimates, the Town Council will hold a public meeting to obtain taxpayer
comments. Concurrently, a copy of the budget estimates is published in a local newspaper. The Town
Council is prevented from legally enacting the budget through passage of a resolution until 15 days have
passed after the date of the public meeting. Prior to July 1, the budget is legally enacted.
The Town Council formally adopts the budget and legally allocates the available monies for the General
Fund, the Highway User Revenue Fund, the Community Development Block Grant Fund, the Affordable
Housing Revolving Fund, the Local JCEF Fund, the Local Technology Enhancement Fund, the Fill the Gap
Fund, the Bed Tax Fund, the RICO fund, the Emergency telecommunications fund, the Impound fund, the
Other Special Revenue Fund, the Saguaro Springs CFD Debt Service Fund, the Gladden Farms CFD Debt
Fund, the Tangerine Farms Improvement District Debt Fund, the Transportation Fund, the One-half cent
sales tax fund, the Pima County Bond Fund, the Downtown Reinvestment Fund, the Impact Fee Funds, the
Other Capital Projects Funds, the Regional Transportation Authority Fund, the Gladden Farms CFD Capital
Fund, the Gladden Farms II CFD Capital Fund, the Vanderbilt CFD Capital Fund, the Saguaro Springs CFD
Capital Fund, and the Tangerine Farms Improvement District Capital Fund. The enterprise funds, Water
Utility, Wastewater Utility and Airport Authority, are subject to flexible budgets.
The Town manager is authorized to transfer budgeted amounts within any department in the General Fund
or between funds for any other fund; however, any revisions that reallocate budgeted amounts between
departments within the General Fund or from the budget line items labeled "contingency" must be
approved by the Town Council.
51
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
NOTE 5 - CASH AND INVESTMENTS
A.R.S. authorize the Town to invest public monies in the State Treasurer’s local government investment
pools, the County Treasurer’s investment pool, interest-bearing savings accounts, certificates of deposit,
and repurchase agreements in eligible depositories; bonds or other obligations of the U.S. government that
are guaranteed as to principal and interest by the U.S. government; and bonds of the State of Arizona
counties, cities, towns, school districts, and special districts as specified by statute. The statutes do not
include any requirements for credit risk, custodial credit risk, concentration of credit risk, interest rate risk,
or foreign currency risk for the Town’s investments. The State Board of Investment provides oversight for
the State Treasurer’s pools.
At June 30, 2016, the carrying amount of the Town’s deposits was $3,382,472 and the bank balance was
$2,869,770. The differences between the book and bank balances are due to timing of certain
transactions like deposits in transit and outstanding checks.
Of the bank balance, $844,556 was covered by Federal depository insurance and $2,708,964 was covered
by collateral held by the pledging financial institution’s trust department but not in the Town’s name; no
portion of the balance was uninsured and uncollateralized. The Town had $4,075 in petty cash funds,
change drawers and other related items at year end. Additionally, the Town had deposits of $1,449,541
held by Pima County in a fiduciary capacity.
At June 30, 2016, the Town’s investments, categorized within the fair value hierarchy established by
generally accepted accounting principles, were as follows:
Fair value measurement using
Quoted prices
in active Significant
Significant
markets for other
unobservable
identical
observable
inputs
assets inputs
(Level 3)
Investment by fair value level Amount (Level 1) (Level 2)
Federal Home Loan Mortgage Corp. $ 1,001,490 $ -$ 1,001,490$ -
Federal National Mortgage Assn. 7,038,778 -7,038,778 -
Total investments by fair value level $ -$ 8,040,268 $ -
External investment pools
measured at fair value
State Treasurer’s investment pool 5 16,779,61422 days average maturities
State Treasurer’s investment pool 7 11,050,46073 days average maturities
Total investments measured at fair
value 35,870,342
Investments measured at
amortized costs
Money market investments 9,901,489
Repurchase agreement 25,781,226
Total investments measured at
amortized costs 35,682,715
Total investments $71,553,057
52
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Investments categorized as Level 2 are valued using market-corroborated inputs by evaluating issues with
its best-known market maker. Investments in the State Treasurer’s investment pools are valued at the
pool’s share price multiplied by the number of shares the Town held. The fair value of a participant’s
position in the pools approximates the value of that participant’s pool shares. The State Board of
Investment provides oversight for the State Treasurer’s investment pools.
. The Town does not have a formal investment policy that limits investment maturities
as a means of managing its exposure to fair value losses arising from increasing interest rates.
. The Town has no investment policy that would further limit its investment choices. As of June
30, 2016, the Town’s investment in the State Treasurer’s investment pool 5 and pool 7 are specifically
limited to those securities that carry the full faith and credit of the United States Government. The net
asset value per share of both pools at June 30, 2016 was $1.00. Pool 5 has continued to maintain the
highest credit rating of AAA f/S1+ by Standard & Poor’s. Pool 7 itself is unrated, but the securities in Pool 7
had a weighted average credit rating of AAA by Standard & Poor’s. The Town’s investments in U.S.
Agencies were rated Aaa by Moody’s Investors Service and AA+ by Standard & Poor’s. The Arizona State
Treasurer has a publicly available financial report that includes financial statements and required
supplementary information. Copies may be obtained by contacting the Arizona State Treasurer, 1700 West
.
Washington, Phoenix, AZ 85007 or at www.aztreasury.gov
The Town’s investment in the State Treasurer’s investment pool represents a
proportionate interest in the pool’s portfolio; however, the Town’s portion is not identified with specific
investments and is not subject to custodial credit risk.
. The Town places no limit on the amount it may invest in any one issuer.
More than 5% of the Town’s investments are in U.S. Agencies. These investments are 11% of the Town’s
total investments.
At June 30, 2016, the Town had the following investment in debt securities:
Investment maturities
Less than 1
Investment Type Amount Year 1-5 Years
Money market investments $ 9,901,489 $ 9,9,01,489 $ -
Repurchase agreement 25,781,226 25,781,226
Federal Home Loan Mortgage Corp. 1,001,490 1,001,490
Federal National Mortgage Assn. 7,038,778 - 7,038,778
Total investments by fair value level $ 35,682,715 8,040,268
53
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
NOTE 6 - CAPITAL ASSETS
The following is a summary of the changes in capital assets for fiscal year ended June 30, 2016.
Beginning Ending
Balance Additions Deletions Balance
Capital assets, not being depreciated:
Land $ 5,720,591 $ 734,144 $ - $ 6,454,735
Construction in progress 13,300,674 9,800,920(6,456,064) 16,645,530
Total capital assets, not being depreciated 19,021,265 10,535,064(6,456,064) 23,100,265
Capital assets, being depreciated:
Buildings and improvements 44,613,814 731,619(16,532) 45,328,901
Machinery, equipment, and other assets 19,218,719 952,818 (507,383) 19,664,154
Infrastructure 333,053,064 10,777,017(240,050) 343,590,031
Total capital assets being depreciated 396,885,597 12,461,454(763,965) 408,583,086
Less accumulated depreciation for:
Buildings and improvements (14,591,293) (1,364,959)4,961 (15,951,291)
Machinery, equipment, and other assets (14,819,396) (1,089,978)473,354 (15,436,020)
Infrastructure (123,299,694) (14,441,672) 37,008 (137,704,358)
Total accumulated depreciation (152,710,383) (16,896,609)515,323 (169,091,669)
Total capital assets, being depreciated, net 244,175,214 (4,435,155) (248,642) 239,491,417
Governmental activities capital assets, net $263,196,479 $6,099,909 $(6,704,706) $262,591,682
Governmental activities depreciation expense was charged to function/programs as follows.
Governmental Activities:
$ 846,495
General government
Public safety 719,472
ghways and streets 13,912,891
Hi
148,231
Economic and community development
Culture and recreation 1,264,952
Total depreciation expense –governmental activities $ 16,892,041
The difference of $4,568 between total increases to accumulated depreciation and total depreciation
expense is due to the inclusion of transfers of capital assets from the business-type activities.
54
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
A summary of changes in capital assets for business-type activities is as follows.
Beginning Ending
Business-type Activities Balance Additions Deletions Balance
Capital assets, not being depreciated:
Land $ 4,493,811 $ - $ - $ 4,493,811
Water rights 3,593,015 317,557 - 3,910,572
Construction in progress 2,880,521 3,715,290 (1,470,369) 5,125,442
Total capital assets, not being depreciated 10,967,347 4,032,847 (1,470,369) 13,529,825
Capital assets, being depreciated:
-
Buildings, improvements and infrastructure 124,706,859 4,141,383128,848,242
Machinery, equipment, and other assets 1,060,331 228,051- 1,288,382
Total capital assets being depreciated 125,767,1904,369,434- 130,136,624
Less accumulated depreciation for:
Buildings, improvements and infrastructure (21,307,834)(4,337,872)(25,645,706)
Machinery, equipment, and other assets (593,754)(221,633)- (815,387)
Total accumulated depreciation (21,901,558)(4,559,505)- (26,461,093)
Total capital assets, being depreciated,
net 103,865,602 (190,071) - 103,675,531
Business-type activities capital assets, net $ 114,832,949 $3,842,776 $(1,470,369) $117,205,356
Business-type depreciation expense was charged to functions/programs as follows.
Business-te Activities:
yp
Airort $ 934,244
p
Water 944,283
Wastewater 2,594,419
otal dereciation exense business-te activities$4,472,946
Tpp–yp
The difference of $86,559 between total increases to accumulated depreciation and total
depreciation expense is due to the inclusion of transfers of capital assets from the government- type
activities.
NOTE 7 – LONG-TERM LIABILITIES
A.Notes Payable
Business-type activities loan payable consists of a loan from the Water Infrastructure Finance Authority
(WIFA), the proceeds of which were used to acquire and construct various water related infrastructure.
The loan is to be repaid in annual principal payments, plus semiannual interest payments, and a
semiannual servicing fee.
During 2010, the Town obtained $5,250,000 in financing from WIFA for the acquisition and construction of
a new water infrastructure. As of year-end, the Town has drawn on $4,690,128 of the loan and returned
$559,872. The interest rate at June 30, 2016 on the outstanding balance is 1.468 percent.
55
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
The following is a schedule by years of the debt service requirements for the loan as of June 30, 2016.
Fiscal Year Principal Interest Total
2017 $ 213,159 $ 51,786 $ 264,945
2018 219,485 48,610 268,095
2019 226,000 45,340 271,340
2020 232,70741,973274,680
2021 239,614 38,506 278,120
2022 – 2026 1,309,064 136,820 1,445,884
2027 – 2030 1,194,187 35,702 1,229,889
Totals $ 3,634,216 $ 398,737 $ 4,032,953
B.Community Facilities District (CFD) General Obligation Bonds
Gladden Farms Community Facilities District (a component unit) issued general obligation bonds for
infrastructure improvements. The CFD general obligation bonds outstanding as reported in governmental
activities as of June 30, 2016, were as follows.
Outstanding
June 30, 2016
$2,105,000 CFD General Obligation Bonds, 2004 Series, due
in annual installments of $45,000 to $165,000; through
July 15, 2029; at a 5.0% to 6.5% interest rate. $ 1,595,000
$3,250,000 CFD General Obligation Bonds, 2006 Series, due
in annual installments of $70,000 to $395,000; through
July 15, 2031; at a 4.9% to 5.5% interest rate. 2,685,000
$3,075,000 CFD General Obligation Bonds, 2007 Series, due
in annual installments of $60,000 to $605,000; through
July 15, 2032; at a 4.4% to 5.45% interest rate. 2,595,000
$1,000,000 CFD General Obligation Bonds, 2010 Series, due
in annual installments of $10,000 to $665,000; through
July 15, 2033; at a 2.7% to 5.75% interest rate.
960,000
Total $ 7,835,000
56
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Annual debt service requirements to maturity on the CFD general obligation bonds at June 30, 2016, are
summarized as follows.
Year ending
June 30 Principal Interest Total
2017 $ 265,000 $ 431,872 $ 696,872
2018 280,000 417,568 697,568
2019 295,000 402,231 697,231
2020 310,000 385,711 695,711
2021 325,000368,107693,107
2022 – 2026 1,930,000 1,538,8243,468,824
2027 – 2031 2,540,000 901,5633,441,563
2032 - 2034 1,890,000 163,5182,053,518
Totals $ 7,835,000 $ 4,609,394 $ 12,444,394
C.Tangerine Farms Road Improvement District Improvement Bonds
Tangerine Farms Road Improvement District (a component unit) issued special assessment bonds for
infrastructure improvements. These bonds will be paid through assessments made to the property owners
within the Tangerine Farms Road Improvement District. The Town is responsible for the collection of the
assessments and the disbursement of funds to retire the bonds. If a delinquency on an assessment
occurs, the Town is required to cover the delinquency with other resources until foreclosure proceeds are
received. The TFRID special assessment bonds outstanding as reported in governmental activities as of
June 30, 2016, were as follows.
Outstanding
June 30, 2016
$25,774,000 TFRID Special Assessment Bonds, due in annual
installments of $951,000 to $1,939,000; through January 1, 2026;
at an interest rate of 4.6%. $ 15,927,000
Total $ 15,927,000
Annual debt service requirements to maturity on the TFRID special assessment bonds at June 30, 2016,
are summarized as follows.
Year ending
June 30 Principal Interest Total
2017 1,328,000 731,699 2,059,699
2018 1,346,000 671,554 2,017,554
2019 1,408,000 609,638 2,017,638
2020 1,472,000 544,870 2,016,870
2021 1,540,000 477,158 2,017,158
ϮϬϮϮϮϬϮϲ
8,833,000 1,255,478 10,088,478
Totals $ 15,927,000 $ 4,290,397 $ 20,217,397
57
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
D.Revenue Bonds
The Town has issued revenue bonds for acquiring water systems, infrastructure upgrades, the design and
construction of the new municipal complex and to refund prior issuances. These bonds are payable from
the excise taxes collected by the Town and water utility revenue. The revenue bonds outstanding as
reported in governmental activities as of June 30, 2016 were as follows.
Outstanding June 30, 2016
Business-
Governmental type
$31,090,000 Revenue Bonds, 2008 Series A, due in
bi-annual installments of $570,000 to $1,275,000;
through July 1, 2028; at a 4.0% to 5.25% interest
rate. 24,185,000
$34,780,000 Pledged Excise Tax Revenue and Revenue
Refunding Obligations, 2013 Series, due in annual
installments of $315,000 to $2,570,000; through July
1, 2033; at a 2.0% to 5.0% interest rate. 33,765,000
$6,493,000 Pledged Excise Tax Revenue and Revenue
Refunding Obligations, 2014 Series, due in annual
installments of $353,000 to $735,000; through July 1,
2025; at a 2.55% interest rate. $6,140,000
$1,343,000 Water Utility Revenue Refunding
Obligations, 2014 Series, due in annual installments
of $129,000 to $197,000; through July 1, 2022; at a
2.53% interest rate. $ 1,214,000
Total $ 64,090,000 $ 1,214,000
Annual debt service requirements to maturity on revenue bonds at June 30, 2016, are summarized as
follows.
