Town Organization Chart
For Fiscal Year Ended June 30, 2022
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TOWN COUNCIL
Town of Prescott Valley
Key Officials and Staff For Fiscal Year Ended June 30, 2022
EXECUTIVE TEAM
Mayor ......................................................... .... Kell Palguta Vice Mayor .................................................... ..... Lori Hunt Councilmember ............................................ Don Packard Councilmember ................................ Kendall Schumacher Councilmember ......................................... April H epperle Councilmember .................................... Brenda Dickinson Councilmember ....................................... Roger Kin singer
Deputy Town Manager ..................................... Ryan Judy Chief Human Resources Officer .................... Karen Smith Community Services Director ................ Casey Van Haren Development Services Director ......... Fernando Gonzalez Finance Director ..............................................
Information Technology Director ............... Casey Danner Magistrate .................................................... Keith Carson Police Chief ..................................................
Public Works Director ..................................... Nor
Town Attorney .................................................
Town Clerk ............................................ Fatima
Utilities Director ..................................... Neil W
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Town Manager ....................................... Gilbert Da vidson
. Katie Pehl
.. Robert Ticer
m Davis
Ivan Legler
Fernandez
adsworth
Independent Auditor’s Report
Report on Audit of Financial Statements
Opinions
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 Prescott Valley, Arizona (Town), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the Town’s basic financial statements as listed in the table of contents.
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, the budgetary comparison information for the General Fund, Highway User Revenue Fund, Development Impact Fees Fund and the Grant Fund, and the aggregate remaining fund information of the Town of Prescott Valley, Arizona, as of June 30, 2022, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
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. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Town of Prescott Valley, Arizona, and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Change in Accounting Principle
As described in Note 1, the Town implemented the provisions of the Governmental Accounting Standards Board (GASB) Statement No. 87, Leases, for the year ended June 30, 2022, which represents a change in accounting principle. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Town’s ability to continue as a going concern for one year beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Honorable Mayor and Members of the Town Council Town of Prescott Valley, Arizona
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Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit 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 Town’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Town’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Other Matters
Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, budgetary comparison information, and net pension liability information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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.
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Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town’s basic financial statements. The Combining and Individual Fund Financial Statements and Schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relatesdirectlytotheunderlyingaccountingandotherrecordsusedtopreparethebasicfinancialstatements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Combining and Individual Fund Financial Statements and Schedules information is fairly stated in all material respects in relation to the basic financial statements as a whole.
Other Information Management is responsible for the other information included in the annual report. The other information comprises the Introductory Section and Statistical Section but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on other work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 13, 2022, on our consideration of Town of Prescott Valley, Arizona’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Town of Prescott Valley, Arizona’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Town of Prescott Valley, Arizona’s internal control over financial reporting and compliance.
Heinfeld, Meech & Co., P.C. Flagstaff, Arizona
December 13, 2022
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MANAGEMENT’S DISCUSSION AND ANALYSIS
This section of the Town of Prescott Valley’s (Town) Annual Comprehensive Financial Report (ACFR) presents a narrative overview and analysis of the financial activities of the Town for the fiscal year ended June 30, 2022. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal.
FINANCIAL HIGHLIGHTS
The assets and deferred outflows of resources of the Town exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $344,523,220 (net position). Of this amount, $86,986,865 (unrestricted net position) may be used to meet the government’s ongoing obligations to citizens and creditors.
The government’s total net position increased by $28,491,053. Most of this increase can be attributed to tax revenue, intergovernmental revenue, and grant funding; with approximately $4.9 million of the increase being attributed to proprietary funds.
As of June 30, 2022, the Town’s governmental funds reported combined ending fund balances of $82,614,137, a net increase of $15,442,462 over the prior year. The increase can primarily be attributed mostly to increased tax collections in all categories. Approximately 56% of this total amount, $46,322,514, is unassigned fund balance available for spending at the government’s discretion.
At the close of the current fiscal year, the unassigned fund balance for the General Fund was $46,720,462, or 113%, of total General Fund expenditures of $41,501,736.
During fiscal year 2021‐22, the Town’s total bonded debt (not including community facilities districts and pension liability) decreased by $4,145,000. The decline of debt is related to current year debt payments.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the Town’s basic financial statements. The Town’s basic financial statements comprise three components: 1) government‐wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements.
Government‐Wide Financial Statements
The government‐wide financial statements are designed to provide readers with a broad overview of the Town’s finances in a manner similar to a private‐sector business.
The statement of net position presents information on all the Town’s assets and liabilities, including deferred inflows/outflows of resources, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial condition of the Town is improving or deteriorating.
The statement of activities presents information showing how the Town’s net position chang ed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes).
Both government‐wide financial statements distinguish functions of the Town that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business‐ type activities). The governmental activities of the Town
Town of Prescott Valley, Arizona
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include general government, public safety, culture and recreation, highways and streets, and public works. The business‐type activities of the Town include water and sewer utilities.
Included within the governmental activities of the government‐wide financial statements are the operations of the Town of Prescott Valley Municipal Property Corporation, StoneRidge Community Facilities District, Pronghorn Ranch Community Facilities District, Raven Ridge Community Facilities District, Quailwood Meadows Community Facilities District, Parkway Community Facilities District No. 1, Entertainment Center Community Facilities District, and Southside Community Facilities District No. 1. Although legally separate from the Town, these component units are blended with the primary government because of their governance or financial relationships to the Town. For additional information related to component units, please refer to the separately issued financial statements.
The government‐wide financial statements can be found on pages 27‐29 of this report.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Town, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance‐related legal requirements. All the funds of the Town can be divided into the following two categories: governmental funds and proprietary funds.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government‐wide financial statements. However, unlike the government‐wide financial statements, governmental fund financial statements focus on near‐term inflows (revenues) and outflows (expenditures) of spendable resources as well as balances of spendable resources available at the end of the fiscal year. Such information may be useful in determining what financial resources are available in the near future to finance the Town’s programs.
Because the focus of governmental funds is narrower than that of the government‐wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government‐wide financial statements. By doing so, read ers may better understand the long‐term impact of the government’s near‐term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The Town maintains several individual governmental funds organized according to their type (special revenue, debt service, and capital projects). Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General Fund, Highway User Revenue Fund (HURF), Development Impact Fees Fund, Grant Fund, Streets Capital Improvement Fund, and Southside Community Facilities District No. 1, which are considered to be major funds. Data from the remaining governmental funds is combined into a single, aggregated presentation. Individual fund data for each of the non‐major governmental funds is provided in the form of combining statements elsewhere in this report.
A budgetary comparison statement has been provided for all governmental funds that adopt an annual appropriated budget to demonstrate budgetary compliance.
The basic governmental fund financial statements can be found on pages 30‐41 of this report.
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Proprietary Funds
Proprietary funds are generally used to account for services for which the Town charges customers – either external customers, or internal units or departments of the Town. The Town maintains the following type 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 the water and sewer operations of the Town. All the enterprise funds are considered to be major funds of the Town.
The basic proprietary fund financial statements can be found on pages 42‐46 of this report.
Notes to the Financial Statements
The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government‐wide and fund financial statements. The notes can be found beginning on page 47 of this report. Other Information
In addition to the basic financial statements and accompanying notes, this report presents certain required supplementary information concerning the Town’s progress in funding its obligation to provide pension benefits to its employees. Required supplementary information can be found on pages 76‐81 of this report with notes on page 82.
Combining Statements
The combining statements referred to earlier in connection with non‐major governmental funds are presented following the required supplementary information on pensions. Combining and individual fund statements and schedules can be found on pages 83‐97 of this report.
GOVERNMENT‐WIDE FINANCIAL ANALYSIS
While this document contains information about the funds used by the Town to provide services to its citizens, the statement of net position and st atement of activities serve to provide an answer to the question of how the Town performed financially throughout the year. These statements include all assets and liabilities using the accrual basis of accounting similar to the accounting used by the private sector. The basis for this accounting considers all the current year’s revenues and expenses regardless of when the cash is received or paid.
These two statements report the Town’s net position and the changes in that position. The change in net position is important because it tells the reader whether the financial condition of the Town has improved or diminished. In evaluating the overall position of the Town, non‐financial information such as changes in the Town’s tax base, the impact of development agreements on future revenues and the condition of the Town’s capital assets will also need to be evaluated.
Town of Prescott Valley, Arizona
Required Supplementary Information
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Analysis of Net Position
As noted earlier, net position may serve as a useful indicator of a government’s financial condition. For the Town, assets, and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $344,523,220 at the close of the current fiscal year. Net position consists of three components: 1) Net investment in capital assets, 2) Restricted, and 3) Unrestricted.
Statement of Net Position
June 30, 2021 and 2022 202220212022202120222021
Assets
Governmental ActivitiesBusiness‐Type Activities Total
Current and other assets98,048,472$ 75,730,550$ 29,055,523$ 19,243,275$ 127,103,995$ 94,973,825 $
Capital assets189,087,591 187,120,936 109,055,257 112,591,677 298,142,848 299,712,613
Total assets 287,136,063 262,851,486 138,110,780 131,834,952 425,246,843 394,686,438
Deferred Outflows of Resources
Deferred outflows related to pensions 6,070,988 6,393,971 ‐ ‐ 6,070,988 6,393,971
Deferred charges on refunding 796,764 892,632 ‐ ‐ 796,764 892,632
Total deferred outflows of resources 6,867,752 7,286,603 ‐ ‐ 6,867,752 7,286,603
Total assets, deferred outflows of resources294,003,815 $ $ 270,138,089 $ 138,110,780 $ 131,834,952 $ 432,114,595 $ 401,973,041
Liabilities
Long‐term liabilities outstanding $ 53,838,010 $ 65,096,921 $ 3,133,845 $ 3,449,949 $ 56,971,855 $ 68,546,870 Other liabilities 18,039,596 13,853,793 3,520,682 3,399,609 21,560,278 17,253,402
Total liabilities 71,877,606 78,950,714 6,654,527 6,849,558 78,532,133 85,800,272
Deferred Inflows of Resources
Leases 3,890,844 ‐ 1,558,497 ‐ 5,449,341 ‐Deferred inflows related to pensions 3,609,901 140,602 ‐ ‐ 3,609,901 140,602 Total deferred inflows of resources 7,500,745 140,602 1,558,497 ‐ 9,059,242 140,602
Net Position
Net investment in capital assets 137,196,695 131,166,088 104,865,815 108,269,565 242,062,510 239,435,653 Restricted 15,473,845 10,541,003 ‐ ‐ 15,473,845 10,541,003 Unrestricted 61,954,924 49,339,682 25,031,941 16,715,829 86,986,865 66,055,511 Total net position 214,625,464 191,046,773 129,897,756 124,985,394 344,523,220 316,032,167 $ 294,003,815 $ 270,138,089 $ 138,110,780 $ 131,834,952 $ 432,114,595 $ 401,973,041
Total liabilities, deferred inflows of resources and net position
A portion of the Town’s net position reflects its investment of $242,062,510, or 70%, in capital assets (e.g., land, buildings and equipment) less any related outstanding debt used to acquire those assets. The Town uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending, and it is not the Town’s intention to sell these assets. Although the Town’s investment in its capital assets is reported net of related debt, it shou ld be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be liquidated for these liabilities.
An additional portion of the Town’s net position, $15,473,845, or 5%, represents resources that are subject to external restrictions (e.g., capital projects, debt service obligations, grantor and contributor purposes and street improvements) on how they may be used.
The remaining balance is unrestricted net position, $86,986,865, or 25%, and may be used to meet the government’s ongoing obligations to citizens and creditors. At the end of the current fiscal year, the Town reports positive balances in all three categories of net position for the government as a whole, as well as for the business‐type activities.
Town of Prescott Valley, Arizona
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Analysis of Changes in Net Position
For the current fiscal year, the Town’s net position increased by $28,491,053.
Changes in Net Position June 30, 2021 and 2022
Revenues
202220212022202120222021
Program revenues: Charges for services6,232,482$ 5,126,801$ 15,865,943$ 16,229,996$ 22,098,425$ 21,356,797 $ Operating grants and contributions 1,189,641 4,416,308 ‐ ‐ 1,189,641 4,416,308 Capital grants and contributions 8,879,460 8,232,982 5,620,904 6,704,850 14,500,364 14,937,832
General revenues:
Taxes and franchise fees 38,643,793 33,678,545 ‐ ‐ 38,643,793 33,678,545 Intergovernmental 23,026,202 22,033,886 ‐ ‐ 23,026,202 22,033,886 Interest and investment income (268,335) (46,187) 196,916 155,846 (71,419) 109,659
Proceeds from sale of effluent water ‐ ‐ 1,672,629 ‐ 1,672,629 ‐ Other 597,468 6,677,389 2,355,499 11,673 2,952,967 6,689,062
Total revenues 78,300,711 80,119,724 25,711,891 23,102,365 104,012,602 103,222,089
Expenses
General government 12,487,378 12,128,632 ‐ ‐ 12,487,378 12,128,632 Public safety 15,625,064 16,225,329 ‐ ‐ 15,625,064 16,225,329 Culture and recreation 10,842,623 9,672,141 ‐ ‐ 10,842,623 9,672,141
Public works 3,540,657 3,645,389 ‐ ‐ 3,540,657 3,645,389 Highways and streets 9,981,662 9,632,912 ‐‐ 9,981,662 9,632,912
Interest on long‐term debt 2,244,636 2,960,863 ‐ ‐ 2,244,636 2,960,863
Wastewater utility ‐ ‐ 7,247,353 7,391,686 7,247,353 7,391,686 Prescott Valley water system ‐ ‐ 13,552,176 8,647,085 13,552,176 8,647,085 Total expenses 54,722,020 54,265,266 20,799,529 16,038,771 75,521,549 70,304,037
Increase (decrease) in net position before special items 23,578,691 25,854,458 4,912,362 7,063,594 28,491,053 32,918,052 Property owner assessment adjustment ‐ (402) ‐ ‐ ‐ (402)
Increase (decrease) in net position 23,578,691 25,854,056 4,912,362 7,063,594 28,491,053 32,917,650 Net position ‐ beginning 191,046,773 165,192,717 124,985,394 117,921,800 316,032,167 283,114,517 Net position ‐ ending $ 214,625,464 $ 191,046,773 $ 129,897,756 $ 124,985,394 $ 344,523,220 $ 316,032,167
Governmental activities. Governmental activities increased the Town’s net position by $23,578,691. Key factors include:
Total revenues for governmental activities decreased by $1,819,013 over the previous fiscal year. The change is accounted for by:
Charges for services increased by $1,105,681 over the prior fiscal year. For the fiscal year 2021‐22, 632 permits for new construction were issued compared to 774 the previous year, a decrease of 18%. There was an increase in building and related permit revenues of $5,060 due to an increase in new commercial construction permit revenue offset by a decrease in new residential permit revenue. Business and liquor licenses revenue decrease by $36,211 over the prior fiscal year due to business license fee policy update. Property rentals increased by $187,466 primarily due to an increase in apartment rental surcharge revenues. Recreation fees increased by $1,025,846 primarily due to Entertainment Center CFD revenue increase associated with post‐pandemic increase in number of events. Building and related charges for services decreased by $17,877. Court fines decreased by $106,178. Other revenues increased by $47,575 due to an increase in refunds and reimbursements and in revenues from sale of Town’s non‐capital assets through Public Surplus.
