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HomeMy WebLinkAbout2017 Financial Statement June 30 This page intentionally left blank TOWN OF MARANA, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 _____________________________ 11555 W. Civic Center Dr., A3 Marana, Arizona 85653 Issued by: Town of Marana Finance Department TOWN OF MARANA, ARIZONA TABLE OF CONTENTS INTRODUCTORY SECTION Page Letter of Transmittal i Certificate of Achievement for Excellence in Financial Reporting vi Principal Officials vii Senior Staff vii Organizational Chart viii FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT 1 MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) (Required Supplementary Information)7 BASIC FINANCIAL STATEMENTS Government-wide Financial Statements: Statement of Net Position 27 Statement of Activities 28 Fund Financial Statements: Balance Sheet –Governmental Funds 32 Reconciliation of the Balance Sheet – Governmental Funds to the Statement of Net Position 35 Statement of Revenues, Expenditures and Changes in Fund Balance s – Governmental Funds 36 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances -Governmental Funds to the Statement of Activities 39 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 –40 Budget and Actual –General Fund Statement of Revenues, Expenditures, and Changes in Fund Balances –41 Budget and Actual –Highway User Revenue Fund Statement of Net Position –Proprietary Funds 42 Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds 43 Statement of Cash Flows –Proprietary Funds 44 Notes to Financial Statements 45 REQUIRED SUPPLEMENTARY INFORMATION Schedule of the Town’s Proportionate Share of the Net Pension Liability - Cost-Sharing Pension Plans 84 Schedule of Changes in the Town’s Net Pension Liability (Asset) and – Related Ratios Agent Pension Plans 85 Schedule of Town Pension Contributions 87 Notes to Pension Plan Schedules 91 Schedule of Agent OPEB Plans’ Funding Progress 92 Notes to Schedule of Agent OPEB Plans’ Funding Progress 93 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES Other Major Governmental Funds Schedules of Revenues, Expenditures an d Changes in Fund Balances –Budget and Actual: Tangerine Farms Road Improvement District Debt Fund 99 TOWN OF MARANA, ARIZONA TABLE OF CONTENTS (Cont’d) FINANCIAL SECTION (Cont’d)Page COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES (Cont’d) PAG/RTA Capital Fund 100 Transportation Capital Fund 101 Non-Major Governmental Funds: Combining Balance Sheet –All Non-Major Governmental Funds – By Fund Type 104 Combining Statement of Revenues, Expenditures and Changes in Fund Balances –All Non-Major Governmental Funds –By Fund Type 105 Non-Major Special Revenue Funds: Combining Balance Sheet 108 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 110 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual 112 Non-Major Capital Projects Funds: Combining Balance Sheet 120 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 124 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual 127 Non-Major Debt Service Fund: Combining Balance Sheet 140 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 142 TOWN OF MARANA, ARIZONA TABLE OF CONTENTS (Cont’d) FINANCIAL SECTION (Concl’d)Page COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES (Concl’d) Combining Schedule of Revenues, Expenditures and Changes in Fund Balances –Budget and Actual 144 STATISTICAL SECTION FINANCIAL TRENDS Net Position by Component –Last Ten Fiscal Years 152 Changes in Net Position –Last Ten Fiscal Years 154 Governmental Activities Tax Revenues by Source –Last Ten Years 158 Fund Balances of Governmental Funds –Last Ten Fiscal Years 159 Changes in Fund Balances of Governmental Funds –Last Ten Fiscal Years 160 REVENUE CAPACITY Assessed Value, Estimated Actual Value and Assessm ent Ratios of Taxable 162 Property –Last Ten Years Property Tax Rates –Direct and Overlapping Governments –Last Ten Years 163 Principal Property Taxpayers –Current Year and Nine Years Ago 164 Property Tax Levies and Collections –Last Ten Fiscal Years 165 Tangerine Farms Road Improvement District Assessments 166 DEBT CAPACITY Ratios of Outstanding Debt by Type –Last Ten Fiscal Years 174 Ratios of General Bonded Debt Outstanding –Last Ten Fiscal Years 175 Direct and Overlapping Governmental Activities Debt 176 TOWN OF MARANA, ARIZONA TABLE OF CONTENTS (Concl’d) STATISTICAL SECTION (Concl’d) Page DEBT CAPACITY (Concl’d) Legal Debt Margin Information 177 Pledged-Revenue Coverage – Last Ten Fiscal Years 178 DEMOGRAPHIC AND ECONOMIC INFORMATION Demographic and Economic Statistics – Last Ten Fiscal Years 179 Principal Employers – Current Year and Nine Years Ago 180 OPERATING INFORMATION Full-time Equivalent City Government Employees by Function – Last 181 Ten Fiscal Years OTHER INFORMATION Sales Tax by Industry – Last Ten Years 182 Excise Tax Collections – Last Ten Years 183 Principal Retail and Contracting Sales Taxpayers – Current and Nine Years Ago 184 Single Family Residential Permits Issued – Last Ten Years 185 Capital Assets Statistics by Function 186 This page intentionally left blank INTRODUCTORY SECTION ii December 4, 2017 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 conformit y 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, 2017. This report consists of senior management’s r epresentations 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’s financial statements in conformity with accounting principles generally accepted in the United States of America. Because the cost of internal controls should not outweigh their benefits, the Town’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free 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, 2017, 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 unmodified opinion that the Town’s financial statements for the fiscal year ended June 30, 2017, are fairly presented in conformity with accounting principles generally acce pted in the United States of America. The independent auditors’ report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the Town was part of a broader, federally mandated Si ngle Audit as required by the provisions of the Single Audit Act Amendments of 1996 and the audit requirements of Title 2 U.S.Code of Federal Regulations (CFR) Part 200,Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance)to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited Town’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal req uirements involving the administration of federal awards. These reports are available in a separately issued Single Audit Report ing Package. 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 iii should be read in conjunction with it. The Town’s MD&A can be found immediately following the report of the independent auditors. Profile of the Town The Town of Marana,incorporated in 1977, is located in northern Pima County and has historically been one 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. Maran a’s original incorporation covered approximately ten square miles.The Town’s planning area currently occupies over 120 square miles and serves a population in excess of 40,000. In its infancy, the Town was primarily a rural, agricultural community. H owever, through annexations 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 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 mon ies, licensing and regulating businesses and trades and other 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 approximately 346 employees is responsible for the functions and operations of the Town government. Economic Condition and Outlook The local economy continued to improve during the current fiscal year. Revenues in the General Fund grew by approximately 8% overall with growth in intergovernmental revenues of 17.3%. Transaction privilege taxes grew by $1.1 million or 4.6% overall, which demonstrates continued growth and improvement in the economy. The Town has seen improvements in economically sensitive revenues over the past several years and the revenue forecast for fiscal year 2017-18 anticipates a continuation of revenue growth of 11%. Expenditures in the General Fund also grew by approximately 4.4% overall. The Town was able to provide team based merit increases to employees while maintaining costs in commodities and services received in order to stay within budget. The General Fund expenditures were $6.2 million under budget. The Town’s budget is structurally balanced with ongoing 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. Current Condition 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 of June 30, 2017, the Town’s governmental funds reported a combined fund balance of $73.1 million, of which $20.7 million is unassigned and available for spending at the Town’s discretion. iv The Town, like most municipalities, is significantly dependent upon transaction privilege tax revenues which are subject to economic fluctuations. Transaction privilege tax revenues comprised 59.2% of general fund revenues. Of those revenues, retail, construction and utilities comprised 74.9% of total transaction privilege tax revenues. Sales taxes and revenues related to the residential and commercial construction ind ustry continued to improve during the fiscal year.The Council approved a temporary half-cent sales tax increase, which began on July 1, 2015, for the construction of a new police facility , which is expected to sunset by fiscal year 2019. Future Economic Outlook 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 is to structurally balance on-going revenues matched with on-going expenses and one-time revenues aligned with one-time expenses. 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 construction of the sites for Home Goods, TJ Maxx, and Ross were completed.Developers are currently constructing a Top Golf facility, which is anticipated to bring more than 300 jobs to the Town as well as additional tax revenues.The Town is also in the process of constructing a new 18-acre park, Tangerine Sky Park. Accomplishments and Initiatives During fiscal year 2017, the Town had several significant accomplishments. Creation of New Town Logo Marana celebrated 40 years of being a city by choosing a new logo. Marana partnered with the University of Arizona to research and draft five different logo designs for the citizens to choose from. A voting process allowed citizens to narrow the choices to the top 3 logos. Town Council made the final selection. The new logo will replace the old as signs, vehicles, and other items bearing the logo are replaced. Video Streaming Council Meetings In alignment with the Town’s Strategic Plan related to progress and inn ovation, the Town implemented video streaming of council meetings to enable the citizens to have better access to the information .This service began in March 2017. Top 10 Digital City Marana was named one of the top-10 Digital Cities in the United States with a population of 75,000 or less. The annual survey recognizes cities using technology to improve citizen services, enhance transparency and encourage citizen engagement. The Town is constantly looking at ways to improve residents’ experience whether they are visiting the website, utilizing town apps, or interacting via social media. All-America City Finalist The Town of Marana was named one of the 20 finalists to be named an All-America City for a second consecutive year by the National Civic League. The distinction i s given to 10 communities each year that have taken innovative action to engage residents in ensuring that all children are healthy and supported to succeed in school and life.The Town was also a finalist in 2008. Expenditure Limitation 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 for inflation, deflation and population growth of the Town. v On November 8, 2016, the voters of the Town approved an alternative expenditure limitation, the effect of which is that the total budgeted expenditures of each yearly bud get becomes the expenditure limitation for that year on a total budget basis. This alternative expenditure limitation is effective for four years. Single Audit As a recipient of Federal, State and County financial assistance, the Town is responsible fo r 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. As part of the Town’s single audit described earlier, tests are made to determine the adequacy of the internal controls, including that portion related to Federal financial assistance programs, as well as to determine that the Town has complied with applicable laws and regulations. Certificate of Achievement 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 ended June 30, 2016. This was the ninth consecutive year that the Town has achieved this prestigious award. In order to be awarded the Certificate of Achievement, a government al 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 to GFOA for consideration. Acknowledgements 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, Jamsheed Mehta Erik Montague, CPA Interim Town Manager Finance Director vi vii TOWN OF MARANA, ARIZONA PRINCIPAL OFFICIALS OF THE TOWN OF MARANA FISCAL YEAR 2017 MAYOR AND COUNCIL Ed Honea, Mayor Jon Post, Vice Mayor Herb Kai, Councilmember Carol McGorray, Councilmember Roxanne Ziegler, Councilmember Dave Bowen, Councilmember Patti Comerford, Councilmember MANAGEMENT STAFF Jamsheed Mehta,Interim Town Manager Steve Romero,Assistant Town Manager DEPARTMENT HEADS Jason Angell,Development Services Director Curry C. Hale, Human Resources Director Jocelyn Bronson, Town Clerk Frank Cassidy, Town Attorney Keith Brann, Town Engineer Erik Montague, Finance Director Ryan Benavides, Public Works Director Steve Miller, Airport Director Terry Rozema, Police Chief Laine Sklar, Town Magistrate Lisa Shafer, Community Development and Neighborhood Services Director Carl Drescher, Technology Services Director Jim Conroy, Parks and Recreation Director John Kmiec, Utilities Director Curt Woody, Director of Economic Development viiiTOWN OF MARANA, ARIZONA ORGANIZATIONAL CHART FISCAL YEAR 2017 This page intentionally left blank 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, 2017, 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. Tempe • Scottsdale • Casa Grande www.hhcpa.com 1 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, 2017, 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. 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 7-21 and 84-93 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. 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. 2 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 4, 2017 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 4, 2017 3 This page intentionally left blank 4 MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) (Required Supplementary Information) 5 This page intentionally left blank 6 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 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 year ended June 30, 2017. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report. FINANCIAL HIGHLIGHTS • The Town’s total net position increased by $20.1 million or 5.8 percent from the previous fiscal year 2015- 16. The increase is primarily due to an increase in the cash position related to unspent bond proceeds, an increase in capital assets, and an increase in funds due from other governments. The increase in cash position is from unspent bond proceeds related to the expansion of the Marana Wastewater Reclamation Facility and construction of the groundwater recharge facility. The increase in capital assets is primarily due to the Tangerine Road Corridor project, Wastewater construction in progress projects, and additions to the infrastructure of the Marana Center. The increase in funds due from other governments is related to the increase in capital asset projects that are reimbursable by other governments. • General revenues from governmental activities, excluding transfers, accounted for $50.1 million in revenue, or 46.1 percent of all revenues from governmental activities. Program specific revenues in the form of charges for services and grants and contributions accounted for $58.5 million or 53.9 percent of total revenues from governmental activities. The Town had $12.3 million of program revenues related to business-type activities. Overall revenues have increased by 37.9 percent, which can be attributed to increases in all revenue sources. The largest increases in revenue in fiscal year 2016-17 have been in reimbursements for capital projects, a 5.8 percent increase in sales taxes, a 17.5 percent increase in state shared revenues, and a 9.2 percent increase in charges for services. • The General Fund had $42.7 million in fiscal year 2016-17 revenues, which primarily consisted of sales taxes, intergovernmental revenue and licenses, fees and permits. The General fund had $36.7 million of expenditures and $3.9 million in required transfers during the year. The $2.2 million fund balance increase is attributed to higher than anticipated revenues in sales taxes and licenses, fees and permits as well as prudent use of Town funds for departmental expenditures. • Highway User Revenue Fund revenues continue to grow in fiscal year 2016-17 at $3.2 million. Expenditures were 30 percent higher than the previous year due to a continued focus of the pavement preservation program. Fund balance decreased by $451,471 and ended the fiscal year at $1.4 million. • Tangerine Farms Road Improvement District Debt Service Fund, which accounts for special assessments, had a $17,279 fund balance attributable to the accumulation of prepaid assessments and resources required for debt service payment. The debt for Tangerine Farms Road Improvement District was refinanced in fiscal year 2016-17 resulting in an economic gain of $2.1 million and eliminating the July 2017 debt service payment. • The PAG/RTA Capital Fund remains a major fund in fiscal year 2016-17 due to the continued increase in revenues and expenditures primarily related to the Tangerine Road Corridor project. The revenues increased 220.32 percent and the expenditures increased 253.49 percent. • The Transportation Fund became a major fund in fiscal year 2016-17 due to the accumulation of dedicated tax revenues for the purpose of financing and constructing transportation improvement projects. Specifically, the Ina Road Bridge project has dedicated $9.8 million for a joint ADOT/Marana project. 7 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the Town’s basic financial statements. The Town’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the Town’s finances, in a manner similar to a private-sector business. All of the activities of the Town, except those of a fiduciary nature, are included in these statements. The Town’s activities are presented in two columns on these statements; governmental activities and business-type activities. A total column for these activities is also provided. • 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, and culture and recreation. These activities are primarily supported by general taxes and revenues. • 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. The statement of net position presents information on all of the Town’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the difference reported as net position. The focus on net position is important because increases and decreases in net position may serve as a useful indicator of how the financial position of the Town may be changing. Increases may indicate an improved financial position. However, decreases in net position may 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 capital projects). As a result, other financial and non-financial indicators must also be considered to effectively assess the Town’s overall financial health. The statement of activities presents information showing how the Town’s net position changed 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 changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and 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 District and Saguaro Springs Community Facilities District are blended component units. The government-wide financial statements can be found on pages 27-29 of this report. 8 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 Fund financial statements. Also presented are the financial statements for governmental funds and proprietary funds. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Town uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the Town can be divided into two categories: governmental funds and proprietary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the Town’s near-term financing requirements and determining what financial resources are available in the near future to fund Town programs. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it may be useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the Town’s near-term financing decision. To facilitate this comparison, reconciliations of the differences between the governmental fund balance sheet and statement of revenues, expenditures and changes in fund balances and government-wide statement of net position and 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 the General Fund, Highway User Revenue, Tangerine Farms Road Improvement District Debt Service, PAG/RTA Capital, and Transportation Capital Fund all of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements and schedules. These statements are included as supplementary information after the basic financial statements starting on page 104. The Town adopts an annual budget and legally allocates (or appropriates) available monies for the General, Highway User Revenue, Tangerine Farms Road Improvement District Debt Service, PAG/RTA Capital, Transportation Capital, and other non-major governmental funds. Budgetary comparison statements are provided for the General Fund and Highway User Revenue fund within the basic financial statements on pages 40-41. Budgetary comparison schedules have been presented for the Town’s major debt and capital funds on pages 99-101, 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 found on pages 32-39 of this report. Proprietary funds. The Town maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The Town uses enterprise funds to account for its water, wastewater and airport services, which are primarily supported by user charges and fees. Internal service funds are an accounting device used to accumulate and allocate costs internally among the Town’s various functions. The Town uses an internal service fund to account for the employee health and dental benefits. 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. 9 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found immediately following the basic financial statements. Required supplementary information other than MD&A. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning 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 within Note 9 Employee Retirement Systems beginning on page 64 in addition to the information on pages 84-93 reported as required supplementary information. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the Town, assets and deferred outflows of resources exceeded liabilities and deferred inflows by $364.6 million as of June 30, 2017. Current and other assets increased $18.9 million or 18.6 percent primarily due to a higher cash position. This is a result of bond proceeds for Wastewater projects and increased revenues, such as sales tax and intergovernmental revenue, which exceeded expenditures. The long-term liabilities increased by $24.2 million or 19.6 percent, which is attributable to an issuance of debt for Wastewater projects and an increase in net pension liability for all pensions. Net position. The majority of the Town’s net position reflects its 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 its citizens; consequently, these assets are not available for future spending. Although the Town’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. In addition, a portion of the Town’s net position represents resources that are subject to external restrictions on how they may be used. The 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’s net position for the fiscal years ended June 30, 2017 and June 30, 2016. 10 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 Governmental Activities Business-type Activities Total 2017 2016 2017 2016 2017 2016 Current and other assets $97,771,267 $ 95,526,859 $ 22,934,999 $ 6,256,381 $120,706,266 $101,783,240 Capital assets, net 273,651,004 262,591,682 126,192,867 117,205,356 399,843,871 379,797,038 Total assets, net 371,422,271 358,118,541 149,127,866 123,461,737 520,550,137 481,580,278 Deferred outflows related to pensions 10,253,753 6,280,106 573,413 312,937 10,827,166 6,593,043 Deferred charge on refunding 1,879,822 - - - 1,879,822 - Total deferred outflows of resources 12,133,575 6,280,106 573,413 312,937 12,706,988 6,593,043 Current and other liabilities 13,558,120 15,246,693 4,553,503 2,897,819 18,111,623 18,144,512 Long-term liabilities 120,641,925 116,451,409 26,657,272 6,674,648 147,299,197 123,126,057 Total liabilities 134,200,045 131,698,102 31,210,775 9,572,467 165,410,820 141,270,569 Deferred inflows related to pensions 2,936,513 2,220,581 282,195 167,137 3,218,708 2,387,718 Total deferred inflows of resources 2,936,513 2,220,581 282,195 167,137 3,218,708 2,387,718 Net position: Net investment in capital assets 210,137,199 193,845,100 101,523,564 112,357,140 311,660,763 306,202,240 Restricted 31,162,624 43,127,195 365,485 365,485 31,528,109 43,492,680 Unrestricted 5,119,465 (6,492,331) 16,319,260 1,312,445 21,438,725 (5,179,886) Total net position $246,419,288 $230,479,964 $118,208,309 $114,035,070 $364,627,597 $344,515,034 Net investment in capital assets of $311.6 million or 85.5 percent represents the largest portion of net position. This portion of net position increased by $5.5 million as of June 30, 2017, which is a result of depreciation, deferred charges on refunding, reduction of related outstanding debt, and additions of capital assets in the governmental activities offset by a decrease in net investment in capital assets in the business-type activities due to the addition of new debt for capital projects in the Wastewater fund. The second portion of net position of $31.5 million or 8.6 percent represents resources that are subject to external restrictions on how they may be utilized. The decrease of $12 million or 27.5 percent is due to the reclassification of a portion of the Transportation fund, Downtown Reinvestment fund, and Sales Tax Capital fund to unrestricted net position as these funds are internally restricted. The third portion consists of unrestricted net position of $21.4 million or 5.9 percent. The unrestricted balance has increased by $26.6 million as a result of the reclassification of Transportation fund, Downtown Reinvestment fund, and Sales Tax Capital fund net position as well as an increase in the General Fund ending fiscal year 2016-17 fund balance. 11 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 Changes in net position. The Town’s total revenues for the fiscal year ended June 30, 2017, were $121.1 million, which was an overall increase of $33.3 million or 37.9 percent. A significant portion of the increase of $27.9 million was in capital grants and contributions, which is due to reimbursable project costs. Specifically an increase of $16.5 million in capital grants and contributions was related to the Tangerine Road Corridor project. Sales tax revenues overall have also continued to increase, which is largely due to new commercial development, such as the Tucson Premium Outlet Mall and an overall recovering economy. Additionally, state shared revenues continued to increase. The $1.6 million or 17.5 percent increase in state shared revenues indicates that the State revenues are also seeing an upward trend. The total cost of all programs and services was $100.9 million. The increase of $24.3 million or 31.7 percent is primarily attributable to the Tangerine Road Corridor project costs related to other jurisdictions. The Town of Marana is the project sponsor for the Tangerine Road Corridor project, however $18.9 million of expenditures for the project were attributable to Oro Valley, Pima County, and utility companies. Additionally, increases in program costs are related to team based performance increases and development agreement reimbursements. The following table presents a summary of the changes in net position for the fiscal years ended June 30, 2017 and June 30, 2016. 