Governmental Activities Business-type Activities
Year ending
June 30 Principal Interest Principal Interest
2017 $ 3,360,000 $ 2,836,238 $ 136,000 $ 28,994
2018 3,510,000 2,692,495 139,000 25,515
2019 3,914,000 2,537,157 179,000 21,492
2020 4,079,000 2,385,121 184,000 16,900
2021 4,226,000 2,226,127 186,000 12,220
2022-2026 23,641,000 8,161,620 390,000 9,918
2027-2031 16,440,000 2,734,075 - -
2032-2034 4,920,000 377,000 - -
Totals $ 64,090,000 $ 23,949,833 $ 1,214,000 $ 115,039
E.Pledged Revenues
The Town has pledged certain future revenues to repay specific bonded debt as follows. The Town has
pledged future excise tax revenues to repay $72.4 million in Excise Tax Revenue Bonds issued in 2008,
58
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
2013, and 2014. The various bonds were issued for the construction of the municipal complex, the
acquisition of certain water systems, acquisition of the Marana Wastewater Reclamation Facility,
infrastructure upgrades and to refund prior debt issuances. At year end, $64.1 million in bonds remain
outstanding to be repaid by future excise tax revenues and the net revenues available for service of this
debt were $45 million. The debt principal and interest paid on this debt during fiscal year 2016 was $5.4
million (12% of available net pledged revenues).
In addition, the Town has pledged future water utility revenues to repay a $4.7 million Water
Infrastructure Financing Authority loan and a $1.3 million Revenue Refunding Bond. The loan was issued
for the acquisition of well sites and the construction of certain infrastructure. The bond was issued in 2014
to refund prior debt issuances. At year end, $4.9 million remains outstanding to be repaid by future water
revenues. For the fiscal year ended June 30, 2016, the net revenues available for service of this debt were
$3.1 million. The debt principal and interest paid on this debt during fiscal year 2016 was $423,231.
F.Changes in Long-term Liabilities
The following is a summary of changes in long-term liability activity for fiscal year ended June 30, 2016.
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities:
General obligation bonds $ 8,085,000$ -$ (250,000)$ 7,835,000$ 265,000
Revenue bonds 66,513,000-(2,423,000)64,090,0003,360,000
Compensated absences 964,5351,011,512(934,339)1,041,708937,538
Net pension liability 28,138,5122,755,065(69,920)30,823,657-
Special assessment
bonds 17,246,000-(1,319,000)15,927,0001,328,000
Deferred bond premium 2,785,687-(161,105)2,624,582-
Total $123,732,734$3,766,577$(5,157,364)$122,341,947$5,890,538
Business-type activities:
Loan payable $ 3,841,231$ -$ (207,015)$ 3,634,216$ 213,159
Net pension liability 1,942,764223,237-2,166,001-
Revenue bonds 1,343,000-(129,000)1,214,000136,000
Compensated absences 86,70784,901(75,720)95,88886,298
Total $ 7,213,702$ 308,138$ (411,735)$ 7,110,105$ 435,457
59
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
NOTE 8 – DEFERRED AMOUNTS
Governmental funds report deferred inflows of resources for revenue due and receivable but not
considered to be available to liquidate liabilities of the current period. Governmental funds also defer
revenue recognition in connection with resources that have been received, but not yet earned. At the end
of the current fiscal year, the various components of deferred amounts reported in the governmental funds
were as follows.
Deferred revenue Unavailable Unearned
$ -
Program revenues (General Fund) $ 314,653
Intergovernmental (PAG/RTA Capital Fund) 533,581
Intergovernmental (Non-Major governmental funds) 493,683 -
Special assessments (Tangerine Farms
Improvement District Debt Service Fund) 15,865,618 -
Total deferred amounts for governmental funds $ 16,892,882 $ 314,653
NOTE 9 – INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
Due to/from other funds:
At June 30, 2016, several funds were involved in interfund borrowing arrangements with the General Fund
due to insufficient resources available in the funds to cover expenditures. Through the fiscal year 2016-
2017, these interfund borrowing will be eliminated as sufficient resources become available. A portion of
the amount due from the Airport Fund, $2,133,216, is considered long term. Listed below is a summary of
the interfund borrowing transactions.
Due From
Non-Major
PAG/RTA Governmental Airport
Due To Capital Fund Funds Fund Total
General Fund $ 1,285,119$ 165,1570$2,283,216 0 $3,733,492
Total $ 1,285,119$ 165,157$2,283,216 $3,733,492
60
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Interfund transfers:
Interfund transfers were made by the Town during the fiscal year to ensure that sufficient resources were
available to cover expenditures in the applicable funds. These were direct transfers between funds and
will not be eliminated as sufficient resources become available in the receiving funds. Listed below is a
summary of transfers between funds.
Transfers In
Non-Major
PAG/RTA Governmental Wastewater Airport
Transfer Out Capital Funds Fund Fund Total
General Fund $ - $ 4,158,378 $1,943,628$ 233,069 $6,335,075
PAG/RTA
Capital Fund 78,390 78,390
Water Fund 53,310 53,310
Non-Major
Governmental 171,846 2,089,858 2,261,704
171,846
Total $ 6,326,626$1,996,938$ 233,069 $8,728,479
NOTE 10 - EMPLOYEE RETIREMENT SYSTEMS
All full-time and permanent part-time employees participate in one of four different retirement plans. With
the exception of public safety personnel, police dispatchers and elected officials, all other employees
participate in the Arizona State Retirement System (ASRS). Certified public safety personnel participate in
the Public Safety Retirement Systems (PSPRS). Police dispatch and communication staff participate in the
Corrections Officer Retirement Plan (CORP). The Town’s Mayor and Council Members participate in the
Elected Officials’ Retirement Plan (EORP).
At June 30, 2016, the Town reported the following aggregate amounts related to pensions for all plans to
which it contributes:
Statement of Net Position and Governmental Business-Type
Statement of Activities Activities Activities Total
Net pension liabilities $ 30,823,657$ 2,166,001$ 32,989,658
Deferred outflows of resources 6,280,106312,9376,593,043
Deferred inflows of resources 2,220,581167,1372,387,718
Pension expense 2,992,521154,8743,147,395
The Town reported $2,622,082 of pension contributions as expenditures in the governmental funds related
to all pension plans to which it contributes.
A. Public Safety Personnel Retirement System and Corrections Officer Retirement Plan
All of the Town's full-time police officers are covered by the Arizona Public Safety Personnel Retirement
System (PSPRS), which is an agent multiple-employer defined benefit plan. PSPRS was established by Title
38, Chapter 5, Article 4 of the Arizona Revised Statutes to provide pension benefits for public safety
personnel who are regularly assigned hazardous duty as employees of the State of Arizona or one of its
political subdivisions. The PSPRS is jointly administered by the Board of Trustees (formerly fund manager)
61
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
and participating local boards. The Board of Trustees is a seven-member board appointed by the Governor
and the State Legislature. The Board of Trustees is responsible for establishing contribution rates in
accordance with an actuarial study.
All full-time and permanent part-time employees employed as police dispatchers or communications
operators are eligible to participate in the Corrections Officers Retirement Plan (CORP), a multiple-
employer cost-sharing defined benefit plan. The CORP is governed by the PSPRS Board of Trustees and
the local participating local boards according to the provisions of A.R.S. Title 38, Chapter 5, Article 6.
PSPRS and CORP issue publicly available financial reports that include financial statements and required
supplemental information. This report may be obtained on the PSPRS website at www.psprs.com or by
writing to 3010 E Camelback Rd, Ste 200, Phoenix, AZ 85016 or by calling (602) 255-5575.
Benefits provided—The PSPRS and CORP provide retirement, health insurance premium supplement,
disability, and survivor benefits. State statute establishes benefit terms. Retirement, disability, and survivor
benefits are calculated on the basis of age, average monthly compensation, and service credit as follows:
PSPRS Initial membership date:
Before January 1, 2012 On or after January 1, 2012
Retirement and Disability
Years of service 20 years, any age 25 years, age 52.5
and age required 15 years, age 62
to receive benefit
Final average Highest 36 consecutive Highest 60 consecutive
salary is based on months of last 20 years months of last 20 years
Benefit percent
2.5% per year of credited service, not to
Normal 50% less 2.0% for each year of
exceed 80%
Retirement credited service less than 20 years
OR plus 2.0% to 2.5% for each year
of credited service over 20 years,
not to exceed 80%
Accidental 50% or normal retirement, whichever is greater
Disability
Retirement
Catastrophic 90% for the first 60 months then reduced to either 62.5%
Disability or normal retirement, whichever is greater
Retirement
Ordinary Normal retirement calculated with actual years of credited service or 20 years of
Disability credited service, whichever is greater, multiplied by years of credited service (not to
Retirement exceed 20 years) divided by 20
Survivor Benefit
Retired Members 80% to 100% of retired member’s pension benefit
Active Members 80% to 100% of accidental disability retirement benefit or 100% of average
monthly compensation if death was the result of injuries received on the job
62
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
CORP Initial membership date:
Before January 1, 2012 On or after January 1, 2012
Retirement and Disability
Years of service Sum of years and age equals 80 25 years, age 52.5
and age required 25 years, any age (dispatchers) 10 years, age 62
to receive benefit 20 years, any age (all others)
10 years, age 62
Final average Highest 36 consecutive Highest 60 consecutive
salary is based on months of last 10 years months of last 10 years
Benefit percent
Normal 2.0% to 2.5% per year of credited service, not to exceed 80%
Retirement
Accidental 50% or normal retirement if more 50% or normal retirement if more than 25
Disability than 20 years of credited service years of credited service
Retirement
Total and 50% or normal retirement if more than 25 years of credited service
Permanent
Disability
Retirement
Ordinary 2.5% per year of credited service
Disability
Retirement
Survivor Benefit
Retired Members 80% of retired member’s pension benefit
Active Members 40% of average monthly compensation or 100% of average monthly compensation
if death was the result of injuries received on the job. If there is no surviving spouse
or eligible children, the beneficiary is entitled to 2 times the member’s contributions.
Retirement and survivor benefits are subject to automatic cost-of-living adjustments based on excess
investment earnings.In addition, from and after December 31, 2015, the Legislature may enact permanent
one-time benefit increases after a Joint Legislative Budget Committee analysis of the increase’s effects on
the plan. PSPRS also provides temporary disability benefits of 50 percent of the member’s compensation
for up to 12 months.
63
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Employees covered by benefit terms—At June 30, 2016, the following employees were covered by the
agent pension plans’ benefit terms:
PSPRS CORP
Dispatchers
Inactive employees or beneficiaries currently 24 -
receiving benefits
Inactive employees entitled to but not yet 20 3
receiving benefits
Active employees 75 8
Total 119 11
Contributions—State statutes establish the pension contribution requirements for active PSPRS and CORP
employees. In accordance with state statutes, annual actuarial valuations determine employer contribution
requirements for PSPRS and CORP pension and health insurance premium benefits. The combined active
member and employer contribution rates are expected to finance the costs of benefits employees earn
during the year, with an additional amount to finance any unfunded accrued liability. Contributions rates
for the year ended June 30, 2016, are indicated below. Rates are a percentage of active members’ annual
covered payroll.
PSPRS CORP
Dispatchers
Active members—Pension 11.65% 7.96%
Town
Pension 24.80% 11.87%
Health insurance premium benefit .38% .36%
In addition, statute required the Town to contribute at the actuarially determined rate of 28.62 percent for
the PSPRS of annual covered payroll of retired members who worked for the Town in positions that an
employee who contributes to the PSPRS would typically fill.
For the agent plans, the Town’s contributions to the pension plan and contributions for the health
insurance premium benefit for the year ended June 30, 2016, were:
PSPRS CORP
Dispatchers
Pension Contributions
$ 1,288,435$ 48,648
Health Insurance Premium Benefit
19,7421,475
Total Contributions
$ 1,308,177$ 50,123
During fiscal year 2016, the Town paid for PSPRS and CORP pension contributions as follows: 95%
percent from the General Fund and 5% percent from other funds.
Pension liability—At June 30, 2016, the Town reported the following net pension liabilities:
Net Pension
Liability
PSPRS 10,225,919
CORP Dispatchers 457,898
64
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
The net pension liabilities were measured as of June 30, 2015, and the total pension liability used to
calculate the net pension liability was determined by an actuarial valuation as of that date.
In May 2016 voters approved Proposition 124 that authorized certain statutory adjustments to PSPRS’
automatic cost-of-living adjustments. The statutory adjustments change the basis for future cost-of-living
adjustments from excess investment earnings to the change in the consumer price index, limited to a
maximum annual increase of 2 percent. The change in the Town’s net pension liability as a result of the
statutory adjustments is not known.
Pension actuarial assumptions – The significant actuarial assumptions used to measure the total pension
liability are as follows:
PSPRS and CORP—Pension
Actuarial valuation date June 30, 2015
Actuarial cost method Entry age normal
Investment rate of return 7.85%
Projected salary increases 4.0%–8.0% for PSPRS and 4.0%–7.25% for CORP
Inflation 4.0%
Permanent benefit increase Included
Mortality rates RP-2000 mortality table (adjusted by 105% for both males
and females)
Actuarial assumptions used in the June 30, 2015, valuation were based on the results of an actuarial
experience study for the 5-year period ended June 30, 2011.
The long-term expected rate of return on PSPRS and CORP pension plan investments was determined to
be 7.85 percent using a building-block method in which best-estimate ranges of expected future real rates
of return (expected returns, net of pension plan investment expenses and inflation) are developed for each
major asset class.