Operating grants and contributions decreased by $3,226,667. Operating contributions decreased by $215,926 over the previous year mainly due to lower than prior year donation contributions. Operating grants
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Governmental ActivitiesBusiness‐Type Activities Total
decreased by $3,010,741 primarily due to the AZ Cares grant received and expended as part of federal financial assistance from the U.S. Department of the Treasury’s Coronavirus Relief Fund in fiscal year 2020‐21.
Capital grants and contributions increased by $646,478. Capital contributions decreased by $716,023 which was primarily due to a decrease of donated assets received from developers. Capital grants increased by $1,410,282 due to higher than prior year Community Development Block Grant activity and funding received from the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program. Capital assessments decreased by $13,505. Impact fee capital contributions decreased by $34,276.
The Town’s tax and franchise revenues increased in fiscal year 2021‐22 by $4,965,248. Sales and use tax collections increased by $4,844,653, with retail sales taxes increasing by 10%, construction increasing by 38%, and restaurant sales taxes increasing by 18% over the prior year. CFD property tax revenues increased by $66,687. Franchise taxes increased by $54,908.
Intergovernmental revenues increased by $992,316 in fiscal year 2021‐22. State‐shared sales tax increased by $1,094,223, or 20%, state revenue sharing decreased by $494,322, or 7%, highway user revenue increased by $268,771, or 6%, and auto lieu tax decreased by $124,700, or 3%, over the previous year. Other intergovernmental revenues increased by $248,344 primarily due to receiving higher than prior year revenues from Yavapai County Flood Control and from Smart and Safe Arizona.
Interest and investment earnings decreased by $222,148 over the previous year primarily due to the change of fair market value of the investment portfolio. The average yield on investments on June 30, 2022, was 1.97% compared to 0.54% on June 30, 2021.
Other revenues decreased by $6,079,921 in fiscal year 2021‐22 primarily due to library litigation proceeds received in fiscal year 2020‐21.
Total expenses increased by $456,754 over the previous year. This change is accounted for by:
General Government increased by $358,746 over the previous year
Public Safety decreased by $600,265 over the previous year due to decrease in Public Safety Retirement contributions.
Culture and Recreation increased by $1,170,482 mainly due to Entertainment Center returning to pre‐pandemic level of operations.
Public Works decreased by $104,732 over the previous year mostly due to an increase in operating expenses.
Highways and Streets increased by $348,750 from the previous year mostly due to an increase in capital outlay expenses.
Interest on Long‐Term Debt decreased by $716,227 from the previous year due to decrease of outstanding debt and the advance refunding of outstanding debt in fiscal year 2020‐21.
The chart below illustrates the Town’s governmental expenses and revenues by function.
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As shown, Public Safety (Building Safety and Police) and General Government (Town Council, Executive Management, Town Clerk, Finance, Human Resources, Information Technology, Legal, Magistrate Court, Facilities and Fleet Maintenance and Other‐Unclassified departments) are the largest functions in expenses at 30% and 24% respectively, followed by Culture and Recreation at 20%, Highways and Streets at 19%, and Public Works at 7%.
General revenues such as sales and use taxes (e.g., transaction privilege taxes), franchise taxes, and intergovernmental are not shown by program, but are effectively used to support program activities of the Town. Taxes and franchise fees account for 49% of the total. Intergovernmental revenues (e.g., state‐shared sales tax, state revenue sharing and auto lieu) account for 29% of the total.
Business‐type activities. Business‐type activities increased the Town’s net position by $4,912,362.
Total revenues for business‐type activities increased by $2,609,526, with most of the changes being attributed to the following:
The number of Water System customers increased by 734 and consu mption increased by approximately 34.2 million gallons. The number of Wastewater System customers increased by 872 and consumption increased by approximately 13.5 million gallons. Water System user charges decreased by $580,732, and Wastewater System user charges increased by $281,719.
Capital grants and contributions decreased by $1,083,946. Connection fee revenue (e.g., water resource and capacity fees) related to new housing permits issued decreased by $508,830 over the previous year. Infrastructure contributions from developers decreased by $910,864 compared to fiscal year 2020‐21. Grant revenue increased by $335,748 due to funding received from SLFRF program.
Town of Prescott Valley, Arizona
Total expenses increased by $4,760,758 over the previous year. The key factors to this change are: Administration and professional services increased by $600,811 Utilities decreased by $155,090 Supplies increased by $142,960 Depreciation and amortization expenses increased by $305,493 Capital outlay increased by $3,983,698 Repairs and maintenance increased by $231,085 Interest expense decreased by $42,131 Other expenses decreased by $152,246 19
As shown in the chart below, the Prescott Valley Water System had expenses of approximately $13.6 million, and Wastewater expenses totaling approximately $7.2 million. For the fiscal year, the Prescott Valley Water System program expenses exceeded program revenues by $227,919, and the Wastewater program revenues exceeded program expenses by $915,237.
Charges for services (e.g., usage fees) are the largest single source of funds representing 62% of the total. Water resource fees, water capacity fees and capital contributions, which are fees paid by or assets donated by developers or individuals on new construction, provide 22% of the revenues. Other revenue (e.g., interest, investment and rental income, proceeds from sale of effluent water) provides 16% of total revenues.
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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 (e.g., revenues), outflows (e.g., expenditures), and balances of resources that are available for spending. Such information is useful in assessing the Town’s financing requirements. Unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. Types of governmental funds reported by the Town include the General Fund, special revenue funds, debt service funds, and capital project funds.
At of the end of the current fiscal year, the Town’s governmental funds reported combined ending fund balances of $82,614,137. Approximately $46.3 million of this total constitutes unassigned fund balance, which is available for spending at the Town’s discretion. The remainder of the fund balance is: 1) non‐spendable ($16.3 million) for inventory, prepaid items, and advances to other funds, 2) restricted ($14.2 million) for special revenue funds, capital improvement funds, community facilities districts, and debt service, and 3) committed ($5.8 million) for capital project growth savings and asset replacement.
Revenues for governmental functions overall totaled $76,185,893 in the fiscal year ended June 30, 2022, which represents a decrease of $734,093 from the fiscal year ended June 30, 2021. Expenditures for governmental functions totaled $63,837,863, an increase of $5,210,717, or about 9%, from the fiscal year ended June 30, 2021. This increase is primarily due to the increase in capital ou tlay expenditures in fiscal year 2021‐22. In the fiscal year ended June 30, 2022, revenues exceeded expenditures for governmental functions by $12,348,030
The General Fund is the chief operating fund of the Town. At the end of the current fiscal year, the unassigned fund balance of the general fund was $46,720,462. As a measure of the General Fund’s liquidity, it may be useful to compare total unassigned and total fund balance to total fund expenditures. The unassigned fund balance represents 113% of total General Fund expenditures of $41,501,736. The total fund balance represents 166% of total General Fund expenditures.
According to the Town’s financial policy, the Town’s General Fund will maintain an unassigned fund balance with a target of a minimum of 25% of General Fund revenues, excluding transfers. The intention of the unassigned fund balance is to provide additional stability to the General Fund recognizing the cyclical nature of the economy and the volatility of the major revenue sources of the Town. Funds in excess of the minimum targets will be retained in the unassigned General Fund balance. As of June 30, 2022, the Town had set aside 85% of General Fund revenues.
The fund balance of the Town’s General Fund increased by $10,346,648 during the current fiscal year. This increase can be mostly attributed to higher than budgeted sales tax revenues, intergovernmental revenues, and property rental revenues due to growing population and flourishing construction industry.
The HURF has a total fund balance of $6,126,481. The net increase in fund balance during the current year was $2,135,160. This increase is primarily due to a positive variance to budget in highway user tax, operating expenditures, and capital outlay expenditures.
The Development Impact Fees Fund had a total fund balance of $794,348 for the current year. The net increase in fund balance was $674,590. Total revenues (including transfers in) were $3,629,702 offset by expenditures of $1,124,266 and transfers out of $1,830,846 for required debt service payments.
Total fund balance for Streets Capital Improvement Fund was $4,290,699 for the current year. The net increase in fund balance during the current year was $1,922,929. This increase is primarily due to a positive variance to budget in sales tax revenues and capital outlay expenditures.
Town of Prescott Valley, Arizona
21
The Southside District No. 1 Community Facilities District Fund had a total negative fund balance of $366,594 for the current year.
Proprietary Funds
The Town’s proprietary funds provide the same type of information found in the government‐wide financial statements, but in more detail.
The total net position for business‐type activities (enterprise funds) was $129,897,756, an increase of $4,912,362. At the end of the fiscal year, unrestricted net position for the Presc ott Valley Water System and Wastewater System was $25,031,941, an increase of $8,316,112 as compared to the prior fiscal year.
According to the Town’s financial policy, contingency and reserve funds in the Water and Wastewater utility operating funds should be equal to a minimum of ninety (90) days operating expenses. As of June 30, 2022, all utility funds had cash reserves equivalent to at least ninety (90) days.
Utility rates will be set at a minimum to ensure the ratio of revenue to debt meets bond indenture requirements of 1.25:1 ratio. The Town’s goal will be to maintain a minimum ratio of utility revenue to debt service of 1.6:1 to ensure debt coverage in times of revenue fluctuations attributable to weather or other causes, and to ensure a balanced pay‐as‐you‐go capital improvement plan. As of June 30, 2022, both utility systems have met the minimum net revenues to debt ratio. Additional information is available in Table 14 in the Statistical Section. No utility rate increases were proposed for Prescott Valley Water System or Wastewater System for the fiscal year 2021‐22.
Other factors concerning the finances of these funds have been addressed previously in the Town’s business‐type activities.
General Fund Budgetary Highlights
Budgetary transfers between departments, funds, capital outlay, personnel services, and contingency must have the approval of Town Council before the transfer can be made.
As a result of the budget process (as approved by Council), the General Fund’s fund balance was anticipated to decrease by $16,950,834. Actual results in the General Fund’s performance resulted in revenues over expenditures and transfers out in the fiscal year ended June 30, 2022, of $10,346,648, a net difference of $27,297,482. The difference was primarily attributable to the following reasons:
Revenue results were over budget by $9,758,348. Sales tax revenues were above estimates by $7,209,071; licenses and permit revenues for building and related permits were $556,235 over budget; intergovernmental revenues combined were over budget by $1,089,802. Other revenue categories combined were $903,240 above budget estimates.
Capital outlay had a positive variance to budget of $5,442,900 due to less than budgeted expenditures for the library building project and engineering projects.
Net budgeted transfers out to other funds are below estimates by $912,375.
Capital Assets
The Town’s capital assets for its governmental and business‐type activities as of June 30, 2022, amount to $298,142,878 (net of accumulated depreciation). Capital assets include land, buildings, improvements other than buildings, machinery and equipment, infrastructure (including roads, water and sewer systems), and construction in progress. The total decrease in the Town’s capital assets (net of accumulated depreciation) for the current fiscal year was 1% for governmental and business‐type activities.
Town of Prescott Valley, Arizona
22
Total capital assets for the Town are shown in the following table:
GovernmentalBusiness‐Type ActivitiesActivitiesTotal
Capital Assets
Land12,779,844$ 2,537,746$ 15,317,590 $ Buildings47,766,023 411,639 48,177,662 Improvements other than buildings8,629,147 14,220,256 22,849,403 Machinery and equipment2,913,507 1,939,498 4,853,005 Infrastructure115,043,218 86,163,743 201,206,961 Construction in progress1,911,160 3,045,637 4,956,797
Right‐to‐use Assets
Land13,870 736,738 750,608 Buildings8,948 ‐ 8,948 Machinery and equipment21,874 ‐ 21,874 Total189,087,591$ 109,055,257$ 298,142,848 $
Major capital asset events during the current fiscal year included the following:
Governmental activities:
Land increased by $1,127,837 due to the acquisition of Exhibition Center land parcels.
Buildings increased by $3,005,976 due to the addition of Exhibition Center and Mountain Valley Park (MVP) Restrooms, and the completion of Boys & Girls Club building improvements offset by depreciation.
Improvements other than buildings increased by $41,106 due to the addition of “Sharing the Land” sculpture and Jenkins Obelisk, the completion of Boys & Girls Club parking lot improvements, the completion of Antelope Park Splash Pad, and other various park improvements offset by depreciation.
Machinery and equipment increased by $240,367 due to the purchase of vehicles and equipment for various departments and Entertainment Center offset by depreciation.