12 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 Governmental Activities Business-type Activities Total 2017 2016 2017 2016 2017 2016 Revenues: Program revenues: Charges for services $ 9,550,903 $9,078,618 $ 6,380,137 $ 5,506,685 $15,931,040 $14,585,303 Operating grants and contributions 4,619,454 4,507,508 - - 4,619,454 4,507,508 Capital grants and contributions 44,370,835 17,157,378 5,940,747 5,213,843 50,311,582 22,371,221 General revenues: Sales taxes 37,500,219 35,441,585 - - 37,500,219 35,441,585 Property taxes 508,819 481,368 - - 508,819 481,368 Franchise taxes 488,477 446,702 - - 488,477 446,702 State shared revenues 10,619,017 9,039,130 - - 10,619,017 9,039,130 Investment income 237,809 173,412 42,545 16,169 280,354 189,581 Miscellaneous revenues 744,452 676,157 54,031 19,030 798,483 695,187 Total revenues 108,639,985 77,001,858 12,417,460 10,755,727 121,057,445 87,757,585 Expenses: General government 19,393,387 17,530,967 - - 19,393,387 17,530,967 Public safety 16,735,675 14,423,483 - - 16,735,675 14,423,483 Highways and streets 40,172,247 22,659,226 - - 40,172,247 22,659,226 Health and welfare 277,906 - - - 277,906 - Economic and community development 4,901,872 4,778,875 - - 4,901,872 4,778,875 Culture and recreation 6,006,335 3,422,289 - - 6,006,335 3,422,289 Interest on long-term debt 2,335,044 3,961,632 - - 2,335,044 3,961,632 Water - - 5,367,466 4,404,767 5,367,466 4,404,767 Wastewater - - 3,982,665 3,662,534 3,982,665 3,662,534 Airport - - 1,772,285 1,828,619 1,772,285 1,828,619 Total expenses 89,822,466 66,776,472 11,122,416 9,895,920 100,944,882 76,672,392 Increase/(decrease) in net position before transfers 18,817,519 10,225,386 1,295,044 859,807 20,112,563 11,085,193 Transfers (2,878,195) (2,176,697) 2,878,195 2,176,697 - - Increase/(decrease) in net position 15,939,324 8,048,689 4,173,239 3,036,504 20,112,563 11,085,193 Net position, beginning of year 230,479,964 222,431,275 114,035,070 110,998,566 344,515,034 333,429,841 Net position, end of year $246,419,288 $230,479,964 $118,208,309 $114,035,070 $364,627,597 $344,515,034 13 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 Governmental Activities. Governmental activities increased net position by $15.9 million for fiscal year ended June 30, 2017. This increase is attributable to the increase in capital grants and contributions, sales tax revenue and state shared revenues. The capital grants and contributions increase of $27.2 million 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 $2 million from the prior year, which is a slight increase from the prior year due to continued development and economic growth. Transfers increased by $0.7 million from the prior year. This is due to a contribution from governmental funds to the Wastewater fund of $3.2 million as part of the debt issuance to fund the Wastewater recharge facility. This increase was offset by contributions from Water and Wastewater to governmental activities for debt service payments. The following table presents the cost of the nine major 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, 2017 Year Ended June 30, 2016 Total Net (Expense)/ Total Net (Expense)/ Expenses Revenue Expenses Revenue Governmental Activities General government $ 19,393,387 $ (14,113,064) $ 17,530,967 $(12,422,551) Public safety 16,735,675 (15,805,657) 14,423,483 (13,542,295) Highways and streets 40,172,247 4,836,412 22,659,226 (6,231,653) Health and welfare 277,906 (256,595) - 20,882 Economic and community development 4,901,872 1,190,122 4,778,875 2,195,899 Culture and recreation 6,006,335 (4,797,448) 3,422,289 (2,091,618) Interest on long-term debt 2,335,044 (2,335,044) 3,961,632 (3,961,632) Total $ 89,822,466 $ (31,281,274) $ 66,776,472 $(36,032,968) Business-Type Activities Water $ 5,367,466 $ 3,048,700 $ 4,404,767 $ 3,597,051 Wastewater 3,982,665 (1,153,624) 3,662,534 (1,483,289) Airport 1,772,285 (696,608) 1,828,619 (1,289,154) Total $ 11,122,416 $ 1,198,468 $ 9,895,920 $ 824,608 • The cost of all governmental activities this year was $89.8 million. The 37.3 percent increase in governmental activities expenses is primarily due to costs associated with the Tangerine Road Corridor project of $18.9 million, an increase in expenses due to development agreements of $1.1 million, an increase in expense related to the issuance of debt of $1 million, and the cost of team based increases for employees. • Net cost of governmental activities of $31.3 million was largely financed by general revenues, which are made up of primarily sales taxes totaling $37.5 million. 14 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 • The general government expenses increased $1.8 million or 10.6 percent. This is primarily due costs associated with the issuance of debt and with team based increases for employees. • Highway and streets expenses increased $17.5 million or 77.3 percent due to an increase in construction projects of $18.9 million that was not eligible for capitalization and cost 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 $58.5 million are 65.2 percent of expenses for fiscal year 2017, up from 45.8 percent a year earlier. As described earlier, this increase is attributable to higher collections in the capital grants and contributions revenues related to a one time reimbursements of major capital projects. As seen on the following graphs, the largest revenue source for the Town’s governmental activities is capital grants and contributions at 40.8 percent, followed by sales tax revenues at 34.5 percent, State shared revenues at 9.8 percent, and charges for services at 8.8 percent. The Town’s largest expense category is highways and streets at 44.7 percent, followed by general government at 21.6 percent and public safety at 18.6 percent. 15 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 16 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 Business-type Activities Business-type activities’ net position increased by $4.2 million for fiscal year ended June 30, 2017. This increase is largely related to the transfer of funds from the General Fund to support functions and projects within the Airport and Wastewater funds. Charges for services increased slightly due to new water and wastewater customers. Capital grants and contributions increased by $0.7 million or 13.9 percent. This was primarily due to an increase in infrastructure contributed to the Town from developers largely for Water and Wastewater related infrastructure in Gladden Farms and Willow Vista. Business-type activity expenses increased by $1.2 million or 12.4 percent as a result of bond issuance costs, increased costs for system repairs and upgrades, and cost of team based increases for employees. The Town’s largest overall business-type activity is the Water Utility with $5.4 million in expenses and $8.4 million in program revenues during the year. The second largest activity is the Wastewater Utility with $4 million in expenses and $2.8 million in program revenues, followed by the Airport with $1.8 million in expenses and $1.1 million in program revenues. As seen on the following graph, the largest revenue source for the Town’s business-type activities is charges for services revenues at 51.4 percent followed by capital grants and contributions at 47.8 percent. 17 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 FINANCIAL ANALYSIS OF THE TOWN’S FUNDS As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds. The focus of the Town’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Town’s financing requirements. In particular, unrestricted fund balance may serve as a useful measure of the Town’s net resources available for spending at the end of the fiscal year. The financial performance of the Town as a whole is reflected in its governmental funds. As of June 30, 2017, the Town’s governmental funds reported a combined fund balance of $73.1 million, of which $20.7 million is unassigned and undesignated and therefore available for spending at the Town’s discretion. The General Fund, which is the principal operating fund of the Town, had a fund balance of $25 million. Revenues and expenditures increased 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 team based increases for employees. The Highway User Revenue Fund had a fund balance of $1.3 million which reflected a decrease of $0.5 million from a year earlier. Revenues increased slightly over the prior year. Expenditures increased due to the pavement preservation program. 18 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 Proprietary funds. 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 funds net position of $118 million, $101.5 million comprised the funds’ net investment in capital assets. $0.4 million is restricted for debt service and unrestricted net position of $16.3 million. The factors concerning the finances of these funds, as well as the changes in net position, have been addressed previously in the discussion of the Town’s business-type activities. BUDGETARY HIGHLIGHTS 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 report as other supplementary 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 revenues exceeded conservative budget projections in several key revenue sources like sales taxes and licenses, permits and fees. Departments maintained their conservative use of available resources. The prudent use of funds as well as higher than expected revenues resulted in an increase in fund balance of $2.2 million. The General Fund budget and actual variances are shown on page 40. 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 Note 3 – Budgetary Control). Budget adjustments between departments in the General Fund did occur. However, none of the amendments were significant. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets. As of June 30, 2017 the Town had invested $399.8 million in governmental and business-type capital assets (net of accumulated depreciation). Total depreciation expense for the year was $23.1 million, with $18.5 million attributed to governmental activities and $4.6 million to business-type activities. The following schedule presents capital asset balances for the fiscal years ended June 30, 2017 and June 30, 2016. Additional information on the Town’s capital assets can be found in Note 5. 19 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 Governmental Activities Business-type Activities Total As of As of As of As of As of As of June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Land $ 6,988,518 $ 6,454,735 $ 4,493,811 $ 4,493,811 $ 11,482,329 $ 10,948,546 Water rights - - 4,430,930 3,910,572 4,430,930 3,910,572 Construction in progress 30,921,798 16,645,530 12,804,795 5,125,442 43,726,593 21,770,972 Buildings and improvements 45,283,387 45,328,901 134,089,117 128,848,242 179,372,504 174,177,143 Machinery and equipment 20,258,351 19,664,154 1,426,571 1,288,382 21,684,922 20,952,536 Infrastructure 356,969,064 343,590,031 - - 356,969,064 343,590,031 Less: Accumulated depreciation (186,770,114) (169,091,669) (31,052,357) (26,461,093) (217,822,471) (195,552,762) Total $273,651,004 $262,591,682 $126,192,867 $117,205,356 $399,843,871 $379,797,038 Major capital asset events during the current fiscal year included the following: • Completion of the Tangerine/Downtown Sewer Conveyance System Phase 1 of $3.1 million. • The purchase of various vehicles and equipment at a total cost of $1.5 million • Construction of the Tangerine/Downtown Sewer Conveyance System Phase 2 (construction in progress as of the close of the fiscal year had reached ($2.1 million) • Expansion of the wastewater reclamation facility to 1 Millions of Gallons per Day (MGD) (construction in progress as of the close of the fiscal year had reached $5.8 million) • Design and construction of the new Police Facility (construction in progress as of the close of the fiscal year had reached $1.8 million) • Widening of Tangerine Road (construction in progress as of the close of the fiscal year had reached $20.4 million). Debt Administration. At year-end, the Town had $111 million in long-term debt obligations outstanding with $2.6 million due within one year. The Town’s total debt increased by $15.6 million during the current fiscal year. The reason for the increase is due to an issuance of debt for Wastewater related capital projects offset by decreases due to regularly scheduled principal reductions. The following table presents a summary of the Town’s outstanding debt for the fiscal years ended June 30, 2017 and June 30, 2016. Additional information on the Town’s long-term obligations can be found in Note 6. 20 TOWN OF MARANA, ARIZONA MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) YEAR ENDED JUNE 30, 2017 Governmental Activities Business-type Activities Total 2017 2016 2017 2016 2017 2016 General obligation bonds $ 7,955,000 $ 7,835,000 $ -$ -$ 7,955,000 $ 7,835,000 Revenue bonds 57,840,000 64,090,000 20,858,000 1,214,000 78,698,000 65,304,000 Special assessment bonds 14,245,132 15,927,000 - - 14,245,132 15,927,000 Loan payable - - 3,421,057 3,634,216 3,421,057 3,634,216 Deferred bond premium 6,253,495 2,624,582 390,246 -6,643,741 2,624,582 Total $86,293,627 $90,476,582 $24,669,303 $4,848,216 $110,962,930 $95,324,798 ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES Our Town has been a leader in residential construction activity in Pima County since the late 1990s. The Town continues to grow 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 2017-18 budget focused on the Strategic Plan III principles and goals. The 2016-17 budget increased by $30.3 million or 17.8%.The majority of this increase is attributable to our investment in capital outlay for transportation, park, water, wastewater, and airport capital improvement projects. Several key revenues like sales taxes, State shared revenues, building permits and planning fees increased modestly during the fiscal year. The budget is structurally balanced with ongoing revenues supporting ongoing program expenditures. The budget document is the comprehensive decision making tool resulting from the annual budget process. The budget is a long-range plan by which financial policy is implemented and controlled. CONTACTING THE TOWN’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, and investors and creditors with a general overview of the Town’s finances and to demonstrate the Town’s accountability for the resources it receives. If you have questions about this report or need additional information, contact the Finance Department, Town of Marana, Arizona at 11555 West Civic Center Drive, Marana, Arizona 85653, or visit www.MaranaAZ.gov. 21 This page intentionally left blank 22 BASIC FINANCIAL STATEMENTS 23 This page intentionally left blank 24 GOVERNMENT-WIDE FINANCIAL STATEMENTS 25 This page intentionally left blank 26 The notes to the financial statements are an integral part of this statement. TOWN OF MARANA, ARIZONA STATEMENT OF NET POSITION JUNE 30, 2017 Governmental Activities Business-type Activities Total ASSETS Current assets: Cash and cash equivalents 58,289,254$ 23,753,898$ 82,043,152$ Property taxes receivable 1,924 - 1,924 Accounts receivable 298,533 929,493 1,228,026 Interest receivable 29,108 - 29,108 Due from other governments 11,522,584 85,599 11,608,183 Internal balances 150,000 (150,000) - Prepaid items 293,527 25,368 318,895 Total current assets 70,584,930 24,644,358 95,229,288 Noncurrent assets: Assessment receivable 14,245,132 - 14,245,132 Restricted cash and investments 10,866,361 365,485 11,231,846 Internal balances 2,074,844 (2,074,844) - Capital assets not depreciated 37,910,316 21,729,536 59,639,852 Capital assets (net of depreciation)235,740,688 104,463,331 340,204,019 Total noncurrent assets 300,837,341 124,483,508 425,320,849 Total assets 371,422,271 149,127,866 520,550,137 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pensions 10,253,753 573,413 10,827,166 Deferred charge on refunding 1,879,822 - 1,879,822 Total deferred outflows of resources 12,133,575 573,413 12,706,988 LIABILITIES Current liabilities: Accounts payable 7,627,738 3,162,920 10,790,658 Accrued payroll and employee benefits 585,137 45,937 631,074 Unearned revenue 325,145 1,960 327,105 Deposits held for others 543,326 700,907 1,244,233 Due to other government 90,207 125,460 215,667 Claims payable 256,982 - 256,982 Accrued interest payable 934,434 64,405 998,839 Compensated absences 980,151 93,429 1,073,580 Loan payable - 219,485 219,485 General obligation bonds - CFD 210,000 - 210,000 Revenue bonds 2,005,000 139,000 2,144,000 Total current liabilities 13,558,120 4,553,503 18,111,623 Noncurrent liabilities: Compensated absences 108,905 10,382 119,287 Net pension liablity 36,454,393 2,336,072 38,790,465 Loan payable - 3,201,572 3,201,572 General obligation bonds - CFD 7,745,000 - 7,745,000 Special assessment bonds - TRFID 14,245,132 - 14,245,132 Revenue bonds 62,088,495 21,109,246 83,197,741 Total non-current liabilities 120,641,925 26,657,272 147,299,197 Total liabilities 134,200,045 31,210,775 165,410,820 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions 2,936,513 282,195 3,218,708 Total deferred inflows of resources 2,936,513 282,195 3,218,708 NET POSITION Net investment in capital assets 210,137,199 101,523,564 311,660,763 Restricted for: Capital projects 25,661,723 - 25,661,723 Debt service - 365,485 365,485 General government 2,040,065 - 2,040,065 Public safety 1,879,344 - 1,879,344 Highways and streets 1,360,670 - 1,360,670 Economic and community development 220,822 - 220,822 Unrestricted 5,119,465 16,319,260 21,438,725 Total net position 246,419,288$ 118,208,309$ 364,627,597$ 27 Program Revenues Functions/Programs Expenses Charges for Services Operating Grants and Contributions Capital Grants and Contributions Primary Government Governmental activities: General government 19,393,387$ 4,908,415$ 367,214$ 4,694$ Public safety 16,735,675 - 842,952 87,066 Highways and streets 40,172,247 - 3,142,347 41,866,312 Health and welfare 277,906 - 21,311 - Economic and community development 4,901,872 4,355,271 212,352 1,524,371 Culture and recreation 6,006,335 287,217 33,278 888,392 Interest on long-term debt 2,335,044 - - - Total governmental activities 89,822,466 9,550,903 4,619,454 44,370,835 Business-type activities: Water 5,367,466 5,063,500 - 3,352,666 Wastewater 3,982,665 1,065,638 - 1,763,403 Airport 1,772,285 250,999 - 824,678 Total business-type activities 11,122,416 6,380,137 - 5,940,747 Total primary government 100,944,882$ 15,931,040$ 4,619,454$ 50,311,582$ General revenues: Taxes: Sales taxes Property taxes Franchise taxes State shared revenues, unrestricted Investment income Miscellaneous Transfers Total general revenues and transfers Changes in net position Net position, beginning of year Net position, end of year The notes to the financial statements are an integral part of this statement. TOWN OF MARANA, ARIZONA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2017 28 Net (Expense) Revenue and Changes in Net Position Governmental Activities Business-type Activities Totals (14,113,064)$ -$ (14,113,064)$ (15,805,657) - (15,805,657) 4,836,412 - 4,836,412 (256,595) - (256,595) 1,190,122 - 1,190,122 (4,797,448) - (4,797,448) (2,335,044) - (2,335,044) (31,281,274) - (31,281,274) - 3,048,700 3,048,700 - (1,153,624) (1,153,624) - (696,608) (696,608) - 1,198,468 1,198,468 (31,281,274) 1,198,468 (30,082,806) 37,500,219 - 37,500,219 508,819 - 508,819 488,477 - 488,477 10,619,017 - 10,619,017 237,809 42,545 280,354 744,452 54,031 798,483 (2,878,195) 2,878,195 - 47,220,598 2,974,771 50,195,369 15,939,324 4,173,239 20,112,563 230,479,964 114,035,070 344,515,034 246,419,288$ 118,208,309$ 364,627,597$ 29 This page intentionally left blank 30 FUND FINANCIAL STATEMENTS 31 General Fund Highway User Revenue Tangerine Farms Improvement District Debt Service ASSETS Cash and cash equivalents 18,744,514$ 1,611,613$ 18,220$ Property taxes receivable - - - Accounts receivable 245,166 - - Special assessments receivable - - 14,245,132 Interest receivable 13 - - Development agreement receivable - - - Due from other governments 3,593,654 292,523 - Due from other funds 5,272,795 - - Prepaid items 292,195 - - Restricted cash and investments - - - Total assets 28,148,337$ 1,904,136$ 14,263,352$ LIABILITIES Accounts payable 1,714,372$ 537,366$ 941$ Accrued payroll and employee benefits 557,245 6,100 - Due to other funds - - - Due to other governments 88,512 - - Deposits held for others 467,568 - - Unearned revenue 313,529 - - Total liabilities 3,141,226 543,466 941 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - - 14,245,132 Total deferred inflows of resources - - 14,245,132 FUND BALANCES (DEFICITS) Nonspendable 2,367,039 - - Restricted - 1,360,670 17,279 Unassigned 22,640,072 - - Total fund balances (deficits)25,007,111 1,360,670 17,279 Total liabilities, deferred inflow of resources, and fund balances (deficits) 28,148,337$ 1,904,136$ 14,263,352$ TOWN OF MARANA, ARIZONA BALANCE SHEET - GOVERNMENTAL FUNDS JUNE 30, 2017 The notes to the financial statements are an integral part of this statement. 32 PAG/RTA Capital Transportation Non-Major Governmental Funds Total Governmental Funds -$ 2,674,827$ 34,277,331$ 57,326,505$ - - 1,924 1,924 - - 1,436 246,602 - - - 14,245,132 - 21,765 7,330 29,108 - - 51,931 51,931 4,986,146 878,832 1,771,429 11,522,584 - - - 5,272,795 - - 1,332 293,527 - 9,844,826 1,021,535 10,866,361 4,986,146$ 13,420,250$ 37,134,248$ 99,856,469$ 3,756,078$ 591,398$ 977,190$ 7,577,345$ - - 21,792 585,137 3,035,622 - 12,329 3,047,951 - - - 88,512 51,547 - 75,758 594,873 - - 11,616 325,145 6,843,247 591,398 1,098,685 12,218,963 51,115 - 281,380 14,577,627 51,115 - 281,380 14,577,627 - 1,332 2,368,371 - 12,828,852 35,752,851 49,959,652 (1,908,216) - - 20,731,856 (1,908,216) 12,828,852 35,754,183 73,059,879 4,986,146$ 13,420,250$ 37,134,248$ 99,856,469$ 33 This page intentionally left blank 34 Total governmental fund balances 73,059,879$ 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 460,421,118$ Less accumulated depreciation (186,770,114) 273,651,004 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 (1,089,056) Revenue bonds payable (57,840,000) General obligation bonds payable (7,955,000) Special assessment bonds (14,245,132) Net pension liability (36,454,393) Accrued interest payable (934,434) (118,518,015) 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.705,226 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 (6,253,495) Deferred charge on refunding 1,879,822 Deferred inflows related to pensions (2,936,513) Deferred outflows related to pensions 10,253,753 2,943,567 Other long-term assets are not available to pay for current period expenditures and, therefore, are reported as unavailable revenue in the funds. Intergovernmental revenue 92,965 Special assessments revenue 14,484,662 14,577,627 Net position of governmental activities 246,419,288$ The notes to the financial statements are an integral part of this statement. TOWN OF MARANA, ARIZONA RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION YEAR ENDED JUNE 30, 2017 35 General Fund Highway User Revenue Tangerine Farms Improvement District Debt Service Revenues: Sales taxes 25,288,246$ -$ -$ Property taxes - - - Intergovernmental 10,716,725 3,142,347 - Licenses, fees & permits 4,848,236 - - Fines, forfeitures & penalties 574,884 - - Charges for services 562,649 - - Lease income 113,298 - - Special assessments - - 2,340,225 Contributions 64,571 - - Investment income 81,908 6,181 - Miscellaneous 447,622 7,508 - Total revenues 42,698,139 3,156,036 2,340,225 Expenditures: Current - General government 11,796,946 - - Public safety 13,575,091 - - Highways and streets 2,215,090 3,591,157 - Health and welfare 365,200 - - Economic and community development 4,242,792 - - Culture and recreation 3,940,874 - - Capital outlay 610,828 16,350 - Debt service - Principal retirement - - 1,458,000 Interest and fiscal charges - - 731,949 Bond issuance costs - - 52,322 Total expenditures 36,746,821 3,607,507 2,242,271 Excess (deficiency) of revenues over expenditures 5,951,318 (451,471) 97,954 Other financing sources (uses): Face value of bonds issued - - 14,245,132 Refunded bond escrow payment - - (14,801,787) Premium on bonds issued - - - Proceeds from sale of capital assets 45,368 - - Transfers in 53,783 - - Transfers out (3,886,141) - - Total other financing sources (uses)(3,786,990) - (556,655) Changes in fund balances 2,164,328 (451,471) (458,701) Fund balances (deficits), beginning of year 22,842,783 1,812,141 475,980 Fund balances (deficits), end of year 25,007,111$ 1,360,670$ 17,279$ TOWN OF MARANA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2017 The notes to the financial statements are an integral part of this statement. 