The target allocation and best estimates of geometric real rates of return for each major asset class are
summarized in the following table:
PSPRS and CORP Long-Term
Target Expected Real
Asset Class AllocationRate of Return
Short term investments 2% 0.75%
Absolute return 5% 4.11%
Risk parity 4% 5.13%
Fixed income 7% 2.92%
Real assets 8% 4.77%
GTAA 10% 4.38%
Private equity 11% 9.50%
Real estate 10% 4.48%
Credit opportunities 13% 7.08%
Non-U.S. equity 14% 8.25%
U.S. equity 16% 6.23%
Total 100%
65
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Pension discount rates—The following discount rates were used to measure the total pension liabilities:
PSPRS CORP
Dispatchers
Discount rates 7.85% 7.85%
Change from prior year
0.00 0.00
The projection of cash flows used to determine the PSPRS and CORP discount rates assumed that plan
member contributions will be made at the current contribution rate and that employer contributions will be
made at rates equal to the difference between the actuarially determined contribution rate and the
member rate. Based on those assumptions, the pension plans’ fiduciary net position was projected to be
available to make all projected future benefit payments of current plan members. Therefore, the long-term
expected rate of return on pension plan investments was applied to all periods of projected benefit
payments to determine the total pension liability.
Changes in the Net Pension Liability (Asset)
PSPRSIncrease (Decrease)
Total Plan Net Pension
Pension Fiduciary Liability
Liability Net Position (Asset)
(a) (b)(a) – (b)
Balances at June 30, 2015 23,540,59114,231,110 9,309,481
Changes for the year:
Service cost 891,324- 891,324
Interest on the total pension liability 1,844,654- 1,844,654
Changes of benefit terms -- -
Differences between expected and actual 333,269- 333,269
experience in the measurement of the
pension liability
Changes of assumptions or other inputs -- -
Contributions—employer -1,006,859 (1,006,859)
Contributions—employee -579,390 (579,390)
Net investment income -533,938 (533,938)
Benefit payments, including refunds of (974,950)(974,950) -
employee contributions
Pension plan administrative expense -(13,410) 13,410
Other changes -46,032 (46,032)
Net changes 2,094,2971,177,859 916,438
Balances at June 30, 2016 25,634,88815,408,969 10,225,919
66
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
CORPIncrease (Decrease)
Total
Plan Net Pension
Pension Fiduciary Liability
Liability Net Position (Asset)
(a) (b)(a) – (b)
Balances at June 30, 2015 1,330,327906,189 424,138
Changes for the year:
Service cost 64,307- 64,307
Interest on the total pension liability 105,144- 105,144
Differences between expected and actual (18,303)- (18,303)
experience in the measurement of the
pension liability
Benefit payments, including refunds of (46,131)(46,131) -
employee contributions
Contributions—employer -49,045 (49,045)
Contributions—employee -35,981 (35,981)
Net investment income -34,230 (34,230)
Pension plan administrative expense -(1,233) 1,233
Other changes -(635) 635
Net changes 105,01771,257 33,760
Balances at June 30, 2016 1,435,344977,446 457,898
Sensitivity of the Town’s net pension liability to changes in the discount rate—The following table presents
the Town’s net pension liabilities calculated using the discount rates noted above, as well as what the
Town’s net pension liability would be if it were calculated using a discount rate that is 1 percentage point
lower or 1 percentage point higher than the current rate:
Pension plan fiduciary net position—Detailed information about the pension plans’ fiduciary net position is
available in the separately issued PSPRS and CORP financial reports.
1% Current 1%
Decrease Discount Increase
Rate
PSPRS
Rate 6.85%7.85%8.85%
Net pension liability $13,650,520$10,225,919$7,399,409
CORP Dispatchers
Rate 6.85%7.85%8.85%
Net pension liability $704,128$457,898$253,950
Pension expense—For the year ended June 30, 2016, the Town recognized the following pension expense:
Pension
Expense
PSPRS 1,324,011
CORP Dispatchers 59,441
67
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Pension deferred outflows/inflows of resources—At June 30, 2016, the Town reported deferred outflows of
resources and deferred inflows of resources related to pensions from the following sources:
PSPRS
Deferred Outflows Deferred Inflows
of Resourcesof Resources
Differences between expected and actual $ 381,798$ -
experience
Changes of assumptions or other inputs 1,316,259
Net difference between projected and
actual earnings on pension plan
investments
486,782428,432
Town contributions subsequent to the
measurement date
1,288,435
Total $ 3,473,274$ 428,432
CORP
Deferred Outflows Deferred Inflows
of Resourcesof Resources
Differences between expected and actual
experience
$ -$ 27,612
Changes of assumptions or other inputs
13,567
Net difference between projected and
actual earnings on pension plan
investments
30,68725,825
Town contributions subsequent to the
measurement date
48,648
Total $ 92,902$ 53,437
The amounts reported as deferred outflows of resources related to pensions resulting from town
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability (or an increase in the net pension asset) in the year ending June 30, 2017. Other amounts
reported as deferred outflows of resources and deferred inflows of resources related to pensions will be
recognized in pension expense as follows:
PSPRS CORP
Dispatchers
Year ending June 30
2017 $363,883$(3,308)
2018 363,883(3,308)
2019 363,881(3,306)
2020 506,6915,300
2021 140,496(2,371)
Thereafter 17,573(2,190)
Agent plan OPEB actuarial assumptions—The health insurance premium benefit contribution requirements
for the year ended June 30, 2016, were established by the June 30, 2014, actuarial valuations, and those
actuarial valuations were based on the following actuarial methods and assumptions.
68
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Actuarial valuations involve estimates of the reported amounts’ value and assumptions about the
probability of events in the future. Amounts determined regarding the plans’ funded status and the annual
required contributions are subject to continual revision as actual results are compared to past expectations
and new estimates are made. The required schedule of funding progress for the health insurance premium
benefit presented as required supplementary information provides multiyear trend information that shows
whether the actuarial value of the plans’ assets are increasing or decreasing over time relative to the
actuarial accrued liability for benefits.
Projections of benefits are based on (1) the plans as the Town and plans’ members understand them and
include the types of benefits in force at the valuation date, and (2) the pattern of sharing benefit costs
between the Town and plans’ members to that point. Actuarial calculations reflect a long-term perspective
and employ methods and assumptions designed to reduce short-term volatility in actuarial accrued
liabilities and the actuarial value of assets. The significant actuarial methods and assumptions used are the
same for all PSPRS and CORP plans and related benefits (unless noted), and the following actuarial
methods and assumptions were used to establish the fiscal year 2016 contribution requirements:
PSPRS and CORP—OPEB Contribution Requirements
Actuarial valuation date June 30, 2014
Actuarial cost method Entry age normal
Amortization method Level percent closed for unfunded actuarial accrued
liability, open for excess
Remaining amortization period 22 years for unfunded actuarial accrued liability, 20 years
for excess
Asset valuation method 7-year smoothed market value; 20% corridor
Actuarial assumptions:
Investment rate of return 7.85%
Projected salary increases 4.00%–8.00% for PSPRS and 4.00%–7.25% for CORP
Wage growth 4.00% for PSPRS and CORP
Agent plan OPEB trend information—Annual OPEB cost information for the health insurance premium
benefit for the current and 2 preceding years follows for each of the agent plans:
Percentage
of Annual
Annual OPEB Cost Net OPEB
Year Ended June 30 Cost Contributed Obligation
PSPRS
2016 $19,742 100 $ -
2015 66,579 100 -
2014 52,614 100 -
CORP Dispatchers
2016 1,475 100 -
2015 3,164 100 -
2014 2,372 100 -
Agent plan OPEB funded status—The health insurance premium benefit plans’ funded status as of the most
recent valuation date, June 30, 2015, along with the actuarial assumptions and methods used in those
valuations follow.
69
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
PSPRS CORP
Dispatchers
Actuarial value of assets (a) $724,917 $35,178
Actuarial accrued liability (b) 607,586 47,755
Unfunded actuarial accrued liability (funding excess)
(b) – (a) (117,331) 12,577
Funded ratio (a)/(b) 119.31% 73.66%
Annual covered payroll (c)
$4,900,569 $430,892
Unfunded actuarial accrued liability (funding excess) as a
percentage of covered payroll
(b) – (a) / (c) 0.00% 2.92%
The actuarial methods and assumptions used are the same for all the PSPRS and CORP health insurance
premium benefit plans (unless noted), and for the most recent valuation date are as follows:
PSPRS and CORP—OPEB Funded Status
Actuarial valuation date June 30, 2015
Actuarial cost method Entry age normal
Amortization method Level percent closed for unfunded actuarial accrued
liability, open for excess
Remaining amortization
21 years for unfunded actuarial accrued liability, 20 years
period
for excess
Asset valuation method 7-year smoothed market value; 80%/120% market corridor
Actuarial assumptions:
Investment rate of return 7.85%
Projected salary increases 4%–8% for PSPRS and 4%–7.25% for CORP
Wage growth 4% for PSPRS and CORP
B. Arizona State Retirement System
All full-time and permanent part-time employees not in the Public Safety Retirement System, Corrections
Officers Retirement System or Elected Officials Retirement System are eligible to participate in the Arizona
State Retirement System (ASRS) a cost sharing multiple-employer defined benefit plan. The ASRS was
established by the State of Arizona to provide pension benefits for employees of the State and employees
of participating political subdivisions and school districts. The ASRS is administered in accordance with the
provisions of A.R.S. Title 38, Chapter 5, Article 2 and 2.1. The ASRS provides for retirement, death, long-
term disability, survivor, and health insurance premium benefits. ASRS issues a publicly available financial
report that includes financial statements and required supplementary information. The report may be
obtained on its website at www.azasrs.gov or by writing to ASRS, 3300 N. Central Avenue, P.O. Box
33910, Phoenix, Arizona 85067-3910 or by calling 602-240-2000 or 1-800-621-3778.
Cost-sharing plan - Arizona Revised Statutes provide statutory authority for determining the employees’
and employers’ contribution amounts. The ASRS funding policy providesfor actuarially determined
employer contributions at rates which will provide assets sufficient to pay benefits when due. Retirement
benefits are calculated on the basis of age, average monthly compensation, and service credit as follows:
70
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
ASRS Retirement
Initial membership date:
Before July 1, 2011 On or after July 1, 2011
Years of service Sum of years and age equals 80 30 years, age 55
and age required 10 years, age 62 25 years, age 60
to receive benefit 5 years, age 50* 10 years, age 62
any years, age 65 5 years, age 50*
any years, age 65
Final average Highest 36 consecutive months Highest 60 consecutive
salary is based on of last 120 months months
of last 120 months
Benefit percent 2.1% to 2.3% 2.1% to 2.3%
per year of service
*With actuarially reduced benefits.
Retirement benefits for members who joined the ASRS prior to September 13, 2013, are subject to
automatic cost-of-living adjustments based on excess investment earning. Members with a membership
date on or after September 13, 2013, are not eligible for cost-of-living adjustments. Survivor benefits are
payable upon a member’s death. For retired members, the retirement benefit option chosen determines
the survivor benefit. For all other members, the beneficiary is entitled to the member’s account balance
that includes the member’s contributions and employer’s contributions, plus interest earned.
Contributions—In accordance with state statutes, annual actuarial valuations determine active member and
employer contribution requirements. The combined active member and employer contribution rates are
expected to finance the costs of benefits employees earn during the year, with an additional amount to
finance any unfunded accrued liability. For the year ended June 30, 2016, statute required active ASRS
members to contribute at the actuarially determined rate of 11.47 percent (11.35 percent for retirement
and 0.12 percent for long-term disability) of the members’ annual covered payroll, and statute required the
Town to contribute at the actuarially determined rate of 11.47 percent (10.85 percent for retirement, 0.50
percent for health insurance premium benefit, and 0.12 percent for long-term disability) of the active
members’ annual covered payroll. In addition, the Town was required by statute to contribute at the
actuarially determined rate of 9.36 percent (9.17 percent for retirement, 0.13 percent for health insurance
premium benefit, and 0.06 percent for long-term disability) of annual covered payroll of retired members
who worked for the Town in positions that would typically be filled by an employee who contributes to the
ASRS. The Town’s contributions to the pension plan for the year ended June 30, 2016, were $1,508,416.
The Town’s contributions for the current and 2 preceding years for OPEB, all of which were equal to the
required contributions, were as follows:
Years ended Health Long-term
June 30, RetirementInsuranceDisabilityTotal
2016 $ 1,426,881$ 65,755$15,780$ 1,508,416
2015 1,367,122 75,393 15,079 1,457,594
2014 1,253,464 70,288 28,115 1,351,867
71
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
During fiscal year 2016, the Town paid for ASRS pension and OPEB contributions as follows: 87.4%
percent from the General Fund, .22% percent from major funds, 11.91% from enterprise funds and .47%
percent from other funds.
Pension liability—At June 30, 2016, the Town reported a liability of $21,263,376 for its proportionate share
of the ASRS’ net pension liability. The net pension liability was measured as of June 30, 2015. The total
pension liability used to calculate the net pension liability was determined using update procedures to roll
forward the total pension liability from an actuarial valuation as of June 30, 2014, to the measurement
date of June 30, 2015. The Town’s proportion of the net pension liability was based on the Town’s actual
contributions to the plan relative to the total of all participating employers’ contributions for the year ended
June 30, 2015. The Town’s proportion measured as of June 30, 2015, was .13651% percent, which was an
increase of .0065 percent from its proportion measured as of June 30, 2014.
Pension expense and deferred outflows/inflows of resources—For the year ended June 30, 2016, the Town
recognized pension expense for ASRS of $1,505,998. At June 30, 2016, the Town reported deferred
outflows of resources and deferred inflows of resources related to pensions from the following sources:
ASRS
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and
actual experience
$ 580,231$ 1,114,222
Net difference between projected and
actual earnings on pension plan
investments
681,444
Changes in proportion and differences
between contributions and
proportionate share of contributions
809,027
Town contributions subsequent to the
measurement date
1,426,881
Total $ 2,816,139$ 1,795,666
The $1,426,881 reported as deferred outflows of resources related to ASRS pensions resulting from
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ending June 30, 2017. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to ASRS pensions will be recognized in pension expense as follows:
Year ending June 30,
2017 $ (62,738)
2018 (410,720)
2019 (424,867)
2020 491,917
72
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Actuarial Assumptions—The significant actuarial assumptions used to measure the total pension liability are
as follows:
ASRS
Actuarial valuation date June 30, 2014
Actuarial roll forward date June 30, 2015
Actuarial cost method Entry age normal
Investment rate of return 8%
Projected salary increases 3–6.75%
Inflation 3%
Permanent benefit increaseIncluded
Mortality rates 1994 GAM Scale BB
Actuarial assumptions used in the June 30, 2014, valuation were based on the results of an actuarial
experience study for the 5-year period ended June 30, 2012.