Infrastructure decreased by $3,290,786 due to depreciation offset by the completion of Antelope Meadow Free Flow and Park View Drive Connector, and developer contributions of drainage and roadways.
Construction in progress increased by $797,463. This increase is due to current year additions to governmental activities including Antelope Park Improvements, Santa Fe Park Improvements, Library Building Remodel project, various street improvement projects offset by the completion of Antelope Meadow Free Flow, Park View Connector, MVP Restroom, Boys & Girls Club Remodel, and sculptures.
Right‐to‐use assets increased by $44,692 due to Town of Prescott Valley entering into lease agreements involving land, a building, and printing and mailing equipment in fiscal year 2021‐22.
Business‐type activities:
Land increased by $768,936 due to the acquisition of Summit 2 Water Tank Right‐of‐Way and a land parcel with additional water rights.
Buildings increased by $50,450 due to Well Site building upgrades offset by depreciation.
Improvements other than buildings decreased by $821,386 due to depreciation.
Machinery and equipment increased by $131,643, primarily due to the purchase of equipment for Prescott Valley Water and Wastewater Systems offset by depreciation and disposal of obsolete items.
Infrastructure decreased by $1,232,775, due to depreciation offset by completion of various upgrade projects for Prescott Valley Water and Wastewater systems and developer contributions of water lines, sewers, and watermains.
Construction in progress decreased by $3,170,026. This decrease is due to the completion of Summit 2 Water Tank Right‐of‐Way and reclassification of Tri‐City Pipeline and Tanks project to capital outlay expenses (the impairment loss is due to outdated design) offset by current year additions to business‐type activities including Fire Hydrants project and Wastewater Treatment Plant Headworks Upgrade.
Right‐to‐use assets increased by $736,738 due to the Town of Prescott Valley implementing GASB 87 in fiscal year 2021‐22 and recognizing leased land parcels as a right‐to‐use asset according to GASB 87 guidelines.
Town of Prescott Valley, Arizona
23
For government‐wide financial statement presentation, all depreciable capital assets were depreciated from the acquisition date to the end of the current fiscal year. Fund financial statements record capital asset purchases as expenditures. See Section III.C in the Notes to the Financial Statements for further information.
Debt Administration
On June 30, 2022, the Town (including component units) had total long‐term obligations outstanding of $65.63 million, a decrease of $10.44 million over the previous year.
Governmental Activities
In the governmental activities, revenue bonds backed by the full faith and credit of the Town (payable with excise taxes and impact fees) total $16.59 million.
Total outstanding ad valorem bonds issued for community facilities districts equaled approximately $14.83 million. Although legally separate from the Town, the debt associated with the component units is blended with the primary government because of their governance or financial relationships to the Town. At the end of the year, total outstanding general obligation bonds were: $5.24 million for StoneRidge, $3.69 million for Pronghorn Ranch, $3.87 million for Quailwood Meadows, and $2.03 million for Parkway No. 1. The bonds issued for StoneRidge, Pronghorn Ranch, Quailwood Meadows, and Parkway No. 1 are primarily payable from revenues generated through an ad valorem tax assessed against the properties located within the boundaries of the district. StoneRidge, Pronghorn Ranch, and Quailwood Meadows were all refinanced. Remaining deposit amounts were used to pay down the existing debt. Parkway No. 1 is the only ad valorem district that still has a reserve account.
The outstanding bonds issued for Southside No. 1 ($1.41 million ) are payable from assessments collected from the property owners and Town’s contributions. The outstanding Water Infrastructure Financing Authority (WIFA) loan for the Raven Ridge project ($1,012) will be repaid from assessments collected from the property owners within the district. No Town revenues are pledged toward these bonds/loan, and the developers and property owners are solely responsible for contributing any differences between the property taxes collect ed and the annual debt service payment.
The outstanding bonds issued for Entertainment Center CFD ($15.12 million) are payable from the Entertainment Center operating revenues and are guaranteed by the Town’s privilege tax revenues.
The outstanding leases ($44,355) and financed purchase payable ($2.43 million) are both payable from General Fund revenues.
The Town’s net pension and OPEB liability for the Public Safety Personnel Retirement System (PSPRS) is $7,204,201. Additional information regarding this liability is in Section IV.F of the Notes to the Financial Statements.
Business‐Type Activities
Outstanding debt associated with business‐type activities totaled approximately $4.19 million. This represents $3.45 million in WIFA loans for the Town’s wastewater utility and $739,493 in outstanding leases payable from Prescott Valley Water System revenues.
Town of Prescott Valley, Arizona
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Outstanding Debt
June 30, 2022
GovernmentalBusiness‐Type ActivitiesActivitiesTotal
Revenue bonds16,585,000$ ‐$ 16,585,000 $
Community facilities district general obligation bonds14,830,00 0 ‐ 14,830,000
Community facilities district revenue bonds15,120,000 ‐ 15,120,000
Community facilities district special assessment bonds1,405,000 ‐ 1,405,000
Community facilities district long‐term loan payable1,012 ‐ 1,012 Premium2,275,893 ‐ 2,275,893 Leases44,355 739,493 783,848 Net pension liability7,204,201 ‐ 7,204,201
Financed purchase payable2,426,400 ‐ 2,426,400
Compensated absences1,546,379 ‐ 1,546,379
Long‐term loan payable‐ 3,449,949 3,449,949
Total long‐term liabilities61,438,240$ 4,189,442$ 65,627,682 $
Debt Limitations
The State Constitution imposes certain debt limitations on the Town of 6% of secondary assessed valuation of the taxable property for general municipal purposes and 20% of the outstanding assessed valuation of the Town for water, light, sewer, open space, and park purposes. The Town’s available debt margin on June 30, 2022, is $34.7 million in the 6% capacity and $115.7 million in the 20% capacity. Additional information on the debt limitations and capacities may be found in Section III.G of the Notes to the Financial Statements and in Table 13 in the Statistical Section of this report.
The Town’s bonded debt ratings as of June 30, 2022, were:
Entertainment Center CFD Revenue Bonds (Series 2017)
Revenue Refunding Bonds (Series 2020)
Economic Factors and Next Year’s Budget and Rates
The fiscal year 2021‐22 continued to show signs of a stabilizin g economy both nationwide and in the Prescott Valley area.
The unemployment rate as of June 2022 was 3.4% for the Town of Prescott Valley and 3.3% for the State of Arizona.
Growth occurred across all sales tax categories during the fiscal year. Recent openings during fiscal year 2021‐22 included a Tropical Smoothie Café, Park Collective, A&W/Roberts Market, Maverik Adventures First Stop, C‐A‐L Ranch Stores, Amazon Distribution, Grumpy Sicilian, Rosa’s Pizzeria, By the Bucket, Wheelhouse Sports Complex, Crumbl Cookies, and Lindo Mexico Restaurante Mexicano. Future b usinesses planned are Church’s Chicken and Credit Union West.
The above factors were considered in preparing the Town’s budget for fiscal year 2022‐23 and due to economic uncertainties, the following strategies were employed:
A conservative economic forecast and limited revenue growth. Continued investment in the Town’s basic infrastructure and public facilities, combined with a careful analysis of their operating costs.
Town of Prescott Valley, Arizona
Moody'sStandard and Poor'sFitch Investors Investors ServicesRating GroupService, Inc.
25
AA+
AA
Sustained funding of general fund and economic investment reserves to ensure the Town can provide basic services during economic downturns or major emergencies, while making strategic investments in the Town’s economic base.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the Town’s finances for all of those with an interest in th e government’s finances. If you have questions about this report or need additional financial information, contact the Town of Prescott Valley, Finance Department, 7501 East Skoog Boulevard, Prescott Valley, AZ 86314.
Town of Prescott Valley, Arizona
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Town of Prescott Valley, Arizona
Statement of Net Position June 30, 2022
ASSETS
Primary Government Governmental Business‐Type ActivitiesActivitiesTotal
Current assets: Cash and investments72,971,999$ 34,494,701$ 107,466,700 $
Receivables (net of allowance for uncollectibles):
Intergovernmental 2,582,099 ‐ 2,582,099
Charges for services ‐ 3,250,589 3,250,589 Grants 1,142,404 246,051 1,388,455
Interest and other 27,522 5,720 33,242
Special assessments 1,318,643 ‐ 1,318,643 Leases 3,990,946 1,600,429 5,591,375 Miscellaneous 880,105 ‐ 880,105 Internal balances 11,420,000 (11,420,000) ‐Prepaid items 128,267 920 129,187
Total current assets 94,461,985 28,178,410 122,640,395
Noncurrent assets: Restricted cash and cash equivalents3,391,845 877,113 4,268,958
Other postemployment benefits194,642 ‐ 194,642
Capital assets: Land and construction in progress (not being depreciated or amortized) 14,691,004 5,583,383 20,274,387
Land, facilities, infrastructure, and equipment (net of depreciation or amortization) 174,396,587 103,471,874 277,868,461 Total noncurrent assets 192,674,078 109,932,370 302,606,448
Total assets 287,136,063 138,110,780 425,246,843
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions 6,070,988 ‐ 6,070,988 Deferred charges on refunding 796,764 ‐ 796,764 Total deferred outflows of resources 6,867,752 ‐ 6,867,752
LIABILITIES
Current liabilities: Accounts payable 2,818,164 1,558,308 4,376,472 Accrued payroll 763,262 22,011 785,273 Long‐term liabilities ‐ due within one year 7,600,230 978,323 8,578,553 Accrued interest payable ‐ 7,653 7,653 Unearned revenue 344,643 ‐ 344,643
Total current liabilities 11,526,299 2,566,295 14,092,594
Noncurrent liabilities: Customer advances and deposits 158,616 877,113 1,035,729 Unearned revenue 6,354,681 ‐ 6,354,681
Long‐term liabilities ‐ due in more than one year 53,838,010 3,211,119 57,049,129
Total noncurrent liabilities 60,351,307 4,088,232 64,439,539
Total liabilities 71,877,606 6,654,527 78,532,133
DEFERRED INFLOWS OF RESOURCES
Leases 3,890,844 1,558,497 5,449,341
Deferred inflows related to pensions 3,609,901 ‐ 3,609,901
Total deferred inflows of resources 7,500,745 1,558,497 9,059,242
NET POSITION
Net investment in capital assets 137,196,695 104,865,815 242,062,510
Restricted for: Capital projects 5,585,047 ‐ 5,585,047
Community facilities districts 23,451 ‐ 23,451 Debt service 2,618,197 ‐ 2,618,197
Grantor and contributor purposes 1,121,559 ‐ 1,121,559 Street improvements 6,125,591 ‐ 6,125,591
Unrestricted 61,954,924 25,031,941 86,986,865
Total net position 214,625,464 $ $ 129,897,756 $ 344,523,220
The notes to the financial statements are an integral part of this statement.
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Town of Prescott Valley, Arizona
Statement of Activities
For the Year Ended June 30, 2022
Program Revenues Operating Charges forGrants and Function/ProgramsExpensesServicesContributions
Primary government: Governmental activities: General government12,487,378$ 3,502,132$ ‐$ Public safety15,625,064 42,964 601,100 Culture and recreation10,842,623 2,687,386 245,352 Public works3,540,657 ‐ 201,660 Highways and streets9,981,662 ‐ 141,529 Interest on long‐term debt2,244,636 ‐ ‐
Total governmental activities54,722,020 6,232,482 1,189,641
Business‐type activities: Wastewater utility7,247,353 5,833,415 ‐Prescott Valley water system13,552,176 10,032,528 ‐Total business‐type activities20,799,529 15,865,943 ‐
Total primary government75,521,549$ 22,098,425$ 1,189,641 $
General revenues: Taxes: Transaction privilege taxes Franchise taxes Property taxes
Intergovernmental: State‐shared sales tax State revenue sharing Highway user Other
Interest and investment income Proceeds from sale of effluent water Other revenues
Total general revenues
Change in net position
Net position ‐ beginning
Net position ‐ ending
28
‐$ (8,985,246)$ ‐$ (8,985,246) $ 626,505 (14,354,495) ‐ (14,354,495) 3,793,401 (4,116,484) ‐ (4,116,484) 943,183 (2,395,814) ‐ (2,395,814) 3,516,371 (6,323,762) ‐ (6,323,762) ‐ (2,244,636) ‐ (2,244,636) 8,879,460 (38,420,437) ‐ (38,420,437)
2,329,175 ‐ 915,237 915,237 3,291,729 ‐ (227,919) (227,919) 5,620,904 ‐ 687,318 687,318 14,500,364 $ (38,420,437) 687,318 (37,733,119) 35,936,066 ‐ 35,936,066 627,113 ‐ 627,113 2,080,614 ‐ 2,080,614
6,612,442 ‐ 6,612,442 6,153,321 ‐ 6,153,321 4,743,649 ‐ 4,743,649 5,516,790 ‐ 5,516,790 (268,335) 196,916 (71,419) ‐ 1,672,629 1,672,629 597,468 2,355,499 2,952,967 61,999,128 4,225,044 66,224,172 23,578,691 4,912,362 28,491,053 191,046,773 124,985,394 316,032,167 214,625,464 $ 129,897,756 $ $ 344,523,220
The notes to the financial statements are an integral part of this statement.