36 PAG/RTA Capital Transportation Non-Major Governmental Funds Total Governmental Funds -$ 5,667,969$ 6,544,005$ 37,500,220$ - - 520,939 520,939 22,963,147 - 6,439,172 43,261,391 - - 2,230,181 7,078,417 - - 153,085 727,969 - - - 562,649 - - - 113,298 - - - 2,340,225 - - 149,401 213,972 - 81,273 68,446 237,808 - - 4,688 459,818 22,963,147 5,749,242 16,109,917 93,016,706 - 854,790 694,823 13,346,559 - - 901,510 14,476,601 - 117,296 113,923 6,037,466 - - - 365,200 - - 398,883 4,641,675 - - 325,561 4,266,435 24,511,580 1,406,030 7,730,336 34,275,124 - - 3,625,000 5,083,000 - - 3,150,295 3,882,244 - - 793,147 845,469 24,511,580 2,378,116 17,733,478 87,219,773 (1,548,433) 3,371,126 (1,623,561) 5,796,933 - - 27,820,000 42,065,132 - - (32,063,864) (46,865,651) - - 4,089,196 4,089,196 - - - 45,368 - - 7,626,022 7,679,805 - (437,399) (6,234,460) (10,558,000) - (437,399) 1,236,894 (3,544,150) (1,548,433) 2,933,727 (386,667) 2,252,783 (359,783) 9,895,125 36,140,850 70,807,096 (1,908,216)$ 12,828,852$ 35,754,183$ 73,059,879$ 37 This page intentionally left blank 38 Net changes in fund balances - total governmental funds 2,252,783$ 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 16,051,747$ Less current year depreciation (18,550,407) (2,498,660) 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. Debt issued (42,242,917) Premium on bonds (4,089,196) Payment to escrow agent for refunding 46,865,651 Special assessment bond retirement 1,458,000 General obligation bond retirement 265,000 Revenue bond principal retirement 3,360,000 5,616,538 Contributions of infrastructure assets are not recorded as revenues in the governmental funds.13,557,982 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 interest 1,095,194 Intergovernmental revenue (694,769) Special assessments (1,620,486) Compensated absences (47,348) Proceeds from the sale of capital assets (45,368) Gain on sale of assets 45,368 Amortization of deferred charges 446,239 (821,170) Town pension contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the Statement of Net Position because the reported net pension liability is measured a year before the Town's report date. Pension expense, which is the change in the net pension liability adjusted for changes in deferred outflows and inflows of resources related to pensions, is reported in the Statement of Activities. Town pension contributions 2,775,991 Pension expense (5,149,012) (2,373,021) 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.204,872 Change in net position in governmental activities 15,939,324$ The notes to the financial statements are an integral part of this statement. TOWN OF MARANA, ARIZONA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2017 39 The notes to the financial statements are an integral part of this statement. TOWN OF MARANA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - GENERAL FUND YEAR ENDED JUNE 30, 2017 Budgeted Amounts Original Final Actual Revenues: Sales taxes 24,156,385$ 24,156,385$ 25,288,246$ 1,131,861$ Intergovernmental 10,805,072 10,805,072 10,716,725 (88,347) Licenses, fees & permits 4,073,385 4,073,385 4,848,236 774,851 Fines, forfeitures & penalties 640,000 640,000 574,884 (65,116) Charges for services 519,524 519,524 562,649 43,125 Lease income 125,000 125,000 113,298 (11,702) Contributions 46,000 46,000 64,571 18,571 Investment income 200,000 200,000 81,908 (118,092) Miscellaneous 502,819 502,819 447,622 (55,197) Total revenues 41,068,185 41,068,185 42,698,139 1,629,954 Expenditures: General government: General government 6,278,097 5,683,523 2,345,442 3,338,081 Town council 289,572 289,572 267,108 22,464 Town clerk 497,244 497,244 466,184 31,060 Town manager 1,650,390 1,650,390 1,501,093 149,297 Human resources 879,634 879,634 781,856 97,778 Facilities 1,074,967 1,074,967 990,718 84,249 Finance 1,212,225 1,212,225 1,012,844 199,381 Legal 832,495 852,495 850,003 2,492 Technology services 2,554,348 2,609,348 2,606,888 2,460 Municipal courts 1,033,015 1,033,015 955,007 78,008 Public Safety: Police 12,413,909 12,713,909 12,703,164 10,745 Building safety 1,121,615 1,121,615 864,693 256,922 Code Enforcement 66,095 58,675 7,234 51,441 Highways and streets: Public works 2,490,576 2,490,576 2,215,090 275,486 Health and welfare: Animal Services 222,000 367,733 365,200 2,533 Economic and community development: Development services 4,117,978 4,121,265 3,436,209 685,056 Economic development and tourism 200,285 196,998 195,039 1,959 Community development 705,765 713,185 611,544 101,641 Culture and recreation: Parks and recreation 4,709,900 4,783,741 3,940,874 842,867 Capital outlay 638,595 638,595 630,631 7,964 Total expenditures 42,988,705 42,988,705 36,746,821 6,241,884 Excess (deficiency) of revenues over expenditures (1,920,520) (1,920,520) 5,951,318 7,871,838 Other financing sources (uses): Proceeds from the sale of capital assets 150,000 150,000 45,368 (104,632) Transfers in - - 53,783 53,783 Transfers out (5,371,145) (5,371,145) (3,886,141) 1,485,004 Total other financing sources (uses)(5,221,145) (5,221,145) (3,786,990) 1,434,155 Changes in fund balances (7,141,665) (7,141,665) 2,164,328 9,305,993 Fund balances, beginning of year - - 22,842,783 22,842,783 Fund balances, end of year (7,141,665)$ (7,141,665)$ 25,007,111$ 32,148,776$ Variance - Positive (Negative) 40 The notes to the financial statements are an integral part of this statement. Budgeted Amounts Original Final Actual Variance - Positive (Negative) Revenues: Intergovernmental 3,093,263$ 3,093,263$ 3,142,347$ 49,084$ Investment income 7,500 7,500 6,181 (1,319) Miscellaneous - - 7,508 7,508 Total revenues 3,100,763 3,100,763 3,156,036 55,273 Expenditures: Current - Highways and streets 3,368,300 3,375,520 3,591,157 (215,637) Capital outlay 498,877 491,657 16,350 475,307 Total expenditures 3,867,177 3,867,177 3,607,507 259,670 Excess (deficiency) of revenues over expenditures (766,414) (766,414) (451,471) 314,943 Fund balances, beginning of year - - 1,812,141 1,812,141 Fund balances, end of year (766,414)$ (766,414)$ 1,360,670$ 2,127,084$ TOWN OF MARANA, ARIZONA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - HIGHWAY USER REVENUE FUND YEAR ENDED JUNE 30, 2017 41 TOWN OF MARANA, ARIZONA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2017 Business-type Activities Governmental Activities Water Wastewater Airport Total Enterprise Funds Internal Service Funds ASSETS Current assets: Cash and cash equivalents 3,805,577$ 19,889,949$ 58,372$ 23,753,898$ 962,749$ Accounts receivable 698,849 174,504 56,140 929,493 - Due from governments - - 85,599 85,599 - Prepaid items 25,368 - - 25,368 - Total current assets 4,529,794 20,064,453 200,111 24,794,358 962,749 Noncurrent assets: Restricted cash 365,485 - - 365,485 - Capital assets not depreciated 8,183,408 10,737,684 2,808,444 21,729,536 - Capital assets (net of depreciation)23,796,441 65,932,875 14,734,015 104,463,331 - Total noncurrent assets 32,345,334 76,670,559 17,542,459 126,558,352 - Total assets 36,875,128 96,735,012 17,742,570 151,352,710 962,749 DEFERRED OUTFLOWS OF RESOURCES Employer contributions 139,710 22,307 19,568 181,585 - Resources related to pensions 295,168 58,517 38,143 391,828 - Total deferred outflows of resources 434,878 80,824 57,711 573,413 - LIABILITIES Current liabilities: Accounts payable 690,364 2,442,324 30,232 3,162,920 541 Accrued payroll and employee benefits 33,590 7,192 5,155 45,937 - Claims payable - - - - 256,982 Compensated absences 71,159 16,296 5,974 93,429 - Due to other funds - - 150,000 150,000 - Deposits held for others 700,907 - - 700,907 - Due to other governments 125,460 - - 125,460 - Bonds payable - current 139,000 - - 139,000 - Loan payable - current 219,485 - - 219,485 - Interest payable 64,405 - - 64,405 - Unearned revenue - - 1,960 1,960 - Total current liabilities 2,044,370 2,465,812 193,321 4,703,503 257,523 Noncurrent liabilities: Due to other funds - - 2,074,844 2,074,844 - Compensated absences 7,907 1,811 664 10,382 - Bonds payable 939,000 20,170,246 - 21,109,246 - Loan payable 3,201,572 - - 3,201,572 - Net pension liability 1,829,651 283,749 222,672 2,336,072 - Total non-current liabilities 5,978,130 20,455,806 2,298,180 28,732,116 - Total liabilities 8,022,500 22,921,618 2,491,501 33,435,619 257,523 DEFERRED INFLOWS OF RESOURCES Resources related to pensions 226,127 26,832 29,236 282,195 - Total deferred inflows of resources 226,127 26,832 29,236 282,195 - NET POSITION Net investment in capital assets 27,480,792 56,500,313 17,542,459 101,523,564 - Restricted for debt service 365,485 - - 365,485 - Unrestricted 1,215,102 17,367,073 (2,262,915) 16,319,260 705,226 Total net position 29,061,379$ 73,867,386$ 15,279,544$ 118,208,309$ 705,226$ The notes to the financial statements are an integral part of this statement. 42 TOWN OF MARANA, ARIZONA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2017 Business-type Activities Governmental Activities Water Wastewater Airport Total Enterprise Funds Internal Service Funds Operating revenues: Licenses, fees & permits -$ 19,124$ -$ 19,124$ -$ Charges for services 5,063,500 1,046,514 250,999 6,361,013 4,337,490 Miscellaneous - - 54,031 54,031 - Total operating revenues 5,063,500 1,065,638 305,030 6,434,168 4,337,490 Operating expenses: Personnel costs 1,817,977 392,219 268,129 2,478,325 - Contractual services 182,487 480,397 93,271 756,155 769,975 Commodities 1,342,669 239,505 41,176 1,623,350 - Other 930,226 4,995 117,394 1,052,615 3,362,643 Depreciation expense 1,016,612 2,602,155 932,009 4,550,776 - Total operating expenses 5,289,971 3,719,271 1,451,979 10,461,221 4,132,618 Operating gain (loss)(226,471) (2,653,633) (1,146,949) (4,027,053) 204,872 Nonoperating revenues (expenses): Development fees Investment income 19,582 22,963 - 42,545 - Interest expense (77,495) - - (77,495) - Loss on disposal of capital assets (320,308) - - (320,308) - Bond issuance costs - (263,392) - (263,392) - Total nonoperating revenues (expenses)(378,221) (240,429) - (618,650) - Net gain (loss) before contributions and transfers (604,692) (2,894,062) (1,146,949) (4,645,703) 204,872 Development fees 1,867,827 1,120,578 - 2,988,405 - Capital contributions 1,484,839 642,825 824,678 2,952,342 - Transfers in - 4,742,557 337,975 5,080,532 - Transfers out (1,288,027) (914,310) - (2,202,337) - Changes in net position 1,459,947 2,697,588 15,704 4,173,239 204,872 Net position, beginning of year 27,601,432 71,169,798 15,263,840 114,035,070 500,354 Net position, end of year 29,061,379$ 73,867,386$ 15,279,544$ 118,208,309$ 705,226$ The notes to the financial statements are an integral part of this statement. 43 Business-type Activities Governmental Activities Water Wastewater Airport Total Enterprise Funds Internal Service Funds Cash flows from operating activities: Received from customers 5,049,546$ 975,239$ 267,072$ 6,291,857$ 4,337,490$ Payments to suppliers for goods and services (2,473,615) 1,155,919 (273,823) (1,591,519) (4,132,370) Payments to employees for services (1,851,104) (393,968) (281,231) (2,526,303) - Other receipts - 19,124 54,031 73,155 - Net cash provided by (used for) operating activities 724,827 1,756,314 (233,951) 2,247,190 205,120 Cash flows from non-capital activities: Interfund borrowing - - (58,372) (58,372) - Transfers in - 4,742,557 337,975 5,080,532 - Transfers out (1,288,027) (914,310) - (2,202,337) - Net cash provided by (used for) non-capital activities (1,288,027) 3,828,247 279,603 2,819,823 - Cash flows from capital activities and related financing activities: Capital grants received 552,000 - 722,671 1,274,671 - Development fees received 1,867,827 1,120,578 - 2,988,405 - Bond proceeds - 20,170,246 - 20,170,246 - Bond issuance costs - (263,392) - (263,392) - Principal payments (349,159) - - (349,159) - Interest paid on debt (82,379) - - (82,379) - Acquisition and construction of capital assets (3,068,212) (8,504,668) (710,051) (12,282,931) - Net cash provided by (used for) capital activities (1,079,923) 12,522,764 12,620 11,455,461 - Cash flows from investing activities: Interest on investments 19,582 22,963 - 42,545 - Net cash provided by investing activities 19,582 22,963 - 42,545 - Net increase (decrease) in cash and cash equivalents (1,623,541) 18,130,288 58,272 16,565,019 205,120 Cash and cash equivalents, beginning of year 5,794,603 1,759,661 100 7,554,364 757,629 Cash and cash equivalents, end of year 4,171,062$ 19,889,949$ 58,372$ 24,119,383$ 962,749$ Reconciliation of operating income (loss) to net cash provided by (used for) operating activities: Operating income (loss)(226,471)$ (2,653,633)$ (1,146,949)$ (4,027,053)$ 204,872$ Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation 1,016,612 2,602,155 932,009 4,550,776 - Pension expense 152,148 33,564 20,526 206,238 - Employer pension contributions (139,710) (22,307) (19,568) (181,585) - Changes in assets and liabilities: (Increase) decrease in accounts receivable 12,658 (73,045) (2,295) (62,682) - Decrease in due from other governments - - 18,368 18,368 - (Increase) decrease in prepaid items (12,683) 1,770 - (10,913) - Increase (decrease) in accounts payable (18,233) 1,880,816 (21,982) 1,840,601 474 Decrease in claims payable - - - - (226) Increase in accrued payroll (59,675) (12,095) (8,784) (80,554) - Increase (decrease) in compensated absences payable 14,110 (911) (5,276) 7,923 - Increase in deposits held for others 40,549 - - 40,549 - Decrease in due to other governments (54,478) - - (54,478) - Net cash provided (used) by operating activities 724,827$ 1,756,314$ (233,951)$ 2,247,190$ 205,120$ Noncash investing, capital and financing activities: Capital contributions 932,839 642,825 - 1,575,664 - TOWN OF MARANA, ARIZONA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2017 The notes to the financial statements are an integral part of this statement. 44 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 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. 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 governm ent, 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 Facil ities 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 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. These statements are to distinguish between the governmental and business-type activities of the Town. Governmental activities normally are supported by taxes and intergovernmental revenues, and are reported separately from business-type activities, which are financed in whole or part by fees charged to 45 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 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 revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The 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 revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes, 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 defini tion 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 c omponent 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. 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. 46 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 Transportation Fund –This fund accounts for the financing and construction of transporta tion capacity 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 focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon 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 47 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 installments after the delinquent date. Pursuant to ARS, a lien against assessed real and personal property 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 as sessment 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 appropriat e 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 48 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 interest and trustee fees associated with the bond issues, retirement of principal balances, and t o finance various capital projects. 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 o f 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 t o 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. 49 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 Depreciation is provided over the estimated useful lives of such assets using the straight-line method. These estimated useful lives are as follows: Years Buildings 15-40 Building improvements 10-15 Pump stations, distribution systems, equipment and improvements 20-75 Public domain infrastructure 20-50 Machinery, equipment, and assets under capital lease 5-10 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. Interfu nd transfers in the fund statements are reported as other financing sources/uses in governmental funds and after non-operating revenues/expenses in proprietary funds. 50 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 O.Use of Estimates The preparation of financial statements in conformity with generall y 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 proceedi ngs. 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, Committe d, 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 purp oses 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. 51 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 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, 2017, the fund balance details by classification are listed below: General Fund Highway User Revenue Tangerine Farms Improvement District Debt Service PAG/RTA Capital Fund Transportation Fund Non-Major Governmental Funds Fund Balances: Nonspendable: Prepaid expenditures $292,195 $-$-$-$-$1,332 Long-term due from other funds 2,074,844 ----- Restricted: Courts -----1,115,408 Tourism promotion -----924,657 Police -----1,786,379 Highways and streets -1,360,670 ---- Housing programs -----220,822 Capital projects ----12,828,852 27,523,433 Debt service --17,279 --4,182,152 Unassigned:22,640,072 --(1,908,216)-- Total fund balances:$25,007,111 $1,360,670 $17,279 $(1,908,216)$12,828,852 $35,754,183 NOTE 3 -BUDGETARY CONTROL Excess Expenditures Over Budget –At June 30, 2017, the Town had expenditures in funds that exceeded the budget; however, this does not constitute a violation of any legal provisions. 52 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 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 November 8, 2016, 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, 2017. 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 ena cted. 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 L ocal 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 Gladden Farms CFD Debt Fund, the Tangerine Farms Improvement District Debt Fund, the Transportation Fund,the One-half Cent Sales Tax 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. NOTE 4 -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 t he 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, 53 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 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, 2017, the carrying amount of the Town’s deposits was $18,450,939 and the bank balance was $16,390,170. The differences between the book and bank balances are due to timing of certain transactions like deposits in transit and outstanding checks.In addition to the regular timing of transactions, the Town had a transfer of $2,787,584 in transit transferring funds from the Local Government Investment Pool to the General Operating Account. The funds were removed from the Local Government Investment Pool on June 30, 2017, but were not received in the General Operating Account until July 6, 2017. Of the bank balance, $584,744 was covered by Federal depository insurance and $16,186,291 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 $4,025 in petty cash funds, change drawers and other related items at year end. Additionally, the Town had deposits of $1,363,154 held by Pima County by in a fiduciary capacity and $432,955 held by Fidelity in an escrow account. At June 30, 2017, the Town’s investments, categorized within the fair value hierarchy established by generally accepted accounting principles, were as follows: Fair value measurement using Investment by fair value level Amount Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Federal Home Loan Mortgage Corp.$999,900 $-$999,900 $- Federal National Mortgage Assn.6,966,041 -6,966,041 - Total investments by fair value level $-$7,965,941 $- External investment pools measured at fair value State Treasurer’s investment pool 5 26,535,746 18.25 days average maturities State Treasurer’s investment pool 7 8,511,206 54.75 days average maturities Total investments measured at fair value 35,046,952 Investments measured at amortized costs Money market investments 30,011,032 Total investments measured at amortized costs 30,011,032 Total investments $73,023,925 54 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 Investments categorized as Level 2 are valued using market-corroborated inputs by evaluating issues with its best-known market maker.The Town’s investment portfolio consisted of deposits in the State Treasurer’s Local Government Investment (LGI) Pools. The pools are not required to register (and are not registered) with the Securities and Exchange Commission under the 1940 Investment Advisors Act.The activity and performance of the pools are reviewed monthly by the State Board of Investment in accordance with Arizona Revised Statutes §35-311.The fair value of investments is measured on a monthly basis. Participant shares are purchased and sold based on the net asset value (NAV) of shares. The NAV is determined by dividing the fair value of the portfolio by the total share s outstanding. Those shares are not identified with specific investments, are not subject to custodial credit risk, and have no stated interest rate or maturity date. The State Treasurer does not contract with an outside insurer in order to guarantee the value of the portfolio or the price of shares redeemed. Interest Rate Risk. 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 . Credit Risk. The Town has no investment policy that would further limit its investment choices.As of June 30, 2017, 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, 2017 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. Custodial Credit Risk.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. Concentration of 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, 2017, the Town had the following investment in debt securities: Investment maturities Investment Type Amount Less than 1 Year 1-5 Years Money market investments $30,011,032 $30,011,032 $- Federal Home Loan Mortgage Corp.999,900 999,900 Federal National Mortgage Assn.6,966,041 -6,966,041 Total investments by fair value level $30,011,032 $7,965,941 55 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 5 -CAPITAL ASSETS The following is a summary of the changes in capital assets for fiscal year ended June 30, 2017: Beginning Balance Additions Deletions Ending Balance Capital assets, not being depreciated: Land $ 6,454,735 $ 533,783 $-$ 6,988,518 Construction in progress 16,645,530 14,355,285 (79,017)30,921,798 Total capital assets, not being depreciated 23,100,265 14,889,068 (79,017)37,910,316 Capital assets, being depreciated: Buildings and improvements 45,328,901 -(45,514)45,283,387 Machinery, equipment, and other assets 19,664,154 1,319,330 (725,133)20,258,351 Infrastructure 343,590,031 13,379,033 -356,969,064 Total capital assets being depreciated 408,583,086 14,698,363 (770,647)422,510,802 Less accumulated depreciation for: Buildings and improvements (15,951,291)(1,434,116)113,356 (17,272,051) Machinery, equipment, and other assets (15,436,020)(919,565)657,291 (15,698,294) Infrastructure (137,704,358)(16,095,411)-(153,799,769) Total accumulated depreciation (169,091,669)(18,449,092)770,647 (186,770,114) Total capital assets, being depreciated, net 239,491,417 (3,750,729)-235,740,688 Governmental activities capital assets, net $262,591,682 $11,138,339 $(79,017)$273,651,004 Governmental activities depreciation expense was charged to function/programs as follows: Governmental Activities: General government $ 868,554 Public safety 622,794 Highways and streets 14,404,524 Economic and community development 162,995 Health and Welfare 976 Culture and recreation 2,490,564 Total depreciation expense –governmental activities $ 18,550,407 The difference of $101,315 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. 56 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 A summary of changes in capital assets for business-type activities is as follows: Business-type Activities Beginning Balance Additions Deletions Ending Balance Capital assets, not being depreciated: Land $ 4,493,811 $-$-$ 4,493,811 Water rights 3,910,572 848,276 (327,918)4,430,930 Construction in progress 5,125,442 11,344,564 (3,665,211)12,804,795 Total capital assets, not being depreciated 13,529,825 12,192,840 (3,993,129)21,729,536 Capital assets, being depreciated: Buildings, improvements and infrastructure 128,848,242 5,240,875 -134,089,117 Machinery, equipment, and other assets 1,288,382 199,016 (60,827)1,426,571 Total capital assets being depreciated 130,136,624 5,439,891 (60,827)135,515,688 Less accumulated depreciation for: Buildings, improvements and infrastructure (25,645,706)(4,423,765)(30,069,471) Machinery, equipment, and other assets (815,387)(228,326)60,827 (982,886) Total accumulated depreciation (26,461,093)(4,652,091)60,827 (31,052,357) Total capital assets, being depreciated, net 103,675,531 787,800 -104,463,331 Business-type activities capital assets, net $ 117,205,356 $12,980,640 $(3,993,129)$126,192,867 Business-type depreciation expense was charged to functions/programs as follows: Business-type Activities: Airport $ 932,009 Water 1,016,612 Wastewater 2,602,155 Total depreciation expense –business-type activities $4,550,776 The difference of $101,315 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 6 –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, 2017 on the outstanding balance is 1.468 percent. 57 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 The following is a schedule by years of the debt service requirements for the loan as of June 30, 2017. Fiscal Year Principal Interest Total 2018 $219,485 $ 48,610 $ 268,095 2019 226,000 45,340 271,340 2020 232,708 41,973 274,681 2021 239,614 38,506 278,120 2022 246,726 34,937 281,663 2023 –2027 1,347,917 110,648 1,458,565 2028 –2030 908,607 26,938 935,545 Totals $ 3,421,057 $ 346,952 $ 3,768,009 B.Community Facilities District (CFD) General Obligation Bonds Gladden Farms Community Facilities District (a component unit) issued $7,955,000 of general obligation bonds with an interest rate ranging from 2.0% to 4.0%. The proceeds were used to advance refund $7,555,000 of outstanding general obligation bonds which had interest rates ranging from 3.6% to 6.0% and provide $400,000 for additional capital infrastructure within the district. The net proceeds of $7,935,148 (including $852,472 premium and after payment of $472,275 in underwriting fees and other issuance costs) were deposited in an irrevocable trust with an escrow agent to provide funds for the future debt service payment on the refunded bonds.As a result the 2004, 2006,2007, and 2010 general obligation bonds are considered defeased and the liability for the refunded bonds has been removed from the statement of net position.At June 30, 2017, $2,425,000 of defeased bonds were still outstanding for the 2007 Series and $875,000 was still outstanding for the 2010 Series. The District advance refunded the 2004, 2006, 2007, and 2010 Series general obligation bonds to obtain an economic gain (difference between the present values of the debt service p ayments on the old and new debt) of $1,544,523. The CFD general obligation bonds outstanding as reported in governmental activities as of June 30, 2017, were as follows: Outstanding June 30, 2017 $7,955,000 CFD General Obligation Bonds, 2016 Series, due in annual installments of $20,000 to $640,000; through July 15, 2041; at a 2.0% to 4.0% interest rate.7,955,000 58 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 Annual debt service requirements to maturity on the CFD general obligation bonds at June 30, 2017, are summarized as follows: Year ending June 30 Principal Interest Total 2018 $ 210,000 $ 271,163 $ 481,163 2019 205,000 267,013 472,013 2020 265,000 262,313 527,313 2021 410,000 255,563 665,563 2022 420,000 247,263 667,263 2023 –2027 2,285,000 1,038,938 3,323,938 2028 –2032 2,735,000 559,060 3,294,060 2033 –2037 1,315,000 74,450 1,389,450 2038 –2042 110,000 9,062 119,062 Totals $ 7,955,000 $ 2,984,825 $ 10,939,825 C.Tangerine Farms Road Improvement District Improvement Bonds Tangerine Farms Road Improvement District (a component unit) issued $14,245,132 of special assessment bonds with an interest rate of 1.96%.The proceeds were used to advance refund $14,469,000 of outstanding special assessment bonds which had an interest rate of 4.6%. The net proceeds of $14,801,787 (including $652,280 in prepaid assessments and fees collected and after payment of $95,625 in agent fees and other issuance costs)were deposited in an irrevocable trust with an escrow agent to provide funds for the future debt service payment on the refunded bonds. As a result the 2006 Series special assessment bond is considered defeased and the liability for the refunded bond has been removed from the statement of net position. The District advance refunded the 2006 Series special assessment bonds to obtain an economic gain (difference between the present values of the debt service payments on the old and new debt) of $2,129,724. These bonds are 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, 2017, were as follows: Outstanding June 30, 2017 $14,245,132 TFRID Refunding Bonds, Series 2017, due in annual installments of $1,618,132 to $1,907,000; through January 1, 2026; at an interest rate of 1.96%.$14,245,132 59 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 Annual debt service requirements to maturity on the TFRID special assessment bonds at June 30, 2017, are summarized as follows: Year ending June 30 Principal Interest Total 2018 253,563 253,563 2019 1,618,132 359,205 1,977,337 2020 1,704,000 247,489 1,951,489 2021 1,736,000 214,091 1,950,091 2022 1,769,000 180,065 1,949,065 2023-2026 7,418,000 366,872 7,784,872 Totals $ 14,245,132 $ 1,621,285 $ 15,866,417 D.Revenue Bonds The Town issued $19,865,000 of pledged excise tax-revenue and refunding obligation bonds with an interest rate of 2% to 5%. Proceeds of $22,912,387 were used of advance refund $22,755,000 of outstanding 2008 Series revenue bonds which had interest rates ranging from 4.0% to 5.25%. Th e net proceeds of $24,128,715 (including a $3,216,239 premium, $1,311,269 Town contribution,and after payment of $263,794 in underwriting fees and other issuance costs)were deposited in an irrevocable trust with an escrow agent to provide funds for the future debt service payment on the refunded bonds. As a result, the 2008 Series revenue bonds are considered defeased and the liability for the refunded bonds has been removed from the statement of net position.As of June 30, 2017, $20,485,000 of defeased bonds are still outstanding. The Town advance refunded the 2008 Series revenue bonds to obtain an economic gain (difference between the present values of the debt service payments on the old and new debt) of $3,481,567. The Town issued $19,780,000 of pledged excise tax-revenue bonds with an interest rate of 2.0% to 5.0%. The proceeds will be used to finance the expansion of the Marana Wastewater Reclamation Facility and construction of the groundwater Recharge Facility. The Town has issued revenue bonds for acquiring water systems,wastewater 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, wastewater utility revenue,and water utility revenue. The revenue bonds outstanding as of June 30, 2017 were as follows: 60 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 Outstanding June 30, 2017 Governmental Business- type $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. $ 32,215,000 $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. 