The long-term expected rate of return on ASRS pension plan investments was determined to be 8.79
percent using a building-block method in which best-estimate ranges of expected future real rates of
return (expected returns, net of pension plan investment expense and inflation) are developed for each
major asset class. These ranges are combined to produce the long-term expected rate of return by
weighting the expected future real rates of return by the target asset allocation percentage and by adding
expected inflation. The target allocation and best estimates of arithmetic real rates of return for each
major asset class are summarized in the following table:
Long-Term
ASRS Expected
Target Arithmetic Real
Asset Class AllocationRate of Return
Equity 58% 6.79%
Fixed income 25% 3.70%
Real estate 10% 4.25%
Multi-asset 5% 3.41%
Commodities 2% 3.93%
Total 100%
Discount Rate—The discount rate used to measure the ASRS total pension liability was 8 percent, which is
less than the long-term expected rate of return of 8.79 percent. The projection of cash flows used to
determine the discount rate assumed that contributions from participating employers will be made based
on the actuarially determined rates based on the ASRS Board’s funding policy, which establishes the
contractually required rate under Arizona statute.
Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long-term expected
rate of return on pension plan investments was applied to all periods of projected benefit payments to
determine the total pension liability.
73
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Sensitivity of the Town’s proportionate share of the ASRS net pension liability to changes in the discount
rate—The following table presents the Town’s proportionate share of the net pension liability calculated
using the discount rate of 8 percent, as well as what the Town’s proportionate share of the net pension
liability would be if it were calculated using a discount rate that is 1 percentage point lower (7 percent) or
1 percentage point higher (9 percent) than the current rate:
ASRS Current
1% Decrease Discount Rate 1% Increase
(7%) (8%) (9%)
Proportionate share of the net $27,862,289$21,263,376 $16,740,958
pension liability
Pension plan fiduciary net position—Detailed information about the pension plan’s fiduciary net position is
available in the separately issued ASRS financial report.
C. Elected Officials’ Retirement Plan
The Town’s Mayor and Council Members are eligible to participate in the Elected Officials’ Retirement Plan
(EORP), a multiple employer cost-sharing defined benefit plan. The EORP is governed by the Public Safety
Retirement System Board of Trustees according to the provisions of A.R.S. Title 38, Chapter 5, Article 3.
EORP issues a publicly available financial report that includes financial statements and required
supplementary information. The report may be obtained on PSPRS’s website at www.psprs.com or by
writing to EORP, 3010 E Camelback Rd, Ste 200, Phoenix, AZ 85016 or by calling (602) 255-5575.
Benefits provided—The EORP provides retirement, health insurance premium supplement, disability, and
survivor benefits. State statute establishes benefit terms. Retirement, disability, and survivor benefits are
calculated on the basis of age, average yearly compensation, and service credit as follows:
EORP Initial membership date:
Before January 1, 2012 On or after January 1, 2012
Retirement and
Disability
Years of service 20 years, any age 10 years, age 62
and age required 10 years, age 62 5 years, age 65
to receive benefit 5 years, age 65 any years and age if disabled
5 years, any age*
any years and age if disabled
Final average Highest 36 consecutive Highest 60 consecutive
salary is based on months of last 10 years months of last 10 years
Benefit percent
Normal 4% per year of service, 3% per year of service,
Retirement not to exceed 80% not to exceed 75%
74
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
EORP Initial membership date:
Before January 1, 2012 On or after January 1, 2012
Disability 80% with 10 or more years of 75% with 10 or more years of
Retirement service
service
40% with 5 to 10 years of service 37.5% with 5 to 10 years of service
20% with less than 5 years of 18.75% with less than 5 years of
service service
Survivor Benefit
Retired Members 75% of retired member’s benefit 50% of retired member’s benefit
Active Members 75% of disability retirement benefit 50% of disability retirement benefit
and Other
Inactive Members
* With reduced benefits of 0.25% for each month early retirement precedes the member’s
normal retirement age, with a maximum reduction of 30%.
Retirement and survivor benefits are subject to automatic cost-of-living adjustments based on excess
investment earning. In addition, from and after December 31, 2015, the Legislature may enact permanent
one-time benefit increases after a Joint Legislative Budget Committee analysis of the increase’s effects on
the plan.
Contributions—State statutes establish active member and employer contribution requirements. Statute
also appropriates $5 million annually through fiscal year 2043 for the EORP from the State of Arizona to
supplement the normal cost plus an amount to amortize the unfunded accrued liability. For the year ended
June 30, 2016, statute required active EORP members to contribute 13 percent of the members’ annual
covered payroll, and the Town was required to contribute 23.5 percent for retirement and 0 percent for
health insurance premium benefit of active EORP members’ annual covered payroll. The Town’s
contributions to the pension plan for the year ended June 30, 2016, was $28,065. The Town has not
contributed for the current year or 2 preceding years for OPEB, as the plan is currently overfunded.
During fiscal year 2016, the Town paid for EORP pension contributions 100 percent from the General Fund.
Pension liability—At June 30, 2016, the Town reported a liability for its proportionate share of the EORP’s
net pension liability that reflected a decrease for the Town’s proportionate share of the State’s
appropriation for EORP. The amount the Town recognized as its proportionate share of the net pension
liability, the related state support, and the total portion of the net pension liability that was associated with
the Town were as follows:
Town’s proportionate share of the EORP
net pension liability $1,042,465
State’s proportionate share of the EORP net
pension liability associated with the Town 324,997
Total $1,367,462
The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate
the net pension liability was determined by an actuarial valuation as of that date.
The Town’s proportion of the net pension liability as of June 30, 2015, was based on the Town’s actual
contributions to the plan relative to the total of all participating employers’ actual contributions for the year
75
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
ended June 30, 2015. The Town’s proportion measured as of June 30, 2015, was .1334 percent, which
was a decrease of .0324 percent from its proportion measured as of June 30, 2014.
Pension expense and deferred outflows/inflows of resources—For the year ended June 30, 2016, the Town
recognized pension expense for EORP of $257,945 and revenue of $87,445 for the Town’s proportionate
share of the State’s appropriation to EORP. At June 30, 2016, the Town reported deferred outflows of
resources and deferred inflows of resources related to pensions from the following sources:
EORP
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and actual
experience
$ 1,667$ 11,606
Changes of assumptions or other inputs
174,673
Net difference between projected and
actual earnings on pension plan
investments
6,323
Changes in proportion and differences
between employer contributions and
proportionate share of contributions
98,577
Town contributions subsequent to the
measurement date
28,065
Total $ 210,728$ 110,183
The $28,065 reported as deferred outflows of resources related to EORP pensions resulting from Town
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ending June 30, 2017. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to EORP pensions will be recognized in pension expense as follows:
Year ending June 30
2017 $80,271
2018 (13,072)
2019 521
2020 4,760
Actuarial assumptions—The significant actuarial assumptions used to measure the total pension liability are
as follows:
EORP
Actuarial valuation date June 30, 2015
Actuarial cost method Entry age normal
Investment rate of return 7.85%
Projected salary increases 4.25%
Inflation 4.0%
Members retired on or before July 1, 2011: 3% of benefit
Permanent benefit increase
Members retired on or after August 1, 2011: 0.5% of benefit
Mortality rates RP-2000 mortality table projected to 2025 with projection
scale AA
76
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Actuarial assumptions used in the June 30, 2015, valuation were based on the results of an actuarial
experience study for the 5-year period ended June 30, 2011.
The long-term expected rate of return on EORP pension plan investments was determined to be 7.85
percent using a building-block method in which best-estimate ranges of expected future real rates of
return (expected returns, net of pension plan investment expenses and inflation) are developed for each
major asset class. The target allocation and best estimates of geometric real rates of return for each major
asset class are summarized in the following table:
EORP Long-Term
Target Expected Real
Asset Class AllocationRate of Return
Short term investments 2% 0.75%
Absolute return 5% 4.11%
Risk parity 4% 5.13%
Fixed income 7% 2.92%
Real assets 8% 4.77%
GTAA 10% 4.38%
Private equity 11% 9.50%
Real estate 10% 4.48%
Credit opportunities 13% 7.08%
Non-U.S. equity 14% 8.25%
U.S. equity 16% 6.23%
Total 100%
Discount rate—At June 30, 2015, the discount rate used to measure the EORP total pension liability was
4.86 percent, which was a decrease of 0.81 from the discount rate used as of June 30, 2014. The
projection of cash flows used to determine the discount rate assumed that plan member contributions will
be made at the current contribution rate, employer contributions will be made at the statutorily set rates,
and state contributions will be made as currently required by statute. Based on those assumptions, the
pension plan’s fiduciary net position was projected to be insufficient to make all projected future benefit
payments of current plan members. Therefore, to determine the total pension liability for the plan, the
long-term expected rate of return on pension plan investments of 7.85 percent was applied to periods of
projected benefit payments through the year ended June 30, 2028. A municipal bond rate of 3.80 percent
obtained from the 20-year Bond Buyer Index, as published by the Federal Reserve as of June 30, 2015,
was applied to periods of projected benefit payments after June 30, 2028.
Sensitivity of the Town’s proportionate share of the EORP net pension liability to changes in the discount
rate—The following table presents the Town’s proportionate share of the net pension liability calculated
using the discount rate of 4.86 percent, as well as what the Town’s proportionate share of the net pension
liability would be if it were calculated using a discount rate that is 1 percentage point lower (3.86 percent)
or 1 percentage point higher (5.86 percent) than the current rate:
EORP Current
1% Decrease Discount Rate 1% Increase
(3.86%) (4.86%) (5.86%)
Town’s proportionate share of the
net pension liability $1,213,560$1,042,465 $1,212,998
77
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
Pension Plan Fiduciary Net Position—Detailed information about the pension plan’s fiduciary net position is
available in the separately issued EORP financial report.
NOTE 11 - RISK MANAGEMENT
The Town is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets;
errors and omissions; and natural disasters.
The Town's insurance protection is provided by the Arizona Municipal Risk Retention Pool, of which the
Town is a participating member. The limit for basic coverage is for $2,000,000 per occurrence on a claims-
made purpose. Excess coverage is for an additional $12,000,000 per occurrence on a follow form, claims-
made basis. The Arizona Municipal Risk Retention Pool is structured such that member premiums are
based on an actuarial review that will provide adequate reserves to allow the pool to meet its expected
financial obligations. The pool has the authority to assess its member’s additional premiums should
reserves and annual premiums be insufficient to meet the pool's obligations.
The Town continues to carry commercial insurance for all other risks of loss, including workers’
compensation and employee health and accident insurance. Settled claims resulting from these risks have
not exceeded commercial insurance coverage in any of the past three fiscal years.
NOTE 12 - COMMITMENTS AND CONTINGENCIES
The Town is subject to a number of lawsuits, investigations, and other claims (some of which involve
substantial amounts) that are incidental to the ordinary course of its operations, including those related to
wrongful death and personal injury matters. Although the Town Attorney does not currently possess
sufficient information to reasonably estimate the amounts of the liabilities to be recorded upon the
settlement of such claims and lawsuits, some claims could be significant to the Town’s operations. While
the ultimate resolution of such lawsuits, investigations, and claims cannot be determined at this time, in
the opinion of Town management, based on the advice of the Town Attorney, the resolution of these
matters will not have a material adverse effect on the Town’s financial position.
Significant Contractual Commitments
At the end of fiscal year 2016, the Town was obligated to $9 million in significant contractual commitments
for airport, transportation, park, water facility, and wastewater facility related construction projects.
Tangerine Corridor improvements accounted for $4.2 million, Public Safety Facility accounted for $2.02
million, Water Reclaim expansion accounted for $1.24 million, Downtown Sewer Conveyance system
accounted for $380,000 and Airport safety lighting and signage accounted for $306,000 in commitments.
The remaining commitments were for other airport projects of $30,000, transportation projects of
$390,000, water projects of $208,000, and park related projects accounted for $120,000.
NOTE 13 - LEASING ARRANGEMENTS
Land – State of Arizona
The Town has assigned and assumed a non-cancelable long-term operating lease for 2,400 acres of land
with the State of Arizona with an expiration of October 2099. This lease had an initial annual rent of
$432,000 that requires 10% increases in the annual rent payments for each succeeding five year period.
78
TOWN OF MARANA, ARIZONA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
In conjunction with the Town assuming the long-term operating lease, a developer signed a non-
cancelable agreement to reimburse the Town the annual rental payment for either a minimum of twenty
years or until the first twelve consecutive months the developer generates more than $1,000,000 in resort
sales tax to the Town from the development project known as "Dove Mountain".
This threshold was reached on June 30, 2011, and therefore the developer ceased reimbursing the Town
for the annual rent payment. These leases provide for payments of minimum annual rentals as follows,
excluding real estate taxes, common area charges, management fees, and sales taxes.
Years
Ending June
30,
2017 574,992
2018 574,992
2019 574,992
2020 574,992
2021 632,491
2022 - 20263,225,704
2027 - 20313,548,274
2032 - 20363,903,101
2037 - 20414,293,410
2042 - 20464,722,753
2047 - 20515,195,028
2052 - 20565,714,530
2057 - 20616,285,985
2062 - 20666,914,585
2067 - 20717,606,043
2072 - 20768,366,647
2077 - 20819,203,312
2082 - 208610,123,643
2087 - 209111,136,008
2092 - 209612,249,608
2097 - 20997,926,216
Total113,347,306$
Minimum annual rentals above excludes annual rental under the remaining renewal options as of June 30,
2016. Rent expense under the above leases for fiscal 2015-16 aggregated $574,992.
NOTE 14 – SUBSEQUENT EVENTS
On October 6, 2016, the Gladden Farms Community Facilities District issued $7,955,000 of general
obligation bonds for the refunding of $7,555,000, which represented the callable balances of the 2004
Series, 2006 Series, 2007 Series, and the 2010 Series bonds. The remaining $400,000 was funding for
additional capital infrastructure within the district. The interest rate is 2.0 - 4.0 percent and the maturity
date is July 15, 2041.
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81
TOWN OF MARANA, ARIZONA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE TOWN’S
PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
COST-SHARING PENSION PLANS
JUNE 30, 2016
Reporting Fiscal Year
Arizona State Retirement System
(Measurement Date)
2014
2016 2015
through
(2015) (2014) 2007
Town’s proportion of the net pension liability 0.136510%0.129998% Information
Town’s proportionate share of the net pension $ 21,263,376$ 19,235,271 not
liability available
Town’s covered payroll $ 12,565,464$ 11,714,615
Town’s proportionate share of the net pension 169.22%164.20%
liability as a percentage of its covered payroll
Plan fiduciary net position as a percentage of the 68.35%69.49%
total pension liability
Reporting Fiscal Year
Elected Officials Retirement Plan
(Measurement Date)
2014
2016 2015
through
(2015) (2014) 2007
Town’s proportion of the net pension liability .133401%.1658860% Information
Town’s proportionate share of the net pension $1,042,465$ 1,112,385 not
liability available
State’s proportionate share of the net pension liability 324,997341,068
associated with the Town
Total $1,367,462$ 1,453,453
Town’s covered payroll $119,424$ 119,423
Town’s proportionate share of the net pension 872.91%931.15%
liability as a percentage of its covered payroll
Plan fiduciary net position as a percentage of the 28.32%31.91%
total pension liability
See accompanying notes to pension plan schedules.