Primary Government
Capital Grants andGovernmentalBusiness‐Type ContributionsActivitiesActivitiesTotal
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Town of Prescott Valley, Arizona
Balance Sheet
Governmental Funds June 30, 2022
HighwayDevelopment Users Impact GeneralRevenue Fees Grant Fund Fund Fund Fund
ASSETS
Cash and investments
$ 50,792,623 $ 5,780,285 $ 3,598,927 $ 6,942,096 Restricted cash and investments 506,178 ‐ ‐ ‐
Receivables: Grants ‐ ‐ ‐ 1,142,404 Interest 26,471 500 286 ‐Intergovernmental 1,922,414 467,193 ‐ ‐Leases 3,990,946 ‐ ‐ ‐
Special assessments ‐ ‐ ‐ ‐Miscellaneous 607,939 ‐ ‐ ‐
Due from other funds 981,490 ‐ ‐ ‐
Prepaid items 110,817 890 ‐ 14,234 Advances to other funds 16,220,697 ‐ ‐ ‐Total assets 75,159,575 $ 6,248,868 $ $ 3,599,213 8,098,734 $
LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES
Liabilities: Accounts payable
$ 1,424,832 $ 95,368 $ 570 $ 857,936 Accrued payroll 728,130 27,019 ‐ 8,113 Due to other funds ‐ ‐ ‐ 981,490 Unearned revenue: Other 103,486 ‐ ‐ 6,251,195 Guaranty and other deposits 158,616 ‐ ‐ ‐Advance from other funds ‐ ‐ 2,804,295 ‐Total liabilities 2,415,064 122,387 2,804,865 8,098,734
Deferred inflows of resources: Unavailable revenue ‐ special assessments ‐ ‐ ‐ ‐Leases 3,890,844 ‐ ‐ ‐Total deferred inflows of resources 3,890,844 ‐ ‐ ‐
Fund Balances: Nonspendable: Prepaid items 110,817 890 ‐ ‐Advances to other funds 16,220,697 ‐ ‐ ‐
Restricted for: Capital projects ‐ ‐ 794,348 ‐Community facilities districts ‐ ‐ ‐ ‐Debt service ‐ ‐ ‐ ‐Grantor and contributor purposes ‐ ‐ ‐ ‐
Street improvements ‐ 6,125,591 ‐ ‐Committed 5,801,691 ‐ ‐ ‐Unassigned 46,720,462 ‐ ‐ ‐Total fund balances 68,853,667 6,126,481 794,348 ‐
Total liabilities, deferred inflows of resources and fund balances 75,159,575 $ 6,248,868 $ $ 3,599,213 8,098,734 $
The notes to the financial statements are an integral part of this statement.
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Southside StreetsDistrict No. 1Total CapitalCommunityNonmajor Total ImprovementFacilities Governmental Governmental FundDistrictFundsFunds
4,099,634 $ ‐$ 2,167,594$ 73,381,159 $ ‐ 326,786 2,558,881 3,391,845
‐ ‐ ‐ 1,142,404 238 ‐ 27 27,522 190,847 ‐ 1,645 2,582,099 ‐ ‐ ‐ 3,990,946 ‐ 1,316,660 1,983 1,318,643 ‐ ‐ 272,166 880,105 ‐ ‐ ‐ 981,490 ‐ ‐ 2,326 128,267 ‐ ‐ ‐ 16,220,697 4,290,719 $ 1,643,446$ 5,004,622$ 104,045,177 $ 20 $ 1,725$ 437,713$ 2,818,164 $ ‐ ‐ ‐ 763,262 ‐ ‐ ‐ 981,490 ‐ ‐ 344,643 6,699,324 ‐ ‐ ‐ 158,616 ‐ 691,655 1,304,747 4,800,697 20 693,380 2,087,103 16,221,553 ‐ 1,316,660 1,983 1,318,643 ‐ ‐ ‐ 3,890,844 ‐ 1,316,660 1,983 5,209,487 ‐ ‐ 2,326 114,033 ‐ ‐ ‐ 16,220,697
4,290,699 ‐ 500,000 5,585,047 ‐ ‐ 23,451 23,451 ‐ ‐ 1,299,554 1,299,554 ‐ ‐ 1,121,559 1,121,559 ‐ ‐ ‐ 6,125,591 ‐ ‐ ‐ 5,801,691 ‐ (366,594) (31,354) 46,322,514 4,290,699 (366,594) 2,915,536 82,614,137
$ 4,290,719 $ 1,643,446 5,004,622 $ $ 104,045,177
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Town of Prescott Valley, Arizona
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position Governmental Activities June 30, 2022
Fund balances ‐ total governmental funds balance sheet $ 82,614,137
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financia l resources and therefore are not reported in the governmental funds.
Governmental capital assets 333,148,067 Less: accumulated depreciation (144,105,168) 189,042,899
Right‐to‐uses assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds.
Right‐to‐use assets 61,432 Less: accumulated amortization (16,740) 44,692
Other assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds.
Change in fair value of investments (409,160) Other postemployment benefits 194,642 (214,518)
Long‐term liabilities, such as net pension liabilities, bonds payable, and lease payable are not due and payable in the current period and therefore are not reported in the governmental funds.
Governmental bonds payable (50,216,905) Net pension liability (7,204,201)
Financed purchase payable (2,426,400) Lease payable (44,355)
Compensated absences (1,546,379) (61,438,240)
Deferred outflows and inflows of resources related to pensions and deferred charges or credits on debt refunding are applicable to future reporting periods and, therefore are not reported in the funds.
Deferred charges on refunding 796,764
Deferred outflows of resources 6,070,988
Deferred inflows of resources (3,609,901) 3,257,851
Certain revenues are not available to pay for current period expenditures and therefore are reported as unavailable in the governmental funds.
Special assessments 1,318,643
Net position of governmental activities ‐ statement of net position 214,625,464 $
The notes to the financial statements are an integral part of this statement.
33
Town of Prescott Valley, Arizona
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2022
HighwayDevelopment UserImpact GeneralRevenueFeesGrant FundFundFundFund
REVENUES
Taxes ‐ local32,168,151$ ‐$ ‐$ ‐$ Taxes ‐ intergovernmental18,117,059 4,743,649 ‐ ‐Taxes ‐ property‐ ‐ ‐ ‐Licenses and permits:
Business and liquor licenses119,396 ‐ ‐ ‐
Building and related permits1,732,235 ‐ ‐ ‐Animal licenses22,939 ‐ ‐ ‐Charges for services:
Building and related charges for services187,953 ‐ ‐ ‐Recreation fees216,517 ‐ ‐ ‐Other51,321 ‐ ‐ ‐Fines and forfeitures:
Court fines503,780 ‐ ‐ ‐
Special assessments‐ ‐ ‐ ‐Property rental706,850 ‐ ‐ ‐Interest earnings192,097 14,707 8,547 ‐Intergovernmental:
Federal grants‐ ‐ ‐ 3,002,450 State grants‐ ‐ ‐ 143,906 Contributions ‐ 75,000 3,576,474 ‐Other653,158 20,567 ‐ ‐
Total revenues54,671,456 4,853,923 3,585,021 3,146,356
EXPENDITURES
Current: General government 11,546,014 ‐ 1,995 ‐Public safety 16,680,593 ‐ ‐ 586,919 Culture and recreation 4,971,674 ‐ ‐ 202,546 Public works 1,557,927 ‐ ‐ 201,660 Highways and streets ‐ 4,500,484 ‐ ‐
Debt service: Principal 606,600 ‐ ‐ ‐Interest and fiscal charges ‐ ‐ ‐ ‐Capital outlay 6,138,928 718,279 1,122,271 2,155,231
Total expenditures 41,501,736 5,218,763 1,124,266 3,146,356
Excess (deficiency) of revenues over expenditures 13,169,720 (364,840) 2,460,755 ‐
OTHER FINANCING SOURCES (USES)
Transfers in ‐ 2,500,000 44,681 ‐
Transfers out (5,917,504) ‐ (1,830,846) ‐
Financed purchase 3,033,000 ‐ ‐ ‐
Financing of leases 61,432 ‐ ‐ ‐
Total other financing sources and uses (2,823,072) 2,500,000 (1,786,165) ‐
Net change in fund balances 10,346,648 2,135,160 674,590 ‐
Fund balances ‐ beginning 58,507,019 3,991,321 119,758 ‐
Fund balances ‐ ending 68,853,667 $ 6,126,481$ 794,348$ ‐$
The notes to the financial statements are an integral part of this statement.
34
Southside StreetsDistrict No. 1Total CapitalCommunityNonmajor Total ImprovementFacilities GovernmentalGovernmental FundDistrictFundsFunds
$ 4,154,995 $ ‐ $ 240,033 $ 36,563,179 ‐ ‐ 165,494 23,026,202 ‐ ‐ 2,080,614 2,080,614 ‐ ‐ ‐ 119,396 ‐ ‐ ‐ 1,732,235 ‐ ‐ ‐ 22,939 ‐ ‐ ‐ 187,953 ‐ ‐ 2,443,854 2,660,371 ‐ ‐ ‐ 51,321 ‐ ‐ 22,943 526,723 ‐ 181,657 3,131 184,788 ‐ ‐ 168,609 875,459 7,599 44 820 223,814 ‐ ‐ ‐ 3,002,450 ‐ ‐ ‐ 143,906 ‐ ‐ 459,344 4,110,818 ‐ ‐ ‐ 673,725 4,162,594 181,701 5,584,842 76,185,893
‐ 1,875 27,813 11,577,697 ‐ ‐ 17,361 17,284,873 ‐ ‐ 3,409,306 8,583,526 ‐ ‐ ‐ 1,759,587 ‐ ‐ ‐ 4,500,484 ‐ 125,000 6,277,985 7,009,585 ‐ 112,157 2,264,201 2,376,358 214,790 ‐ 396,254 10,745,753 214,790 239,032 12,392,920 63,837,863 3,947,804 (57,331) (6,808,078) 12,348,030 ‐ ‐ 7,228,544 9,773,225 (2,024,875) ‐ ‐ (9,773,225) ‐ ‐ ‐ 3,033,000 ‐ ‐ ‐ 61,432 (2,024,875) ‐ 7,228,544 3,094,432 1,922,929 (57,331) 420,466 15,442,462 2,367,770 (309,263) 2,495,070 67,171,675 $ 4,290,699 $ (366,594) $ 2,915,536 82,614,137 $
35
Town of Prescott Valley, Arizona
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2022
Net change in fund balances ‐ total governmental funds 15,442,462 $
Amounts reported for governmental activities in the statements of activities are different because:
Government funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation or amortization expense.
Expenditures for capital assets 10,745,753
Less amount not capitalized (1,184,294)
Less current year depreciation (10,318,772)
Less current year amortization (16,740) (774,053)
Donations of capital assets are not reflected on the governmental fund statements but are shown in the statement of activities. 2,740,708
Some expenses reported in the statement of activities, such as compensated absences, do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.
Compensated absences 50,571
Accrued payroll 196,860
Amortization of deferred bond premium cost 227,590
Amortization of deferred charges on refunding (95,868) 379,153
Some revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. (492,149)
The issuance of long‐term debt provides current financial resources to governmental funds, while the repayment of the principal of long‐term debt consumes the current financial resources of governmental funds Neither transaction, however, has any effect on net position. In the current period, these amounts are:
Financed purchase proceeds (3,033,000) Lease proceeds(61,432) Payment of lease payables17,077
Principal payments on debt 7,009,585 3,932,230
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.
Pension contributions 3,814,283
Pension expense(1,330,202) 2,484,081
Certain revenues in the governmental funds that provide current financial resources are not included in the statement of activities because they were recognized in a prior period. However, other revenues that are deferred in the governmental funds, because they do not provide current financial resources due to unavailability, are recognized in the statement of activities
Special assessments (133,741)
Change in net position of governmental activities ‐ statement of activities 23,578,691 $
The notes to the financial statements are an integral part of this statement.
36
Town of Prescott Valley, Arizona
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual ‐ GAAP Basis
Governmental Funds
For the Year Ended June 30, 2022
REVENUES
Budgeted AmountsVariance Between Actual Amounts,Final Budget and
Original FinalBudgetary BasisActual Amounts
Taxes ‐ local: Transaction privilege 24,572,000 $ 24,572,000 $ 31,781,071 $ 7,209,071 $ Cable TV franchise 170,000 170,000 148,454 (21,546) Light and power franchise 180,000 180,000 238,626 58,626 Licenses and permits: Business and liquor licenses 173,351 173,351 119,396 (53,955) Building and related permits 1,176,000 1,176,000 1,732,235 556,235 Animal licenses20,500 20,500 22,939 2,439 Intergovernmental:
State revenue sharing6,069,090 6,069,090 6,153,321 84,231 Auto lieu 3,559,266 3,559,266 3,820,660 261,394 State‐shared sales5,461,574 5,461,574 6,612,442 1,150,868
Other intergovernmental 1,937,327 1,937,327 1,530,636 (406,691) Charges for services:
Building and related 141,000 141,000 187,953 46,953 Recreation fees172,000 172,000 216,517 44,517 Other36,500 36,500 51,321 14,821 Fines and forfeitures:
Court fines594,500 594,500 503,780 (90,720) Interest earnings62,000 62,000 192,097 130,097 Property rental482,500 482,500 706,850 224,350 Other105,500 105,500 653,158 547,658
Total revenues44,913,108 44,913,108 54,671,456 9,758,348
EXPENDITURES
Current: General government: Council 149,771 149,771 146,076 3,695 Executive Management 1,204,230 1,204,230 955,256 248,974 Human Resources 473,973 473,973 574,090 (100,117) Information Technology 844,504 844,504 810,221 34,283 Town Clerk 328,323 328,323 307,455 20,868 Finance 1,764,706 1,764,706 1,786,027 (21,321) Legal 850,604 850,604 738,713 111,891 Magistrate Court 731,325 731,325 634,627 96,698 Facilities and Fleet Maintenance 744,428 744,428 859,001 (114,573) Other‐Unclassified 11,976,784 11,906,784 4,734,548 7,172,236
Total general government 19,068,648 18,998,648 11,546,014 7,452,634
Public safety: Building/Safety 1,139,207 1,139,207 1,087,746 51,461 Police 15,778,581 15,748,631 15,592,847 155,784
Total public safety 16,917,788 16,887,838 16,680,593 207,245
The notes to the financial statements are an integral part of this statement.