5,760,000 $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. $1,078,000 $17,215,000 Pledged Excise Tax Revenue Bonds, 2017 Series A, due in annual installments of $1,920,000 to $2,420,000; through July 1, 2042; at a 2.0%to 5.0%interest rate.17,215,000 $19,865,000 Pledged Excise Tax Revenue and Revenue Refunding Obligations, 2017 Series B, due in annual installments of $840,000 to $2,580,000; through July 1, 2028; at a 2.0% to 5.0% interest rate. 19,865,000 $2,565,000 Pledged Excise Tax Revenue Bonds, 2017 Series C, due in annual installments of $30,000 to $1,980,000; through July 1, 2034; at a 2.0%to 5.0%interest rate. 2,565,000 Total $ 57,840,000 $ 20,858,000 Annual debt service requirements to maturity on revenue bonds at June 30, 2017, are summarized as follows: Governmental Activities Business-type Activities Year ending June 30 Principal Interest Principal Interest 2018 $ 2,005,000 $ 2,207,934 $ 139,000 $ 589,616 2019 3,184,000 2,402,294 179,000 830,561 2020 3,624,000 2,303,358 184,000 825,969 2021 3,726,000 2,185,415 186,000 821,289 2022 3,865,000 2,037,374 193,000 816,494 2023-2027 23,566,000 7,161,952 197,000 4,047,836 2028-2032 14,510,000 2,053,700 235,000 4,032,969 2033-2037 3,360,000 170,000 6,325,000 3,506,194 2038-2042 --13,220,000 1,633,728 Totals $ 57,840,000 $ 20,522,027 $ 20,858,000 $17,104,656 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 $80.9 million in Excise Tax Revenue Bonds issued in 2013, 61 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 2014, and 2017. The various bonds were issued for the expansion of the Marana Wastewater Reclamation Facility, construction of the groundwater Recharge Facility,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, $75.6 million in bonds remain outstanding to be repaid by future excise tax revenues and the net revenues available for service of this debt were $51.7 million. The debt principal and interest paid on this debt during fiscal year 2017 was $6.2 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, $4.5 million remains outstanding to be repaid by future water revenues. For the fiscal year ended June 30, 2017, the net revenues available for service of this debt were $1.7 million. The debt principal and interest paid on this debt during fiscal year 2017 was $482,853. F.Changes in Long-term Liabilities The following is a summary of changes in long-term liability activity for fiscal year ended June 30, 2017. Governmental activities: Beginning Balance Additions Reductions Ending Balance Due Within One Year General obligation bonds $ 7,835,000 $7,955,000 $ (7,835,000)$ 7,955,000 $ 210,000 Revenue bonds 64,090,000 19,865,000 (26,115,000)57,840,000 2,005,000 Compensated absences 1,041,708 1,012,305 (964,957)1,089,056 980,151 Net pension liability 30,823,657 5,630,736 -36,454,393 - Special assessment bonds 15,927,000 14,245,132 (15,927,000)14,245,132 - Deferred bond premium 2,624,582 4,089,196 (460,283)6,253,495 - Total $122,341,947 $52,797,369 $(51,302,240)$123,837,076 $3,195,151 Business-type activities: Loan payable $ 3,634,216 $-$ (213,159)$ 3,421,057 $219,485 Net pension liability 2,166,001 170,071 -2,336,072 - Revenue bonds 1,214,000 19,780,000 (136,000)20,858,000 139,000 Compensated absences 95,888 82,907 (74,984)103,811 93,429 Deferred bond premium -390,246 -390,246 - Total $ 7,110,105 $20,423,224 $ (424,143)$ 27,109,186 $ 451,914 62 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 7 –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 gov ernmental funds were as follows: Deferred revenue Unavailable Unearned Program revenues (General Fund)$-$313,529 Intergovernmental (PAG/RTA Capital Fund)51,115 Intergovernmental (Non-Major governmental funds)281,380 11,616 Special assessments (Tangerine Farms Improvement District Debt Service Fund)14,245,132 - Total deferred amounts for governmental funds $14,577,627 $325,145 NOTE 8 –INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS Due to/from other funds: At June 30, 2017, 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 201 7- 2018, these interfund borrowing will be eliminated as sufficient resources become available.A portion of the amount due from the Airport Fund, $2,074,844, is considered long term.Listed below is a summary of the interfund borrowing transactions. Due From Due To PAG/RTA Capital Fund Non-Major Governmental Funds Airport Fund Total General Fund $3,035,622 $12,329 0 $2,224,844 0 $5,272,795 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 Transfer Out General Fund Non-Major Governmental Funds Wastewater Fund Airport Fund Total General Fund $-$2,379,851 $1,168,315 $337,975 $3,886,141 Transportation 437,399 437,399 Non-Major Governmental 53,783 2,980,152 3,200,525 6,234,460 Water 914,310 373,717 1,288,027 Wastewater 914,310 914,310 Total $53,783 $7,626,022 $4,742,557 $337,975 $12,760,337 63 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 NOTE 9 -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, 2017, the Town reported the following aggregate amounts related to pensions for all plans to which it contributes: Statement of Net Position and Statement of Activities Governmental Activities Business-Type Activities Total Net pension liabilities $36,454,393 $ 2,336,072 $38,790,465 Deferred outflows of resources 10,253,753 573,413 10,827,166 Deferred inflows of resources 2,936,513 282,195 3,218,708 Pension expense 5,149,012 206,238 5,355,250 The Town reported $2,775,991 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 Tit le 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) and participating local boards. The Board of Trustees is a nine-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 n agent multiple- employer defined benefit pension plan and an agent multiple-employer defined benefit health insurance premium benefit (OPEB) 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: 64 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 PSPRS Initial membership date: Before January 1,2012 On or after January 1,2012 Retirement and Disability Years of service and age required to receive benefit 20 years,any age 15 years,age 62 25 years,age 52.5 Final average salary is based on Highest 36 consecutive months of last 20 years Highest 60 consecutive months of last 20 years Benefit percent Normal Retirement 50% less 2.0% for each year of 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% 2.5% per year of credited service, not to exceed 80% Accidental Disability Retirement 50% or normal retirement, whichever is greater Catastrophic Disability Retirement 90% for the first 60 months then reduced to either 62.5% or normal retirement, whichever is greater Ordinary Disability Retirement Normal retirement calculated with actual years of credited service or 20 years of credited service, whichever is greater, multiplied by years of credited service (not to 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 CORP Initial membership date: Before January 1,2012 On or after January 1,2012 Retirement and Disability Years of service and age required to receive benefit Sum of years and age equals 80 25 years,any age (dispatchers) 20 years,any age (all others) 10 years,age 62 25 years,age 52.5 10 years,age 62 Final average salary is based on Highest 36 consecutive months of last 10 years Highest 60 consecutive months of last 10 years Benefit percent Normal Retirement 2.0% to 2.5% per year of credited service, not to exceed 80% 65 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 CORP Initial membership date: Before January 1,2012 On or after January 1,2012 Accidental Disability Retirement 50% or normal retirement if more than 20 years of credited service 50% or normal retirement if more than 25 years of credited service Total and Permanent Disability Retirement 50% or normal retirement if more than 25 years of credited service Ordinary Disability Retirement 2.5% per year of credited service 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. Employees covered by benefit terms—At June 30, 2017, the following employees were covered by the agent pension plans’ benefit terms: PSPRS CORP Dispatchers Inactive employees or beneficiaries currently receiving benefits 26 - Inactive employees entitled to but not yet receiving benefits 20 3 Active employees 78 7 Total 124 10 Contributions—State statutes establish the pension contribution requirements for active PSPRS and CORP employees. In accordance with state statutes, annual actuarial valuations determine employer con tribution 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, 2017, are indicated below. Rates are a percentage of active members’ annual covered payroll. 66 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 PSPRS CORP Dispatchers Active members—Pension 11.65%7.96% Town Pension 24.97%12.66% Health insurance premium benefit .24%.39% In addition,statute required the Town to contribute at the actuarially determined rate of 13.28 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, 2017, were: PSPRS CORP Dispatchers Pension Contributions $1,381,861 $51,210 Health Insurance Premium Benefit 13,062 1,578 Total Contributions $1,394,923 $52,788 During fiscal year 2017, the Town paid for PSPRS and CORP pension contributions as follows:96% percent from the General Fund and 4%percent from other funds. Pension liability—At June 30, 2017, the Town reported the following net pension liabilities: Net Pension Liability PSPRS 14,524,676 CORP Dispatchers 532,300 The net pension liabilities were measured as of June 30,2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The total pension liabilities as of June 30, 2016, reflect the following changes of benefit terms and actuarial assumptions. 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. Laws 2016, Chapter 2, changed the benefit formula and contribution requirements for members hired on or after July 1, 2017. The investment rate of return actuarial assumption was decreased from 7.85 percent to 7.5 percent for PSPRS and CORP plans. The net pension liabilities measured as of June 30, 2017, will reflect changes of actuarial assumptions based on the results of an actuarial experience study for the 5-year period ended June 30, 2016. The change in the Town’s net pension liabilities as a result of these changes is not known. 67 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 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, 2016 Actuarial cost method Individual entry age normal Investment rate of return 7.50% Projected salary increases 4.0%–8.0% for PSPRS and 4.0%–7.25% for CORP Inflation 3.0% 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, 2016 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 7.50 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 arithmetic real rates of return for each major asset class are summarized in the following table: PSPRS and CORP Asset Class Target Allocation Long-Term Expected Real Rate of Return U.S. Equity 16%6.23% Non-U.S. Equity 14%8.25% Private Equity 11%9.50% Fixed Income 7%2.92% Credit Opportunities 13%7.08% Absolute Return 5%4.11% GTAA 10%4.38% Real Assets 8%4.77% Real Estate 10%4.48% Risk Parity 4%5.13% Short Term Inv 2%0.75% Total 100% Pension discount rates—The following discount rates were used to measure the total pension liabilities: PSPRS CORP Dispatchers Discount rates 7.50%7.50% Change from prior year (0.35)(0.35) 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 68 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 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) PSPRS Increase (Decrease) Total Pension Liability (a) Plan Fiduciary Net Position (b) Net Pension Liability (Asset) (a)–(b) Balances at June 30, 2016 25,634,888 15,408,969 10,225,919 Changes for the year: Service cost 994,058 -994,058 Interest on the total pension liability 2,005,255 -2,005,255 Changes of benefit terms 1,837,430 -1,837,430 Differences between expected and actual experience in the measurement of the pension liability 536,692 -536,692 Changes of assumptions or other inputs 1,226,081 -1,226,081 Contributions—employer -1,323,677 (1,323,677) Contributions—employee -672,181 (672,181) Net investment income -95,438 (95,438) Benefit payments, including refunds of employee contributions (1,174,525)(1,174,525)- Pension plan administrative expense -(14,134)14,134 Other changes -223,597 (223,597) Net changes 5,424,991 1,126,234 4,298,757 Balances at June 30, 2017 31,059,879 16,535,203 14,524,676 CORP Increase (Decrease) Total Pension Liability (a) Plan Fiduciary Net Position (b) Net Pension Liability (Asset) (a)–(b) Balances at June 30, 2016 1,435,344 977,446 457,898 Changes for the year: Service cost 57,866 -57,866 Interest on the total pension liability 113,075 -113,075 Changes of benefit terms 15,002 15,002 Differences between expected and actual experience in the measurement of the pension liability (25,358)-(25,358) Changes of assumptions or other inputs (136)-(136) Benefit payments, including refunds of employee contributions (47,673)(47,673)- 69 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 CORP Increase (Decrease) Contributions—employer -48,648 (48,648) Contributions—employee -32,623 (32,623) Net investment income -6,034 (6,034) Pension plan administrative expense -(1,253)1,253 Other changes -(5)5 Net changes 112,776 38,374 74,402 Balances at June 30, 2017 1,548,120 1,015,820 532,300 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 calcul ated 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. Pension expense—For the year ended June 30, 2017, the Town recognized the following pension expense: Pension Expense PSPRS 3,540,057 CORP Dispatchers 83,669 Pension deferred outflows/inflows of resources—At June 30, 2017, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: PSPRS Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $758,290 $- Changes of assumptions or other inputs 2,042,088 Net difference between projected and actual earnings on pension plan investments 1,288,786 285,622 Town contributions subsequent to the measurement date 1,381,861 Total $5,471,025 $285,622 1% Decrease Current Discount Rate 1% Increase PSPRS Rate 6.50%7.50%8.50% Net pension liability $19,075,515 $14,524,676 $10,821,055 CORP Dispatchers Rate 6.50%7.50%8.50% Net pension liability $773,990 $532,300 $332,549 70 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 CORP Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $-$44,059 Changes of assumptions or other inputs 11,001 115 Net difference between projected and actual earnings on pension plan investments 80,587 17,216 Town contributions subsequent to the measurement date 51,210 Total $142,798 $61,390 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 t he net pension liability (or an increase in the net pension asset) in the year ending June 30, 201 8. 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 2018 $870,263 $7,090 2019 870,261 7,092 2020 1,013,071 15,698 2021 646,876 8,027 2022 293,029 (6,185) Thereafter 110,042 (1,524) Agent plan OPEB actuarial assumptions—The health insurance premium benefit contribution requirements for the year ended June 30, 2017, were established by the June 30, 2015, actuarial valuations, and those actuarial valuations were based on the following actuarial methods and assumptions. 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 71 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 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 201 7 contribution requirements: PSPRS and CORP—OPEB Contribution Requirements 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 period 21 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 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: Year Ended June 30 Annual OPEB Cost Percentage of Annual Cost Contributed Net OPEB Obligation PSPRS 2017 $13,062 100 $- 2016 19,742 100 - 2015 66,579 100 - CORP Dispatchers 2017 1,578 100 - 2016 1,475 100 - 2015 3,164 100 - Agent plan OPEB funded status—The health insurance premium benefit plans’ funded status as of the most recent valuation date, June 30, 2016, along with the actuarial assumptions and methods used in those valuations follow. 72 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 PSPRS CORP Dispatchers Actuarial value of assets (a)$768,883 $39,112 Actuarial accrued liability (b)739,259 51,144 Unfunded actuarial accrued liability (funding excess) (b)–(a)(29,624)12,032 Funded ratio (a)/(b)104.0%76.5% Annual covered payroll (c) $5,182,784 $397,428 Unfunded actuarial accrued liability (funding excess) as a percentage of covered payroll (b)–(a) / (c)0.57%3.03% 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, 2016 Actuarial cost method Entry age normal Amortization method Level percent closed for unfunded actuarial accrued liability, open for excess Remaining amortization period 20 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 7.50% 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 i n 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 iss ues 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 provides for 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: 73 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 ASRS Retirement Initial membership date: Before July 1,2011 On or after July 1,2011 Years of service and age required to receive benefit Sum of years and age equals 80 10 years,age 62 5 years,age 50* any years,age 65 30 years,age 55 25 years,age 60 10 years,age 62 5 years,age 50* any years,age 65 Final average salary is based on Highest 36 consecutive months of last 120 months Highest 60 consecutive months of last 120 months Benefit percent per year of service 2.1% to 2.3%2.1% to 2.3% *With actuarially reduced benefits. Retirement benefits for members who joined the ASRS prior to September 13, 2013, are subject to automatic cost-of-living adjustments based on excess investment 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, 2017,statute required active ASRS members to contribute at the actuarially determined rate of 11.48 percent (11.34 percent for retirement and 0.14 percent for long-term disability) of the members’ annual covered payroll, and statute required the Town to contribute at the actuarially determined rate of 11.48 percent (10.78 percent for retirement, 0.56 percent for health insurance premium benefit, and 0.14 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 9.47 percent (9.17 percent for retirement, 0.21 percent for health insurance premium benefit, and 0.09 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, 2017, were $1,593,612. 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 June 30,Retirement Health Insurance Long-term Disability Total 2017 $1,496,440 $77,738 $19,434 $1,593,612 2016 1,426,881 65,755 15,780 1,508,416 2015 1,367,122 75,393 15,079 1,457,594 During fiscal year 2017, the Town paid for ASRS pension and OPEB contributions as follows:86.76% percent from the General Fund,.59%percent from major funds,12.13% from enterprise funds and .52% percent from other funds. 74 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 Pension liability—At June 30, 2017, the Town reported a liability of $22,691,024 for its proportionate share of the ASRS’ net pension liability. The net pension liability was measured as of June 30, 201 6. 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, 201 5, to the measurement date of June 30, 2016.The total pension liability as of June 30, 2016, reflects a change in actuarial assumption for a decrease in loads for future potential permanent benefit increases. 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, 2016. The Town’s proportion measured as of June 30, 2016, was 0.140584 percent, which was an increase of 0.004075 percent from its proportion measured as of June 30, 2014 Pension expense and deferred outflows/inflows of resources—For the year ended June 30, 2017, the Town recognized pension expense for ASRS of $1,731,524.At June 30, 2017, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: ASRS Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $137,892 $1,560,977 Changes of assumptions or other inputs -1,200,536 Net difference between projected and actual earnings on pension plan investments 2,458,952 - Changes in proportion and differences between contributions and proportionate share of contributions 881,266 - Town contributions subsequent to the measurement date 1,496,440 Total $4,974,550 $2,761,513 The $1,496,440 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, 2018. 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, 2018 $(505,315) 2019 (511,375) 2020 1,043,803 2021 689,484 Actuarial Assumptions—The significant actuarial assumptions used to measure the total pension liability are as follows: 75 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 ASRS Actuarial valuation date June 30, 2015 Actuarial roll forward date June 30, 2016 Actuarial cost method Entry age normal Investment rate of return 8% Projected salary increases 3–6.75% Inflation 3% Permanent benefit increase Included Mortality rates 1994 GAM Scale BB 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, 2012. The long-term expected rate of return on ASRS pension plan investments was determined to be 8.75 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 re turn for each major asset class are summarized in the following table: ASRS Asset Class Target Allocation Long-Term Expected Arithmetic Real Rate of Return Equity 58%6.73% Fixed income 25%3.70% Real estate 10%4.25% Multi-asset 5%3.41% Commodities 2%3.84% 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 8.75 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. 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: 76 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 ASRS 1% Decrease (7%) Current Discount Rate (8%) 1% Increase (9%) Proportionate share of the net pension liability $28,932,779 $22,691,024 $17,686,501 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.At the time of issuance, the most recent report for EORP was unavailable.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 and age required to receive benefit 20 years,any age 10 years,age 62 5 years,age 65 5 years,any age* any years and age if disabled 10 years,age 62 5 years,age 65 any years and age if disabled Final average salary is based on Highest 36 consecutive months of last 10 years Highest 60 consecutive months of last 10 years Benefit percent Normal Retirement 4% per year of service, not to exceed 80% 3% per year of service, not to exceed 75% Disability Retirement 80% with 10 or more years of service 40% with 5 to 10 years of service 20% with less than 5 years of service 75% with 10 or more years of service 37.5% with 5 to 10 years of service 18.75% with less than 5 years of service Survivor Benefit Retired Members 75% of retired member’s benefit 50% of retired member’s benefit 77 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 EORP Initial membership date: Before January 1,2012 On or after January 1,2012 Active Members and Other Inactive Members 75% of disability retirement benefit 50% of disability retirement benefit *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 Legisl ature 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, 2017,statute required active EORP members with an initial membership date on or before July 19, 2011,to contribute 13 percent of the members’ annual covered payroll for July 2016 through March 2017 and 7 percent of the members’ annual covered payroll for April 2017 through June 2017.Statute required active EORP members with an initial membership date after July 19, 2011, 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 all active EORP members’ annual covered payroll. The Town’s contributions to the pension plan for the year ended June 30, 2017, was $28,065.No OPEB contributions were required or made for the years ended June 30, 2015, 2016, and 2017. During fiscal year 2017, the Town paid for EORP pension contributions 100 percent from the General Fund. Pension liability—The most recent EORP Schedule of Employer Allocations, Schedule of Pension Amounts by Employer was unavailable.At June 30, 2017,Town reported the previous year’s liability for its proportionate share of the EORP’s net pension liability.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 follo ws: 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 total pension liability as of June 30, 2016, reflects a decrease in the investment rate of return actuarial assumption fro m 7.85 percent to 7.50 percent. The Town’s proportion of the net pension liability as of June 30, 201 5, was based on the Town’s actual contributions to the plan relative to the total of all participating employers’ actual contributions for the year 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. 78 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 The collective net pension liability measured as of June 30, 2017, will reflect changes of actuarial assumptions based on the results of an actuarial experience study for the 5 -year period ended June 30, 2016. The change in the Town’s proportionate share of the collective net pension liability as a result of these changes is not known. Pension expense and deferred outflows/inflows of resources—For the year ended June 30, 2017, the Town did not recognize pension expense for EORP due to the unavailability of the report.At June 30, 2017, the Town reported the June 30, 2016 deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: EORP Deferred Outflows of Resources Deferred Inflows 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, 2018. 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, 2016 Actuarial cost method Entry age normal Investment rate of return 7.50% Projected salary increases 4.25% Inflation 4.0% Permanent benefit increase Members retired on or before July 1, 2011: 3% of benefit 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 79 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 Actuarial assumptions used in the June 30, 2016, 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 7.50 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 arithmetic real rates of return for each major asset class are summarized in the following table: EORP Asset Class Target Allocation Long-Term Expected Real Rate 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, 2016, the discount rate used to measure the EORP total pension liability was 3.68 percent, which was a decrease of 1.18 from the discount rate used as of June 30, 2015. 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 7.50 percent was applied to periods of projected benefit payments through the year ended June 30, 20 27. A municipal bond rate of 2.85 percent obtained from the 20-year Bond Buyer Index, as published by the Federal Reserve as of June 30, 2016, was applied to periods of projected benefit payments after June 30, 2027. 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 3.68 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 (2.68 percent) or 1 percentage point higher (4.68 percent) than the current rate: EORP 1% Decrease (2.68%) Current Discount Rate (3.68%) 1% Increase (4.68%) Town’s proportionate share of the net pension liability $1,213,560 $1,042,465 $1,212,998 80 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 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 10 -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 11 -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 2017, the Town was obligated to $43 .26 million in significant contractual commitments for airport, transportation, park, water facility, and wastewater facility related construction projects.The water reclamation expansion project accounted for $22.6 million,Tangerine Corridor improvements accounted for $17.8 million,Public Safety Facility accounted for $831,000,Tangerine Sky Community Park accounted for $385,000, and Ora Mae Harn Park improvements accounted for $313,000. The remaining commitments were for other airport projects of $30,000,transportation projects of $372,000, water projects of $669,000, and park related projects accounted for $260,000. NOTE 12 -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. 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 81 TOWN OF MARANA, ARIZONA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2017 years or until the first twelve consecutive months the developer generates more than $1,000,000 in resort sales tax to the Town from the development project known as "Dove Mountain". This threshold was reached on June 30, 2011, and therefore the developer ceased reimbursing the Town for the annual rent payment.These leases provide for payments of minimum annual rentals as follows, excluding real estate taxes, common area charges, management fees, and sales taxes: Years Ending June 30, 2018 574,992 2019 574,992 2020 574,992 2021 632,491 2022 632,491 2023 - 2027 3,288,953 2028 - 2032 3,617,848 2033 - 2037 3,979,632 2038 - 2042 4,377,595 2043 - 2047 4,815,356 2048 - 2052 5,296,891 2053 - 2057 5,826,580 2058 - 2062 6,409,240 2063 - 2067 7,050,165 2068 - 2072 7,755,181 2073 - 2077 8,530,699 2078 - 2082 9,383,769 2083 - 2087 10,322,146 2088 - 2092 11,354,361 2093 - 2097 12,489,796 2098 - 2099 5,284,144 Total 112,772,314$ Minimum annual rentals above excludes annual rental under the remaining renewal options as of June 30, 2017. Rent expense under the above leases for fiscal 2016-17 aggregated $574,992. 