82
TOWN OF MARANA, ARIZONA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE TOWN’S
NET PENSION LIABILITY (ASSET) AND RELATED RATIOS
AGENT PENSION PLANS
JUNE 30, 2016
Reporting Fiscal Year
PSPRS
(Measurement Date)
2014
2016 2015 through
(2015) (2014) 2007
Total pension liability Information
Service cost $ 891,324$ 876,619 not
Interest on the total pension liability 1,844,6541,551,602 available
Changes of benefit terms -308,515
Differences between expected and actual 333,269148,583
experience in the measurement of the pension
liability
Changes of assumptions or other inputs -1,933,583
Benefit payments, including refunds of employee (974,950)(1,211,258)
contributions
Net change in total pension liability 2,094,2973,607,644
Total pension liability—beginning 23,540,59119,932,947
Total pension liability—ending (a) $25,634,888$ 23,540,591
Plan fiduciary net position
Contributions—employer $1,006,859$ 797,871
Contributions—employee 579,390578,596
Net investment income 533,9381,698,902
Benefit payments, including refunds of employee (974,950)(1,211,258)
contributions
Pension plan administrative expense (13,410)-
Other changes 46,032(543,969)
Net change in plan fiduciary net position 1,177,8591,320,142
Plan fiduciary net position—beginning 14,231,11012,910,968
Plan fiduciary net position—ending (b) $15,408,969$ 14,231,110
Town’s net pension liability (asset)—ending (a) – $10,225,919$ 9,309,481
(b)
Plan fiduciary net position as a percentage of the 60.11% 60.45%
total pension liability
Covered payroll $4,900,569 $ 4,615,299
Town’s net pension liability (asset) as a 208.67% 201.71%
percentage of covered payroll
See accompanying notes to pension plan schedules.
83
TOWN OF MARANA, ARIZONA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE TOWN’S
NET PENSION LIABILITY (ASSET) AND RELATED RATIOS
AGENT PENSION PLANS
JUNE 30, 2016
CORP – Dispatchers Reporting Fiscal Year
(Measurement Date)
2014
2016 2015 through
(2015) (2014) 2007
Total pension liability Information
Service cost $ 64,307$ 63,474 not
Interest on the total pension liability 105,14494,360 available
Changes of benefit terms --
Differences between expected and actual
experience in the measurement of the pension (18,303)(16,512)
liability
Changes of assumptions or other inputs -18,699
Benefit payments, including refunds of employee
contributions (46,131)-
Net change in total pension liability 105,017160,021
Total pension liability—beginning 1,330,3271,170,306
Total pension liability—ending (a) $ 1,435,344$ 1,330,327
Plan fiduciary net position
Contributions—employer $ 49,045$ 48,667
Contributions—employee 35,98136,306
Net investment income 34,230102,910
Benefit payments, including refunds of employee
contributions (46,131)-
Pension plan administrative expense (1,233)-
Other changes (635)(24,446)
Net change in plan fiduciary net position 71,257163,437
Plan fiduciary net position—beginning 906,189742,752
Plan fiduciary net position—ending (b) $ 977,446$ 906,189
Town’s net pension liability (asset)—ending (a) –
(b) $ 457,898$ 424,138
Plan fiduciary net position as a percentage of the
total pension liability 68.10%68.12%
Covered payroll $ 430,892$ 456,107
Town’s net pension liability (asset) as a percentage
of covered payroll 106.27%92.99%
See accompanying notes to pension plan schedules.
84
85
86
87
88
TOWN OF MARANA, ARIZONA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF AGENT OPEB PLANS’ FUNDING PROGRESS
JUNE 30, 2016
Note 1 – Change in accounting principle
For the year ended June 30, 2016, the Town implemented the provisions of GASB Statement No. 82,
The statement changed the measure of payroll that is required to be presented in required
supplementary information from covered-employee payroll to covered payroll. Accordingly, payroll amounts
presented in the pension plan schedules and related ratios for prior periods have been restated.
Note 2 - Actuarially Determined Contribution Rates
Actuarial determined contribution rates for PSPRS and CORP are calculated as of June 30 two years prior
to the end of the fiscal year in which contributions are made. The actuarial methods and assumptions used
to establish the contribution requirements are as follows:
Actuarial cost method Entry age normal
Amortization method Level percent closed for unfunded actuarial accrued
liability, open for excess
Remaining amortization period 22 years for unfunded actuarial accrued liability, 20 years
for excess
Asset valuation method 7-year smoothed market value; 80%/120% market
corridor
Actuarial assumptions:
Investment rate of return In the 2013 actuarial valuation, the investment rate of
return was decreased from 8.0% to 7.85%
Projected salary increases In the 2014 actuarial valuation, projected salary increases
were decreased from 4.5%–8.5% to 4.0%–8.0% for
PSPRS and from 4.5%–7.75% to 4.0%–7.25% for CORP.
In the 2013 actuarial valuation, projected salary increases
were decreased from 5.0%–9.0% to 4.5%–8.5% for
PSPRS and from 5.0%–8.25% to 4.5%–7.75% for CORP.
Wage growth In the 2014 actuarial valuation, wage growth was
decreased from 4.5% to 4.0% for PSPRS and CORP. In
the 2013 actuarial valuation, wage growth was decreased
from 5.0% to 4.5% for PSPRS and CORP
Retirement age Experience-based table of rates that is specific to the type
of eligibility condition. Last updated for the 2012 valuation
pursuant to an experience study of the period July 1, 2006
- June 30, 2011.
Mortality RP-2000 mortality table (adjusted by 105% for both males
and females)
89
TOWN OF MARANA, ARIZONA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF AGENT OPEB PLANS’ FUNDING PROGRESS
JUNE 30, 2016
Health Insurance Premium Benefit
Unfunded UAAL
actuarial
(funding
accrued excess)
liability as a
Actuarial Actuarial (UAAL) Annual
percentage
value of accrued (funding Funded covered of covered
Actuarial assets liability excess) ratio payroll payroll
Valuation Date (a) (b) (b) – (a) (a)/(b) (c)
(b) – (a)/c)
PSPRS
6/30/15 $ 724,917 $ 607,586$ (117,331)119.31%$ 4,900,569 0.00%
6/30/14 645,386 651,2075,82199.11%4,638,418 0.13%
6/30/13 - 651,978651,9780%4,498,048 14.49%
CORP Dispatchers
6/30/15 $ 35,178 $ 47,755$ 12,57773.66%$ 430,892 2.92%
6/30/14 30,453 44,11113,65869.04%456,104 2.99%
6/30/13 - 38,20838,2080%443,980 8.61%
See accompanying notes to schedule of agent OPEB plans’ funding progress.
90
TOWN OF MARANA, ARIZONA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO SCHEDULE OF AGENT OPEB PLANS’ FUNDING PROGRESS
JUNE 30, 2016
Note 1 – Factors That Affect the Identification of Trends
Beginning in fiscal year 2014, PSPRS and CORP established separate funds for pension benefits and
health insurance premium benefits. Previously, the plans recorded both pension and health
insurance premium contributions in the same Pension Fund. During fiscal year 2014, the plans
transferred prior-year health insurance premium benefit contributions that exceeded benefit
payments from each plan’s Pension Fund to the new Health Insurance Fund.
91
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92
COMBINING AND INDIVIDUAL
FUND FINANCIAL STATEMENTS
AND SCHEDULES
93
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94
OTHER MAJOR GOVERNMENTAL FUNDS
SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES – BUDGET AND ACTUAL
95
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96
Budgeted Amounts
Variance -
Positive
OriginalFinalActual(Negative)
Special assessments$2,034,816$2,034,816$2,128,613$93,797
2,034,8162,034,8162,128,61393,797
Debt service -
Principal retirement1,240,0001,240,0001,319,000(79,000)
Interest and fiscal charges794,816794,816792,3932,423
2,034,8162,034,8162,111,393(76,577)
--17,22017,220
458,760458,760
$475,980$475,980
$-$-
97
PAG Capital
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Intergovernmental$18,690,634$18,690,634$7,168,697$(11,521,937)
Miscellaneous--100100
18,690,63418,690,6347,168,797(11,521,837)
Capital outlay18,690,63418,690,6346,934,17111,756,463
18,690,63418,690,6346,934,17111,756,463
--234,626234,626
Transfers in--171,846171,846
Transfers out--(78,390)(78,390)
--93,45693,456
--328,082328,082
--(687,865)(687,865)
--(359,783)(359,783)
98
NON-MAJOR GOVERNMENTAL FUNDS
99
Total
Non-Major
SpecialGovernmental
RevenueCapital ProjectsDebt ServiceFunds
Cash and cash equivalents$3,767,291$30,820,399$5,081,056$39,668,746
Taxes receivable-1581,3131,471
Accounts receivable3,683--3,683
Interest receivable-25,742725,749
Development agreement receivable-171,364-171,364
Due from governments324,4252,215,073-2,539,498
Prepaid items1,8511,382-3,233
Restricted cash and investments-1,117,3865,606,9876,724,373
$4,097,250$34,351,504$10,689,363$49,138,117
Accounts payable$213,934$1,467,481$-$1,681,415
Accrued payroll and employee benefits33,2916,176-39,467
Due to other funds-165,157-165,157
Deposits held for others-75,758646,662722,420
247,2251,714,572646,6622,608,459
Unavailable revenue1,870491,813-493,683
1,870491,813-493,683
Fund balances:
Nonspendable1,8511,382-3,233
Restricted3,846,30432,308,89410,042,70146,197,899
Unassigned-(165,157)-(165,157)
3,848,15532,145,11910,042,70146,035,975
$4,097,250$34,351,504$10,689,363$49,138,117
100
Total
Non-Major
SpecialGovernmental
RevenueCapital ProjectsDebt ServiceFunds
Sales tax$1,068,554$10,192,489$-$11,261,043
Property tax-62,076427,193489,269
Intergovernmental 1,027,576578,050-1,605,626
Licenses, fees & permits-1,774,478-1,774,478
Fines, forfeitures & penalties 170,624--170,624
Contributions-701,480421,1921,122,672
Investment income 8,844109,061339118,244
Miscellaneous 9,0211,425-10,446
2,284,61913,419,059848,72416,552,402
Current -
General government 769,961192,259-962,220
Public safety 1,025,130--1,025,130
Highways and streets-43,651-43,651
Economic and community development 339,634--339,634
Culture and recreation-162,540-162,540
Capital outlay-4,142,718-4,142,718
Debt service -
Principal retirement--2,673,0002,673,000
Interest and fiscal charges--3,419,8453,419,845
2,134,7254,541,1686,092,84512,768,738
149,8948,877,891(5,244,121)3,783,664
Transfers in-78,3906,248,2366,326,626
Transfers out-(2,261,704)-(2,261,704)
-(2,183,314)6,248,2364,064,922
149,8946,694,5771,004,1157,848,586
3,698,26125,450,5429,038,58638,187,389
$3,848,155$32,145,119$10,042,701$46,035,975
101
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102
NON-MAJOR SPECIAL REVENUE FUNDS
Community Development Grant Fund (CDBG) – This fund accounts for the CDBG program
which provides resources to address community development needs
Affordable Housing Fund – This revolving fund accounts for resources utilized on affordable
housing projects and programs.
Bed Tax Fund – This fund accounts for the collection of the discriminatory portion of bed tax
revenues which funds economic development and tourism initiatives.
Judicial Collection Enhancement Fund – This fund accounts for resources required to
improve, maintain and enhance the ability to collect and manage monies assessed or received
by the courts including restitution, child support, fines and civil penalties; and to improve court
automation projects likely to improve case processing or the administration of justice.
Fill-the-Gap Fund – This fund accounts for local Fill-the-Gap resources which shall be used to
improve, maintain and enhance the ability to collect and manage monies assessed or received
by the courts, to improve court automation and to improve case processing or the
administration of justice.
Local Technology Fund – This fund accounts for resources required to fund local or
collaborative technology improvement projects and programs.
Other Special Revenue Fund – Includes all other grant related programs and projects.