37
Town of Prescott Valley, Arizona
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual ‐ GAAP Basis
Governmental Funds
For the Year Ended June 30, 2022
Budgeted AmountsVariance Between Actual Amounts,Final Budget and
Original FinalBudgetary BasisActual Amounts
(continued) Channel 56174,144 174,144 167,217 6,927 Community Services ‐ Parks and Recreation2,998,219 2,998,219 2,701,399 296,820 Community Services ‐ Library2,401,411 2,401,411 2,103,058 298,353 Total culture and recreation5,573,774 5,573,774 4,971,674 602,100
Culture and recreation:
Public works: Transit Program4,600 4,600 ‐ 4,600 Planning and Development847,190 847,190 569,731 277,459 Neighborhood Services451,046 451,046 329,123 121,923
Administrative Hearing Office5,169 5,169 2,729 2,440 Engineering633,970 683,970 656,344 27,626 Total public works1,941,975 1,991,975 1,557,927 434,048
Debt Service:
Other debt principal‐ 606,600 (606,600) Capital outlay 11,531,878 11,581,828 6,138,928 5,442,900 Total expenditures 55,034,063 55,034,063 41,501,736 13,532,327
Excess (deficiency) of revenues over expenditures (10,120,955) (10,120,955) 13,169,720 23,290,675
OTHER FINANCING SOURCES (USES)
Transfers in ‐ ‐ ‐ ‐Transfers out (6,829,879) (6,829,879) (5,917,504) 912,375 Financed purchase ‐ ‐ 3,033,000 3,033,000 Financing of leases ‐ ‐ 61,432 61,432 Total other financing sources and uses (6,829,879) (6,829,879) (2,823,072) 4,006,807
Net change in fund balances (16,950,834) (16,950,834) 10,346,648 27,297,482
Fund balances ‐ beginning 53,284,000 53,284,000 58,507,019 5,223,019
Fund balances ‐ ending $ 36,333,166 36,333,166 $ 68,853,667 $ $ 32,520,501
The notes to the financial statements are an integral part of this statement.
38
Town of Prescott Valley, Arizona
Highway User Revenue Fund ‐ Special Revenue Fund
Statement of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual ‐ GAAP Basis
Governmental Funds
For the Year Ended June 30, 2022
REVENUES
Budgeted Amounts
Variance Between Actual Amounts,Final Budget and OriginalFinalBudgetary BasisActual Amounts
Intergovernmental: Highway user tax $ 4,021,168 $ 4,021,168 $ 4,743,649 $ 722,481 Charges for services 8,500 8,500 ‐ Contributions 75,000 Interest earnings 10,000 10,000 14,707 4,707 Other ‐ 20,567 Total revenues 4,139,668 4,139,668 4,853,923 714,255
EXPENDITURES
Current: Highways and streets: Personnel services 1,064,732 1,064,732 1,003,043 Operating expenditures 3,374,941 3,559,941 3,497,441 Total highways and streets 4,439,673 4,624,673 4,500,484 124,189
Capital outlay 4,285,000 4,100,000 3,381,721 Total expenditures 8,724,673 8,724,673 5,218,763 3,505,910
Excess (deficiency) of revenues over expenditures (4,585,005) (4,585,005) (364,840) 4,220,165
OTHER FINANCING SOURCES (USES)
Transfers in 2,500,000 2,500,000 2,500,000 ‐ Transfers out ‐ ‐ ‐ Total other financing sources and uses 2,500,000 2,500,000 2,500,000 ‐
Net change in fund balances (2,085,005) (2,085,005) 2,135,160 4,220,165
Fund balances ‐ beginning 3,211,000 3,211,000 3,991,321 780,321
Fund balances ‐ ending 1,125,995 $ 1,125,995$ 6,126,481$ 5,000,486 $
The notes to the financial statements are an integral part of this statement.
39
Town of Prescott Valley, Arizona
Development Impact Fees Fund ‐ Special Revenue Fund
Statement of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual ‐ GAAP Basis
Governmental Funds
For the Year Ended June 30, 2022
Variance Between Budgeted AmountsFinal Budget and Actual Amounts,Actual Amounts OriginalFinalBudgetary BasisBudgetary Basis
REVENUES
Intergovernmental: Other intergovernmental6,000$ 6,000$ 8,547$ 2,547 $ Impact fees2,551,033 2,551,033 3,326,474 775,441 Other‐ 250,000
Total revenues 2,557,033 2,557,033 3,585,021 1,027,988
EXPENDITURES
Current: General government 58,605 58,605 1,995 56,610 Capital outlay 1,065,200 1,199,622 1,122,271 77,351 Total expenditures 1,123,805 1,258,227 1,124,266 133,961
Excess (deficiency) of revenues over expenditures 1,433,228 1,298,806 2,460,755 1,161,949
OTHER FINANCING SOURCES (USES)
Transfers in 44,681 44,681 Transfers out (1,830,846) (1,830,846) (1,830,846) Total other financing sources (1,830,846) (1,830,846) (1,786,165) 44,681
Net change in fund balances (397,618) 1,206,630
Fund balances ‐ beginning (307,000) 426,758
Fund balances ‐ ending (704,618) $ (839,040)$ 794,348$ 1,633,388 $
The notes to the financial statements are an integral part of this statement.
40
Town of Prescott Valley, Arizona
Grant Fund ‐ Special Revenue Fund
Statement of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual ‐ GAAP Basis
Governmental Funds
For the Year Ended June 30, 2022
Variance Between Budgeted AmountsFinal Budget and Actual Amounts,Actual Amounts OriginalFinalBudgetary BasisBudgetary Basis
REVENUES
Intergovernmental: Federal grants $ 9,066,700 $ 9,066,700 $ 3,002,450 $ (6,064,250) State grants 143,906
Total revenues 9,600,912 9,600,912 3,146,356 (6,454,556)
EXPENDITURES
Current: General government ‐ 500,000 Public safety 1,196,532 1,196,532 609,613
Culture and recreation 2,546,000 2,546,000 2,343,454 Public works 37,980 Capital outlay 5,118,740 5,118,740 2,155,231 2,963,509 Total expenditures 9,600,912 9,600,912 3,146,356 6,454,556
Excess (deficiency) of revenues over expenditures ‐
OTHER FINANCING SOURCES (USES)
Transfers in ‐
Transfers out ‐
Total other financing sources and uses ‐
Net change in fund balances ‐
Fund balances ‐ beginning ‐
Fund balances ‐ ending ‐ $ ‐ $ ‐ $ ‐ $
The notes to the financial statements are an integral part of this statement.
41
Town of Prescott Valley, Arizona
Statement of Net Position Proprietary Funds June 30, 2022
ASSETS
PV Water WastewaterSystemTotal
Current assets: Cash and investments18,596,774$ 15,897,927$ 34,494,701 $ Receivables (net of allowance for uncollectibles): Charges for services276,531 2,974,058 3,250,589 Grants‐ 246,051 246,051 Leases ‐ 1,600,429 1,600,429 Interest 1,669 4,051 5,720 Prepaid items 460 920
Total current assets 18,875,434 20,722,976 39,598,410
Noncurrent assets:
Restricted cash, cash equivalents 351,366 525,747 877,113
Capital assets: Land 302,907 2,234,839 2,537,746 Buildings 3,797,375 413,683 4,211,058 Improvements other than buildings 72,057 30,302,382 30,374,439 Machinery and equipment 7,828,421 3,404,421 11,232,842 Infrastructure 86,835,003 60,126,466 146,961,469 Construction in progress 296,429 2,749,208 3,045,637 Right‐to‐use land ‐ 824,040 824,040
Less accumulated depreciation (57,776,651) (32,268,021) (90,044,672) Less accumulated amortization ‐ (87,302) (87,302)
Total capital assets (net of accumulated depreciation) 41,355,541 67,699,716 109,055,257
Total noncurrent assets 41,706,907 68,225,463 109,932,370
Total assets 60,582,341 88,948,439 149,530,780
The notes to the financial statements are an integral part of this statement.
42
Town of Prescott Valley, Arizona
Statement of Net Position
Proprietary Funds
June 30, 2022
LIABILITIES
Current liabilities:
PV Water WastewaterSystemTotal
Accounts payable406,115 1,152,193 1,558,308
Accrued payroll9,905 12,106 22,011
Accrued Interest payable‐ 7,653 7,653
Lease payable ‐ due within one year‐ 77,274 77,274
Notes payable ‐ due within one year901,049 ‐ 901,049
Total current liabilities1,317,069 1,249,226 2,566,295
Noncurrent liabilities:
Customer advances and deposits351,366 525,747 877,113
Lease payable‐ 662,219 662,219
Notes payable2,548,900 ‐ 2,548,900 Advance from other funds‐ 11,420,000 11,420,000
Total noncurrent liabilities2,900,266 12,607,966 15,508,232
Total liabilities4,217,335 13,857,192 18,074,527
DEFERRED INFLOWS OF RESOURCES
Leases‐ 1,558,497 1,558,497
Total deferred inflows of resources‐ 1,558,497 1,558,497
NET POSITION
Net investment in capital assets37,905,592 66,960,223 104,865,815 Unrestricted18,459,414 6,572,527 25,031,941
Total net position 56,365,006 $ 73,532,750 $ $ 129,897,756
43
Town of Prescott Valley, Arizona
Statement of Revenues, Expenses and Changes in Fund Net Position
Proprietary Funds
For the Year Ended June 30, 2022
OPERATING REVENUES
PV Water WastewaterSystem Total
Charges for sales and services 5,759,607 $ 9,768,923 $ 15,528,530 $ Other 73,808 263,605 337,413
Total operating revenues 5,833,415 10,032,528 15,865,943
OPERATING EXPENSES
Administration 713,133 1,068,011 1,781,144 Professional 1,953,754 3,178,958 5,132,712 Technical ‐ 156 156 Utilities 677,790 1,311,935 1,989,725 Repairs and maintenance 674,918 725,191 1,400,109 Supplies 40,987 423,389 464,376 Capital outlay 61,328 4,327,151 4,388,479 Depreciation and amortization 2,979,539 2,441,927 5,421,466 Other 17,680 63,786 81,466
Total operating expenses 7,119,129 13,540,504 20,659,633
Operating income (loss) (1,285,714) (3,507,976) (4,793,690)
NON‐OPERATING REVENUES (EXPENSES)
Investment and rental income 47,560 149,356 196,916 Interest expense (127,429) (11,672) (139,101) Other expenses (795) ‐ (795)
Proceeds from sale of effluent water ‐ 1,672,629 1,672,629 Other revenues ‐ 2,355,499 2,355,499 Net non‐operating revenues (expenses) (80,664) 4,165,812 4,085,148
Income (loss) before contributions and transfers (1,366,378) 657,836 (708,542)
Capital contributions 514,294 879,266 1,393,560
Capital contributions ‐ grants 41,693 294,055 335,748
Capital contributions from customers 1,773,188 2,118,408 3,891,596 Transfers in ‐ 934,783 934,783 Transfers out (934,783) ‐ (934,783)
Total transfers and capital contributions 1,394,392 4,226,512 5,620,904
Change in net position 28,014 4,884,348 4,912,362
Total net position ‐ beginning 56,336,992 68,648,402 124,985,394
Total net position ‐ ending 56,365,006 $ 73,532,750 $ 129,897,756 $
The notes to the financial statements are an integral part of this statement.
44
Town of Prescott Valley, Arizona
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2022
Cash flows from operating activities
PV Water Wastewater System Total
5,899,651 $ $ 7,999,452 13,899,103 $ Payments to suppliers (3,771,676) (6,796,358) (10,568,034) Payments to employees (269,586) (521,388) (790,974) Other operating revenues ‐ 2,355,499 2,355,499
Receipts from customers and users
Net cash provided by operating activities 1,858,389 3,037,205 4,895,594
Cash flows from noncapital financing activities
Transfers from (to) other funds (934,783) 934,783 ‐
Net cash provided (used) by noncapital financing activities (934,783) 934,783 ‐
Cash flows from capital and related financing activities
Contributed from customers 1,773,188 3,791,037 5,564,225 Contributed from grants 41,693 294,055 335,748 Acquisition and construction of property and equipment (584,308) (3,194,311) (3,778,619)
Principal paid on capital debt (872,163) ‐ (872,163) Interest paid on capital debt (127,429) (11,672) (139,101)
Net cash used by capital and related financing activities 230,981 879,109 1,110,090
Cash flows from investing activities
Interest and dividends received 53,574 150,710 204,284 Net cash provided by investing activities 53,574 150,710 204,284
Net increase (decrease) in cash and cash equivalents 1,208,161 5,001,807 6,209,968
Cash and cash equivalents ‐ July 1 17,739,979 11,421,867 29,161,846
Cash and cash equivalents ‐ June 30 18,948,140 $ 16,423,674 $ 35,371,814 $
The notes to the financial statements are an integral part of this statement.
(continued)
45
Town of Prescott Valley, Arizona
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2022
Cash and cash equivalents at end of year includes: Cash and investments
PV Water WastewaterSystem Total
18,596,774 $ 15,897,927 $ 34,494,701 $ Restricted cash and investments 351,366 525,747 877,113
Total cash and cash equivalents 18,948,140 $ 16,423,674 $ 35,371,814 $
Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating (loss) $ (1,285,714) $ (3,507,976) $ (4,793,690) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization 2,979,539 2,441,927 5,421,466 Impairment loss ‐ 4,026,626 4,026,626 Decrease (increase) in accounts receivables 27,180 (2,036,079) (2,008,899) (Increase) in lease receivables ‐ (1,600,429) (1,600,429) (Increase) decrease in prepaid items (460) 140 (320)
Increase (decrease) in accounts payable 96,367 (245,562) (149,195) Increase in customer deposits 39,056 44,935 83,991 Increase (decrease) in accrued payroll 3,216 (373) 2,843
Increase (decrease) in deferred inflows of resources ‐ leases ‐ 1,558,497 1,558,497 Other revenues (expenses) (795) 2,355,499 2,354,704
Total adjustments 3,144,103 6,545,181 9,689,284
Net cash provided by operating activities 1,858,389 $ $ 3,037,205 4,895,594 $
Noncash investing, capital and financing activities: Additions (deletions) to property, plant and equipment Contributions from developers 514,294 $ $ 879,266 1,393,560 $ Impairment loss ‐ 4,026,626 4,026,626
The notes to the financial statements are an integral part of this statement.