82 REQUIRED SUPPLEMENTARY INFORMATION 83 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, 2017 Arizona State Retirement System Reporting Fiscal Year (Measurement Date) 2017 (2016) 2016 (2015) 2015 (2014) 2014 through 2008 Town’s proportion of the net pension liability 0.140584% 0.136510% 0.129998% Information not available Town’s proportionate share of the net pension liability $ 22,691,024 $ 21,263,376 $ 19,235,271 Town’s covered payroll $ 13,150,962 $ 12,565,464 $ 11,714,615 Town’s proportionate share of the net pension liability as a percentage of its covered payroll 172.54% 169.22% 164.20% Plan fiduciary net position as a percentage of the total pension liability 67.06% 68.35% 69.49% Elected Officials Retirement Plan Reporting Fiscal Year (Measurement Date) 2017 (2016) 2016 (2015) 2015 (2014) 2014 through 2008 Town’s proportion of the net pension liability Information not available .133401% .1658860% Information not available Town’s proportionate share of the net pension liability $1,042,465 $ 1,112,385 State’s proportionate share of the net pension liability associated with the Town 324,997 341,068 Total $1,367,462 $ 1,453,453 Town’s covered payroll $119,424 $ 119,423 Town’s proportionate share of the net pension liability as a percentage of its covered payroll 872.91% 931.15% Plan fiduciary net position as a percentage of the total pension liability 28.32% 31.91% See accompanying notes to pension plan schedules. 84 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, 2017 PSPRS Reporting Fiscal Year (Measurement Date) 2017 (2016) 2016 (2015) 2015 (2014) 2014 through 2008 Total pension liability Information Service cost $ 994,058 $ 891,324 $ 876,619 not Interest on the total pension liability 2,005,255 1,844,654 1,551,602 available Changes of benefit terms 1,837,430 - 308,515 Differences between expected and actual experience in the measurement of the pension liability 536,692 333,269 148,583 Changes of assumptions or other inputs 1,226,081 - 1,933,583 Benefit payments, including refunds of employee contributions (1,174,525) (974,950) (1,211,258) Net change in total pension liability 5,424,991 2,094,297 3,607,644 Total pension liability—beginning 25,634,888 23,540,591 19,932,947 Total pension liability—ending (a) $31,059,879 $25,634,888 $ 23,540,591 Plan fiduciary net position Contributions—employer $1,323,677 $1,006,859 $ 797,871 Contributions—employee 672,181 579,390 578,596 Net investment income 95,438 533,938 1,698,902 Benefit payments, including refunds of employee contributions (1,174,525) (974,950) (1,211,258) Pension plan administrative expense (14,134) (13,410) - Other changes 223,597 46,032 (543,969) Net change in plan fiduciary net position 1,126,234 1,177,859 1,320,142 Plan fiduciary net position—beginning 15,408,969 14,231,110 12,910,968 Plan fiduciary net position—ending (b) $16,535,203 $15,408,969 $ 14,231,110 Town’s net pension liability (asset)—ending (a) – (b) $14,524,676 $10,225,919 $ 9,309,481 Plan fiduciary net position as a percentage of the total pension liability 53.24% 60.11% 60.45% Covered payroll $5,182,784 $4,900,569 $ 4,638.415 Town’s net pension liability (asset) as a percentage of covered payroll 280.25% 208.67% 200.70% See accompanying notes to pension plan schedules. 85 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, 2017 CORP – Dispatchers Reporting Fiscal Year (Measurement Date) 2017 (2016) 2016 (2015) 2015 (2014) 2014 through 2008 Total pension liability Information Service cost $ 57,866 $ 64,307 $ 63,474 not Interest on the total pension liability 113,075 105,144 94,360 available Changes of benefit terms 15,002 - - Differences between expected and actual experience in the measurement of the pension liability (25,358) (18,303) (16,512) Changes of assumptions or other inputs (136) - 18,699 Benefit payments, including refunds of employee contributions (47,673) (46,131) - Net change in total pension liability 112,776 105,017 160,021 Total pension liability—beginning 1,435,344 1,330,327 1,170,306 Total pension liability—ending (a) $ 1,548,120 $ 1,435,344 $ 1,330,327 Plan fiduciary net position Contributions—employer $ 48,648 $ 49,045 $ 48,667 Contributions—employee 32,623 35,981 36,306 Net investment income 6,034 34,230 102,910 Benefit payments, including refunds of employee contributions (47,673) (46,131) - Pension plan administrative expense (1,253) (1,233) - Other changes (5) (635) (24,446) Net change in plan fiduciary net position 38,374 71,257 163,437 Plan fiduciary net position—beginning 977,446 906,189 742,752 Plan fiduciary net position—ending (b) $ 1,015,820 $ 977,446 $ 906,189 Town’s net pension liability (asset)— ending (a) – (b) $ 532,300 $ 457,898 $ 424,138 Plan fiduciary net position as a percentage of the total pension liability 65.62% 68.10% 68.12% Covered payroll $ 397,428 $ 430,892 $ 456,107 Town’s net pension liability (asset) as a percentage of covered payroll 133.94% 106.27% 92.99% See accompanying notes to pension plan schedules. 86 TOWN OF MARANA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF TOWN PENSION CONTRIBUTIONS JUNE 30, 2017 Arizona State Retirement System Reporting Fiscal Year 2017 2016 2015 2014 2013 Statutorily required contribution $1,496,440 $1,426,879 $ 1,367,122 $ 1,253,464 $1,172,006 Town’s contributions in relation to the statutorily required contribution 1,496,440 1,426,879 1,367,122 1,253,464 1,172,006 Town’s contribution deficiency (excess) $- $- $ - $ - $ - Town’s covered payroll $13,881,636 $13,150,962 $12,565,464 $11,714,615 $11,434,201 Town’s contributions as a percentage of covered payroll 10.78% 10.85% 10.88% 10.70% 10.25% 2012 2011 2010 2009 2008 Statutorily required contribution $1,095,471 $934,621 $929,807 $961,911 Information not available Town’s contributions in relation to the statutorily required contribution 1,095,471 934,621 929,807 961,911 Town’s contribution deficiency (excess) $ - $ - $ - $ - Town’s covered payroll $11,098,998 $10,373,156 $11,148,776 $12,038,936 Town’s contributions as a percentage of covered payroll 9.87% 9.00% 8.34% 7.99% See accompanying notes to pension plan schedules. 87 TOWN OF MARANA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF TOWN PENSION CONTRIBUTIONS JUNE 30, 2017 Elected Officials Retirement Plan Reporting Fiscal Year 2017 2016 2015 2014 2013 Statutorily required contribution $28,065 $28,065 $28,065 $38,431 $43,518 Town’s contributions in relation to the statutorily required contribution 28,065 28,065 28,065 38,431 43,518 Town’s contribution deficiency (excess) $- $- $ - $ - $ - Town’s covered payroll $119,423 $119,423 $119,424 $119,423 $119,423 Town’s contributions as a percentage of covered payroll 23.50% 23.50% 23.50% 32.18% 36.44% 2012 2011 2010 2009 through 2008 Statutorily required contribution $40,861 $34,226 $29,793 Information not available Town’s contributions in relation to the statutorily required contribution 40,861 34,226 29,793 Town’s contribution deficiency (excess) $ - $ - $ - Town’s covered payroll $123,858 $114,891 $113,497 Town’s contributions as a percentage of covered payroll 32.99% 29.79% 26.25% See accompanying notes to pension plan schedules. 88 TOWN OF MARANA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF TOWN PENSION CONTRIBUTIONS JUNE 30, 2017 PSPRS Reporting Fiscal Year 2017 2016 2015 2014 2013 Actuarially determined contribution $1,323,677 $1,006,859 $ 797,871 $ 831,677 $778,039 Town’s contributions in relation to the actuarially determined contribution 1,323,677 1,006,859 797,871 831,677 778,039 Town’s contribution deficiency (excess) $- $- $ - $ - $ - Town’s covered payroll $5,182,784 $4,900,569 $4,638,418 $4,498,048 $4,512,699 Town’s contributions as a percentage of covered payroll 25.54% 20.55% 17.20% 18.49% 17.24% 2012 2011 2010 2009 through 2008 Actuarially determined contribution $644,505 $554,133 $457,749 Information not available Town’s contributions in relation to the actuarially determined contribution 644,505 554,133 457,749 Town’s contribution deficiency (excess) $ - $ - $ - Town’s covered payroll $4,254,314 $4,345,965 $4,625,605 Town’s contributions as a percentage of covered payroll 15.15% 12.75% 9.90% See accompanying notes to pension plan schedules. 89 TOWN OF MARANA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF TOWN PENSION CONTRIBUTIONS JUNE 30, 2017 CORP - Dispatchers Reporting Fiscal Year 2017 2016 2015 2014 2013 Actuarially determined contribution $48,648 $49,045 $ 48,667 $ 32,506 $ 25,550 Town’s contributions in relation to the actuarially determined contribution 48,648 49,045 48,667 32,506 25,550 Town’s contribution deficiency (excess) $ - $ - $ - $ - $ - Town’s covered payroll $ 397,428 $ 430,892 $ 456,106 $ 443,980 $ 530,695 Town’s contributions as a percentage of covered payroll 12.24% 11.38% 10.67% 7.32% 4.25% 2012 2011 2010 2009 through 2008 Actuarially determined contribution $ 24,843 $ 22,805 $ 28,540 Information not available Town’s contributions in relation to the actuarially determined contribution 24,843 22,805 28,540 Town’s contribution deficiency (excess) $ - $ - $ - Town’s covered payroll $ 536,843 $ 593,407 $ 603,377 Town’s contributions as a percentage of covered payroll 4.63% 3.84% 4.73% See accompanying notes to pension plan schedules. 90 TOWN OF MARANA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO PENSION PLAN SCHEDULES JUNE 30, 2017 Note 1 - 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 as of the 2015 actuarial valuation 21 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) Note 2 – Factors that affect trends In February 2014, the Arizona Supreme Court affirmed a Superior Court ruling that a 2011 law that changed the mechanism for funding permanent benefit increases was unconstitutional. As a result, the PSPRS and CORP changed benefit terms to reflect the prior mechanism for funding permanent benefit increases and revised actuarial assumptions to explicitly value future permanent benefit increases. These changes are included in the PSPRS’ and CORP’s changes in total pension liability for fiscal year 2015 (measurement date 2014) in the schedule of changes in the County’s net pension liability and related ratios. These changes also increased the PSPRS and CORP required contributions beginning in fiscal 2016 in the schedule of town pension contributions year. 91 TOWN OF MARANA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF AGENT OPEB PLANS’ FUNDING PROGRESS JUNE 30, 2017 Health Insurance Premium Benefit Actuarial Valuation Date Actuarial value of assets (a) Actuarial accrued liability (b) Unfunded actuarial accrued liability (UAAL) (funding excess) (b) – (a) Funded ratio (a)/(b) Annual covered payroll (c) UAAL (funding excess) as a percentage of covered payroll (b) – (a)/c) PSPRS 6/30/16 $ 768,883 $ 739,259 $ (29,624) 104.0% $ 5,182,784 0.57% 6/30/15 $ 724,917 $ 607,586 $ (117,331) 119.31% $ 4,900,569 2.39% 6/30/14 645,386 651,207 5,821 99.11% 4,638,418 0.13% CORP Dispatchers 6/30/16 $ 39,112 $ 51,144 $ 12,032 76.5% $ 397,428 3.03% 6/30/15 $ 35,178 $ 47,755 $ 12,577 73.66% $ 430,892 2.92% 6/30/14 30,453 44,111 13,658 69.04% 456,104 2.99% See accompanying notes to schedule of agent OPEB plans’ funding progress. 92 TOWN OF MARANA, ARIZONA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO SCHEDULE OF AGENT OPEB PLANS’ FUNDING PROGRESS JUNE 30, 2017 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. 93 This page intentionally left blank 94 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES 95 This page intentionally left blank 96 OTHER MAJOR GOVERNMENTAL FUNDS SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL 97 This page intentionally left blank 98 TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - TANGERINE FARMS IMPROVEMENT DISTRICT DEBT SERVICE YEAR ENDED JUNE 30, 2017 Budgeted Amounts Original Final Actual Variance - Positive (Negative) Revenues: Special assessments 2,111,776$ 2,111,776$ 2,340,225$ 228,449$ Total revenues 2,111,776 2,111,776 2,340,225 228,449 Expenditures: Debt service - Principal retirement 1,374,000 1,374,000 1,458,000 (84,000) Interest and fiscal charges 737,776 737,776 731,949 5,827 Bond issuance costs - - 230,107 (230,107) Total expenditures 2,111,776 2,111,776 2,420,056 (308,280) Excess (deficiency) of revenues over expenditures - - (79,831) (79,831) Other financing sources (uses): Face value of bonds issued - - 14,245,132 (14,245,132) Refunded bond escrow payment - - (14,801,787) 14,801,787 Capitalized interest - - 177,785 (177,785) Total other financing sources (uses)- - (378,870) 378,870 Changes in fund balances - - (458,701) (458,701) Fund balances, beginning of year - - 475,980 475,980 Fund balances, end of year -$ -$ 17,279$ 17,279$ 99 TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - PAG CAPITAL YEAR ENDED JUNE 30, 2017 PAG Capital Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Intergovernmental 40,382,226$ 40,382,226$ 22,963,147$ (17,419,079)$ Miscellaneous - - - - Total revenues 40,382,226 40,382,226 22,963,147 (17,419,079) Expenditures: Capital outlay 40,382,227 40,382,227 24,511,580 15,870,647 Total expenditures 40,382,227 40,382,227 24,511,580 15,870,647 Excess (deficiency) of revenues over expenditures (1) (1) (1,548,433) (1,548,432) Fund balance (deficit), beginning of year - - (359,783) (359,783) Fund balance (deficit), end of year (1) (1) (1,908,216) (1,908,215) 100 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Sales taxes 5,933,250$ 5,933,250$ 5,667,969$ (265,281)$ Investment income - - 81,273 81,273 Total revenues 5,933,250 5,933,250 5,749,242 (184,008) Expenditures: Current - General government - - 854,790 (854,790) Highways and streets 169,186 169,186 117,296 51,890 Capital outlay 14,857,522 14,857,522 1,406,030 13,451,492 Total expenditures 15,026,708 15,026,708 2,378,116 12,648,592 Excess (deficiency) of revenues over expenditures (9,093,458) (9,093,458) 3,371,126 12,464,584 Other financing sources (uses): Transfers out (862,294) (862,294) (437,399) 424,895 Total other financing sources (uses)(862,294) (862,294) (437,399) 424,895 Changes in fund balances (9,955,752) (9,955,752) 2,933,727 12,889,479 Fund balances (deficits), July 1, 2016 - - 9,895,125 9,895,125 Fund balances (deficits), June 30, 2017 (9,955,752)$ (9,955,752)$ 12,828,852$ 22,784,604$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - TRANSPORTATION CAPITAL YEAR ENDED JUNE 30, 2017 Transportation Capital 101 This page intentionally left blank 102 NON-MAJOR GOVERNMENTAL FUNDS 103 Special Revenue Capital Projects Debt Service Total Non-Major Governmental Funds ASSETS Cash and cash equivalents 3,919,913$ 26,175,082$ 4,182,336$ 34,277,331$ Taxes receivable - 206 1,718 1,924 Accounts receivable 1,436 - - 1,436 Interest receivable - 7,232 98 7,330 Development agreement receivable - 51,931 - 51,931 Due from governments 295,780 1,475,649 - 1,771,429 Prepaid items - 1,332 - 1,332 Restricted cash and investments - 1,021,535 - 1,021,535 Total assets 4,217,129$ 28,732,967$ 4,184,152$ 37,134,248$ LIABILITIES Accounts payable 31,161$ 944,029$ 2,000$ 977,190$ Accrued payroll and employee benefits 21,792 - - 21,792 Due to other funds 12,329 - - 12,329 Deposits held for others - 75,758 - 75,758 Unearned revenue 11,616 - - 11,616 Total liabilities 76,898 1,019,787 2,000 1,098,685 DEFERRED INFLOWS OF RESOURCES Unavailable revenue 92,965 188,415 - 281,380 Total deferred inflows of resources 92,965 188,415 - 281,380 FUND BALANCES (DEFICITS) Fund balances: Nonspendable - 1,332 - 1,332 Restricted 4,047,266 27,523,433 4,182,152 35,752,851 Unassigned - - - - Total fund balances 4,047,266 27,524,765 4,182,152 35,754,183 Total liabilities, deferred inflows of resources, and fund balances 4,217,129$ 28,732,967$ 4,184,152$ 37,134,248$ TOWN OF MARANA, ARIZONA COMBINING BALANCE SHEET - ALL NON-MAJOR GOVERNMENTAL FUNDS - BY FUND TYPE JUNE 30, 2017 104 Special Revenue Capital Projects Debt Service Total Non-Major Governmental Funds Revenues: Sales tax 1,178,535$ 5,365,470$ -$ 6,544,005$ Property tax - 68,450 452,489 520,939 Intergovernmental 883,435 5,555,737 - 6,439,172 Licenses, fees & permits - 2,230,181 - 2,230,181 Fines, forfeitures & penalties 153,085 - - 153,085 Contributions - 139,989 9,412 149,401 Investment income 10,423 56,955 1,068 68,446 Miscellaneous 4,688 - - 4,688 Total revenues 2,230,166 13,416,782 462,969 16,109,917 Expenditures: Current - General government 676,879 17,944 - 694,823 Public safety 901,510 - - 901,510 Highways and streets - 113,923 - 113,923 Economic and community development 398,883 - - 398,883 Culture and recreation - 325,561 - 325,561 Capital outlay - 7,730,336 - 7,730,336 Debt service - Principal retirement - - 3,625,000 3,625,000 Interest and fiscal charges - - 3,150,295 3,150,295 Bond issuance costs - 47,823 745,324 793,147 Total expenditures 1,977,272 8,235,587 7,520,619 17,733,478 Excess (deficiency) of revenues over expenditures 252,894 5,181,195 (7,057,650) (1,623,561) Other financing sources (uses): Face value of bonds issued - 400,000 27,420,000 27,820,000 Refunded bond escrow payment - - (32,063,864) (32,063,864) Premium on bonds issued - - 4,089,196 4,089,196 Transfers in - 416,682 7,209,340 7,626,022 Transfers out (53,783) (723,106) (5,457,571) (6,234,460) Total other financing sources (uses)(53,783) 93,576 1,197,101 1,236,894 Change in fund balances 199,111 5,274,771 (5,860,549) (386,667) Fund balances, beginning of year 3,848,155 22,249,994 10,042,701 36,140,850 Fund balances, end of year 4,047,266$ 27,524,765$ 4,182,152$ 35,754,183$ TOWN OF MARANA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - ALL NON-MAJOR GOVERNMENTAL FUNDS - BY FUND TYPE YEAR ENDED JUNE 30, 2017 105 This page intentionally left blank 106 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. 107 Community Development Block Grant Affordable Housing Bed Tax ASSETS Cash and cash equivalents -$ 220,157$ 824,112$ Accounts receivable - - - Due from governments 13,112 - 119,169 Prepaid - - - Total assets 13,112$ 220,157$ 943,281$ LIABILITIES Accounts payable 32$ -$ 16,894$ Accrued payroll and employee benefits 86 - 1,730 Due to other funds 12,329 - - Unearned revenue - - - Total liabilities 12,447 - 18,624 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - - - Total deferred inflows of resources - - - FUND BALANCES (DEFICITS) Nonspendable - - - Restricted 665 220,157 924,657 Total fund balances 665 220,157 924,657 Total liabilities, deferred inflows of resources, and fund balances 13,112$ 220,157$ 943,281$ TOWN OF MARANA, ARIZONA COMBINING BALANCE SHEET - NON-MAJOR SPECIAL REVENUE FUNDS JUNE 30, 2017 108 Judicial Collection Enhancement Fill-the-Gap Local Technology Other Special Revenue Fund Totals 143,696$ 84,937$ 891,718$ 1,755,293$ 3,919,913$ - 1,436 - - 1,436 - - - 163,499 295,780 - - - - - 143,696$ 86,373$ 891,718$ 1,918,792$ 4,217,129$ -$ -$ 5,433$ 8,802$ 31,161$ - - 946 19,030 21,792 - - - - 12,329 - - - 11,616 11,616 - - 6,379 39,448 76,898 - - - 92,965 92,965 - - - 92,965 92,965 - - - - - 143,696 86,373 885,339 1,786,379 4,047,266 143,696 86,373 885,339 1,786,379 4,047,266 143,696$ 86,373$ 891,718$ 1,918,792$ 4,217,129$ 109 Community Development Block Grant Affordable Housing Bed Tax Judicial Collection Enhancement Revenues: Sales taxes -$ -$ 1,178,535$ -$ Intergovernmental 93,112 - - - Fines, forfeitures & penalties - - - 13,967 Investment income - - - - Miscellaneous - 2,218 - - Total revenues 93,112 2,218 1,178,535 13,967 Expenditures: Current - General government - - 615,932 6,013 Public safety - - - - Economic and community development 92,447 - 246,436 - Total expenditures 92,447 - 862,368 6,013 Excess (deficiency) of revenues over expenditures 665 2,218 316,167 7,954 Other financing sources (uses): Transfers in - - - - Transfers out (53,783) - - - Total other financing sources (uses)(53,783) - - - Change in fund balances (53,118) 2,218 316,167 7,954 Fund balances (deficits), beginning of year 53,783 217,939 608,490 135,742 Fund balances (deficits), end of year 665$ 220,157$ 924,657$ 143,696$ TOWN OF MARANA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NON-MAJOR SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2017 110 Fill-the-Gap Local Technology Other Special Revenue Fund Totals -$ -$ -$ 1,178,535$ - - 790,323 883,435 4,666 89,602 44,850 153,085 - - 10,423 10,423 - - 2,470 4,688 4,666 89,602 848,066 2,230,166 - 48,913 6,021 676,879 - - 901,510 901,510 - - 60,000 398,883 - 48,913 967,531 1,977,272 4,666 40,689 (119,465) 252,894 - - - - - - - (53,783) - - - (53,783) 4,666 40,689 (119,465) 199,111 81,707 844,650 1,905,844 3,848,155 86,373$ 885,339$ 1,786,379$ 4,047,266$ 111 Community Development Block Grant Fund Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Intergovernmental 261,700$ 261,700$ 93,112$ (168,588)$ Total revenues 261,700 261,700 93,112 (168,588) Expenditures: Current - Economic and community development 261,700 261,700 92,447 169,253 Total expenditures 261,700 261,700 92,447 169,253 Excess (deficiency) of revenues over expenditures - - 665 665 Other financing sources: Transfer out - - (53,783) (53,783) Total other financing sources - - (53,783) (53,783) Change in fund balance - - (53,118) (53,118) Fund balance, July 1, 2016 - - 53,783 53,783 Fund balance, June 30, 2017 -$ -$ 665$ 54,448$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR SPECIAL REVENUE FUNDS COMMUNITY DEVELOPMENT BLOCK GRANT FUND YEAR ENDED JUNE 30, 2017 112 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Miscellaneous 10,000$ 10,000$ 2,218$ (7,782)$ Total revenues 10,000 10,000 2,218 (7,782) Expenditures: Current - Economic and community development 215,720 215,720 - 215,720 Total expenditures 215,720 215,720 - 215,720 Excess (deficiency) of revenues over expenditures (205,720) (205,720) 2,218 207,938 Fund balance, July 1, 2016 - - 217,939 217,939 Fund balance (deficits), June 30, 2017 (205,720)$ (205,720)$ 220,157$ 425,877$ Affordable Housing Revolving Fund TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR SPECIAL REVENUE FUNDS AFFORDABLE HOUSING REVOLVING FUND YEAR ENDED JUNE 30, 2017 113 Bed Tax Fund Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Sales taxes 937,884$ 937,884$ 1,178,535$ 240,651$ Total revenues 937,884 937,884 1,178,535 240,651 Expenditures: Current - General government 680,030 680,030 615,932 64,098 Economic and community development 260,619 260,619 246,436 14,183 Total expenditures 940,649 940,649 862,368 78,281 Excess (deficiency) of revenues over expenditures (2,765) (2,765) 316,167 318,932 Fund balance, July 1, 2016 - - 608,490 608,490 Fund balance (deficits), June 30, 2017 (2,765)$ (2,765)$ 924,657$ 927,422$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR SPECIAL REVENUE FUNDS BED TAX FUND YEAR ENDED JUNE 30, 2017 114 Judicial Collection Enhancement Fund Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Fines, forfeitures & penalties 15,000$ 15,000$ 13,967$ (1,033)$ Total revenues 15,000 15,000 13,967 (1,033) Expenditures: Current - General government 82,000 82,000 6,013 75,987 Total expenditures 82,000 82,000 6,013 75,987 Excess (deficiency) of revenues over expenditures (67,000) (67,000) 7,954 74,954 Fund balance, July 1, 2016 - - 135,742 135,742 Fund balance (deficits), June 30, 2017 (67,000)$ (67,000)$ 143,696$ 210,696$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR SPECIAL REVENUE FUNDS JUDICIAL COLLECTION ENHANCEMENT FUND YEAR ENDED JUNE 30, 2017 115 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Fines, forfeitures & penalties 6,000$ 6,000$ 4,666$ (1,334)$ Total revenues 6,000 6,000 4,666 (1,334) Expenditures: Current - General government 34,500 34,500 - 34,500 Total expenditures 34,500 34,500 - 34,500 Excess (deficiency) of revenues over expenditures (28,500) (28,500) 4,666 33,166 Fund balance, July 1, 2016 - - 81,707 81,707 Fund balance (deficits), June 30, 2017 (28,500)$ (28,500)$ 86,373$ 114,873$ Fill-the-Gap TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR SPECIAL REVENUE FUNDS FILL-THE-GAP FUND YEAR ENDED JUNE 30, 2017 116 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Fines, forfeitures & penalties 140,000$ 140,000$ 89,602$ (50,398)$ Total revenues 140,000 140,000 89,602 (50,398) Expenditures: Current - General government 283,256 283,256 48,913 234,343 Total expenditures 283,256 283,256 48,913 234,343 Change in fund balance (143,256) (143,256) 40,689 183,945 Fund balance, July 1, 2016 - - 844,650 844,650 Fund balance (deficits), June 30, 2017 (143,256)$ (143,256)$ 885,339$ 1,028,595$ Local Technology Fund TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR SPECIAL REVENUE FUNDS LOCAL TECHNOLOGY YEAR ENDED JUNE 30, 2017 117 Other Special Revenue Fund Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Intergovernmental 1,253,704$ 1,253,704$ 790,323$ (463,381)$ Fines, forfeitures & penalties 50,000 50,000 44,850 (5,150) Contributions 789 789 - (789) Investment income 1,615 1,615 10,423 8,808 Miscellaneous 10,000 10,000 2,470 (7,530) Total revenues 1,316,108 1,316,108 848,066 (468,042) Expenditures: Current - General government 680,789 678,789 6,021 672,768 Public safety 1,638,126 1,640,126 901,510 738,616 Economic and community development - - 60,000 (60,000) Total expenditures 2,318,915 2,318,915 967,531 1,351,384 Excess (deficiency) of revenues over expenditures (1,002,807) (1,002,807) (119,465) 883,342 Other financing sources: Transfer in 100,000 100,000 - (100,000) Total other financing sources 100,000 100,000 - (100,000) Change in fund balance (902,807) (902,807) (119,465) 783,342 Fund balance, July 1, 2016 - - 1,905,844 1,905,844 Fund balance (deficits), June 30, 2017 (902,807)$ (902,807)$ 1,786,379$ 2,689,186$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR SPECIAL REVENUE FUNDS OTHER SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2017 118 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. 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. 