103
Community
DevelopmentAffordable
Block GrantHousingBed Tax
Cash and cash equivalents$23,635$217,939$546,119
Accounts receivable---
Due from governments40,262-108,952
Prepaid--1,626
$63,897$217,939$656,697
Accounts payable$3,083$47,884
$-
Accrued payroll and employee benefits6,366-323
9,449-48,207
Unavailable revenue665--
665--
Nonspendable--1,626
Restricted53,783217,939606,864
53,783217,939608,490
$63,897$217,939$656,697
104
Judicial
CollectionLocalOther Special
EnhancementFill-the-GapTechnologyRevenue FundTotals
$135,742$79,677$846,456$1,917,723$3,767,291
-2,030-1,6533,683
---175,211324,425
---2251,851
$135,742$81,707$846,456$2,094,812$4,097,250
$-$26$162,941$213,934
$-
--1,78024,82233,291
--1,806187,763247,225
---1,2051,870
---1,2051,870
---2251,851
135,74281,707844,6501,905,6193,846,304
135,74281,707844,6501,905,8443,848,155
$135,742$81,707$846,456$2,094,812$4,097,250
105
CommunityJudicial
DevelopmentAffordableCollection
Block GrantHousingBed TaxEnhancement
Sales taxes$1,068,554
$-$-$-
Intergovernmental106,029---
Fines, forfeitures & penalties---11,432
Investment income----
Miscellaneous-2,219--
106,0292,2191,068,55411,432
Current -
General government--721,442-
Public safety----
Economic and community development104,477-235,157-
104,477-956,599-
1,5522,219111,95511,432
1,5522,219111,95511,432
52,231215,720496,535124,310
$53,783$217,939$608,490$135,742
106
LocalOther Special
Fill-the-GapTechnologyRevenue FundTotals
$-$1,068,554
$-$-
--921,5471,027,576
6,733103,25949,200170,624
--8,8448,844
--6,8029,021
6,733103,259986,3932,284,619
-44,7813,738769,961
--1,025,1301,025,130
---339,634
-44,7811,028,8682,134,725
6,73358,478(42,475)149,894
6,73358,478(42,475)149,894
74,974786,1721,948,3193,698,261
$81,707$844,650$1,905,844$3,848,155
107
Community Development Block Grant Fund
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Intergovernmental$215,000$215,000$106,029$(108,971)
215,000215,000106,029(108,971)
Current -
Economic and community development215,000215,000104,477110,523
215,000215,000104,477110,523
--1,5521,552
--52,23152,231
$53,783$53,783
$-$-
108
Affordable Housing Revolving Fund
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Miscellaneous$100,000$100,000$2,219$(97,781)
100,000100,0002,219(97,781)
Current -
Economic and community development70,00070,000-70,000
70,00070,000-70,000
30,00030,0002,219(27,781)
--215,720215,720
$30,000$30,000$217,939$187,939
109
Bed Tax Fund
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Sales taxes$925,450$925,450$1,068,554$143,104
925,450925,4501,068,554143,104
Current -
General government664,447668,447721,442(52,995)
Economic and community development267,129263,796235,15728,639
931,576932,243956,599(24,356)
(6,126)(6,793)111,955118,748
--496,535496,535
$(6,126)$(6,793)$608,490$615,283
110
Judicial Collection Enhancement Fund
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Fines, forfeitures & penalties$15,000$15,000$11,432$(3,568)
15,00015,00011,432(3,568)
Current -
General government72,00072,000-72,000
Capital outlay10,00010,000-10,000
82,00082,000-82,000
(67,000)(67,000)11,43278,432
--124,310124,310
$(67,000)$(67,000)$135,742$202,742
111
Fill-the-Gap
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Fines, forfeitures & penalties$4,000$4,000$6,733$2,733
4,0004,0006,7332,733
Current -
General government34,50034,500-34,500
34,50034,500-34,500
(30,500)(30,500)6,73337,233
--74,97474,974
$(30,500)$(30,500)$81,707$112,207
112
Local Technology Fund
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Fines, forfeitures & penalties$140,000$140,000$103,259$(36,741)
140,000140,000103,259(36,741)
Current -
General government475,408475,40844,781430,627
475,408475,40844,781430,627
(335,408)(335,408)58,478393,886
--786,172786,172
$(335,408)$(335,408)$844,650$1,180,058
113
Other Special Revenue Fund
Variance -
Positive
Original BudgetFinal BudgetActual(Negative)
Intergovernmental$1,116,078$1,116,078$921,547$(194,531)
Fines, forfeitures & penalties50,00050,00049,200(800)
Contributions1,0001,000-(1,000)
Investment income1,6151,6158,8447,229
Miscellaneous20,00020,0006,802(13,198)
1,188,6931,188,693986,393(202,300)
Current -
General government1,001,000941,0003,738937,262
Public safety1,596,0671,596,0671,025,130570,937
Economic and community development-60,000-60,000
2,597,0672,597,0671,028,8681,568,199
(1,408,374)(1,408,374)(42,475)1,365,899
Transfer in100,000100,000-(100,000)
100,000100,000-(100,000)
(1,308,374)(1,308,374)(42,475)1,265,899
1,948,3191,948,319
$(1,308,374)$(1,308,374)$1,905,844$3,214,218
114
NON-MAJOR CAPITAL PROJECTS FUND
Capital Projects Funds are created to account for the purchase or construction of major capital
facilities which are not financed by the general, enterprise, or special revenue funds.
Northwest (Benefit Area) Transportation Impact Fees – This fund accounts for the
financing and construction of transportation projects that are defined within the northwest
benefit area.
Northeast (Benefit Area) Transportation Impact Fees – This fund accounts for the
financing and construction of transportation projects that are defined within the northeast
benefit area.
South (Benefit Area) Transportation Impact Fees – This fund accounts for the financing
and construction of transportation projects that are defined within the south benefit area.
Transportation– This fund accounts for the financing and construction of transportation
capacity improvement projects.
Park Impact Fees Fund – This fund accounts for park impact fees collected by the Town and
utilized for authorized capital improvements.
Pima County Bond Capital Fund – This fund accounts for the financing and construction of
projects funded through Pima County Bond program.
Sales Tax Capital Fund – This fund accounts for sales tax proceeds which are used for
authorized capital improvements.
Downtown Reinvestment Fund – This fund accounts for sales tax proceeds which are used
for authorized capital improvements in the Downtown area.
Other Capital Projects Fund – Includes all other capital related funding and projects.
Gladden Farms Capital Fund – This fund accounts for the proceeds from the sale of general
obligation bonds which are used for authorized capital improvements.
Vanderbilt Farms Capital Fund – This fund accounts for the proceeds from property tax
revenues to be used for authorized capital improvements.
Saguaro Springs Capital Fund – This fund accounts for the financing and construction of
authorized capital improvements.
115
NorthwestNortheastSouth
TransportationTransportationTransportation
Impact FeesImpact FeesImpact FeesTransportation
Cash and cash equivalents$1,524,892$2,927,828$2,998,000$9,716,151
Taxes receivable----
Interest receivable--1,60719,564
Development agreement receivable----
Due from governments---631,723
Prepaid items----
Restricted cash----
$1,524,892$2,927,828$2,999,607$10,367,438
Accounts payable$15,888$16,797$503$466,137
Accrued payroll and employee benefits---6,176
Due to other funds----
Unearned revenue----
Deposits held for others----
15,88816,797503472,313
Unavailable revenue----
----
Nonspendable----
Restricted1,509,0042,911,0312,999,1049,895,125
Unassigned----
1,509,0042,911,0312,999,1049,895,125
$1,524,892$2,927,828$2,999,607$10,367,438
116
Gladden
Park ImpactPima CountySales TaxDowntownOther CapitalFarms
FeesBond CapitalCapitalReinvestmentProjectsCapital
$4,406,730$4,167,759$356,186$4,089,900
$-$511,317
-----158
--4,561-10-
----171,364-
--610,25128,236944,863-
----1,382-
----1,020,56896,818
$4,406,730$4,782,571$384,422$6,228,087
$-$608,293
$160,023$150,257$657,876
$-$-$-
------
-165,157----
------
----72,373-
160,023165,157150,257-730,249-
----491,813-
----491,813-
----1,382-
4,246,707-4,632,314384,4225,004,643608,293
-(165,157)----
4,246,707(165,157)4,632,314384,4225,006,025608,293
$4,406,730$-$4,782,571$384,422$6,228,087
$608,293
117
VanderbiltSaguaro
FarmsSprings
CapitalCapitalTotals
$30,820,399
$52,792$68,844
--158
--25,742
--171,364
--2,215,073
--1,382
--1,117,386
$34,351,504
$52,792$68,844
$1,467,481
$-$-
--6,176
--165,157
---
-3,38575,758
-3,3851,714,572
--$491,813
--491,813
--$1,382
52,79265,45932,308,894
--(165,157)
52,79265,45932,145,119
$34,351,504
$52,792$68,844
118
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119
NorthwestNortheastSouth
TransportationTransportationTransportation
Impact FeesImpact FeesImpact FeesTransportation
Sales tax$-$-$-$5,162,337
Property tax----
Intergovernmental----
Licenses, fees & permits-388,631620,236-
Contributions----
Investment income 68,6308,57458,791
Miscellaneous revenue---1,425
6397,261628,8105,222,553
Current -
General government---192,217
Highways and streets---35,140
Culture and recreation----
Capital outlay 178,230-3,7201,493,521
178,230-3,7201,720,878
(178,224)397,261625,0903,501,675
Transfers in34,116--44,274
Transfers out-(603,947)(623,120)(1,034,626)
34,116(603,947)(623,120)(990,352)
(144,108)(206,686)1,9702,511,323
1,653,1123,117,7172,997,1347,383,802
$1,509,004$2,911,031$2,999,104$9,895,125
120
Gladden
Park ImpactPima CountySales TaxDowntownOther CapitalFarms
FeesBond CapitalCapitalReinvestmentProjectsCapital
$4,775,944$254,208$-
$-$-$-
-----51,449
----578,050-
588,180---177,431-
----701,480-
11,659-12,542-8,543290
------
599,839-4,788,486254,2081,465,50451,739
------
----8,511-
162,540----
904,605-230,950-1,331,692-
1,067,145-230,950-1,340,203-
(467,306)-4,557,536254,208125,30151,739
------
----(11)-
----(11)-
(467,306)-4,557,536254,208125,29051,739
4,714,013(165,157)74,778130,2144,880,735556,554
$4,246,707$(165,157)$4,632,314$384,422$5,006,025
$608,293
121
VanderbiltSaguaro
FarmsSprings
CapitalCapitalTotals
$10,192,489
$-$-
2,7267,90162,076
--578,050
--1,774,478
--701,480
26-109,061
--1,425
2,7527,90113,419,059
42-192,259
--43,651
--162,540
--4,142,718
42-4,541,168
2,7107,9018,877,891
--78,390
--(2,261,704)
--(2,183,314)
2,7107,9016,694,577
50,08257,55825,450,542
$32,145,119
$52,792$65,459
122
Northwest Transportation Impact Fees
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Licenses, fees & permits$25,000$25,000$(25,000)
$-
Investment income--66
25,00025,0006(24,994)
Capital outlay1,461,4641,461,464178,2301,283,234
1,461,4641,461,464178,2301,283,234
(1,436,464)(1,436,464)(178,224)1,258,240
Transfers in--34,11634,116
--34,11634,116
(1,436,464)(1,436,464)(144,108)1,292,356
1,653,1121,653,112
$(1,436,464)$(1,436,464)$1,509,004$2,945,468
123
Northeast Transportation Impact Fees
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Licenses, fees & permits$338,585$338,585$388,631$50,046
Investment income--8,6308,630
338,585338,585397,26158,676
Capital outlay728,020728,020-728,020
728,020728,020-728,020
(389,435)(389,435)397,261786,696
Transfers out(603,947)(603,947)(603,947)-
(603,947)(603,947)(603,947)-
(993,382)(993,382)(206,686)786,696
3,117,7173,117,717
$(993,382)$(993,382)$2,911,031$3,904,413
124
South Transportation Impact Fees
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Licenses, fees & permits$728,543$728,543$620,236$(108,307)
Investment income--8,5748,574
728,543728,543628,810(99,733)
Capital outlay--3,720(3,720)
--3,720(3,720)
728,543728,543625,090(103,453)
Transfers out(623,120)(623,120)(623,120)-
(623,120)(623,120)(623,120)-
105,423105,4231,970(103,453)
2,997,1342,997,134
$105,423$105,423$2,999,104$2,893,681
125
Transportation Capital
Variance -
Positive
Original BudgetFinal BudgetActual(Negative)
Sales taxes$5,242,050$5,242,050$5,162,337$(79,713)
Investment income--58,79158,791
Miscellaneous income--1,4251,425
5,242,0505,242,0505,222,553(19,497)
Current -
General government--192,217(192,217)
Highways and streets--35,140(35,140)
Capital outlay8,271,0138,271,0131,493,5216,777,492
8,271,0138,271,0131,720,8786,550,135
(3,028,963)(3,028,963)3,501,6756,530,638
Transfers in--44,27444,274
Transfers out
(862,780)(862,780)(1,034,626)(171,846)
(862,780)(862,780)(990,352)(127,572)
(3,891,743)(3,891,743)2,511,3236,403,066
7,383,8027,383,802
$(3,891,743)$(3,891,743)$9,895,125$13,786,868
126
Park Impact Fees
Variance -
Positive
Original BudgetFinal BudgetActual(Negative)
Licenses, fees & permits$751,048$751,048$588,180$(162,868)
Investment income--11,65911,659
751,048751,048599,839(151,209)
Current -
Culture and recreation
65,00065,000162,540(97,540)
Capital outlay5,807,7895,807,789904,6054,903,184
5,872,7895,872,7891,067,1454,805,644
(5,121,741)(5,121,741)(467,306)4,654,435
4,714,0134,714,013
$(5,121,741)$(5,121,741)$4,246,707$9,368,448
127
Pima County Bond Capital
Variance -
Positive
Original BudgetFinal BudgetActual(Negative)
Intergovernmental$-$-
$-$-
----
----
Capital outlay
----
----
(165,157)(165,157)
$(165,157)$(165,157)
$-$-
128
Sales Tax Capital
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Sales tax$4,800,000$4,800,000$4,775,944$(24,056)
Investment income--12,54212,542
4,800,0004,800,0004,788,486(11,514)
Capital outlay4,500,0004,500,000230,9504,269,050
4,500,0004,500,000230,9504,269,050
300,000300,0004,557,5364,257,536
74,778(74,778)
$300,000$300,000$4,632,314$4,182,758
129
Downtown Reinvestment
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Sales tax$125,000$125,000254,208129,208$
125,000125,000254,208129,208
Economic and community development185,319185,319-185,319
185,319185,319-185,319
(60,319)(60,319)254,208314,527
130,214(130,214)
$(60,319)$(60,319)$384,422$184,313
130
Other Captial Projects
Variance -
Positive
Original BudgetFinal BudgetActual(Negative)
Intergovernmental$10,335,028$10,335,028$578,050$(9,756,978)
Licenses, fees & permits--177,431177,431
Contributions410,000410,000701,480291,480
Investment income--8,5438,543
10,745,02810,745,0281,465,504(9,279,524)
Highways and streets35,00035,0008,51126,489
Capital outlay11,552,56311,552,5631,331,69210,220,871
11,587,56311,587,5631,340,20310,247,360
(842,535)(842,535)125,301967,836
Transfers in----
Transfers out--(11)(11)
--(11)(11)
(842,535)(842,535)125,290967,825
4,880,7354,880,735
$(842,535)$(842,535)$5,006,025$5,848,560
131
Gladden Farms Community Facilities District Capital
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Property tax$51,335$51,335$51,449$114
Investment income--290290
51,33551,33551,739404
Current -
228,365228,365-228,365
General government
Capital outlay900,000900,000-900,000
Debt service -
Bond issuance costs100,000100,000-100,000
1,228,3651,228,365-1,228,365
(1,177,030)(1,177,030)51,7391,228,769
1,000,0001,000,000-(1,000,000)
Bond proceeds
1,000,0001,000,000-(1,000,000)
(177,030)(177,030)51,739228,769
556,554556,554
$(177,030)$(177,030)$608,293$785,323
132
Vanderbilt Farms Capital
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Property tax$2,727$2,727$2,726$(1)
Contributions27,50027,500-(27,500)
Investment income--2626
30,22730,2272,752(27,475)
Current -
General government32,56632,5664232,524
32,56632,5664232,524
(2,339)(2,339)2,7105,049
50,08250,082
$(2,339)$(2,339)$52,792$55,131
133
Saguaro Springs Capital
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Property tax$73,865$73,865$7,901$(65,964)
Contributions318,135318,135-(318,135)
392,000392,0007,901(384,099)
Current -
Economic and community development442,000442,000-442,000
Capital outlay4,000,0004,000,000-4,000,000
Debt service -
Bond issuance costs450,000450,000-450,000
4,892,0004,892,000-4,892,000
(4,500,000)(4,500,000)7,9014,507,901
4,500,0004,500,000-(4,500,000)
Bond proceeds
4,500,0004,500,000-(4,500,000)
--7,9017,901
57,55857,558
$65,459$65,459
$-$-
134
NON-MAJOR DEBT SERVICE FUNDS
Debt Service Funds are created to account for the accumulation of resources for, and the
payment of, general long-term debt principal and interest.