46
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NOTES TO THE FINANCIAL STATEMENTS
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Financial Reporting Entity
The Town of Prescott Valley (Town) was incorporated on August 22, 1978, under the provisions of the State of Arizona. The current Town Charter established the Council/Manager form of government. The Town provides basic government services to its citizens including public safety, roads, water, sewer, planning and zoning, parks and recreation facilities, library, and general administrative services. The accounting policies of the Town conform to U.S. Generally Accepted Accounting Principles (GAAP) as applicable to governmental units.
The financial reporting entity presented in these financial statements consists of the Town of Prescott Valley (the primary government) and its component units. The component units discussed below are included in the Town’s reporting entity because of the significance of their operational or financial relationships with the Town.
In accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, the Town includes in its financial statements all entities for which the Town’s Mayor and Council are financially accountable. As the primary government, the Town is financially accountable if it appoints a voting majority of an organization’s governing body, and: 1) it is able to impose its will on that organization, or 2) there is a potential for that organization to provide specific benefits to, or impose specific financial burdens on, the primary government. Additionally, the primary government may be financially accountable if an organization is fiscally dependent on the primary government.
In accordance with GASB Statement No. 72, Fair Value Measurement and Application, the Town addresses accounting and financial reporting issues related to fair value measurements and establishes a hierarchy of inputs to valuation techniques used to measure fair value. This Statement also enhances accountability and transparency through revised note disclosures.
In accordance with GASB Statement No. 87, Leases, the Town includes in its financial statements information to better account for and report leases. The statement requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. A lessee is required to recognize a lease liability and an intangible right‐to‐use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. The Town determined that there was no change to beginning net position due to GASB 87 implementation, and restatement of net position for prior periods is not required.
Individual Component Units ‐ Blended
The Town of Prescott Valley Municipal Property Corporation (MPC) is a not‐for‐profit corporation organized under the laws of the State of Arizona to assist the Town in the acquisition and financing of municipal projects and facilities. The MPC is governed by a board of directors who are responsible for approving the corporation’s bond sales. The Town Council must also approve all bond sales. Although it is legally separate from the Town, the MPC debt service liability is reported as a debt service fund (blended component unit) in these financial statements. Additional information for the MPC can be obtained from the Town of Prescott Valley, Finance Department, located at 7501 E. Skoog Boulevard, Prescott Valley, AZ 86314.
The Town of Prescott Valley has a total of seven (7) community facilities districts (CFDs). StoneRidge, Pronghorn Ranch, Raven Ridge and Quailwood Meadows were created as funding mechanisms for local subdivision developers. Parkway No. 1 and Southside No. 1 were created as a funding mechanism for public improvements within the district located along Highway 69. The purpose of these six (6) districts is to assist in financing necessary on‐ and off‐site infrastructure and public improvements. Generally, the developers initially build the public infrastructure, and the district sells bonds to buy the improvements from the developers. The Entertainment Center CFD was created as a funding mechanism for the operation and debt service obligation of the Findlay Toyota Center.
Town of Prescott Valley, Arizona
48
Town of Prescott Valley, Arizona
StoneRidge, Pronghorn Ranch, Quailwood Meadows, and Parkway No. 1 bonds are repaid from revenues generated through an ad valorem tax against property located within the respective districts. The property owners within the districts are solely responsible for repaying the bonds through ad valorem tax collections.
Raven Ridge was created as a funding mechanism for a sewer line installation project and funded by a low interest loan through the Water Infrastructure Financing Authority (WIFA). Raven Ridge’s low interest loan and Southside’s bonds are repaid from assessments paid by the property owners within the districts. No Town revenues are pledged toward these obligations.
The Town Council serves as the board of directors for these districts. For financial reporting purposes, the districts are reported as blended component units. All community facilities districts are reported as governmental funds as if the districts were a part of the Town’s operation. Additional information for these districts can be obtained from the Town of Prescott Valley, Finance Department, 7501 E. Skoog Boulevard, Prescott Valley, AZ 86314.
B. Government‐Wide and Fund Financial Statements
The government‐wide financial statements (e.g., statement of net position and statement of activities) report information on the primary government and its component units. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business‐type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.
The statement of activities demonstrates the degree to which direct expenses are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental and proprietary funds. Major individual governmental funds and proprietary funds are reported as separate columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government‐wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund statements. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes, where applicable (e.g., community facilities districts), are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. The Town considers revenues to be available if they are collected within sixty (60) days following the end of the fiscal period. Expenditures generally are recorded when a liability is incurred. However, debt service expenditures, as well as expenditures related to vacation, sick leave, claims and judgments, are recorded only when payment is due.
Property taxes, other local taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when the Town receives cash.
The government reports the following major governmental funds:
The General Fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
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The Highway User Revenue Fund (HURF) accounts for the Town’s share of Arizona’s highway user tax and associated expenditures.
The Development Impact Fees Fund accumulates funds to help pay for capital improvements that are proposed due to growth.
The Grant Fund was established to account for grant revenues and expenditures. Grant revenues may be used only for the stated purpose in the approved grant agreement and are subject to grantor expenditure guidelines.
The Streets Capital Improvement Fund is used to acquire, construct, and improve major streets projects.
The Southside District No. 1 Community Facilities District accounts for the principal and interest of debt obligations issued by the district.
The government reports the following major proprietary funds:
The Wastewater Fund accounts for the operating revenues and expenses of the Town’s sewer system.
The Prescott Valley Water System Fund accounts for the operating revenues and expenses of the Town’s water utility system.
As a general rule, the effect of interfund activity has been eliminated from the government‐wide financial statements. Exceptions to this general rule are payments in lieu of taxes where the amounts are reasonably equivalent in value to the interfund services provided and other charges between the government’s water and sewer function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from non‐operating revenues and expenses. Operating revenues and expenses generally result from providing services in connection with principle ongoing operations. Operating revenues of the enterprise funds are charges for customer services, consisting of water and sewer charges. Operating expenses for enterprise funds include the cost of services, administrative expenses, and depreciation. All revenues and expenses not meeting this definition are reported as non‐operating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the Town’s policy to use restricted resources first, then unrestricted resources as needed.
D. Property Tax Calendar
The County Treasurer is responsible for collecting property taxes for all government entities within the county. The county levies real and personal property taxes on or before the third Monday in August that become due and payable in two equal installments. The first installment is due on the first day of October and becomes delinquent after the first business day of November. The second installment is due on the first day of March of the next year and becomes delinquent after the first business day of May.
Pursuant to Arizona statutes, 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.
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1. Deposits and Investments
Cash equivalents for purposes of the statements of cash flows are investments (including restricted assets) in the State of Arizona’s Local Government Investment Pool (LGIP), mutual funds, demand deposits, repurchase agreements and U.S. Treasury bills and notes.
Arizona Revised Statutes authorize the Town to invest public monies in the State Treasurer’s LGIP, interest‐bearing savings accounts, certificates of deposit and repurchase agreements in eligible depositories, bonds or other obligations of the U.S. government that are guaranteed as to principal and interest by the U.S. government, and bonds of the State of Arizona counties, cities, towns, school districts and special districts as specified by statute.
GASB Statement No. 31 provides that governmental entities may report all investments at fair value or they may elect to report certain money market investments and participating interest earning investment contracts at amortized cost. The Town has elected to report all investments at fair value. The Town’s policy is to invest in certificates of deposit, repurchase agreements, direct U.S. Treasury debt, securities guaranteed by the U.S. government or any of its agencies and the State of Arizona’s LGIP. The LGIP is overseen by the State of Arizona. The fair value of each share in the LGIP is $1.
2. Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “due to/from other funds” (e.g., current portion of inter‐fund loans) or “advances to/from other funds” (e.g., non‐current portion of inter‐fund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business‐type activities are reported in the government‐wide financial statements as internal balances.
Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate they are not available for appropriation and are not expendable financial resources.
All accounts are shown net of an allowance for uncollectible accounts. All receivables outstanding for greater than ninety (90) days comprise the allowance for uncollectible accounts on June 30, 2022.
3. Inventories and Prepaid Items
Inventories of the governmental funds are recorded under the consumption method as expenditures when consumed rather than when purchased. Inventories are valued at yearend based on cost, with cost determined using an average cost method.
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. Prepayments are recorded under the purchase method as expenditures when incurred rather when consumed.
4. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position may report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to future periods and will not be recognized as an outflow of resources (expenses/expenditures) until then.
In addition to liabilities, the statement of financial position may report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time.
Town of Prescott Valley, Arizona
E. Assets, Liabilities, Deferred Outflows/Inflows of Resources and Net Position/Fund Balance
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5. Restricted Cash and Investments
Certain proceeds of the Town’s bonds (including community facilities districts), as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheets because their use is limited by applicable bond covenants.
6. Capital Assets
Capital assets include property, plant, equipment, and infrastructure and are reported in the governmental and business‐type activities columns in the government‐wide financial statements.
Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000, and an estimated useful life in excess of one (1) year. Donated capital assets, donated works of art, and similar items and capital assets received through service concession arrangements are recorded at acquisition value or at fair market value if acquisition value is not available.
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business‐type activities is included as part of the capitalized value of the assets constructed. There was no capitalized interest for the fiscal year 2021‐22.
Depreciation and amortization of all assets are recorded and calculated using the straight‐line method over the following estimated useful lives:
Infrastructure 50 years Buildings and Improvements 5‐50 years Land Improvements 10‐20 years Machinery and Equipment 10 years Motor Vehicles 5 years Furniture, Fixtures and Office Equipment5‐10 years
When capital assets are disposed, the cost and accumulated depreciation/amortization are removed from the accounts and any resulting gain/loss is recognized in the government‐wide and proprietary financial statements.
7. Compensated Absences
Compensated absences consist of general leave and a prior balance of sick leave accumulated by employees. Employees accumulate general leave hours depending on years of service. The Town’s policy is to pay employees for unused accumulated general leave hours at termination or retirement, up to a maximum amount depending on years of service at such time. The Town’s policy is applicable for both full‐time and part‐time employees.
All general leave pay is accrued when incurred in the government‐wide and proprietary fund financial statements. A liability for the current amount of compensated absences is recorded as a current liability on June 30 in the governmental and proprietary funds. The current compensated absences amount in the governmental funds is combined with accrued payroll and other payroll‐related amounts in the accrued payroll and benefits line item. The Town calculates this current amount based on the average general leave and compensatory time taken during the first ninety (90) days of the previous three (3) years. The General Fund, Highway User Revenue Fund, Wastewater Fund and Prescott Valley Water System Fund are typically used to liquidate compensated absences.
8. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions and pension expense, information about the pension plan’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by the plan. For this
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purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.
9. Long‐Term Obligations
In the government‐wide financial statements and the proprietary fund types in the fund financial statements, long‐term debt and other long‐term obligations are reported as liabilities in the applicable governmental activities, business‐type activities, or proprietary fund statement of net position. Bond premiums and discounts as well as the difference between the reacquisition price and the net carrying amount of old debt, are deferred, and amortized over the life of the bonds using the straight‐line method. Bond issuance costs are expensed.
In the fund financial statements, governmental fund types recog nize 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.
10. Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
II. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budget and Budgetary Accounting
The Town prepared an annual budget that covered fiscal year 2021‐22. The Town, like other towns and cities in the State of Arizona, is subject to numerous budget and budget‐related legal requirements. Article IX, Section 20 (1) of the Arizona Constitution sets limits on the Town’s legal budget capacity. The Town currently operates under the Alternative Expenditure Limitation – Home Rule Option. This option allows the Town Cou ncil to establish the budgetary limits locally. This option must be authorized by the voters every four years. It was last authorized by the citizens of Prescott Valley in August 2020. The fiscal year 2021‐22 budget appropriation is established and reflected in the financial statements.
The Town Council formally adopts the budget and legally allocates, or appropriates, available monies for the General Fund, Special Revenue Funds (Highway User Revenue Fund, UNS Facilities Relocation Fund, Impoundment Fee Fund, Police Safety Fund, Development Impact Fees Fund, Smart and Safe Arizona Fund, Donation Fund, and Grant Fund), Debt Service Funds (except for the community facilities districts’ debt service funds), Capital Improvement Funds, and Enterprise Funds. Therefore, these funds have appropriated budgets and budget to actual information is presented for governmental fund types.
Budgets for governmental funds are adopted under the GAAP method using a modified accrual basis.
Budgets for proprietary funds utilize the economic resources measurement focus and accrual basis except for principal debt service and capital outlay which are budgeted due to expenditure limitation purposes and then reclassified at year end to comply with GAAP.
Budgets for the community facilities districts are established in accordance with Arizona Revised Statutes, which do not require their inclusion in the Town budget or adoption by the Town Council.
Budgets for capital project funds are established for individual projects and unexpended funds are re‐appropriated each year until the project is completed and capitalized.
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On or before the second regular Council meeting in June, the Town Manager submits to the Town Council a proposed budget for the fiscal year commencing the following July 1. The budget includes proposed expenditures and the means of financing them.
One public hearing is held prior to the budget’s final adoption in order to obtain citizens’ comments. On or before the first regular Council meeting in July, the budget is legally enacted through passage of a resolution which sets the limit for expenditures during the fiscal year. Additional expenditures may be authorized for expenditures directly necessitated by a natural or man‐made disaster as prescribed in the State Constitution, Article 9, Section 20. During fiscal year 2021‐22, there were no supplemental budgetary appropriations to the original budget.