119 Northwest Transportation Impact Fees Northeast Transportation Impact Fees South Transportation Impact Fees Park Impact Fees ASSETS Cash and cash equivalents 1,334,610$ 2,904,896$ 3,453,954$ 4,306,664$ Taxes receivable - - - - Interest receivable - - 1,788 - Development agreement receivable - - - - Due from governments - - - - Prepaid items - - - - Restricted cash - - - - Total assets 1,334,610$ 2,904,896$ 3,455,742$ 4,306,664$ LIABILITIES Accounts payable 4,498$ 4,022$ 1,191$ 348,339$ Accrued payroll and employee benefits - - - - Due to other funds - - - - Unearned revenue - - - - Deposits held for others - - - - Total liabilities 4,498 4,022 1,191 348,339 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - - - - Total deferred inflows of resources - - - - FUND BALANCES (DEFICITS) Nonspendable - - - - Restricted 1,330,112 2,900,874 3,454,551 3,958,325 Unassigned - - - - Total fund balances (deficits) 1,330,112 2,900,874 3,454,551 3,958,325 Total liabilities, deferred inflows of resources, and fund balances 1,334,610$ 2,904,896$ 3,455,742$ 4,306,664$ TOWN OF MARANA, ARIZONA COMBINING BALANCE SHEET - NON-MAJOR CAPITAL PROJECTS FUNDS (Cont'd) YEAR ENDED JUNE 30, 2017 120 Pima County Bond Capital Sales Tax Capital Downtown Reinvestment Other Capital Projects Gladden Farms Capital Vanderbilt Farms Capital -$ 7,809,818$ 577,365$ 5,104,310$ 548,029$ 54,563$ - - - - 206 - - 5,074 - 370 - - - - - 51,931 - - - 653,153 29,531 792,965 - - - - - 1,332 - - - - - 1,021,535 - - -$ 8,468,045$ 606,896$ 6,972,443$ 548,235$ 54,563$ -$ 57,294$ -$ 528,685$ -$ -$ - - - - - - - - - - - - - - - - - - - - - 72,373 - - - 57,294 - 601,058 - - - - - 188,415 - - - - - 188,415 - - - - - 1,332 - - - 8,410,751 606,896 6,181,638 548,235 54,563 - - - - - - - 8,410,751 606,896 6,182,970 548,235 54,563 -$ 8,468,045$ 606,896$ 6,972,443$ 548,235$ 54,563$ 121 Saguaro Springs Capital Totals 80,873$ 26,175,082$ - 206 - 7,232 - 51,931 - 1,475,649 - 1,332 - 1,021,535 80,873$ 28,732,967$ -$ 944,029$ - - - - - - 3,385 75,758 3,385 1,019,787 - 188,415$ - 188,415 - 1,332$ 77,488 27,523,433 - - 77,488 27,524,765 80,873$ 28,732,967$ TOWN OF MARANA, ARIZONA COMBINING BALANCE SHEET - NON-MAJOR CAPITAL PROJECTS FUNDS (Concl'd) YEAR ENDED JUNE 30, 2017 122 This page intentionally left blank 123 Northwest Transportation Impact Fees Northeast Transportation Impact Fees South Transportation Impact Fees Park Impact Fees Revenues: Sales tax -$ -$ -$ -$ Property tax - - - - Intergovernmental - - - - Licenses, fees & permits - 364,842 776,159 888,392 Contributions - - - - Investment income 7,461 14,040 2,848 19,759 Miscellaneous revenue - - - - Total revenues 7,461 378,882 779,007 908,151 Expenditures: Current - General government - - - - Highways and streets 11,432 84,218 11,431 - Economic and community development - - - - Culture and recreation - - - 325,561 Capital outlay 174,921 3,018 745 857,873 Debt service Bond Issuance Costs - - - - Total expenditures 186,353 87,236 12,176 1,183,434 Excess (deficiency) of revenues over expenditures (178,892) 291,646 766,831 (275,283) Other financing sources (uses): Face value of bonds issued - - - - Refunding bonds issued - - - - Premium on bonds issued - - - - Transfers in - - - - Transfers out - (301,803) (311,384) (13,099) Total other financing sources (uses) - (301,803) (311,384) (13,099) Change in fund balances (178,892) (10,157) 455,447 (288,382) Fund balances (deficits), beginning of year 1,509,004 2,911,031 2,999,104 4,246,707 Fund balances (deficits), end of year 1,330,112$ 2,900,874$ 3,454,551$ 3,958,325$ TOWN OF MARANA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NON-MAJOR CAPITAL PROJECT FUNDS (Cont'd) YEAR ENDED JUNE 30, 2017 124 Pima County Bond Capital Sales Tax Capital Downtown Reinvestment Other Capital Projects Gladden Farms Capital Vanderbilt Farms Capital -$ 5,142,996$ 222,474$ -$ -$ -$ - - - - 54,472 1,858 - - - 5,555,737 - - - - - 200,788 - - - - - 139,989 - - - 5,626 - 7,167 50 4 - - - - - - - 5,148,622 222,474 5,903,681 54,522 1,862 - - - - 17,762 91 - - - 6,842 - - - - - - - - - - - - - - 1,370,185 - 4,928,114 395,480 - - - - 43,303 4,520 - - 1,370,185 - 4,978,259 417,762 91 - 3,778,437 222,474 925,422 (363,240) 1,771 - - - - 400,000 - - - - - - - - - - - - - 165,157 - - 251,525 - - - - - (2) (96,818) - 165,157 - - 251,523 303,182 - 165,157 3,778,437 222,474 1,176,945 (60,058) 1,771 (165,157) 4,632,314 384,422 5,006,025 608,293 52,792 -$ 8,410,751$ 606,896$ 6,182,970$ 548,235$ 54,563$ 125 Saguaro Springs Capital Totals -$ 5,365,470$ 12,120 68,450 - 5,555,737 - 2,230,181 - 139,989 - 56,955 - - 12,120 13,416,782 91 17,944 - 113,923 - - - 325,561 - 7,730,336 - 47,823 91 8,235,587 12,029 5,181,195 - 400,000 - - - - - 416,682 - (723,106) - 93,576 12,029 5,274,771 65,459 22,249,994 77,488$ 27,524,765$ TOWN OF MARANA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NON-MAJOR CAPITAL PROJECT FUNDS (Concl'd) YEAR ENDED JUNE 30, 2017 126 Northwest Transportation Impact Fees Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Licenses, fees & permits 38,500$ 38,500$ -$ (38,500)$ Investment income - - 7,461 7,461 Total revenues 38,500 38,500 7,461 (31,039) Expenditures: Current - Highways and streets - 111,131 11,432 99,699 Capital outlay 1,353,399 1,242,268 174,921 1,067,347 Total expenditures 1,353,399 1,353,399 186,353 1,167,046 Excess (deficiency) of revenues over expenditures (1,314,899) (1,314,899) (178,892) 1,136,007 Other financing sources (uses): Transfers in - - - - Total other financing sources (uses)- - - - Change in fund balances (1,314,899) (1,314,899) (178,892) 1,136,007 Fund balances (deficits), July 1, 2016 - - 1,509,004 1,509,004 Fund balances (deficits), June 30, 2017 (1,314,899)$ (1,314,899)$ 1,330,112$ 2,645,011$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR CAPITAL PROJECTS FUNDS NORTHWEST TRANSPORTATION IMPACT FEES YEAR ENDED JUNE 30, 2017 127 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Licenses, fees & permits 297,820$ 297,820$ 364,842$ 67,022$ Investment income - - 14,040 14,040 Total revenues 297,820 297,820 378,882 81,062 Expenditures: Current - Highways and streets - - 84,218 (84,218) Capital outlay 3,642,682 3,642,682 3,018 3,639,664 Total expenditures 3,642,682 3,642,682 87,236 3,555,446 Excess (deficiency) of revenues over expenditures (3,344,862) (3,344,862) 291,646 3,636,508 Other financing sources (uses): Transfers out (603,606) (603,606) (301,803) 301,803 Total other financing sources (uses)(603,606) (603,606) (301,803) 301,803 Change in fund balances (3,948,468) (3,948,468) (10,157) 3,938,311 Fund balances (deficits), July 1, 2016 - - 2,911,031 2,911,031 Fund balances (deficits), June 30, 2017 (3,948,468)$ (3,948,468)$ 2,900,874$ 6,849,342$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR CAPITAL PROJECTS FUNDS NORTHEAST TRANSPORTATION IMPACT FEES YEAR ENDED JUNE 30, 2017 Northeast Transportation Impact Fees 128 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Licenses, fees & permits 599,445$ 599,445$ 776,159$ 176,714$ Investment income - - 2,848 2,848 Total revenues 599,445 599,445 779,007 179,562 Expenditures: Current - Highways and streets - - 11,431 (11,431) Capital outlay - - 745 (745) Total expenditures - - 12,176 (12,176) Excess (deficiency) of revenues over expenditures 599,445 599,445 766,831 167,386 Other financing sources (uses): Transfers out (622,768) (622,768) (311,384) 311,384 Total other financing sources (uses)(622,768) (622,768) (311,384) 311,384 Change in fund balances (23,323) (23,323) 455,447 478,770 Fund balances (deficits), July 1, 2016 - - 2,999,104 2,999,104 Fund balances (deficits), June 30, 2017 (23,323)$ (23,323)$ 3,454,551$ 3,477,874$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR CAPITAL PROJECTS FUNDS SOUTH TRANSPORTATION IMPACT FEES YEAR ENDED JUNE 30, 2017 South Transportation Impact Fees 129 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Licenses, fees & permits 610,328$ 610,328$ 888,392$ 278,064$ Investment income - - 19,759 19,759 Total revenues 610,328 610,328 908,151 297,823 Expenditures: Current - Culture and recreation 65,000 195,709 325,561 (129,852) Capital outlay 4,322,053 4,191,344 857,873 3,333,471 Total expenditures 4,387,053 4,387,053 1,183,434 3,203,619 Excess (deficiency) of revenues over expenditures (3,776,725) (3,776,725) (275,283) 3,501,442 Other financing sources: Transfers out - - (13,099) (13,099) Total other financing sources - - (13,099) (13,099) Change in fund balances (3,776,725) (3,776,725) (288,382) 3,488,343 Fund balances (deficits), July 1, 2016 - - 4,246,707 4,246,707 Fund balances (deficits), June 30, 2017 (3,776,725)$ (3,776,725)$ 3,958,325$ 7,748,149$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR CAPITAL PROJECTS FUNDS PARK IMPACT FEES YEAR ENDED JUNE 30, 2017 Park Impact Fees 130 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Intergovernmental -$ -$ -$ -$ Total revenues - - - - Expenditures: Capital outlay - - - - Total expenditures - - - - Excess (deficiency) of revenues over expenditures - - - - Other financing sources: Transfers in - - 165,157 165,157 Total other financing sources - - 165,157 165,157 Change in fund balances - - 165,157 165,157 Fund balances (deficits), July 1, 2016 - - (165,157) (165,157) Fund balances (deficits), June 30, 2017 -$ -$ -$ -$ Pima County Bond Capital TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR CAPITAL PROJECTS FUNDS PIMA COUNTY BOND CAPITAL YEAR ENDED JUNE 30, 2017 131 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Sales tax 6,000,000$ 6,000,000$ 5,142,996$ (857,004)$ Investment income - - 5,626 5,626 Total revenues 6,000,000 6,000,000 5,148,622 (851,378) Expenditures: Capital outlay 7,092,271 7,092,271 1,370,185 5,722,086 Total expenditures 7,092,271 7,092,271 1,370,185 5,722,086 Excess (deficiency) of revenues over expenditures (1,092,271) (1,092,271) 3,778,437 4,870,708 Fund balances (deficits), July 1, 2016 - - 4,632,314 (4,632,314) Fund balances (deficits), June 30, 2017 (1,092,271)$ (1,092,271)$ 8,410,751$ 238,394$ Sales Tax Capital TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR CAPITAL PROJECTS FUNDS SALES TAX CAPITAL YEAR ENDED JUNE 30, 2017 132 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Sales tax 180,165$ 180,165$ 222,474 42,309$ Total revenues 180,165 180,165 222,474 42,309 Expenditures: Economic and community development 185,319 185,319 - 185,319 Total expenditures 185,319 185,319 - 185,319 Excess (deficiency) of revenues over expenditures (5,154) (5,154) 222,474 227,628 Fund balances (deficits), July 1, 2016 - - 384,422 (384,422) Fund balances (deficits), June 30, 2017 (5,154)$ (5,154)$ 606,896$ (156,794)$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR CAPITAL PROJECTS FUNDS DOWNTOWN REINVESTMENT YEAR ENDED JUNE 30, 2017 Downtown Reinvestment 133 Other Captial Projects Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Intergovernmental 516,075$ 516,075$ 5,555,737$ 5,039,662$ Licenses, fees & permits - - 200,788 200,788 Contributions 410,000 410,000 139,989 (270,011) Investment income - - 7,167 7,167 Total revenues 926,075 926,075 5,903,681 4,977,606 Expenditures: Highways and streets 35,000 35,000 6,842 28,158 Capital outlay 3,073,238 3,073,238 4,928,114 (1,854,876) Debt service - Bond issuance costs - - 43,303 (43,303) Total expenditures 3,108,238 3,108,238 4,978,259 (1,870,021) Excess (deficiency) of revenues over (2,182,163) (2,182,163) 925,422 3,107,585 expenditures Other financing sources (uses): Transfers in 2,000,000 2,000,000 251,525 (1,748,475) Transfers out - - (2) (2) Total other financing sources (uses) 2,000,000 2,000,000 251,523 (1,748,477) Changes in fund balances (182,163) (182,163) 1,176,945 1,359,108 Fund balances (deficits), July 1, 2016 - - 5,006,025 5,006,025 Fund balances (deficits), June 30, 2017 (182,163)$ (182,163)$ 6,182,970$ 6,365,133$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - OTHER CAPITAL PROJECTS YEAR ENDED JUNE 30, 2017 134 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Property tax 54,444$ 54,444$ 54,472$ 28$ Investment income - - 50 50 Total revenues 54,444 54,444 54,522 78 Expenditures: Current - General government 531,485 531,485 17,762 513,723 Capital outlay 900,000 900,000 395,480 504,520 Debt service - Bond issuance costs 100,000 100,000 4,520 95,480 Total expenditures 1,531,485 1,531,485 417,762 1,113,723 Excess (deficiency) of revenues over expenditures (1,477,041) (1,477,041) (363,240) 1,113,801 Other financing sources (uses): Bond proceeds 1,000,000 1,000,000 400,000 (600,000) Transfers out - - (96,818) (96,818) Total other financing sources (uses)1,000,000 1,000,000 303,182 (696,818) Change in fund balances (477,041) (477,041) (60,058) 416,983 Fund balances (deficits), July 1, 2016 - - 608,293 608,293 Fund balances (deficits), June 30, 2017 (477,041)$ (477,041)$ 548,235$ 1,025,276$ Gladden Farms Community Facilities District Capital TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR CAPITAL PROJECTS FUNDS GLADDEN FARMS COMMUNITY FACILITIES DISTRICT CAPITAL YEAR ENDED JUNE 30, 2017 135 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Property tax 2,355$ 2,355$ 1,858$ (497)$ Contributions 29,839 29,839 - (29,839) Investment income - - 4 4 Total revenues 32,194 32,194 1,862 (30,332) Expenditures: Current - General government 32,194 32,194 91 32,103 Total expenditures 32,194 32,194 91 32,103 Excess (deficiency) of revenues over expenditures - - 1,771 1,771 Fund balances (deficits), July 1, 2016 - - 52,792 52,792 Fund balances (deficits), June 30, 2017 -$ -$ 54,563$ 54,563$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR CAPITAL PROJECTS FUNDS VANDERBILT FARMS COMMUNITY FACILITIES DISTRICT CAPITAL YEAR ENDED JUNE 30, 2017 Vanderbilt Farms Capital 136 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Property tax 12,150$ 12,150$ 12,120$ (30)$ Contributions 384,086 384,086 - (384,086) Total revenues 396,236 396,236 12,120 (384,116) Expenditures: Current - General government 442,000 442,000 91 441,909 Capital outlay 4,000,000 4,000,000 - 4,000,000 Debt service - Bond issuance costs 450,000 450,000 - 450,000 Total expenditures 4,892,000 4,892,000 91 4,891,909 Excess (deficiency) of revenues over expenditures (4,495,764) (4,495,764) 12,029 4,507,793 Other financing sources (uses): Bond proceeds 4,500,000 4,500,000 - (4,500,000) Total other financing sources (uses)4,500,000 4,500,000 - (4,500,000) Change in fund balances 4,236 4,236 12,029 7,793 Fund balances (deficits), July 1, 2016 - - 65,459 65,459 Fund balances (deficits), June 30, 2017 4,236$ 4,236$ 77,488$ 73,252$ Saguaro Springs Capital TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR CAPITAL PROJECTS FUNDS SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT CAPITAL YEAR ENDED JUNE 30, 2017 137 This page intentionally left blank 138 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. 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. 2017 Bond Debt Service Fund – This fund accounts for the accumulation of resources and payment of principal and interest on the series 2017 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. 139 2008 Bond Debt Service 2013 Bond Debt Service 2014 Bond Debt Service ASSETS Cash and cash equivalents -$ 2,339,362$ 463,440$ Property taxes receivable - - - Interest receviable - 98 - Due from other governments - - - Prepaid items - - - Restricted cash and investments - - - Total assets -$ 2,339,460$ 463,440$ LIABILITIES AND FUND BALANCES Liabilities: Accounts payable -$ 2,000$ -$ Total liabilities - 2,000 - Fund balances: Reserved for: Prepaid items - - - Restricted - 2,337,460 463,440 Unassigned - - - Total fund balances - 2,337,460 463,440 Total liabilities and fund balances -$ 2,339,460$ 463,440$ TOWN OF MARANA, ARIZONA COMBINING BALANCE SHEET - NON-MAJOR DEBT SERVICE FUNDS JUNE 30, 2017 140 2017 Bond Debt Service Other Debt Service Gladden Farms Debt Service Totals 949,108$ 45,514$ 384,912$ 4,182,336$ - - 1,718 1,718 - - - 98 - - - - - - - - - - - - 949,108$ 45,514$ 386,630$ 4,184,152$ -$ -$ -$ 2,000$ - - - 2,000 - - - - 949,108 45,514 386,630 4,182,152 - - - - 949,108 45,514 386,630 4,182,152 949,108$ 45,514$ 386,630$ 4,184,152$ 141 2008 Bond Debt Service 2013 Bond Debt Service 2014 Bond Debt Service Revenues: Property Taxes -$ -$ -$ Contributions - - - Investment income 766 105 (237) Total revenues 766 105 (237) Expenditures: Debt service - Principal retirement 1,430,000 1,550,000 380,000 Interest and fiscal charges 1,207,788 1,481,725 153,725 Bond Issuance Costs - - - Total expenditures 2,637,788 3,031,725 533,725 Excess (deficiency) of revenues over expenditures (2,637,022) (3,031,620) (533,962) Other financing sources (uses): Face value of bonds issued - - - Refunded bond escrow payment - - - Premium on bonds issued - - - Transfers in 1,252,891 3,063,718 538,867 Transfers out (5,457,571) - - Total other financing sources (uses)(4,204,680) 3,063,718 538,867 Change in fund balances (6,841,702) 32,098 4,905 Fund balances, beginning of year 6,841,702 2,305,362 458,535 Fund balances, end of year -$ 2,337,460$ 463,440$ TOWN OF MARANA, ARIZONA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NON-MAJOR DEBT SERVICE FUNDS YEAR ENDED JUNE 30, 2017 142 2017 Bond Debt Service Other Debt Service Gladden Farms Debt Service Totals -$ -$ 452,489$ 452,489$ - - 9,412 9,412 378 - 56 1,068 378 - 461,957 462,969 - - 265,000 3,625,000 - - 307,057 3,150,295 260,840 - 484,484 745,324 260,840 - 1,056,541 7,520,619 (260,462) - (594,584) (7,057,650) 19,865,000 - 7,555,000 27,420,000 (24,128,715) - (7,935,149) (32,063,864) 3,216,239 - 872,957 4,089,196 2,257,046 - 96,818 7,209,340 - - - (5,457,571) 1,209,570 - 589,626 1,197,101 949,108 - (4,958) (5,860,549) - 45,514 391,588 10,042,701 949,108$ 45,514$ 386,630$ 4,182,152$ 143 Original Final Actual Variance - Positive (Negative) Revenues: Property Taxes -$ -$ -$ -$ Contributions - - - - Investment income - - 766 766 Total revenues - - 766 766 Expenditures: Debt service - Principal retirement 1,430,000 1,430,000 1,430,000 - Interest and fiscal charges 1,207,788 1,207,788 1,207,788 - Total expenditures 2,637,788 2,637,788 2,637,788 - Excess (deficiency) of revenues over expenditures (2,637,788) (2,637,788) (2,637,022) 766 Other financing sources: Face value of bonds issued - - - - Refunded bond escrow payment - - - - Transfers in 2,637,788 2,637,788 1,252,891 (1,384,897) Transfers out - - (5,457,571) (5,457,571) Total other financing sources 2,637,788 2,637,788 (4,204,680) (6,842,468) Change in fund balances - - (6,841,702) (6,841,702) Fund balances (deficits), July 1, 2016 - - 6,841,702 6,841,702 Fund balances (deficits), June 30, 2017 -$ -$ -$ -$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR DEBT SERVICE FUNDS 2008 BOND DEBT SERVICE YEAR ENDED JUNE 30, 2017 2008 Bond Debt Service 144 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Property Taxes -$ -$ -$ -$ Contributions - - - - Investment income - - 105 105 Total revenues - - 105 105 Expenditures: Debt service - Principal retirement 1,550,000 1,550,000 1,550,000 - Interest and fiscal charges 1,481,725 1,481,725 1,481,725 - Total expenditures 3,031,725 3,031,725 3,031,725 - Excess (deficiency) of revenues over expenditures (3,031,725) (3,031,725) (3,031,620) 105 Other financing sources (uses): Face value of bonds issued - - - - Refunded bond escrow payment - - - - Transfers in 3,031,725 3,031,725 3,063,718 (31,993) Transfers out - - - - Total other financing sources (uses)3,031,725 3,031,725 3,063,718 (31,993) Change in fund balances - - 32,098 32,098 Fund balances (deficits), July 1, 2016 - - 2,305,362 2,305,362 Fund balances (deficits), June 30, 2017 -$ -$ 2,337,460$ 2,337,460$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR DEBT SERVICE FUNDS 2013 BOND DEBT SERVICE YEAR ENDED JUNE 30, 2017 2013 Bond Debt Service 145 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Property Taxes -$ -$ -$ -$ Contributions - - - - Investment income - - (237) (237) Total revenues - - (237) (237) Expenditures: Debt service - Principal retirement 380,000 380,000 380,000 - Interest and fiscal charges 151,725 151,725 153,725 (2,000) Total expenditures 531,725 531,725 533,725 (2,000) Excess (deficiency) of revenues over expenditures (531,725) (531,725) (533,962) (2,237) Other financing sources (uses): Face value of bonds issued - - - - Refunded bond escrow payment - - - - Transfers in 531,725 531,725 538,867 (7,142) Transfers out - - - - Total other financing sources (uses)531,725 531,725 538,867 (7,142) Change in fund balances - - 4,905 4,905 Fund balances (deficits), July 1, 2016 - - 458,535 458,535 Fund balances (deficits), June 30, 2017 -$ -$ 463,440$ 463,440$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR DEBT SERVICE FUNDS 2014 BOND DEBT SERVICE YEAR ENDED JUNE 30, 2017 2014 Bond Debt Service 146 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Property Taxes -$ -$ -$ -$ Contributions - - - - Investment income - - 378 378 Total revenues - - 378 378 Expenditures: Debt service - Principal retirement - - - - Interest and fiscal charges - - - - Bond issuance costs - - 260,840 (260,840) Total expenditures - - 260,840 (260,840) Excess (deficiency) of revenues over expenditures - - (260,462) (260,462) Other financing sources (uses): Face value of bonds issued - - 19,865,000 (19,865,000) Refunded bond escrow payment - - (24,128,715) 24,128,715 Premium on bonds issued - - 3,216,239 (3,216,239) Transfers in - - 2,257,046 (2,257,046) Transfers out - - - - Total other financing sources (uses)- - 1,209,570 (1,209,570) Change in fund balances - - 949,108 949,108 Fund balances (deficits), July 1, 2016 - - - - Fund balances (deficits), June 30, 2017 -$ -$ 949,108$ 949,108$ TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR DEBT SERVICE FUNDS 2017 BOND DEBT SERVICE YEAR ENDED JUNE 30, 2017 2017 Bond Debt Service 147 Original Budget Final Budget Actual Variance - Positive (Negative) Revenues: Property Taxes 452,269$ 452,269$ 452,489$ 220$ Contributions 264,603 264,603 9,412 (255,191) Investment income - - 56 56 Total revenues 716,872 716,872 461,957 (254,915) Expenditures: Debt service - Principal retirement 265,000 265,000 265,000 - Interest and fiscal charges 451,872 451,872 307,057 144,815 Bond issuance costs - - 484,484 (484,484) Total expenditures 716,872 716,872 1,056,541 (339,669) Excess (deficiency) of revenues over expenditures - - (594,584) (594,584) Other financing sources (uses): Face value of bonds issued - - 7,555,000 (7,555,000) Refunded bond escrow payment - - (7,935,149) 7,935,149 Premium on bonds issued - - 872,957 (872,957) Transfers in - - 96,818 (96,818) Transfers out - - - - Total other financing sources (uses)- - 589,626 (589,626) Change in fund balances - - (4,958) (4,958) Fund balances (deficits), July 1, 2016 - - 391,588 391,588 Fund balances (deficits), June 30, 2017 -$ -$ 386,630$ 386,630$ Gladden Farms Debt Service TOWN OF MARANA, ARIZONA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NON-MAJOR DEBT SERVICE FUNDS GLADDEN FARMS DEBT SERVICE YEAR ENDED JUNE 30, 2017 148 STATISTICAL INFORMATION 149 This page intentionally left blank 150 TOWN OF MARANA, ARIZONA STATISTICAL SECTION JUNE 30, 2017 Statistical Section 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. Schedule Page 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 Years 1 152 Changes in Net Position - Last Ten Fiscal Years 2 154 Governmental Activities Tax Revenues by Source - Last Ten Years 3 158 Fund Balances of Governmental Funds - Last Ten Fiscal Years 4 159 Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years 5 160 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 - 6 162 Last Ten Years Property Tax Rates - Direct and Overlapping Governments - Last Ten Years 7 163 Principal Property Taxpayers - Current Year and Nine Years Ago 8 164 Property Tax Levies and Collections - Last Ten Fiscal Years 9 165 Tangerine Farms Road Improvement District Active Assessments 10 166 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 Years 11 174 Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years 12 175 Direct and Overlapping Governmental Activities Debt 13 176 Legal Debt Margin Information 14 177 Pledged-Revenue Coverage - Last Ten Fiscal Years 15 178 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 Years 16 179 Principal Employers - Current Year and Nine Years Ago 17 180 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 Years 18 181 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 Years 19 182 Excise Tax Collections - Last Ten Years 20 183 Principal Retail and Contracting Sales Taxpayers - Current Year and Nine Years Ago 21 184 Single Family Residential Permits Issued - Last Ten Years 22 185 Capital Assets Statistics by Function 23 186 151 Schedule 1 2008 2009 2010 2011 Governmental activities Net investment in capital assets 184,396$ 174,286$ 193,721$ 196,326$ Restricted 25,465 45,727 25,459 28,136 Unrestricted 22,320 39,916 39,929 38,889 Total governmental activities net position 232,181 259,929 259,109 263,351 Business-type activities Net investment in capital assets 32,341 41,643 44,310 42,148 Restricted 1,297 - - 73 Unrestricted (1,242) (4,714) (5,813) (2,683) Total business-type activities net position 32,396 36,929 38,497 39,538 Primary government Net investment in capital assets 216,737 215,929 238,031 238,474 Restricted 26,762 45,727 25,459 28,209 Unrestricted 21,078 35,202 34,116 36,206 Total primary government net position 264,577$ 296,858$ 297,606$ 302,889$ Source: Statement of Net Position (Amounts expressed in thousands) TOWN OF MARANA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (Accrual basis of accounting) 152 Schedule 1 2012 2013 2014 2015 2016 2017 (as restated) 194,287$ 184,949$ 189,171$ 190,297$ 193,845$ 210,137$ 29,004 62,437 58,820 36,418 43,127 31,163 39,911 1,384 (283) (4,283) (6,492) 5,119 263,202 248,770 247,708 222,432 230,480 246,419 112,528 111,045 109,111 109,649 112,357 101,524 146 219 293 365 365 365 (17,519) (2,677) (208) 984 1,313 16,319 95,155 108,587 109,196 110,998 114,035 118,208 306,815 295,994 298,282 299,946 306,202 311,661 29,150 62,656 59,113 36,783 43,492 31,528 22,392 (1,293) (491) (3,299) (5,179) 21,439 358,357$ 357,357$ 356,904$ 333,430$ 344,515$ 364,628$ 153 Schedule 2 2008 2009 2010 2011 Expenses Governmental activities: General government 12,925$ 9,565$ 14,638$ 10,643$ Development & planning services - 1,304 - - Town Attorney *- 917 - - Public safety 11,215 12,255 10,675 9,044 Magistrate court *- 946 - - Highways and streets 10,269 6,734 14,986 15,425 Health & Welfare **130 112 102 86 Culture & recreation 3,978 4,818 3,943 3,335 Economic & community development 8,643 12,751 4,835 4,596 Interest on long-term debt 2,500 2,530 865 5,173 Total governmental activities expenses 49,660 51,932 50,044 48,302 Business-type activities: Airport 1,196 2,546 3,803 3,392 Wastewater N/A N/A N/A N/A Water 3,276 1,178 1,136 1,273 Total business-type activities expenses 4,472 3,724 4,939 4,665 Total primary government expenses 54,132$ 55,656$ 54,983$ 52,967$ Program Revenues Governmental activities: Charges for services: General government 899$ 918$ 939$ 830$ Culture and recreation 200 315 211 140 Economic & community development 2,380 1,740 1,974 2,256 Operating grants and contributions 4,700 3,537 4,221 3,555 Capital grants and contributions 14,590 40,725 11,618 14,963 Total government activities program revenues 22,768 47,235 18,963 21,744 Business-type activities: Charges for services: Airport 221 227 235 238 Wastewater N/A N/A N/A N/A Water 2,968 2,718 3,035 3,103 Capital grants and contributions 6,885 5,269 3,489 2,669 Total business-type activity program revenues 10,074 8,214 6,759 6,010 Total primary government program revenues 32,842 55,449 25,722 27,754 Net (expense)/revenue Governmental activities (26,892) (4,697) (31,081) (26,558) Business-type activities 5,602 4,490 1,820 1,345 Total primary government net expense (21,290)$ (207)$ (29,261)$ (25,213)$ TOWN OF MARANA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (Accrual basis of accounting) (Amounts expressed in thousands) 154 Schedule 2 2012 2013 2014 2015 2016 2017 10,833$ 9,532$ 10,662$ 14,707$ 17,531$ 19,393$ - - - - - - - - - - - - 10,206 11,777 12,134 14,324 14,423 16,736 - - - - - - 17,233 18,327 19,053 18,522 22,659 40,172 23 23 23 - - 278 2,173 3,831 3,131 4,433 3,422 6,006 4,258 4,123 4,691 4,796 4,779 4,902 4,721 4,312 4,543 4,106 3,962 2,335 49,447 51,925 54,237 60,888 66,776 89,822 1,112 1,179 1,197 1,289 1,829 1,772 3,831 2,599 2,756 3,431 3,662 3,983 3,074 3,779 5,244 4,150 4,405 5,368 8,017 7,557 9,197 8,870 9,896 11,123 57,464$ 59,482$ 63,434$ 69,758$ 76,672$ 100,945$ 881$ 975$ 941$ 4,490$ 4,787$ 4,909$ 134 216 200 305 265 287 2,513 3,906 3,386 4,585 4,027 4,355 3,202 3,747 4,442 4,360 4,507 4,619 9,017 12,373 10,268 11,281 17,157 44,371 15,747 21,217 19,237 25,021 30,743 58,541 233 239 248 239 247 251 241 730 834 933 1,016 1,065 3,281 3,455 3,766 4,146 4,243 5,064 60,207 1,958 2,534 4,015 5,214 5,941 63,962 6,382 7,382 9,333 10,720 12,321 79,709 27,599 26,619 34,354 41,463 70,862 (33,700) (33,699) (35,000) (35,867) (36,033) (31,281) 55,945 55,944 (1,815) 463 824 1,198 22,245$ 22,245$ (36,815)$ (35,404)$ (35,209)$ (30,083)$ 155 Schedule 2 2008 2009 2010 2011 General Revenues and Other Changes in Net Position Governmental activities: General revenues City sales taxes 27,173$ 22,404$ 21,662$ 22,948$ Property taxes 460 691 623 584 Franchise fees 309 315 313 322 State shared revenues 7,397 7,221 6,462 5,719 Investment income (loss)3,024 595 135 105 Miscellaneous 459 1,227 774 814 Gain on sale of assets - - - - Transfers (160) (8) 291 309 Total governmental activities 38,661 32,445 30,260 30,801 Business-type activities: General revenues Investment income 110 8 1 1 Miscellaneous 37 26 38 4 Transfers 160 8 (291) (309) Special item - - - - Total business-type activities 307 42 (252) (304) Total primary government 38,968 32,487 30,008 30,497 Change in Net Position Governmental activities 11,769 27,748 (821) 4,243 Business-type activities 5,909 4,532 1,568 1,041 Total primary government 17,678$ 32,280$ 747$ 5,284$ * In prior fiscal years, 2003 through 2009, 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 General Accounting 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. Source: Statement of Activities (Amounts expressed in thousands) TOWN OF MARANA CHANGES IN NET POSITION LAST TEN FISCAL YEARS (Accrual basis of accounting) 156 Schedule 2 2012 2013 2014 2015 2016 2017 24,539$ 24,768$ 26,226$ 28,059$ 35,442$ 37,500$ 506 447 421 442 482 509 333 349 377 401 447 488 6,943 7,714 8,273 8,820 9,039 10,619 97 152 171 149 173 238 803 737 854 813 676 744 - 36 - 116 - - 329 (15,912) (2,384) (404) (2,177) (2,878) 33,550 18,291 33,938 38,396 44,082 47,220 1 2 1 9 16 43 1 19 39 19 19 54 (329) 15,911 2,384 404 2,177 2,878 - (1,326) - - - - (327) 14,606 2,424 432 2,212 2,975 33,223 32,897 36,362 38,828 46,294 50,195 (150) (15,408) (1,062) 2,529 8,049 15,939 55,618 70,550 609 895 3,036 4,173 55,468$ 55,142$ (453)$ 3,424$ 11,085$ 20,112$ 157 Schedule 3 Fiscal Year Sales Tax Highway User Revenue taxes Total 2017 37,500$3,099$40,599$ 2016 35,442 2,623 38,065 2015 28,059 2,484 30,458 2014 25,958 2,286 28,244 2013 24,618 2,257 26,875 2012 24,300 2,061 26,361 2011 22,800 1,869 24,669 2010 21,578 1,806 23,384 2009 22,718 1,936 24,654 2008 27,173 2,036 29,209 Source: Statement of Revenues (Amounts expressed in thousands) TOWN OF MARANA GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS (Accrual basis of accounting) 158 Schedule 4 TOWN OF MARANA FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (Modified accrual basis of accounting) (Amounts expressed in