2004 Bond Debt Service Fund – This fund accounts for the accumulation of resources and
payment of principal and interest on the series 2004 revenue bonds. The Town has pledged
Town sales tax revenue, state shared revenues, licenses, fees and permits revenue, and fines,
forfeitures and penalties revenue to make the required payments for this series.
2008 Bond Debt Service Fund – This fund accounts for the accumulation of resources and
payment of principal and interest on the series 2008 revenue bonds. The Town has pledged
Town sales tax revenue, state shared revenues, licenses, fees and permits revenue, and fines,
forfeitures and penalties revenue to make the required payments for this series.
2013 Bond Debt Service Fund – This fund accounts for the accumulation of resources and
payment of principal and interest on the series 2013 revenue bonds. The Town has pledged
Town sales tax revenue and state shared revenues to make the required payments for this
series.
2014 Bond Debt Service Fund – This fund accounts for the accumulation of resources and
payment of principal and interest on the series 2014 revenue bonds. The Town has pledged
Town sales tax revenue and state shared revenues to make the required payments for this
series.
Gladden Farms Debt Service Fund – This fund accounts for the accumulation of resources
and payment of principal and interest on the Gladden Farms general obligation bonds.
135
2004 Bond2008 Bond Debt
Debt ServiceService
Cash and cash equivalents$2,259,544
$-
Property taxes receivable--
Interest receviable--
Restricted cash and investments-4,582,158
$6,841,702
$-
Liabilities:
Due to other funds-
$-
Deposits held for others--
--
Fund balances:
Reserved for:
Restricted-6,841,702
Unassigned--
-6,841,702
$-$6,841,702
136
2013 Bond2014 BondOther DebtGladden Farms
Debt ServiceDebt ServiceServiceDebt ServiceTotals
$2,305,362$458,535$45,514$12,101$5,081,056
---1,3131,313
---77
---1,024,8295,606,987
$2,305,362$458,535$45,514$1,038,250$10,689,363
$-
$-$-$-$-
---646,662646,662
---646,662646,662
2,305,362458,53545,514391,58810,042,701
-----
2,305,362458,53545,514391,58810,042,701
$2,305,362$458,535$45,514$1,038,250$10,689,363
137
2004 Bond2008 Bond Debt
Debt ServiceService
Property Taxes$-
$-
Contributions--
Investment income-13
-13
Debt service -
Principal retirement-1,370,000
Interest and fiscal charges-1,272,276
-2,642,276
-(2,642,263)
Transfers in10,3042,636,288
10,3042,636,288
10,304(5,975)
(10,304)6,847,677
$6,841,702
$-
138
2013 Bond2014 BondOther DebtGladden Farms
Debt ServiceDebt ServiceServiceDebt ServiceTotals
$427,193$427,193
$-$-$-
---421,192421,192
-252-74339
-252-848,459848,724
700,000353,000-250,0002,673,000
1,523,225163,071-461,2733,419,845
2,223,225516,071-711,2736,092,845
(2,223,225)(515,819)-137,186(5,244,121)
3,064,725536,919--6,248,236
3,064,725536,919--6,248,236
841,50021,100-137,1861,004,115
1,463,862437,43545,514254,4029,038,586
$2,305,362$458,535$45,514$391,588$10,042,701
139
2004 Bond Debt Service
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Property Taxes
$-$-$-$-
Contributions----
Investment income----
----
Debt service -
Principal retirement----
Interest and fiscal charges----
----
----
Transfers in--10,304(10,304)
--10,304(10,304)
--10,30410,304
--(10,304)(10,304)
$-$-
$-$-
140
2008 Bond Debt Service
Variance -
Positive
OriginalFinalActual(Negative)
Property Taxes
$-$-$-$-
Contributions----
Investment income--1313
--1313
Debt service -
Principal retirement1,370,0001,370,0001,370,000-
Interest and fiscal charges1,269,2751,269,2751,272,276(3,001)
2,639,2752,639,2752,642,276(3,001)
(2,639,275)(2,639,275)(2,642,263)(2,988)
Transfers in2,639,2752,639,2752,636,288(2,987)
2,639,2752,639,2752,636,288(2,987)
--(5,975)(5,975)
--6,847,6776,847,677
$6,841,702$6,841,702
$-$-
141
2013 Bond Debt Service
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Property Taxes
$-$-$-$-
Contributions----
Investment income----
----
Debt service -
Principal retirement700,000700,000700,000-
Interest and fiscal charges1,536,8751,536,8751,523,22513,650
2,236,8752,236,8752,223,22513,650
(2,236,875)(2,236,875)(2,223,225)13,650
Transfers in1,746,0131,746,0133,064,725(1,318,712)
1,746,0131,746,0133,064,725(1,318,712)
(490,862)(490,862)841,5001,332,362
--1,463,8621,463,862
$(490,862)$(490,862)$2,305,362$2,796,224
142
2014 Bond Debt Service
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Property Taxes
$-$-$-$-
Contributions----
Investment income--252252
--252252
Debt service -
Principal retirement353,000353,000353,000-
Interest and fiscal charges161,071161,071163,071(2,000)
514,071514,071516,071(2,000)
(514,071)(514,071)(515,819)(1,748)
Transfers in514,071514,071536,919(22,848)
514,071514,071536,919(22,848)
--21,10021,100
--437,435437,435
$458,535$458,535
$-$-
143
Gladden Farms Debt Service
Variance -
OriginalPositive
BudgetFinal BudgetActual(Negative)
Property Taxes$426,267$426,267$427,193$926
Contributions275,005275,005421,192146,187
Investment income--7474
701,272701,272848,459147,187
Debt service -
Principal retirement250,000250,000250,000-
Interest and fiscal charges451,272451,272461,273(10,001)
701,272701,272711,273(10,001)
--137,186137,186
Transfers in----
----
--137,186137,186
--254,402254,402
$-$-$391,588$391,588
144
STATISTICAL INFORMATION
145
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146
Financial presentations included in the Statistical Section provide data and information on the financial, physical, a
and economic characteristics of the Town of Marana. The following schedules cover multiple fiscal years and
provide users with a broader and more complete understanding of the Town and its financial affairs and economic
condition. They also present detailed information as a context for understanding this year's financial statements,
note disclosures, and required supplementary information.
SchedulePage
Financial Trends
These schedules contain trend information to help users understand and assess how the Town's
financial position has changed over time.
Net Position by Component - Last Ten Fiscal Years1148
Changes in Net Position - Last Ten Fiscal Years2150
Governmental Activities Tax Revenues by Source - Last Ten Years3154
Fund Balances of Governmental Funds - Last Ten Fiscal Years4155
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years5156
Revenue Capacity
These schedules contain information to help users understand and assess the Town's local revenue
source, the property tax.
Assessed Value, Estimated Actual Value and Assessment Ratios of Taxable Property -6158
Last Ten Years
Property Tax Rates - Direct and Overlapping Governments - Last Ten Years7159
Principal Property Taxpayers - Current Year and Eight Years Ago8160
Property Tax Levies and Collections - Last Ten Fiscal Years9161
Tangerine Farms Road Improvement District Active Assessments10162
Debt Capacity
These schedules present information to help users understand and assess the Town's debt burden
and its ability to service current debt and to issue additional debt in the future.
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years11170
Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years12171
Direct and Overlapping Governmental Activities Debt13172
Legal Debt Margin Information14173
Pledged-Revenue Coverage - Last Ten Fiscal Years15174
Demographic and Economic Information
These schedules present economic and demographic indicators to help users understand the
environment within which the Town's financial activities take place.
Demographic and Economic Statistics - Last Ten Fiscal Years16175
Principal Employers - Current Year and Eight Years Ago17176
Operating Information
These schedules present information to help users understand the Town's operations and resources
as well as to provide a context for understanding and assessing the Town's economic condition.
Full-time Equivalent City Government Employees by Function - Last Ten Fiscal Years18177
Other Information
These schedules present information to help users understand potential for growth and
economic opportunities within the town.
Sales Tax by Industry - Last Ten Years19178
Excise Tax Collections - Last Ten Years20179
Principal Retail and Contracting Sales Taxpayers - Current Year and Nine Years Ago21180
Single Family Residential Permits Issued - Last Ten Years22181
Capital Assets Statistics by Function23182
147
2007200820092010
Governmental activities
Net investment in capital assets
$159,963$184,396$174,286$193,721
Restricted59,31325,46545,72725,459
Unrestricted(279)22,32039,91639,929
Total governmental activities net position218,998232,181259,929259,109
Business-type activities
Net investment in capital assets25,52232,34141,64344,310
Restricted-1,297--
Unrestricted966(1,242)(4,714)(5,813)
Total business-type activities net position26,48832,39636,92938,497
Primary government
Net investment in capital assets185,485216,737215,929238,031
Restricted59,31326,76245,72725,459
Unrestricted68721,07835,20234,116
Total primary government net position
$245,485$264,577$296,858$297,606
148
201120122013201420152016
(as restated)
$196,326$194,287$184,949$189,171$190,297$193,845
28,13629,00462,43758,82036,41843,127
38,88939,9111,384(283)(4,283)(6,492)
263,351263,202248,770247,708222,432230,480
42,148112,528111,045109,111109,649112,357
73146219293365365
(2,683)(17,519)(2,677)(208)9841,313
39,53895,155108,587109,196110,998114,035
238,474306,815295,994298,282299,946306,202
28,20929,15062,65659,11336,78343,492
36,20622,392(1,293)(491)(3,299)(5,179)
$302,889$358,357$357,357$356,904$333,430$344,515
149
2007200820092010
Governmental activities:
General government
$10,134$12,925$9,565$14,638
Development & planning services3,442-1,304-
Town Attorney *--917-
Public safety9,18711,21512,25510,675
Magistrate court *--946-
Highways and streets15,89810,2696,73414,986
Health & Welfare **-130112102
Culture & recreation3,5573,9784,8183,943
Economic & community development ***3758,64312,7514,835
Interest on long-term debt2,2972,5002,530865
Total governmental activities expenses44,89149,66051,93250,044
Business-type activities:
Airport1,0281,1962,5463,803
WastewaterN/AN/AN/AN/A
Water3,2273,2761,1781,136
Total business-type activities expenses4,2554,4723,7244,939
Total primary government expenses
$49,146$54,132$55,656$54,983
Governmental activities:
Charges for services:
General government
$1,108$899$918$939
Development & planning services4,718---
Town attorney----
Public safety19---
Magistrate court----
Highways and streets ****5---
Culture and recreation208200315211
Economic & community development2,3801,7401,974
Operating grants and contributions1,4044,7003,5374,221
Capital grants and contributions5,90414,59040,72511,618
Total government activities program revenues13,36522,76847,23518,963
Business-type activities:
Changes for services:
Airport185221227235
WastewaterN/AN/AN/AN/A
Water2,9052,9682,7183,035
Capital grants and contributions9,0736,8855,2693,489
Total business-type activity program revenues12,16310,0748,2146,759
Total primary government program revenues25,52832,84255,44925,722
Net (expense)/revenue
Governmental activities(31,525)(26,892)(4,697)(31,081)
Business-type activities7,9085,6024,4901,820
Total primary government net expense
$(23,618)$(21,290)$(207)$(29,261)
150
201120122013201420152016
$9,532$10,662$14,707$17,531
$10,643$10,833
------
------
9,04410,20611,77712,13414,32414,423
------
15,42517,23318,32719,05318,52222,659
86232323--
3,3352,1733,8313,1314,4333,422
4,5964,2584,1234,6914,7964,779
5,1734,7214,3124,5434,1063,962
48,30249,44751,92554,23760,88866,776
3,3921,1121,1791,1971,2891,829
N/A3,8312,5992,7563,4313,662
1,2733,0743,7795,2444,1504,405
4,6658,0177,5579,1978,8709,896
$59,482$63,434$69,758$76,672
$52,967$57,464
$975$941$4,490$4,787
$830$881
------
------
------
------
------
140134216200305265
2,2562,5133,9063,3864,5854,027
3,5553,2023,7474,4424,3604,508
14,9639,01712,37310,26811,28117,157
21,74415,74721,21719,23725,02130,744
238233239248239247
N/A2417308349331,016
3,1033,2813,4553,7664,1464,243
2,66960,2071,9582,5344,0155,214
6,01063,9626,3827,3829,33310,720
27,75479,70927,59926,61934,35441,464
(26,558)(33,699)(30,708)(35,000)(35,867)(36,032)
1,34555,944(1,175)(1,815)463824
$(31,883)$(36,815)$(35,404)$(35,208)
$(25,213)$22,245
151
2007200820092010
Governmental activities:
General revenues
City sales taxes
$30,900$27,173$22,404$21,662
Property taxes-460691623
Franchise fees-309315313
Highway Users/Local Transit Assistance Funding2,068---
State shared revenues6,8947,3977,2216,462
Intergovernmental4,810---
System development fees231---
Investment income (loss)4,4633,024595135
Miscellaneous2214591,227774
Gain on sale of assets----
Transfers470(160)(8)291
Total governmental activities50,05738,66132,44530,260
Business-type activities:
General revenues
Investment income-11081
Miscellaneous-372638
Transfers(470)1608(291)
Special item----
Total business-type activities(470)30742(252)
Total primary government49,58638,96832,48730,008
Governmental activities18,53111,76927,748(821)
Business-type activities7,4375,9094,5321,568
Total primary government
$25,968$17,678$32,280$747
* In prior fiscal years, 2003 through 2006, the functions of Town Attorney and Magistrate Court were reported
separately. However, both functions have been consolidated as part of the General Government function, as
per GeneralAccounting and Financial Reporting standards.
**In prior fiscal years, 2003 through 2008, programs and services offered by the Senior Center were included
in the function of Culture and Recreation. Effective fiscal year 2008, these programs and services are reported
under the function of Health and Welfare.