The expenditure appropriations in the adopted budget are approved at the fund level. The maximum legal expenditure permitted for the fiscal year is the total budget as adopted. Departmental appropriations may be amended during the year. Upon the recommendation of the Town Manager and with the approval of the Town Council:
Transfers may be made from the appropriations for contingencies to departments
Unexpended appropriations may be transferred from one department to another
Transfers may be made from salaries and benefit accounts or capital outlay to operating
Management control of budgets is further maintained at a line‐item level within the individual Town departments.
B. Excess of Expenditures over Appropriations
Expenditure appropriations are adopted in the budget at the fund level. For presentation purposes, the following table shows any deficits at the line‐item level within departments/divisions, all of which were funded by available fund balances within the general fund:
Variance Between Final Budget and Actual Amounts Original Budget Final Budget Actual Expenditures
General Fund: Current: Human Resources $ 473,973 $ 473,973 $ 574,090 $ (100,117) Finance 1,764,706 1,764,706 1,786,027 (21,321) Facilities and Fleet Maintenance 744,428 744,428 859,001 (114,573)
The deficit in personnel services in Human Resources was due to the Assistant Town Manager position under Executive Management returning to a dedicated Human Resources Director position under Human Resources. The deficit in personnel services in Finance is due to hiring a new Town Manager at a higher rate than budgeted. The deficit in personnel in Facilities and Fleet Maintenance was due to higher than budgeted salaries and wages expenditures from re‐classifying one of the Town’s positions from Highway User Revenue Fund to General Fund (Facilities and Fleet Maintenance division).
C. Deficit Fund Equity
For the fiscal year ending June 30, 2022, Southside Community Facilities District No. 1 and Entertainment Center Community Facilities District funds had deficit fund balances.
D. Fund Balance Classifications
Governmental fund balances as of June 30, 2022, are as follows:
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Community HighwayDevelopmentStreetsFacilitiesTotal UserImpactCapitalDistrictNonmajor Total GeneralRevenueFeesImprovementSouthside GovernmentalGovernmental FundFundFundFundDistrict No. 1FundsFunds Fund balances: Nonspendable: Prepaid items110,817$ 890 $ ‐$ 114,033 $ Advances to other funds 16,220,697 ‐ ‐ 16,220,697
Restricted for: Capital projects ‐ ‐ 794,348 4,290,699 ‐ 500,00 0
Community facilities districts ‐ ‐ 23,451 Debt service ‐ ‐ 1,299,55 4 1,299,554 Grantor and contributor purposes‐ ‐ ‐ 1,121,559 Street improvements ‐ 6,125,591 ‐ ‐ 6,125,591
Committed to: Replacement fund 334,545 ‐ ‐ 334,545 Stabilization fund 5,467,146 ‐ ‐ 5,467,146 Unassigned 46,720,462 ‐ (366,594) (31,354) 46,322,514 Total 68,853,667$ 6,126,481 $ 794,348 $ $ (366,594) $ 2,915,536 82,614,137 $
Only restrictions imposed by external sources are shown as restricted net assets on the government‐wide financial statements. Restrictions imposed by external sources or the State of Arizona enabling legislation are shown as restricted fund balance on the governmental fund financial statements.
Nonspendable represents amounts such as inventories, advances, and prepaid items. Committed includes amounts that can be used only for the specific purposes determined by a formal action (i.e., resolution) of the Council, the Town’s highest level of decision‐making authority. A formal action is also required to modify or rescind an established commitment. Assigned amounts are intended to be used by the government for specific purposes, but do not meet the criteria to be restricted or committed. Assigned represents the remaining amount that is not restricted or committed in governmental funds other than the General Fund, which is classified as unassigned. Assigned is expressed by the direction of the Finance Director with the authority to assign amounts to be used for specific purposes as authorized by the Council adopted financial policies. Unassigned represents General Fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes. The Town’s General Fund will maintain an unassigned fund balance with a target of a minimum of 25% of General Fund revenues, excluding transfers. The intention of unassigned fund balance is to provide additional stability to the General Fund recognizing the cyclical nature of the economy and the volatility of the major revenue sources of the Town. Funds in excess of the minimum targets will be retained in the unassigned General Fund balance. In funds other than the General Fund, the unassigned balance is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned. When both restricted and unrestricted resources are available for use, it is the Town’s policy to use restricted resources first, then unrestricted resources. Unrestricted fund balance would be used in the order of committed, assigned and then unassigned.
The Town has set aside stabilization funds in the General Fund. The authority for the stabilization fund is the Council‐adopted financial policies. The stabilization fund is shown as committed on the governmental fund financial statements. The stabilization fund will be no less than 10% of general fund revenues, excluding transfers. It may only be used if specific action is taken by Mayor and Council after the unassigned fund balance is depleted. The Town Manager must be able to demonstrate the magnitude of the unforeseen emergency or catastrophic event, and that there are no reasonable budget adjustments available to continue to provide the essential services to the public. In the event the stabilization fund must be used, the Town must restore the balance to the minimum limit over a period not to exceed five (5) fiscal years following the fiscal year in which the event occurred. If the reduction to the stabilization fund was the result of an ongoing economic downturn, the Town is to restore the balance within five (5) fiscal years of revenue stabilization.
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III. DETAILED NOTES ON ALL FUNDS
A. Cash and Investments
The Town maintains a cash investment pool for use by all funds except the Municipal Property Corporation and community facilities district funds, which have investments held separately by a trustee. The Town maintains petty cash funds in various departments, which amounts to $7,805 on June 30, 2022. The Entertainment Center CFD maintains a petty cash fund which amounts to $8,200 on June 30, 2022.
Deposits
On June 30, 2022, the carrying amount of the Town’s deposits was $12,684,020 and the bank balance was $14,217,805. The $1,533,785 difference represents outstanding checks, petty cash, and other reconciling items.
Custodial Credit Risk – Deposits
Custodial credit risk is the risk that in the event of a bank failure, the government’s deposits may not be returned. As of June 30, 2022, all of the Town’s deposits were covered by federal depository insurance or by the collateral held by the Town’s agent, pledging financial institution’s trust department, or ag ent in the name of the Town, leaving no funds uninsured or uncollateralized.
Interest Rate Risk
As a means of limiting its exposure to fair value losses as a result of changing interest rates, the Town’s investment policy limits the Town’s investment portfolio to maturities of five (5) years or less, unless matched to a specific cash flow.
Credit Risk
Town Charter, Ordinances and Trust Agreements authorize the Town to invest in obligations of the U.S. Treasury, U.S. Government agencies, certificates of deposit, bankers’ acceptances, repurchase agreements, mutual funds, corporations or sponsored corporations, money markets, and the State of Arizona Local Government Investment Pool (LGIP). The Town’s Investment Policy specifies the minimization of credit risk through the limitation to top tier quality investments, pre‐qualification of financial institutions, and diversification of the portfolio.
The Town’s investment in the bonds of U.S. agencies was rated AA+ by Standard and Poor’s, AAA by Fitch Ratings and Aaa by Moody’s Investors Service. On June 30, 2022, the Town’s investments in the State of Arizona Local Government Investment Pool were rated AAA.
Investments
The Town categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset.
• Level 1 inputs are quoted prices in active markets for identical assets
• Level 2 inputs are significant other observable inputs
• Level 3 inputs are significant unobservable inputs
The Town’s investments on June 30, 2022, are summarized in the following table:
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Investment Type
US Treasuries
Investment Maturities (in Years)
Level 1 641,171 $ 641,171 $ ‐$
US Agencies Level 1 ‐ ‐ Certificates of Deposit Level 1 1,002,477 1,002,477 ‐ Local Government Investment PoolN/A 97,407,990 97,407,990 ‐ 99,051,638 $ 99,051,638 $ ‐$
Total Town cash and investments at fair value are as follows:
Total Town cash and investments are reported as follows:
Debt securities are classified as held‐to‐maturity. A debt sec urity should be classified as held‐to‐maturity only if the reporting entity has both the positive intent and the ability to hold those securities to maturity. In accordance with the Town’s investment policy, securities shall not be sold prior to maturity with the following exceptions: 1) a security with declining credit may be sold early to minimize loss of principal, 2) liquidity needs of the portfolio require that the security be sold, or 3) if market conditions present an opportunity to benefit from the sale.
B. Receivables
Receivables as of yearend for the government’s individual major and non‐major funds in the aggregate, as shown in the Balance Sheet, including the applicable allowances for uncollectible accounts, are as follows:
Town of Prescott Valley, Arizona
CategoryFair ValueLess Than 1 1 ‐ 5 6 ‐ 10
Less: Charges for Inter‐SpecialGross Allowance for Net Total Receivables: Services Grants Interest Leases governmental AssessmentsReceivables Uncollectibles Receivables
‐$ ‐$ 26,471$ 3,990,946$1,922,414$ ‐$ 607,939$ 6,547,770$ ‐$ 6,547,770
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Carrying Amount of Town deposits 12,684,020 $ Investments99,051,638 Total cash and investments111,735,658 $ Primary government: Cash and investments 107,466,700 $ Restricted cash and cash equivalents 4,268,958 Total cash and investments 111,735,658 $
General Fund
$ Highway User Revenue Fund
‐ 500 ‐ 467,193 ‐ ‐ 467,693 ‐ 467,693 Development Impact Fees Fund ‐ ‐ 286 ‐ ‐ 286 ‐ 286 Grants Fund ‐ 1,142,404 ‐ ‐ 1,142,404 ‐ 1,142,404 Streets Capital Improvement Fund ‐ ‐ 238 ‐ 190,847 ‐ ‐ 191,085 ‐ 191,085 CFD ‐ Southside District No. 1 ‐ ‐ ‐ ‐ 1,316,660 ‐ 1,316,660 ‐ 1,316,660 Wastewater System 313,996 ‐ 1,669 ‐ ‐ 315,665 (37,465) 278,200 PV Water System 3,087,262 246,051 4,051 1,600,429 ‐ ‐ 4,937,793 (113,204) 4,824,589 Nonmajor Governmental Funds ‐ ‐ 27 ‐ 1,645 1,983 272,166 275,821 ‐ 275,821 Total 1,388,455$ 33,242 $ 5,591,375 $ $ 2,582,099 $1,318,643 880,105 $ $ 15,195,177 $ (150,669) 15,044,508 $ Misc‐ellaneous
C. Capital Assets
Capital asset activity for the year ended June 30, 2022, was as follows:
Capital Capital Assets Assets June 30, 2021*IncreasesDecreasesTransfersJune 30, 2022
Governmental activities:
Capital assets, not being depreciated:
Land $ 11,652,007 1,127,837 $ ‐ $ $ ‐ $ 12,779,844
Construction in progress 1,113,697 3,999,502 (325,000) (2,877,039) 1,911,160
Total capital assets, not being depreciated:12,765,704 5,127,339 (325,000) (2,877,039) 14,691,004
Capital assets, being depreciated:
Buildings 61,492,340 2,769,695 ‐ 1,907,694 66,169,729
Improvements other than buildings 24,984,306 705,889 ‐ 433,949 26,124,144
Machinery and equipment 12,778,352 1,243,932 (103,806) ‐ 13,918,478
Infrastructure 208,990,436 2,718,880 ‐ 535,396 212,244,712
Total capital assets, being depreciated: 308,245,434 7,438,396 (103,806) 2,877,039 318,457,063
Less accumulated depreciation for: Buildings (16,732,293) (1,671,413) ‐ ‐ (18,403,706)
Improvements other than buildings (16,396,265) (1,098,732) ‐ ‐ (17,494,997)
Machinery and equipment (10,105,212) (1,003,565) 103,806 ‐ (11,004,971)
Infrastructure (90,656,432) (6,545,062) ‐ ‐ (97,201,494)
Total accumulated depreciation: (133,890,202) (10,318,772) 103,806 ‐ (144,105,168)
Total capital assets, being depreciated, net174,355,232 (2,880,376) ‐ 2,877,039 174,351,895
Right‐to‐use assets, being amortized:
Land 15,917 ‐ ‐ ‐ 15,917
Buildings 14,914 ‐ ‐ ‐ 14,914
Machinery and equipment 30,601 ‐ ‐ ‐ 30,601
Total right‐to‐use assets, being amortized: 61,432 ‐ ‐ ‐ 61,432
Less accumulated amortization for:
Land ‐ (2,047) ‐ ‐ (2,047)
Buildings ‐ (5,966) ‐ ‐ (5,966)
Machinery and equipment ‐ (8,727) ‐ ‐ (8,727)
Total accumulated amortization: ‐ (16,740) ‐ ‐ (16,740)
Total right‐to‐use assets, being amortized, net 61,432 (16,740) ‐ ‐ 44,692
Governmental activities capital assets, net187,182,368 2,230,223 (325,000) ‐ 189,087,591
Business‐type activities:
Capital assets, not being depreciated: Land 1,768,810 745,637 ‐ 23,299 2,537,746
Construction in progress 6,215,663 879,899 (4,026,626) (23,299) 3,045,637
Total cap i tal assets, not being depreciated: 7,984,473 1,625,536 (4,026,626) ‐ 5,583,383
Capital assets, being depreciated:
Buildings 4,119,272 91,786 ‐ ‐ 4,211,058
Improvements other than buildings 30,374,439 ‐ ‐ ‐ 30,374,439
Machinery and equipment 10,670,569 658,228 (95,955) ‐ 11,232,842
Infrastructure 144,248,947 2,712,522 ‐ ‐ 146,961,469
Total capital assets, being depreciated: 189,413,227 3,462,536 (95,955) ‐ 192,779,808
Less accumulated depreciation for:
Buildings (3,758,083) (41,336) ‐ ‐ (3,799,419)
Improvements other than buildings (15,332,797) (821,386) ‐ ‐ (16,154,183)
Machinery and equipment (8,862,714) (526,145) 95,515 ‐ (9,293,344)
Infrastructure (56,852,429) (3,945,297) ‐ ‐ (60,797,726)
Total accumulated depreciation: (84,806,023) (5,334,164) 95,515 ‐ (90,044,672)
Total capital assets, being depreciated, net104,607,204 (1,871,628) (440) ‐ 102,735,136
Right‐to‐use assets, being amortized:
Land 824,040 ‐ ‐ ‐ 824,040
Total right‐to‐use assets, being amortized: 824,040 ‐ ‐ ‐ 824,040
Less accumulated amortization for:
Land ‐ (87,302) ‐ ‐ (87,302)
Total accumulated amortization: ‐ (87,302) ‐ ‐ (87,302)
Total right‐to‐use assets, being amortized, net 824,040 (87,302) ‐ ‐ 736,738
Business‐type activities capital assets, net113,415,717 (333,394) (4,027,066) ‐ 109,055,257
Total 300,598,085 $ 1,896,829 $ (4,352,066) $ ‐ $ 298,142,848 $
*Capital Asset balance as of June 30, 2021 is reinstated (increased by $885,472) due to GASB 87 implementation.