thousands) 2008 2009 2010 2011* 2012 2013 2014 2015 2016 2017 General Fund Reserved 286$185$313$-$-$-$-$-$-$-$ Unreserved 20,128 14,299 14,779 ------- Nonspendable ---229 293 2,803 2,540 2,282 2,418 2,367 Unassigned --- 16,149 18,004 18,115 21,123 22,309 20,425 22,640 Total general fund 20,414 14,484 15,092 16,378 18,297 20,918 23,663 24,591 22,843 25,007 All other governmental funds Reserved 257$7,221$7,099$-$-$-$-$-$-$-$ Unreserved, reported in: Major governmental funds 13,978 23,762 6,341 ------- Special revenue funds 1,193 2,561 4,844 ------- Capital revenue funds 6,438 4,648 7,174 ------- Debt service funds ---------- Nonspendable ------33 -3 1 Restricted --- 28,137 29,821 47,616 40,774 40,771 48,486 49,960 Unassigned ---- (816) (444) (472) (863) (525) (1,908) Total all other governmental funds 21,866$38,192$25,458$28,137$29,005$47,172$40,335$39,908$47,964$48,053$ Total fund balance of governmental funds 42,280$52,676$40,550$44,515$47,302$68,090$63,998$64,499$70,807$73,060$ *GASB Statement No. 54 implemented in fiscal year 2011, changed the way fund balances are classified. Source: Governmental Fund Statements159 Schedule 5 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Revenues Sales taxes 27,173$ 22,404$ 21,662$ 22,948$ 24,539$ 24,768$ 26,226$ 28,058$ 35,442$ 37,500$ Property taxes 460 692 622 584 506 497 424 447 489 521 Intergovernmental revenues 19,280 21,607 16,331 17,707 14,960 18,000 12,732 14,927 20,537 43,261 Licenses, fees and permits 3,341 2,521 3,681 4,361 4,906 8,586 6,549 7,048 6,243 7,078 Fines, forfeitures and penalties 808 869 879 730 752 871 831 889 750 728 Charges for services 980 706 621 430 456 379 509 692 500 563 Lease Income 987 543 555 647 92 105 99 96 90 113 Special assessments - 2,136 2,352 2,239 2,302 2,337 2,176 2,050 2,129 2,340 Contributions 1,457 658 381 3,690 537 589 1,098 583 1,216 214 System development fees - - - - - - - -- - Investment earnings 3,025 595 135 105 97 152 171 149 173 238 Miscellaneous 484 286 820 614 636 804 927 853 376 460 Total revenues 57,995 53,017 48,039 54,055 49,783 57,088 51,742 55,792 67,945 93,016 Expenditures General government 9,999 8,947 9,080 9,661 8,481 7,860 8,953 9,652 12,017 13,347 Public safety 10,500 11,204 10,164 9,334 10,590 12,067 11,952 13,886 14,068 14,477 Highways and streets 3,897 3,693 2,854 3,043 3,657 4,026 4,214 5,441 5,796 6,037 Health and welfare 130 113 75 59 - - - -- 365 Economic and community development 4,910 4,405 4,654 4,520 4,259 4,479 4,508 4,351 4,146 4,642 Culture and recreation 3,267 3,665 3,309 2,552 2,604 2,859 3,195 3,598 3,710 4,266 Town attorney - 917 - - - - - -- - Magistrate Court - 946 - - - - - -- - Community development - 370 - - - - - -- - Capital outlay 57,213 35,888 29,420 13,800 7,040 3,700 4,453 9,885 11,840 34,275 Debt service Principal 2,129 2,535 3,191 3,490 6,059 4,177 10,338 3,412 3,992 5,083 Interest 3,121 2,313 4,931 4,832 4,635 4,408 4,522 4,491 4,212 3,882 Other charges - 628 109 - 521 97 --1,023 Total expenditures 95,165 75,624 67,678 51,400 47,325 44,097 52,232 54,716 59,781 87,397 Excess of revenues over (under) expenditures (37,171) (22,607) (19,639) 2,655 2,458 12,991 (490) 1,076 8,164 5,619 (Amounts expressed in thousands) Fiscal Year TOWN OF MARANA CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (Modified accrual basis of accounting) 160 Schedule 5 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Other financing sources (uses) Transfers in 4,195 15,978 8,492 5,297 5,998 19,700 14,155 6,380 6,498 7,680 Transfers out (4,355) (15,987) (8,201) (4,988) (5,669) (35,611) (16,540) (6,955) (8,675) (10,558) Proceeds from sale of capital assets - - - - - 57 - - 321 45 Capitalized interest - - - - - - - - - 178 Bonds issued 3,075 39,790 - 1,000 - 34,780 6,493 - - 42,065 Premium on bonds issued - 443 - - - 3,031 - - - 4,089 Payments to refunded bond escrow agent - - - - - (14,160) (14,160) - - (46,865) Total other financing sources (uses) 2,915 40,224 291 1,309 329 7,797 (10,052) (575) (1,856) (3,366) Net change in fund balance (19,692)$ 20,585$ 2,946$ 3,767$ 13,320$ 7,307$ (8,976)$ (575)$ 6,308$ 2,253$ Debt service as a percentage of noncapital expenditures 16.1%13.9%27.0%27.5%26.5%21.5%31.3%18.1%16.5%12.6% Source: Governmental Fund Statements Fiscal Year 161 Schedule 6TOWN OF MARANA ASSESSED VALUE AND ESTIMATED ACTUAL OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (Amounts expressed in thousands) Fiscal Year Ended June 30 Fiscal Year Residential Property Commercial Property Less: Tax Exempt Real Property Total Taxable Assessed Value Total Direct Tax Rate Estimated Actual Taxable Value Assessed Value as a Percentage of Actual Value 2018 2017/18 20,719$ 182$ 1,264$ 19,637$ 2.8000 $201,092 9.8% 2017 2016/17 19,250 42 1,202 18,091 2.8000 185,483 9.8% 2016 2015/16 18,274 5 1,228 17,051 2.8000 173,938 9.8% 2015 2014/15 17,078 4 1,359 15,724 2.8000 160,756 9.8% 2014 2013/14 16,176 5 1,354 14,826 2.8000 150,182 9.9% 2013 2012/13 17,851 4 1,343 16,512 2.8000 165,517 10.0% 2012 2011/12 18,920 10 1,339 17,591 2.8000 176,256 10.0% 2011 2010/11 21,859 7 1,251 20,616 2.8000 201,039 10.3% 2010 2009/10 23,438 9 1,190 22,257 2.8000 215,989 10.3% 2009 2008/09 24,964 23 406 24,581 2.8000 230,393 10.7% Notes: 1) The Town of Marana does not impose a property tax; principal property taxpayers represented above reflect those properties within the boundaries of the Gladden Farms Community Facilities District, which does impose a property tax. 2) The valuations shown are consistent with Gladden Farms CFD Property Tax Levy as adopted by the board of superviosrs on the third Monday in August of each year. Source: Pima County Assessor's Office 162 Schedule 7 Fiscal Year Tax Year State of Arizona Pima County (General Fund) Road Tax County Library District Debt Service Flood Control District State Education Equalizatio n Assistance Tax Flowing Wells School District Community College District Northwest Fire District 2017/18 2017 - 4.2096$ 0.2500$ 0.5053$ 0.7000$ 0.3135$ 0.4875 6.7539$ 1.3890$ 3.0734$ 2016/17 2016 - 4.2896 - 0.5153 0.7000 0.3335 0.5010 6.8971 1.3733 2.9920 2015/16 2015 - 4.3877 - 0.5153 0.7000 0.3135 0.5054 6.6292 1.3689 2.9138 2014/15 2014 - 4.2779 - 0.4353 0.7000 0.3035 0.5089 6.6135 1.3344 2.9272 2013/14 2013 - 3.6665 - 0.3753 0.7800 0.2635 0.5123 6.7146 1.2933 3.0213 2012/13 2012 - 3.4178 - 0.3460 0.7800 0.2635 0.4717 5.9778 1.1741 2.8339 2011/12 2011 - 3.4178 - 0.3460 0.7800 0.2635 0.4259 5.9689 1.1094 2.7109 2010/11 2010 - 3.3133 - 0.3100 0.7500 0.2635 0.3564 6.0407 1.0848 2.4646 2009/10 2009 - 3.3133 - 0.2643 0.7100 0.2635 0.3306 6.1239 1.0770 2.2077 2008/09 2008 - 3.3913 - 0.3393 0.6050 0.2935 6.2665 1.1355 2.2601 Fiscal Year Tax Year Fire District Assistance Central Arizona Water Conservation District Total Overlapping Rates Town of Marana Marana School District Gladden Farms Community Facilities District Vanderbilt Farms Community Facilities District Saguaro Springs Community Facilities District Total Direct Rates Total Direct & Overlapping Rates 2017/18 2017 0.0459$ 0.1400$ 17.6822$ - 6.2334$ 2.8000$ 0.3000$ 0.3000$ 9.6334$ 27.3156$ 2016/17 2016 0.0468 0.1400 17.6018 - 6.3871 2.8000 0.3000 0.3000 9.7871 27.3889 2015/16 2015 0.0467 0.1400 17.3338 - 6.3370 2.8000 0.3000 0.3000 9.7370 27.0708 2014/15 2014 0.0472 0.1400 17.1007 - 6.2288 2.8000 0.3000 0.3000 9.6288 26.7295 2013/14 2013 0.0456 0.1400 16.6268 - 6.0085 2.8000 0.3000 0.3000 9.4085 26.0353 2012/13 2012 0.0447 0.1000 15.2648 - 5.5863 2.8000 0.3000 0.3000 8.9863 24.2511 2011/12 2011 0.0418 0.1000 15.0224 - 5.2047 2.8000 0.3000 0.3000 8.6047 23.6271 2010/11 2010 0.0430 0.1000 14.5833 - 4.6995 2.8000 0.3000 0.3000 8.0995 22.6828 2009/10 2009 0.0406 0.1000 14.2903 - 4.9286 2.8000 0.3000 0.3000 8.3286 22.6189 2008/09 2008 0.0411 0.1000 14.2912 - 5.4815 2.8000 0.3000 0.3000 8.8815 23.1727 Notes: 1) The Flowing Wells School District (a school district of approximately 13 miles) intersects approximately one mile of the Town's boundaries. Marana School District covers the remaining approximate 69 miles of the Town's boundaries. 2) The Town intersects several fire districts. Prior to fiscal year 1999, the Town contracted for fire service for the Town until fire districts could be established. 3) The Pima County Flood Control District tax levy applies only to real property. 4) Primary and secondary tax rates are assessed per $100 of the net assessed value and are set by the County Board of Supervisors or governing board of taxing jurisdiction. Source: Pima County TOWN OF MARANA PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS 163 Schedule 8 Taxpayer Full Cash Value Rank Percentage of Total taxable Assessed Value Full Cash Value Rank Percentage of Total taxable Assessed Value GLADDEN 25 LENDING LLC 171$1 19.3%282 5 6.4% SMITHS FOOD & DRUG CENTERS INC 125 2 14.1%324 4 7.4% WEINGARTEN NEWQUIST LLC 120 3 13.5%224 6 5.1% AMH 2014-1 BORROWER LLC 92 4 10.4%- -- AT&T MOBILITY LLC 89 5 10.0%- -- FIDELITY NATIONAL TITLE TR 60421 66 6 7.4%- -- TITLE SECURITY AGENCY OF AZ TR 201401-T 61 7 6.9%- -- GIGAFISH LLC 57 8 6.4%- -- KB HOME TUCSON INC 54 9 6.1%- -- TITLE SECURITY AGENCY LLC TR-201546S 52 10 5.9%- -- FIDELITY NATIONAL TITLE TR 30212 2,301 1 52.5% FIDELITY NATIONAL TITLE TR 60360 339 2 7.7% FIDELITY NATIONAL TITLE TR 60338 328 3 7.4% FREEDBER BARRY & FREEDBRG BELLA 201 7 4.6% MIRAMONTE GLADDEN FARMS LLC 171 8 3.9% OS REALITY LLC 134 9 3.0% TITLE SECURITY AGENCY OF AZ TR 891 103 10 2.3% Totals 887$4,407$ 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) 20082017 TOWN OF MARANA PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO (Amounts expressed in thousands) 164 Schedule 9TOWN OF MARANA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (Amounts expressed in thousands) Collected within the Fiscal Year of the Levy Total Collections to Date Fiscal Year Ended June 30 Total Tax Levy for Fiscal Year Amount Percentage of Levy Amount Percentage of Levy 2017 521$515 98.85%520 99.81% 2016 489 485 99.18%438 99.80% 2015 440 436 99.09%438 99.55% 2014 415 411 99.04%412 99.28% 2013 462 456 98.65%456 98.65% 2012 492 489 99.39%491 99.80% 2011 623 563 97.57%563 97.57% 2010 623 623 100.00%623 100.00% 2009 688 681 98.98%687 99.85% 2008 544 532 97.79%543 99.82% Notes: 1) 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 165 Schedule 10 District Assessment Number Tax Assessor's Parcel Number Owner Original Assessment Amount (1) Remaining Assessment Amount (2) 2017 Full Cash Value (3) Non-Residential Square Footage (4) Expected Future Use 242-C1 215-01-003P Tangerine/I-10, LLC $1,135,478.05 $741,140.00 $12,587.00 1,015,384 Commercial 242-A 215-01-003R Tangerine/I-10, LLC 910,428.35 594,248.00 8,440.00 814,136 Commercial 242-B3-1 215-01-003S INTERNATIONAL CENTER TUCSON LLC & SECUNDUS TUCSON LLC 87,681.70 57,231.00 2,678,258.00 78,565 Commercial 242-B1/2 215-01-003T Tangerine/I-10, LLC 266,454.95 173,918.00 2,954.00 238,273 Commercial 242-B4/5 215-01-003U Tangerine/I-10, LLC 620,104.49 404,750.00 6,788.00 554,519 Commercial 242-B1/2/4/5 215-01-003V Tangerine/I-10, LLC 1,240,696.11 809,817.00 13,789.00 1,109,473 Commercial 242-B3-2 215-01-003W INTERNATIONAL CENTER TUCSON LLC & SECUNDUS TUCSON LLC 82,323.38 53,733.00 985.00 73,738 Commercial 242-D1 216-12-0250 Tangerine/I-10, LLC 82,810.50 54,051.00 29,545.00 73,864 Commercial 242-D2 216-12-0260 Tangerine/I-10, LLC 430,127.46 280,749.00 159,923.00 384,808 Commercial 242-D3 216-12-0270 Tangerine/I-10, LLC 608,900.71 397,437.00 217,717.00 544,292 Commercial 242-D4 216-12-0300 Tangerine/I-10, LLC 29,227.23 19,077.00 10,409.00 26,023 Commercial 242-C2 216-12-0330 Tangerine/I-10, LLC 197,770.95 129,087.00 8,120.00 176,854 Commercial 237 217-53-040A TOWN OF MARANA 119,965.96 78,303.23 2,106,900.00 1,019,740 Park 235 217-53-8060 KB Home Tucson Inc.504,741.16 329,450.62 419,263.00 - Residential 236 217-53-8070 KB Home Tucson Inc.319,456.43 208,513.06 315,775.00 - Residential 238/239-1 217-53-8080 WALGREEN CO.47,073.12 30,725.19 238,512.00 79,504 Commercial 238/239-2 217-53-8090 GLADDEN 25 LLC 34,021.62 22,206.31 114,954.00 57,477 Residential and Commercial 238/239-3 217-53-8100 GLADDEN 25 LLC 36,317.24 23,704.69 122,704.00 61,352 Residential and Commercial 238/239-4 217-53-8110 GLADDEN 25 LLC 34,975.98 22,829.24 118,098.00 59,049 Residential and Commercial 238/239-5 217-53-8120 GLADDEN 25 LLC 31,674.41 20,674.28 107,006.00 53,503 Residential and Commercial 238/239-6 217-53-8130 GLADDEN 25 LLC 33,583.13 21,920.11 113,434.00 56,717 Residential and Commercial 238/239-7 217-53-8140 GLADDEN 25 LLC 25,767.70 16,818.89 87,048.00 43,524 Residential and Commercial 238/239-8 217-53-8150 GLADDEN 25 LLC 59,118.69 38,587.48 169,764.00 99,861 Residential and Commercial 238/239-9 217-53-8160 GLADDEN 25 LLC 54,733.79 35,725.41 157,140.00 92,435 Residential and Commercial 238/239-10 217-53-8170 GLADDEN 25 LLC 51,638.56 33,705.12 148,232.00 87,195 Residential and Commercial 230-1 217-54-0110 Gladden Phase II, LLC 511,130.62 333,621.10 13,295.00 1,072,482 Residential and Commercial 230-2 217-54-0120 Gladden Phase II, LLC 648,590.84 423,343.04 17,744.00 1,431,382 Residential and Commercial 230-3 217-54-0130 Gladden Phase II, LLC 550,694.98 359,445.24 15,066.00 1,215,324 Residential and Commercial 230-4 217-54-0140 Northwest Medical Center 1,140,957.82 744,716.90 31,212.00 2,517,768 Hospital 230-5 217-54-0150 Gladden Phase II, LLC 766,695.93 500,431.65 137,732.00 1,930,109 Residential and Commercial 230-6 217-54-0160 Gladden Phase II, LLC 626,135.01 408,685.86 11,961.00 964,854 Residential and Commercial 230-7 217-54-0180 Gladden Phase II, LLC 715,582.86 467,069.54 14,742.00 1,189,188 Residential and Commercial 230-8 217-54-0190 Gladden Phase II, LLC 597,781.67 390,179.28 16,351.00 1,318,997 Residential and Commercial 230-9 217-54-0200 Gladden Phase II, LLC 530,298.02 346,131.90 16,492.00 1,330,522 Residential and Commercial 230-10 217-54-0210 Gladden Phase II, LLC 690,026.33 450,388.49 13,970.00 1,126,897 Residential and Commercial 230-11 217-54-0220 Gladden Phase II, LLC 1,181,989.55 771,498.81 21,902.00 1,766,794 Residential and Commercial 230-12 217-54-0230 Gladden Phase II, LLC 659,991.24 430,784.22 18,052.00 1,456,211 Residential and Commercial 230-13 217-54-0240 Gladden Phase II, LLC 773,085.06 504,601.93 21,368.00 1,723,472 Residential and Commercial 230-14 217-54-0250 Gladden Phase II, LLC 779,474.19 508,772.18 14,602.00 1,177,862 Residential and Commercial 230-15 217-54-0260 Gladden Phase II, LLC 632,524.14 412,856.12 14,546.00 955,706 Residential and Commercial 230-16 217-54-0270 Gladden Phase II, LLC 894,478.58 583,836.94 17,809.00 1,436,609 Residential and Commercial 230-17 217-54-0280 Gladden Phase II, LLC 625,192.30 408,070.54 17,102.00 1,379,545 Residential and Commercial 231 217-55-012A WESTCOR MARANA LLC 2,645,066.47 1,726,466.72 32,195.00 2,597,047 Commercial 99 217-56-2440 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 100 217-56-2450 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 101 217-56-2460 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 102 217-56-2470 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 103 217-56-2480 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 104 217-56-2490 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 106 217-56-2510 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential Town of Marana, Arizona Tangerine Farms Road Improvement District All Active Assessments As of 6/30/2017 166 Schedule 10 District Assessment Number Tax Assessor's Parcel Number Owner Original Assessment Amount (1) Remaining Assessment Amount (2) 2017 Full Cash Value (3) Non-Residential Square Footage (4) Expected Future Use Town of Marana, Arizona Tangerine Farms Road Improvement District All Active Assessments As of 6/30/2017 108 217-56-2530 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 109 217-56-2540 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 110 217-56-2550 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 111 217-56-2560 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 112 217-56-2570 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 113 217-56-2580 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 114 217-56-2590 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 115 217-56-2600 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 122 217-56-2670 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 123 217-56-2680 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 127 217-56-2720 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 128 217-56-2730 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 130 217-56-2750 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 131 217-56-2760 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 132 217-56-2770 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 133 217-56-2780 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 134 217-56-2790 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 135 217-56-2800 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 141 217-56-2860 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 142 217-56-2870 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 143 217-56-2880 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 144 217-56-2890 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 148 217-56-2930 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 162 217-56-3070 KB Home Tucson Inc.6,389.13 4,170.26 163,500.00 - Residential 163 217-56-3080 KB Home Tucson Inc.6,389.13 4,170.26 190,429.00 - Residential 164 217-56-3090 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 165 217-56-3100 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 166 217-56-3110 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 167 217-56-3120 KB Home Tucson Inc.6,389.13 4,170.26 24,836.00 - Residential 170-1 217-56-3900 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-2 217-56-3910 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-3 217-56-3920 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-4 217-56-3930 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-5 217-56-3940 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-6 217-56-3950 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-7 217-56-3960 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-8 217-56-3970 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-9 217-56-3980 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-10 217-56-3990 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-11 217-56-4000 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-12 217-56-4010 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-13 217-56-4020 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-14 217-56-4030 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-15 217-56-4040 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-16 217-56-4050 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-17 217-56-4060 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-18 217-56-4070 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-19 217-56-4080 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-20 217-56-4090 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-21 217-56-4100 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-22 217-56-4110 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-23 217-56-4120 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential167 Schedule 10 District Assessment Number Tax Assessor's Parcel Number Owner Original Assessment Amount (1) Remaining Assessment Amount (2) 2017 Full Cash Value (3) Non-Residential Square Footage (4) Expected Future Use Town of Marana, Arizona Tangerine Farms Road Improvement District All Active Assessments As of 6/30/2017 170-24 217-56-4130 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-25 217-56-4140 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-26 217-56-4150 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-27 217-56-4160 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-28 217-56-4170 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-29 217-56-4180 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-30 217-56-4190 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-31 217-56-4200 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-32 217-56-4210 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-33 217-56-4220 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-34 217-56-4230 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-35 217-56-4240 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-36 217-56-4250 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-37 217-56-4260 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-38 217-56-4270 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-39 217-56-4280 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-40 217-56-4290 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-41 217-56-4300 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-42 217-56-4310 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-43 217-56-4320 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-44 217-56-4330 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-45 217-56-4340 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-46 217-56-4350 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-47 217-56-4360 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-48 217-56-4370 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-49 217-56-4380 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-50 217-56-4390 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-51 217-56-4400 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-52 217-56-4410 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-53 217-56-4420 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-54 217-56-4430 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-55 217-56-4440 MERITAGE HOMES OF ARIZONA 6,389.13 4,170.26 5,501.00 - Residential 170-56 217-56-4450 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-57 217-56-4460 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-58 217-56-4470 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-59 217-56-4480 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-60 217-56-4490 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-61 217-56-4500 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-62 217-56-4510 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-63 217-56-4520 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-64 217-56-4530 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-65 217-56-4540 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-66 217-56-4550 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-67 217-56-4560 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-68 217-56-4570 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-69 217-56-4580 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-70 217-56-4590 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-71 217-56-4600 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-72 217-56-4610 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-73 217-56-4620 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-74 217-56-4630 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-75 217-56-4640 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential168 Schedule 10 District Assessment Number Tax Assessor's Parcel Number Owner Original Assessment Amount (1) Remaining Assessment Amount (2) 2017 Full Cash Value (3) Non-Residential Square Footage (4) Expected Future Use Town of Marana, Arizona Tangerine Farms Road Improvement District All Active Assessments As of 6/30/2017 170-76 217-56-4650 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-77 217-56-4660 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-78 217-56-4670 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-79 217-56-4680 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-80 217-56-4690 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-81 217-56-4700 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-82 217-56-4710 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-83 217-56-4720 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-84 217-56-4730 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-85 217-56-4740 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-86 217-56-4750 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-87 217-56-4760 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-88 217-56-4770 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 170-89 217-56-4780 MERITAGE HOMES OF ARIZONA 6,389.12 4,170.26 5,501.00 - Residential 232/233-1 217-56-4930 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-2 217-56-4940 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-3 217-56-4950 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-4 217-56-4960 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-5 217-56-4970 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-6 217-56-4980 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-7 217-56-4990 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-8 217-56-5000 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-9 217-56-5010 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-10 217-56-5020 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-11 217-56-5030 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-12 217-56-5040 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-13 217-56-5050 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-14 217-56-5060 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-15 217-56-5070 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-16 217-56-5080 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-17 217-56-5090 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-18 217-56-5100 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-19 217-56-5110 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-20 217-56-5120 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-21 217-56-5130 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-22 217-56-5140 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-23 217-56-5150 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-24 217-56-5160 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-25 217-56-5170 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-26 217-56-5180 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-27 217-56-5190 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-28 217-56-5200 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-29 217-56-5210 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-30 217-56-5220 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-31 217-56-5230 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-32 217-56-5240 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-33 217-56-5250 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-34 217-56-5260 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-35 217-56-5270 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-36 217-56-5280 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-37 217-56-5290 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-38 217-56-5300 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential169 Schedule 10 District Assessment Number Tax Assessor's Parcel Number Owner Original Assessment Amount (1) Remaining Assessment Amount (2) 2017 Full Cash Value (3) Non-Residential Square Footage (4) Expected Future Use Town of Marana, Arizona Tangerine Farms Road Improvement District All Active Assessments As of 6/30/2017 232/233-39 217-56-5310 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-40 217-56-5320 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-41 217-56-5330 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-42 217-56-5340 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-43 217-56-5350 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-44 217-56-5360 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-45 217-56-5370 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-46 217-56-5380 Gladden Phase I, LLC 6,389.13 4,170.26 5,501.00 - Residential 232/233-47 217-56-5390 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-48 217-56-5400 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-49 217-56-5410 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-50 217-56-5420 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-51 217-56-5430 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-52 217-56-5440 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-53 217-56-5450 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-54 217-56-5460 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-55 217-56-5470 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-56 