***In prior fiscal years, 2003 through 2007, the functions of Development and Planning Services and Economic
Development were reported separately. Effective fiscal year 2008, the functions were consolidated under
one function, Economic and Community Development.
In prior fiscal years, Highway Users Revenues and Local Transportation Assistance Funds were reported as general
revenues. Effective fiscal year 2008, these revenues are being reported as program revenues.
152
201120122013201420152016
$24,768$26,226$28,059$35,442
$22,948$24,539
584506447421442482
322333349377401447
------
5,7196,9437,7148,2738,8209,039
------
------
10597152171149173
814803737854813676
--36-116-
309329(15,912)(2,384)(404)(2,177)
30,80133,55018,29133,93838,39644,082
1121916
4119391919
(309)(329)15,9112,3844042,177
--(1,326)--
(304)(327)14,6062,4244322,212
30,49733,22332,89736,36238,82846,294
4,243(149)(12,417)(1,062)2,5298,049
1,04155,61713,4316098953,036
$1,014$(453)$3,424$11,085
$5,284$55,468
153
FiscalHighway User
YearSales TaxRevenue taxesTotal
2016$35,442$2,623$38,065
201528,0592,48430,458
201425,9582,28628,244
201324,6182,25726,875
201224,3002,06126,361
201122,8001,86924,669
201021,5781,80623,384
200922,7181,93624,654
200827,1732,03629,209
200730,9002,06832,968
154
155
156
157
Assessed
FiscalValue as a
YearLess: TaxTotal TaxableTotalEstimatedPercentage
EndedFiscalResidentialCommercialExempt RealAssessedDirect TaxActual Taxableof Actual
June 30YearPropertyPropertyPropertyValueRateValueValue
20172016/1719,250,176$$42,349$19,292,525$18,090,779$185,483,0359.8%
$2.8000
20162015/1618,273,6324,5361,227,50617,050,6622.8000173,938,0819.8%
20152014/1517,078,0104,3561,358,64015,723,7262.8000160,756,1419.8%
20142013/1416,175,5924,8801,354,22014,826,2522.8000150,182,0559.8%
20132012/1317,850,5314,1691,342,77816,511,9222.8000165,517,0389.9%
20122011/1218,920,21410,1261,338,91217,591,4282.8000176,255,76010.0%
20112010/1121,859,2417,0111,250,73720,615,5152.8000201,038,91910.0%
20102009/1023,437,9438,8381,189,51222,257,2692.8000215,989,17410.3%
20092008/0924,963,90522,810405,75624,580,9592.8000230,392,99410.3%
20082007/0819,649,92620,935251,95019,418,9112.8000174,652,52610.7%
SOURCE: Pima County Assessor's Office
NOTES:
1) The Town of Marana does not impose a property tax; principal property taxpayers represented above
reflect those properties within the boundaries of the Gladden Farms Community Facilities District,
which does impose a property tax.
2) The valuations shown are consistent with Gladden Farms CFD Property Tax Levy as adopted by the
board of superviosrs on the third Monday in August of each year.
158
159
20162007
PercentagePercentage
of Totalof Total
taxabletaxable
Full CashAssessedFull CashAssessed
ValueRankValueValueRankValue
Taxpayer
Gladden 25 LLC114.8%28256.0%
$1,138
AH4R 2014-1 Borrower LLC1,081214.1%
Smith Food & Drug Centers Inc953312.4%32446.9%
KB Home Tucson Inc900411.7%
Title Security Agency TR 201406-T825510.8%23464.9%
Weingarten Newquist LLC797610.4%22474.8%
Gigafish LLC66478.7%
Title Security Agency TR 201401-T49086.4%
Fidelity National Title TR 6042142795.6%
Mills Samuel Heber & Julie Ann CP/RS397105.2%
Fidelity National Title TR 302122,659156.3%
Fidelity National Title TR 6033835227.5%
Bank of America33937.2%
Fidelity National Title TR 6018314483.0%
Wells Fargo Bank National Assn8391.8%
First American Title TR 917079101.7%
Totals
$7,672$4,720
Notes:
1) The Town of Marana does not impose a property tax; principal property taxpayers represented above
reflect those properties within the boundaries of the Gladden Farms Community Facilities District,
which does impose a property tax.
Source: Pima County Assessor's Office - IS Dept
(Information System's Coordinator)
160
Collected within the Fiscal Year
of the LevyTotal Collections to Date
Fiscal Year
Ended JuneTotal Tax Levy forPercentagePercentage
30Fiscal YearAmountof LevyAmountof Levy
2016$48948599.18%48899.80%
201544043699.09%43899.55%
201441541199.04%41299.28%
201346245698.65%45698.65%
201249248999.39%49199.80%
201162356397.57%56397.57%
2010623623100.00%623100.00%
200968868198.98%68799.85%
200854453297.79%54399.82%
200728728699.70%287100.00%
Notes:
The Town does not impose a property tax; levies and collections presented above reflect assessments
directly related to the Gladden Farms Community Facilities District I and II, Vanderbilt, and Saguaro Springs.
Source: Pima County Treasurer's Office
161
162
163
164
165
166
167
168
169
TOWN OF MARANA
Schedule 11
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(Amounts expressed in thousands, except per capita amount)
Business-Type Activities
Governmental Activities
General Special Total Percentage
Fiscal Revenue Obligation Assessment Capital Revenue Loans Primary of Personal
Year Bonds(1)Bonds(2)Bonds(3)LeasesBondsPayableGovernmentIncome (4)Per Capita
2016$ 66,715$ 7,835$ 15,927$ -$ 1,214$ 3,634 95,325233.2% 2,307
2015 69,299 8,085 17,246 - 1,343 3,841 97,028237.3% 2,406
2014 71,659 8,325 18,488 - 1,343 4,042 100,641256.0% 2,628
2013 81,720 8,550 19,926 - - 4,265 111,076293.9% 3,022
2012 60,699 8,765 21,288 - - 4,480 94,848261.0% 2,645
2011 65,384 8,965 22,492 - - 4,586 101,013289.1% 2,931
2010 67,344 8,155 23,828 33 - 1,562.00 100,478299.0% 2,944
2009 67,975 8,335 24,823 75 - - 101,208313.3% 3,039
2008 29,225 8,385 - 115 - - 37,725151.6% 1,258
2007 30,460 5,355 - 154 - - 35,969134.7% 1,199
Notes:
(1) Presented net of original issuance discounts and premiums
(2) Bonds issued for Gladden Farms Facilities District fiscal year 2005, a component unit of the Town. Principal
debt payoff does not begin until fiscal year 2008.
(3) Bonds issued for Tangerine Farms Road Improvement District FY 2008, a component unit of the Town.
(4) Individual statistics not available for Marana, included in figures for Pima County and Tucson
Metropolitan area.
Source: US Census Bureau, Bureau of Economic Analysis
170
Less: AmountsPercentage of
GeneralAvailable inEstimated Actual
ObligationDebt ServiceTaxable Value ofPer
Fiscal YearBondsFundTotalpropertyCapita
2016$7,835$1,025$6,8100.17%16.9%
20158,0859007,1850.18%17.8%
20148,3258817,4440.19%19.4%
20138,5506897,8610.22%21.4%
20128,7658867,8790.21%22.0%
20118,7651,0667,6990.19%23.1%
20108,9659638,0020.24%26.7%
20098,3359577,3780.30%27.6%
20088,3859687,4170.38%32.1%
20075,3556224,7330.29%23.2%
Notes:
The Town of Marana does not impose a property tax; any property taxes presented in this report are
directly related to the Gladden Farms Community Facilities District, formed in fiscal year 2005.
171
Estimated
DebtPercentageEstimated Share of
OutstandingApplicableOverlapping Debt
Governmental Unit
State of ArizonaNoneN/ANone
Pima County$350,1355.03%$17,612
Pima County Community College DistrictNoneN/ANone
Pima County Flood Control DistrictNoneN/ANone
Northwest Fire District26,33041.48%10,922
Marana Unified School District No. 6112,87855.08%62,173
Total overlapping debt90,707
Gladden Farms Community Facilities District7,835100.00%7,835
Flowing Wells Unified School District No. 816,080100.00%16,080
Town of Marana *47,379100.00%47,379
Total direct debt$71,294
Total direct and overlapping debt$162,001
Notes:
* Presented net of original issuance discounts and premiums. Does not include the Municipal Property
Corporation municipal facilities revenue bonds outstanding in the aggregate principal amount of
$24,185,000. In addition, the above schedule does not include the Tangerine Farms Road Impovement
Special Assessment bonds outstanding in the amount of $15,927,000.
** The estimated percentage of debt applicable to the Town is calculated based on the Town's secondary
assessed valuation as a percentatge of the secondary assessed valuation of the overlapping jurisdiction.
Sources: The various entities
172
173
174
175
20162007
Percentage ofPercentage of
Total CityTotal City
EmploymentEmployment
EmployeesEmployees
Marana Unified School District1,4049.2%1,66022.6%
Marana Health Center4232.8%
N/AN/A
FLSmidth Krebs3802.5%
N/AN/A
The Ritz Carlton, Dove Mountain3502.3%
N/AN/A
Town of Marana3392.2%3304.5%
Sargent Aerospace & Defense3032.0%2403.3%
Fry's Food & Drug2401.6%
N/AN/A
Northwest Fire District2221.5%
N/AN/A
Hunter Construction2001.3%
N/AN/A
Coca-Cola Enterprises1851.2%1852.5%
Wal-Mart1831.2%4506.1%
Tusonix Building1751.1%
N/AN/A
KOLD-TV 131501.0%
N/AN/A
Trico Electric Cooperative1300.8%
N/AN/A
Costco1300.8%2753.7%
The Home Depot1250.8%
N/AN/A
Lowe's1250.8%
N/AN/A
Kohls1200.8%
N/AN/A
Lasertel1150.8%
N/AN/A
Target1000.7%2253.1%
Texas Roadhouse1000.7%
N/AN/A
Sprouts Market1000.7%
N/AN/A
Comcast720.5%2092.8%
Source: "Star 200" published in the Arizona Daily Star; Marana.com/950/Major-Employers
176
2007200820092010201120122013201420152016
General Government58.064.090.462.872.562.562.562.567.571.9
Public Safety
Police
Officers84.084.081.078.080.079.080.080.081.083.0
Civilians29.029.530.028.028.828.526.026.028.028.0
Building Safety-19.0-5.06.06.09.09.013.013.0
Highways and streets36.0-24.031.032.032.036.036.035.035.0
Engineering22.040.8--------
Maintenance-35.0--------
Culture and recreation49.349.850.043.841.541.733.333.336.538.5
Community Development3.0-3.03.04.03.0----
Economic & Community Development51.518.045.154.652.453.448.548.540.439.4
Water Utilities18.019.017.415.418.120.119.119.122.023.0
Wastewater Utilities N/AN/AN/AN/AN/A-4.04.04.04.0
Municipal Airport2.03.02.0---1.01.01.03.0
Total352.8362.0342.9321.6335.3326.1319.3319.3328.3338.8
Source: Town of Marana; Annual Budget; Authorized position schedule.
177
178
179
Fiscal Year 2016Fiscal Year 2007
Percentage ofPercentage of
Sales TaxTotal SalesSales TaxTotal Sales
PaymentsRankTax PaymentsPaymentsRankTax Payments
TaxpayerA1,975,517$15.7%$1,784,65415.8%
TaxpayerB1,279,64823.7%1,194,20423.9%
TaxpayerC795,42532.3%816,77132.7%
TaxpayerD712,14942.0%265,980100.9%
TaxpayerE642,59051.8%568,16661.9%
TaxpayerF516,86761.5%653,76442.1%
TaxpayerG489,33771.4%605,78252.0%
TaxpayerH318,70480.9%282,72590.9%
TaxpayerI295,62590.8%0.0%
TaxpayerJ267,464100.8%359,32681.2%
Taxpayer KK522,21071.7%
$7,293,32520.9%$7,053,58323.0%
TaxpayerA1,159,356$13.3%0.0%
TaxpayerB853,70922.4%0.0%
TaxpayerC781,52132.2%987,33433.2%
TaxpayerD621,69741.8%1,998,67526.5%
TaxpayerE376,64951.1%739,40042.4%
TaxpayerF210,71460.6%0.0%
TaxpayerG214,65170.6%0.0%
TaxpayerH193,17580.6%0.0%
TaxpayerI140,23990.4%0.0%
TaxpayerJ115,068100.3%0.0%
TaxpayerK2,875,75419.4%
TaxpayerL555,25851.8%
TaxpayerM284,61660.9%
TaxpayerN246,37970.8%
TaxpayerO229,77880.7%
TaxpayerP199,52990.7%
TaxpayerQ184,125100.6%
$4,666,77913.4%$8,300,84827.1%
Source: Town of Marana Finance Department, Arizona Department of Revenue
180
2007200820092010201120122013201420152016
January3511338172260394239
February8327925283152615158
March53122463846125425759
April55501148144164475554
May81181320355346558737
June65282023224961596750
July51213144327074415936
August50764628314660503547
September30272718222944295237
October3571422305646716257
November13512122235278822
December28512194648433033
Calendar Total579287200343337526702612622474
Fiscal Total744353199342297425692597668560
Source: Town of Marana Finance Department, Town of Marana Building Services
181
182
AUDITORS’ SECTION
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184
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT
AUDITING STANDARDS
The Honorable Mayor and Town Council
Town of Marana, Arizona
We have audited, in accordance with the auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States, the financial
statements of the governmental activities, the business-type activities, each major fund, and the
aggregate remaining fund information of the Town of Marana, Arizona, (Town), as of and for the
year ended June 30, 2016, and the related notes to the financial statements, which collectively
comprise Town of Marana’s basic financial statements, and have issued our report thereon
dated December 1, 2016.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Town of
Marana, Arizona's internal control over financial reporting (internal control) to determine the
audit procedures that are appropriate in the circumstances for the purpose of expressing our
opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of Town of Marana, Arizona’s internal control. Accordingly, we do not express an
opinion on the effectiveness of Town of Marana, Arizona’s internal control.
Adeficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity’s financial statements will not be prevented,
or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies. Given these limitations, during our audit, we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified.
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185
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Compliance and Other Matters
As part of obtaining reasonable assurance about whether Town of Marana, Arizona's financial
statements are free from material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with
which could have a direct and material effect on the determination of financial statement
amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our
tests disclosed no instances of noncompliance or other matters that are required to be reported
underGovernment Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the entity’s internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the entity’s
internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
Casa Grande, Arizona
December 1, 2016
186
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