217-56-5480 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-57 217-56-5490 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-58 217-56-5500 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-59 217-56-5510 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-60 217-56-5520 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-61 217-56-5530 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-62 217-56-5540 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-63 217-56-5550 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-64 217-56-5560 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-65 217-56-5570 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-66 217-56-5580 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-67 217-56-5590 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-68 217-56-5600 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-69 217-56-5610 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-70 217-56-5620 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-71 217-56-5630 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-72 217-56-5640 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-73 217-56-5650 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-74 217-56-5660 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 232/233-75 217-56-5670 Gladden Phase I, LLC 6,389.12 4,170.26 5,501.00 - Residential 218 217-57-3660 NP Investments LLC 30,562.80 19,948.70 260,465.00 52,093 Gladden Farms Commercial Center - Bank 219 217-57-3670 Weingarten Realty 20,712.16 13,519.08 70,606.00 35,303 Gladden Farms Commercial Center - Fast Food Restaurant 220 217-57-3680 Weingarten Realty 24,176.01 15,779.98 82,414.00 41,207 Gladden Farms Commercial Center - Fast Food Restaurant 221 217-57-3690 Weingarten Realty 19,133.95 12,488.96 65,226.00 32,613 Gladden Farms Commercial Center 222 217-57-3700 Weingarten Realty 45,150.43 29,470.24 153,914.00 76,957 Gladden Farms Commercial Center 224 217-57-3720 Weingarten Realty 69,415.04 45,308.03 201,136.00 118,315 Gladden Farms Commercial Center - Grocery 225 217-57-3730 Weingarten Realty 15,904.18 10,380.85 46,084.00 27,108 Gladden Farms Commercial Center 226 217-57-3740 Weingarten Realty 30,604.45 19,975.90 104,328.00 52,164 Gladden Farms Commercial Center 227 217-57-3750 Weingarten Realty 21,497.74 14,031.82 73,284.00 36,642 Gladden Farms Commercial Center 228/229-1 217-57-3760 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-2 217-57-3770 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-3 217-57-3780 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-4 217-57-3790 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-5 217-57-3800 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-6 217-57-3810 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential170 Schedule 10 District Assessment Number Tax Assessor's Parcel Number Owner Original Assessment Amount (1) Remaining Assessment Amount (2) 2017 Full Cash Value (3) Non-Residential Square Footage (4) Expected Future Use Town of Marana, Arizona Tangerine Farms Road Improvement District All Active Assessments As of 6/30/2017 228/229-7 217-57-3820 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-8 217-57-3830 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-9 217-57-3840 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-10 217-57-3850 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-11 217-57-3860 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-12 217-57-3870 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-13 217-57-3880 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-14 217-57-3890 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-15 217-57-3900 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-16 217-57-3910 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-17 217-57-3920 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-18 217-57-3930 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-19 217-57-3940 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-20 217-57-3950 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-21 217-57-3960 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-22 217-57-3970 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-23 217-57-3980 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-24 217-57-3990 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-25 217-57-4000 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-26 217-57-4010 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-27 217-57-4020 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-28 217-57-4030 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-29 217-57-4040 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-30 217-57-4050 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-31 217-57-4060 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-32 217-57-4070 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-33 217-57-4080 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-34 217-57-4090 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-35 217-57-4100 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-36 217-57-4110 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-37 217-57-4120 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-38 217-57-4130 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-39 217-57-4140 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-40 217-57-4150 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-41 217-57-4160 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-42 217-57-4170 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-43 217-57-4180 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-44 217-57-4190 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-45 217-57-4200 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-46 217-57-4210 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-47 217-57-4220 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-48 217-57-4230 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-49 217-57-4240 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-50 217-57-4250 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-51 217-57-4260 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-52 217-57-4270 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-53 217-57-4280 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-54 217-57-4290 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-55 217-57-4300 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-56 217-57-4310 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-57 217-57-4320 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-58 217-57-4330 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential171 Schedule 10 District Assessment Number Tax Assessor's Parcel Number Owner Original Assessment Amount (1) Remaining Assessment Amount (2) 2017 Full Cash Value (3) Non-Residential Square Footage (4) Expected Future Use Town of Marana, Arizona Tangerine Farms Road Improvement District All Active Assessments As of 6/30/2017 228/229-59 217-57-4340 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-60 217-57-4350 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-61 217-57-4360 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-62 217-57-4370 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-63 217-57-4380 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-64 217-57-4390 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-65 217-57-4400 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-66 217-57-4410 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-67 217-57-4420 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-68 217-57-4430 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-69 217-57-4440 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-70 217-57-4450 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-71 217-57-4460 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-72 217-57-4470 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-73 217-57-4480 Gladden Phase 22-24, LLC 6,389.13 4,170.26 5,501.00 - Residential 228/229-74 217-57-4490 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-75 217-57-4500 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-76 217-57-4510 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-77 217-57-4520 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-78 217-57-4530 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-79 217-57-4540 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-80 217-57-4550 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-81 217-57-4560 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-82 217-57-4570 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-83 217-57-4580 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-84 217-57-4590 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-85 217-57-4600 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-86 217-57-4610 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-87 217-57-4620 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-88 217-57-4630 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-89 217-57-4640 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-90 217-57-4650 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-91 217-57-4660 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-92 217-57-4670 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-93 217-57-4680 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-94 217-57-4690 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-95 217-57-4700 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-96 217-57-4710 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-97 217-57-4720 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-98 217-57-4730 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-99 217-57-4740 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-100 217-57-4750 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-101 217-57-4760 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-102 217-57-4770 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-103 217-57-4780 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-104 217-57-4790 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-105 217-57-4800 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-106 217-57-4810 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-107 217-57-4820 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-108 217-57-4830 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-109 217-57-4840 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-110 217-57-4850 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential172 Schedule 10 District Assessment Number Tax Assessor's Parcel Number Owner Original Assessment Amount (1) Remaining Assessment Amount (2) 2017 Full Cash Value (3) Non-Residential Square Footage (4) Expected Future Use Town of Marana, Arizona Tangerine Farms Road Improvement District All Active Assessments As of 6/30/2017 228/229-111 217-57-4860 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-112 217-57-4870 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-113 217-57-4880 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-114 217-57-4890 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-115 217-57-4900 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-116 217-57-4910 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-117 217-57-4920 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential 228/229-118 217-57-4930 Gladden Phase 22-24, LLC 6,389.12 4,170.26 5,501.00 - Residential Residential Totals:320 Active Assessments $2,855,939.85 $1,864,106.36 $3,484,673.00 0 Non-Residential Totals:50 Active Assessments $21,467,726.45 $14,012,241.97 $8,136,905.00 33,863,456 Totals:370 Active Assessments $24,323,666.30 $15,876,348.33 $11,621,578.00 33,863,456 (4) (1) Includes capitalized interest on the Bonds as sold. (2) Amount remaining after billing for the 6/1/2016 assessment installment. (3) The 2016 Full Cash Value is shown for all parcels except for parcels: 217-53-8060, 217-53-8070, 217-54-0150, 217-54-0200, and 217-54-0240. As these parcels are currently undergoing valuation, the 2015 Full Cash Values were used instead for these five parcels. (4) The Pima County Assessor does not provide the square footage for most residential properties.173 Schedule 11TOWN OF MARANA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (Amounts expressed in thousands, except per capita amount) Fiscal Year Revenue Bonds(1) General Obligation Bonds(2) Special Assessment Bonds(3) Capital Leases Revenue Bonds Loans Payable Total Primary Government Percentage of Personal Income (4)Per Capita 2017 57,840$ 7,955$ 14,245$ -$ 20,858$ 3,421$ 104,319 267.0%2,400 2016 66,715 7,835 15,927 - 1,214 3,634 95,325 251.3%2,307 2015 69,299 8,085 17,246 - 1,343 3,841 97,028 263.5%2,406 2014 71,659 8,325 18,488 - 1,343 4,042 100,641 281.5%2,628 2013 81,720 8,550 19,926 - - 4,265 111,076 293.9%3,022 2012 60,699 8,765 21,288 - - 4,480 94,848 261.0%2,645 2011 65,384 8,965 22,492 - - 4,586 101,013 289.1%2,931 2010 67,344 8,155 23,828 33 - 1,562.00 100,478 299.0%2,944 2009 67,975 8,335 24,823 75 - - 101,208 313.3%3,039 2008 29,225 8,385 - 115 - - 37,725 151.6%1,258 Notes: (1) Presented net of original issuance discounts and premiums (2) Bonds issued for Gladden Farms Facilities District , a component unit of the Town. (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 Governmental Activities Business-Type Activities 174 Schedule 12 Fiscal Year General Obligation Bonds Less: Amounts Available in Debt Service Fund Total Percentage of Estimated Actual Taxable Value of property Per Capita 2017 7,955$1,021$6,934$0.15% 17.2% 2016 7,835 1,025 6,810 0.16% 16.9% 2015 8,085 900 7,185 0.18% 17.8% 2014 8,325 881 7,444 0.19% 19.4% 2013 8,550 689 7,861 0.22% 21.4% 2012 8,765 886 7,879 0.21% 22.0% 2011 8,765 1,066 7,699 0.19% 23.1% 2010 8,965 963 8,002 0.24% 26.7% 2009 8,335 957 7,378 0.30% 27.6% 2008 8,385 968 7,417 0.38% 32.1% Notes: 1) The Town of Marana does not impose a property tax; any property taxes presented in this report are directly related to the Gladden Farms Community Facilities District, formed in fiscal year 2005. Source: General Obligation Bonds TOWN OF MARANA RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS (Amounts expressed in thousands, except per capita amount) 175 Schedule 13 Governmental Unit Debt Outstanding Estimated Percentage Applicable * Estimated Share of Overlapping Debt State of Arizona None N/A None Pima County 336,954$ 6.30%21,228$ Pima County Community College District None N/A None Pima County Flood Control District None N/A None Northwest Fire District 23,641 46.80%11,064 Flowing Wells Unified School District No. 8 14,585 100.00%14,585 Marana Unified School District No. 6 134,064 63.07%84,554 Total overlapping debt 131,431 Gladden Farms Community Facilities District 7,955 100.00%7,955 Tangerine Farms Road Improvement District 14,245 100.00%14,245 Town of Marana 64,093 100.00%64,093 Total direct debt 86,293$ Total direct and overlapping debt 217,724$ Notes: * 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 TOWN OF MARANA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF JUNE 30, 2017 (Amounts expressed in thousands) 176 Schedule 14 Legal Debt Margin Calculation for Fiscal Year 2017 Full Cash Net Assessed 535,649,907$ Debt Limit: 6% of assessed value 32,138,994 20% of assessed value 107,129,981 Total debt limit:139,268,976 Debt applicable to limit: General obligation bonds - Less: Amount set aside for the repayment of general obligation debt - Total net debt applicable to limit - Legal Debt Margin 139,268,976$ 2008 2009 2010 2011 2012 Debt limit equal to 6% of assessed valuation 24,801,918$ 33,009,019$ 60,524,235$ 27,274,051$ 25,992,985$ Debt limit equal to 20% of assessed valuation 413,365,306 110,030,063 201,747,448 90,913,503 86,643,283 Total net debt applicable to limit - - - - - Legal debt margin 438,167,225$ 143,039,082$ 262,271,683$ 118,187,553$ 112,636,268$ 0%0%0%0%0% 2013 2014 2015 2016 2017 Debt limit equal to 6% of assessed valuation 24,745,839$ 28,630,929$ 29,446,070$ 31,218,157$ 32,138,994$ Debt limit equal to 20% of assessed valuation 82,486,130 95,436,430 98,153,568 104,060,525 107,129,981 Total net debt applicable to limit - - - - - Legal debt margin 107,231,969$ 124,067,359$ 127,599,639$ 135,278,682$ 139,268,976$ 0%0%0%0%0% Notes: * The Gladden Farms Community Facilities District, a legally separate entity, is a special taxing district whose debt was approved by voters of the District. The District's general obligation debt does not count towards the Town's legal debt limit. Sources:Financial Statements; Pima County Total net debt applicable to the limit as a percentage of debt limit Total net debt applicable to the limit as a percentage of debt limit TOWN OF MARANA LEGAL DEBT MARGIN INFORMATION AS OF JUNE 30, 2017 Fiscal Year Fiscal Year177 Schedule 15 Gladden Farms Community Facilities District General Obligation Bonds * Tangerine Road Farms Improvement District Special Assessment Bonds ** Fiscal Year Property Tax Collections Coverage Special Assessment Collections Debt Service Coverage Principal Interest Principal Interest 2017 507$265$295$90.5%2,351$1,328$732$114.1% 2016 479 250 445 68.9%2,141 1,319 792 101.4% 2015 441 240 458 63.2%2,065 1,242 849 98.8% 2014 418 225 470 60.1%2,210 1,438 913 94.0% 2013 444 215 481 63.9%2,337 1,362 976 100.0% 2012 503 200 490 72.9%2,302 1,204 1,035 102.8% 2011 576 190 477 86.4%2,239 1,336 1,096 92.1% 2010 609 180 455 95.9%2,352 995 1,142 110.1% 2009 616 -233 264.4%2,136 951 593 138.3% 2008 423 50 448 84.9%--1,186 - Notes: * Bonds issued for Gladden Farms Facilities District FY 05, a component unit of the Town. Principal debt payoff did not begin until FY 2008. Collection of property tax revenues to begin fiscal year 2008. Shortfalls are covered by a standby contribution agreement. **Special assessment amounts issued for Tangerine Road Farms Improvement District, a governmental fund of the Town. Principal debt payoff begins fiscal year 2009. Collection fees related to special assessment to begin fiscal year 2009. Source: Finanacial statements TOWN OF MARANA PLEDGED-REVENUE COVERAGE Debt Service (Amounts expressed in thousands) LAST TEN FISCAL YEARS 178 Schedule 16 Fiscal Year Population Personal Income* Per Capita Personal Income Median Age School Enrollment Unemployment Rate 2017 43,474 N/A 32,646$48.1 12,050 4.3% 2016 41,315 N/A 37,107 29.7 12,350 4.7% 2015 40,324 N/A 34,026 39.6 12,326 5.9% 2014 38,290 N/A 33,196 39.4 12,476 6.9% 2013 36,756 N/A 29,626 37.7 12,361 6.1% 2012 35,858 N/A 31,085 37.6 12,576 9.7% 2011 35,124 N/A N/A 37.4 12,314 7.9% 2010 34,961 35,172,000 N/A 37.4 12,426 8.7% 2009 34,466 34,516,000 31,648 37.4 12,546 4.7% 2008 34,133 34,392,945 34,058 34.5 12,760 4.1% Notes: * Information published for census year only. N/A indicates that the information is not available. Sources: U.S. Census Bureau, Population Division; Arizona Department of Commerce; Pima Association of Governments; Arizona's Economy; Marana Unified School District. TOWN OF MARANA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS 179 Schedule 17TOWN OF MARANA PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO Employees Percentage of Total City Employment Employees Percentage of Total City Employment Employer Marana Unified School District 1,404 9.2% 1,776 24.2% Marana Health Center 356 2.3% -N/A Town of Marana 347 2.3% 367 5.0% Wal-Mart Cortaro Rd 343 2.2% 450 6.1% The Ritz Carlton, Dove Mountain 320 2.1% -N/A Sargent Aerospace & Defense 313 2.0% 244 N/A Tucson Hauling & Transfer 300 2.0% -N/A Costco 250 1.6% 275 N/A FLSmidth Krebs 239 1.6% -N/A Northwest Fire District 230 1.5% -N/A Coca-Cola Enterprises 185 1.2% 185 N/A Home Depot 180 1.2% 125 N/A Target 175 1.1% 225 3.1% Fry's Food & Drug Thornydale Rd 165 1.1% -N/A Cal Portland 160 1.0% -N/A Fry's Food & Drug Ina Rd 150 1.0% -N/A Wal-Mart Ina Rd 141 0.9% -N/A Comcast Corporation 138 0.9% 189 N/A Trico Electric Co-operative 131 0.9% 135 N/A Cracker Barrel 130 0.8% -N/A Kohls 123 0.8% -N/A KOLD LLC 110 0.7% -N/A Legacy Traditional School 110 0.7% -N/A Lasertel Inc 109 0.7% -N/A Source: PAG TRP 2017 2008 180 Schedule 18 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Function General Government 64.0 90.4 62.8 72.5 62.5 62.5 62.5 67.5 70.9 72.9 Public Safety Police Officers 84.0 81.0 78.0 80.0 79.0 80.0 80.0 81.0 83.0 85.0 Civilians 29.5 30.0 28.0 28.8 28.5 26.0 26.0 28.0 28.0 28.0 Building Safety 19.0 - 5.0 6.0 6.0 9.0 9.0 13.0 13.0 12.0 Highways and streets - 24.0 31.0 32.0 32.0 36.0 36.0 35.0 35.0 34.0 Engineering 40.8 - - - - - - - - - Maintenance 35.0 - - - - - - - - - Culture and recreation 49.8 50.0 43.8 41.5 41.7 33.3 33.3 36.5 38.5 41.8 Community Development - 3.0 3.0 4.0 3.0 - - - - - Economic & Community Development 18.0 45.1 54.6 52.4 53.4 48.5 48.5 40.4 39.4 43.0 Water Utilities 19.0 17.4 15.4 18.1 20.1 19.1 19.1 22.0 23.0 23.0 Wastewater Utilities N/A N/A N/A N/A -4.0 4.0 4.0 4.0 4.0 Municipal Airport 3.0 2.0 - - - 1.0 1.0 1.0 3.0 3.0 Total 362.0 342.9 321.6 335.3 326.1 319.3 319.3 328.3 337.8 346.7 Source: Town of Marana; Annual Budget; Authorized position schedule. TOWN OF MARANA FULL-TIME EQUIVALENT TOWN GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 181 Schedule 19 Industry Group FY 2008 % FY 2009 % FY 2010 % FY 2011 % FY 2012 % Construction 9,885,086$36.18% 6,450,530$28.79% 4,448,469$20.54% 4,870,797$21.23% 5,782,644$23.57% Manufacturing 183,545 0.67% 154,594 0.69% 138,817 0.64% 123,524 0.54% 128,089 0.52% Transportation, Communications, & Utilities 2,459,656 9.00% 2,522,671 11.26% 2,768,198 12.78% 2,927,271 12.76% 2,985,979 12.17% Wholesale Trade 528,937 1.94% 339,051 1.51% 184,203 0.85% 194,392 0.85% 233,850 0.95% Retail Trade 9,380,087 34.33% 8,554,332 38.18% 8,673,055 40.04% 8,667,896 37.77% 8,804,206 35.88% Restaurant & Bars 1,407,901 5.15% 1,384,914 6.18% 1,555,032 7.18% 1,658,180 7.23% 1,789,232 7.29% Fire, Insurance & Real Estate 1,616,223 5.92% 903,810 4.03% 1,050,046 4.85% 1,253,481 5.46% 1,350,977 5.51% Hotels & Other Lodging 626,656 2.29% 508,199 2.27% 1,378,271 6.36% 1,914,004 8.34% 1,991,767 8.12% Services 1,056,309 3.87% 1,002,992 4.48% 1,057,433 4.88% 982,631 4.28% 1,026,443 4.18% All Others 175,070 0.64% 583,330 2.60% 408,581 1.89% 355,642 1.55% 445,774 1.81%0.00% 27,319,468$100.00% 22,404,422$100.00% 21,662,105$100.00% 22,947,818$100.00% 24,538,961$100.00% Industry Group FY 2013 % FY 2014 % 2015 % 2016* % 2017 % Construction 5,260,345$21.33% 6,411,509$24.45% 6,838,195$24.37% 6,883,116$19.42% 7,557,292$20.15% Manufacturing 127,214 0.52% 97,014 0.37% 100,329 0.36%- 0.00%- 0.00% Transportation, Communications, & Utilities 3,038,071 12.32% 3,182,854 12.14% 3,318,976 11.83% 3,919,633 11.06% 3,809,315 10.16% Wholesale Trade 296,077 1.20% 213,657 0.81% 305,012 1.09%- 0.00%- 0.00% Retail Trade 9,380,544 38.03% 9,593,163 36.58% 10,133,523 36.12% 16,305,878 46.01% 17,120,561 45.65% Restaurant & Bars 1,819,588 7.38% 1,865,602 7.11% 2,038,788 7.27% 3,076,737 8.68% 3,295,734 8.79% Fire, Insurance & Real Estate 1,234,426 5.00% 1,256,418 4.79% 1,240,196 4.42% 1,339,496 3.78% 1,540,358 4.11% Hotels & Other Lodging 2,140,493 8.68% 2,064,986 7.87% 2,481,304 8.84% 2,292,705 6.47% 2,558,312 6.82% Services 1,003,377 4.07% 1,031,325 3.93% 1,046,669 3.73%- 0.00%- 0.00% All Others 363,807 1.47% 509,351 1.94% 555,522 1.98% 1,624,023 4.58% 1,618,648 4.32% 24,663,942$100.00% 26,225,881$100.00% 28,058,514$100.00% 35,441,588$100.00% 37,500,220$100.00% Note: *In fiscal year 2016, the Arizona Department of Revenue began using a new form and payment journal, which affected the classification of certain tax revenues within the industry groups Source: Town of Marana Finance Department, Arizona Department of Revenue TOWN OF MARANA SALES TAX BY INDUSTRY LAST TEN FISCAL YEARS 182 Schedule 20 Industry Classification 2007/08 2008/09 2009/10 2010/11 2011/12 Town Sales Tax 27,172,921$22,404,422$21,662,077$22,947,818$24,538,961$ State-shared Sales Taxes 2,458,329 2,126,326 1,961,225 2,099,083 2,731,863 State-shared Income Taxes 3,761,010 3,971,447 3,450,478 2,601,218 2,950,734 Licenses and permits 2,307,878 1,932,797 2,150,360 2,502,494 2,720,872 Fines and forfeitures and penalties 716,983 692,514 641,484 537,680 558,393 TOTAL 36,417,121$31,127,506$29,865,624$30,688,293$33,500,823$ Budgeted Industry Classification 2012/13 2013/14 2014/2015 2015/2016 2016/2017 2017/2018 Town Sales Tax 24,768,104$26,225,881$28,058,823$35,441,585$37,500,219$39,628,395$ State-shared Sales Taxes 2,861,622 3,043,102 3,195,042 3,344,679 3,798,503 4,077,246 State-shared Income Taxes 3,571,191 3,896,487 4,232,245 4,209,300 5,054,592 5,384,087 Licenses and permits 4,323,155 3,932,108 4,813,378 4,468,910 4,848,237 4,490,185 Fines and forfeitures and penalties 661,341 635,869 664,955 579,369 574,884 625,000 TOTAL 36,185,413$37,733,447$40,964,443$48,043,843$51,776,435$54,204,913$ Source: Statement of Revenues TOWN OF MARANA EXCISE TAX COLLECTIONS LAST TEN FISCAL YEARS 183 Schedule 21TOWN OF MARANA PRINCIPAL RETAIL AND CONTRACTING SALES TAXPAYERS CURRENT YEAR AND NINE YEARS AGO Sales Tax Payments Rank Percentage of Total Sales Tax Payments Sales Tax Payments Rank Percentage of Total Sales Tax Payments RETAIL Taxpayer A 2,254,976$1 6.0%1,661,241$1 6.1% Taxpayer B 1,436,916 2 3.8%1,156,655 2 4.2% Taxpayer C 981,515 3 2.6%726,352 3 2.7% Taxpayer D 792,892 4 2.1%376,993 8 1.4% Taxpayer E 674,296 5 1.8%428,815 7 1.6% Taxpayer F 595,259 6 1.6%550,143 5 2.0% Taxpayer G 555,277 7 1.5%626,850 4 2.3% Taxpayer H 358,211 8 1.0%258,204 10 0.9% Taxpayer I 282,777 9 0.8%311,109 9 1.1% Taxpayer J 237,465 10 0.6%0.0% Taxpayer K 431,408 6 1.6% 8,169,584$21.8%6,527,769$23.9% CONTRACTING Taxpayer A 1,559,815$1 4.2%274,461$9 1.0% Taxpayer B 809,224 2 2.2%339,564 6 1.2% Taxpayer C 773,023 3 2.1%0.0% Taxpayer D 714,115 4 1.9%0.0% Taxpayer E 372,300 5 1.0%0.0% Taxpayer F 290,500 6 0.8%0.0% Taxpayer G 272,521 7 0.7%0.0% Taxpayer H 232,397 8 0.6%0.0% Taxpayer I 186,095 9 0.5%0.0% Taxpayer J 174,170 10 0.5%734,093 3 2.7% Taxpayer K 798,749 1 2.9% Taxpayer L 759,376 2 2.8% Taxpayer M 498,395 4 1.8% Taxpayer N 392,242 5 1.4% Taxpayer O 329,339 7 1.2% Taxpayer P 280,875 8 1.0% Taxpayer Q 271,586 10 1.0% 5,384,160$14.4%4,678,679$17.1% Source: Town of Marana Finance Department, Arizona Department of Revenue Fiscal Year 2017 Fiscal Year 2008 184 Schedule 22 Month 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 January 11 3 38 17 22 60 39 42 39 54 February 27 9 25 28 31 52 61 51 58 73 March 12 2 46 38 46 125 42 57 59 76 April 50 11 48 14 41 64 47 55 54 52 May 18 13 20 35 53 46 55 87 37 85 June 28 20 23 22 49 61 59 67 50 63 July 21 31 44 32 70 74 41 59 36 73 August 76 46 28 31 46 60 50 35 47 75 September 27 27 18 22 29 44 29 52 37 40 October 7 14 22 30 56 46 71 62 57 November 5 12 12 22 35 27 88 22 51 December 5 12 19 46 48 43 30 33 58 Calendar Total 287 200 343 337 526 702 612 622 583 591 Fiscal Total 681 199 342 297 425 692 597 668 560 689 Source: Town of Marana Finance Department, Town of Marana Building Services TOWN OF MARANA SINGLE FAMILY RESIDENTIAL PERMITS LAST TEN FISCAL YEARS 185 Schedule 23 Fiscal Year 2010 2011 2012 2013 2014 2015 2016 2017 Public Safety Police: Stations 1 1 1 1 1 1 1 1 Substations 2 1 1 1 1 1 1 1 Police Vehicles 113 113 113 99 118 129 128 129 Highways and Streets Street (miles)300 300 300 494 494 511 518 520 Culture and Recreation Parks 7 7 7 8 8 8 9 9 Parks Acreage 84 84 84 139 139 139 157 157 Trails in Miles - Hiking 11 28 28 37 37 37 38 39 Trails in Miles - Paved 16 16 16 16 16 18 19 21 Swimming Pools 1 1 1 1 1 1 1 1 Tennis Courts 5 5 5 6 6 6 6 6 Senior/Community Center 1 1 1 1 1 1 1 1 Water Systems Miles of Water Mains 70 70 70 128 132 135 138 146 Number of Meters 4,755 5,556 5,734 6,002 6,272 6,429 6,745 7,205 Wastewater* Number of Manholes N/A N/A 841 863 863 891 909 978 Sewer Mains (miles)N/A N/A 46.4 47.5 47.5 48.33 49.2 53.6 Avg Daily Sewage Treated (MGD)N/A N/A 0.192 0.198 0.287 0.348 0.360 0.425 Notes: *Due to the wastewater plant transfer from Pima County on January 3, 2012 infromation is reflected from that point forward. Prior years are not available however will be accumulated and reported each year until the ten years of data is presented. years of data for certain statistical schedules. This information will be accumulated and reported each year until the complete ten years of data is presented. Source: This information is provided from the Town's facility records. **Due to cost considerations for the accumulation of data, the Town has elected to present less than ten TOWN OF MARANA CAPITAL ASSET STATISTICS BY FUNCTION AS OF JUNE 30, 2017 Function 186