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Construction in progress activity for the year ended June 30, 2022, was as follows:
Construction Construction in Progress in Progress June 30, 2021IncreasesDecreasesTransfersJune 30, 2022
Governmental activities:
Agua Fria Drainage Project 325,000 $ ( 325,000) $
Antelope Meadows Free Flow 17,000 325,153 ( 342,153)
Antelope Park Improvements ‐ 460,789 ‐ 460,789
Boys & Girls Club Remodel 10,190 1,497,769 ‐ (1, 507,959)
Bronze Sculpture 63,095 68,589 ( 131,684)
Central Core Multiuse Path ‐ Phase III 36,979 ‐ 36,979
Disc Golf course ‐ Santa Fe Park ‐ 11,599 ‐ 11,599
Florentine Road Storm Drain 109,890 316,510 ‐ 426,400
Glassford Hill Rod ‐ Mill & Fill ‐ 29,650 ‐ 29,650
Glassford Summit Trail Extension 33,840 ‐ 33,840
HVAC ‐ Civic Center ‐ 21,700 ‐ 21,700
Jenkin's Obelisk 54,550 78,987 ( 133,537)
Library Building Remodel ‐ 249,069 ‐ 249,069
MVP Restroom 230,448 338,015 ( 568,463)
PV Monument Sign 27,530 22,113 ‐ 49,643
Park V iew Drive Connector 12,910 180,333 ( 193,243)
Pipeline Multiuse Path 187,828 ‐ 187,828
Starlight Pedestrian Improvement ‐ 45,961 ‐ 45,961
Spreader Racks 4,437 ‐ 4,437
Viewpoint Long Look ‐ Manley ‐ 214,790 ‐ 214,790
Viewpoint Stormwater Channel ‐ 138,475 ‐ 138,475
Total governmental activities 1,113,697 3,999,502 ( 325,000) (2, 877,039) 1, 911,160
Business‐type activities:
Bighorn PRV Station 8,580 (8,580) ‐
Duplex Booster Station Upsizing 205,692 10,100 ‐ 215,792
Monks Well 604,657 390,104 ‐ 994,761
Florentine Road ‐ Storm Drain 18,370 228,882 ‐ 247,252
Fire Hydrants (12) ‐ 56,332 ‐ 56,332
Injection Well ‐ Mountain Valley Park 830,036 35,595 ‐ 865,631
Second Street Sewer Manholes 16,300 ‐ 16,300 Section II Sewer Upsizing 88,554 ‐ 88,554 Summit II Water Tank 2,500 20,799 (23,299) Tri‐City Pipeline and Tanks 4,018,046 ‐ (4, 018,046) ‐ Water Transmission Pipeline 422,928 ‐ 422,928 WWTP Headworks Upgrade ‐ 138,087 ‐ 138,087
Total business‐type activities 6,215,663 879,899 (4, 026,626) (23,299) 3, 045,637 Total $ 7,329,360 $ 4,879,401 (4, 351,626) $ $ (2,900,338) 4, 956,797 $
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Depreciation expense charged to functions/programs of the primary government was as follows:
Governmental activities:
General government942,287 $ Public safety831,372 Highways and streets4,788,736 Culture and recreation2,015,131 Public works1,741,246
Total depreciation expense ‐ governmental activities10,318,772 $
Business‐type activities:
Wastewater2,979,539 $ Prescott Valley water system2,354,625
Total depreciation expense ‐ business‐type activities5,334,164 $
Amortization expense charged to functions/programs of the primary government was as follows:
Governmental activities:
General government5,328 $ Public safety8,013 Culture and recreation3,399
Total amortization expense ‐ governmental activities16,740 $
Business‐type activities: Prescott Valley water system87,302 $ Total amortization expense ‐ business‐type activities87,302 $
D. Construction Commitments
The Town has active construction projects as of June 30, 2022. At yearend, the government’s commitments were as follows:
Total Contract Remaining Balance
General Fund 300,255 $ 51,186 $ Highway User Revenue Fund2,104,682 1,996,954 Development Impact Fees Fund 488,602 28,939 Grant Funds 567,110 358,328 Wastewater System 736,445 556,665 PV Water System 2,172,814 1,626,866 6,369,908 $ 4,618,938 $
General Fund project (Library Building Remodel) is funded by th e litigation proceeds. Highway User Revenue Fund project (Florentine Road Improvement) is funded by highway user tax. Development Impact Fees project (Antelope Park Improvements) is funded by impact fees. Grant Funds project (Florentine Road Improvement) is funded by the Coronavirus State and Local Fiscal Recovery Fund program (SLFRF). The PV Water System improvement projects (Monks Well, Florentine Road Improvement, Fire Hydrants, Injection Well – Mountain Valley Park, Wastewater Treatment Plant Headworks Upgrade) and Wastewater System project (Florentine Road Improvement) are being funded through the water and wastewater user fee revenues, water connection fee revenues, and SLFRF.
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E. Inter‐Fund Balances and Inter‐Fund Transfers
“Due to” and “due from” balances have been recorded when funds overdraw their share of pooled cash. The composition of inter‐fund balances as of June 30, 2022, was as follows:
Due To/From Other Funds
Receivable FundPayable FundAmount General FundGrants 981,490 $ $ 981,490
“Advance to” and “advance from” balances have been recorded when funds overdraw their share of pooled cash, and the repayment is not expected within a reasonable time.
The Town has issued Certificates of Participation debt to fund the library building project. The repayment of the debt is to be shared between the General Fund and Development Impact Fees Fund. Due to previous economic conditions, the Development Impact Fees Fund did not have adequate cash to pay the debt service; therefore, the General Fund has advanced funds to the Development Impact Fees Fund.
The secondary assessed values for StoneRidge, Parkway, Pronghorn, and Quailwood community facilities districts were severely affected with the downturn in the housing market and commercial real estate values in 2008. As a result, the districts did not generate sufficient ad valorem taxes to cover operating expenditures incurred within the district. The Town has advanced funds to the districts to cover these costs. Due to increase of the secondary assessed or commercial real estate values, the districts have begun repaying the Town.
Southside community facilities districts (assessment district) did not collect sufficient amount of assessments to pay the property owner’s share of the annual debt service payment. The Town has advanced funds to the districts to cover these costs.
The Town had issued Municipal Property Corporation debt to fund capital project expenses in the enterprise funds. The payback period for the enterprise funds is over the life of the bonds as a means to fund the future debt service principal and interest payments. Municipal Property Corporation debt was refunded in fiscal year 2020‐21. The Town anticipates selling effluent water credits in the future to repay the advance to the General Fund.
The composition of advance balances as of June 30, 2022, was as follows:
Advance To/From Other Funds
Receivable Fund
Payable Fund Amount
General Fund Development Impact Fees2,804,295 $
General Fund StoneRidge CFD 775,490 General Fund Parkway CFD No. 1 117,606
General Fund Pronghorn CFD 299,905
General Fund Quailwood CFD 111,956 General Fund Southside CFD No. 1 691,655
General Fund PV Water System11,420,000 $ 16,220,907
Transfers are used to fund capital projects and debt service and to reallocate special revenue funds to operating centers or other operations.
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Interfund Transfers
Highway Development UserImpact
Transfer In:
Non‐major RevenueFeesWaterGovernmental
Transfer Out: FundFundSystemFundsTotal General Fund 44,681 $ ‐$ 3,372,823 $ $ 5,917,504 Development Impact Fees Fund‐ ‐ ‐ 1,830,846 1,830,846 Streets Capital Improvement Fund‐ ‐ 2,024,875 2,024,875 Wastewater System ‐ ‐ 934,783 ‐ 934,783 Total 2,500,000 $ 44,681 $ 7,228,544 $ 10,708,008$
F. Leases
Town as Lessee ‐ Leases Payable
On July 1, 2021, Town of Prescott Valley, as a lessee, has entered into lease agreements involving land, a building, and print ing and mailing equipment. The related obligations have been recorded at the present value of their future minimum lease payments as of the inception date. Revenues from General Fund and Prescott Valley Water System Fund are used to pay the lease obligations. The total of the Town’s right‐to‐use assets as of June 30, 2022 is $885,472 with accumulated amortization of $104,402.
The future lease payments under lease agreements are as follows:
Business‐Type
Fiscal Year EndingPrincipalInterestPrincipalInterestPrincipalInterest 202317,799$ 418$ 77,274 $ 95,073 $ 11,710$ 2024 10,608 280 78,454 89,062 2025 5,334 187 79,652 84,986 9,101 2026 5,397 123 80,868 86,265 7,821 2027 2,851 82,103 84,954 6,532 2028‐32 2,366 34 341,142 343,508 $ 44,355 $ 739,493 $ 783,848 58,712$
Town as Lessor – Leases Receivable
On July 1, 2021, Town of Prescott Valley, as a lessor, has entered into lease agreements involving land and buildings. The total amount of inflow of resources as of June 30, 2022 was $5,449,341, and Prescott Valley recognized lease revenue (including lease interest revenue) of $438,521 during the fiscal year.
G. Bonds, Loans, Capital Leases and Other Payables
The following are brief descriptions of bonds and long‐term loa ns/obligations outstanding as of June 30, 2022. There are several limitations and restrictions contained in the various documents, and the Town is in compliance with all significant limitations and restrictions.
Revenue Bonds
On November 19, 2020, the Town issued revenue bonds in the amou nt of $25,190,000 with an interest rate of 0.35%‐4.00%. The proceeds were used to advance refund the following bonds: Municipal Property Corporation (MPC) bonds Series 2011 and 2012 totaling $15,695,000 (including $1,760,000 of Wastewater Revenue bonds), and Private Placement bonds Series 2015, Series 2017, and Series 2018 totaling $14,230,000. This purchase resulted in a reduction of the total debt service payments over twelve (12) years by $5,105,074, present value cash flow savings of $4,870,192, and net present value savings of $1,729,926. The reacquisition price exceeded the net carrying amount of the old debt by $649,038. This amount is being amortized over the remaining life of the refunding debt.
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Activities Total Activities Governmental
Utility Revenue Bonds and Loans
Utility Revenue Bonds are issued as authorized by the voters for the construction, acquisition, furnishing and equipping of utility facilities. Such bonds are collateralized by revenue in excess of operating and maintenance expenses of the utility system and are repaid solely from user charges or fees for service.
In 2005 the Town had $9,317,000 in bond capacity that was authorized but un‐issued for Wastewater Revenue Bonds. Rather than issue bonds, the Town entered into a low‐interest, long‐term loan agreement with the Water Infrastructure Financing Authority (WIFA). This loan funded wastewater treatment facility expansion and is collateralized by revenue in excess of operating and maintenance expenses of the Town’s wastewater utility system. Property taxes cannot be used to pay the debt service on Utility Revenue Bonds or on these loans.
In 2006 Arizona statutes related to water infrastructure financing were amended. For towns and cities with populations of less than fifty thousand, the revenues of the towns and cities’ utility systems may now be pledged towards repayment of loan agreements without an election if the pledge does not violate any covenant pertaining to previous bond/loan issues. In March 2007 the Town entered into an additional loan agreement with WIFA in the amount of $5,000,000 to finance the balance of the wastewater treatment facility expansion project. On June 30, 2022, $3,672,321 in sewer loans (including principal and interest) remained outstanding to be repaid by future wastewater revenues. The debt principal and interest paid on this debt in fiscal year ended June 30, 2022, was $999,592.
For the fiscal year ended June 30, 2022, the net revenues available for service of wastewater system debt were $2,579,790. Current Wastewater Revenue Bond covenants require that the Town’s net wastewater system revenues (revenues remaining after providing sufficient funds for the system) are at least one and one‐quarter (1¼) times the maximum annual debt service payment. As of June 30, 2022, the Town’s debt service coverage is 2.58 times the annual debt service payment (see Table 14 in the statistical section).
Community Facilities District (CFD) Bonds
Community facilities districts are special purpose government entities which the Town Council may create under Arizona law to (among other things) acquire and improve public infrastructure. Community facilities districts may issue bonds, which are repaid either with ad valorem taxes levied directly on property within the community facilities district (approved by vote of the property owners and collected by Yavapai County), or with assessments applied against property benefited by the improvements. Aside from nominal costs the Town may incur based on intergovernmental agreements to administer community facilities districts, the Town has no liability for community facilities district bonds.
Community facilities districts are created only by petition to the Town Council from property owners within the community facilities district area. Because the members of the Town Council generally sit as community facilities district board members (as required by statute), the Town Council has adopted a policy that community facilities districts not be formed (or related debt incurred) unless the ratio of the full cash value of the unimproved community facilities district property to the proposed community facilities district debt, is a minimum of 3:1 (and 5:1 after construction of improvements). These ratios are verified by an appraisal. In addition, the policy states that cumulative debt of all community facilitie s districts should not exceed 15% of the Town’s secondary assessed valuation. At present, the cumulative debt of all community facilities districts does not exceed 15% of the Town’s secondary assessed valuation.
StoneRidge, Pronghorn Ranch and Quailwood Meadows have issued general obligation bonds to finance streets, utilities, parks and related public improvements, payable from ad valorem taxes levied directly on property within the districts and collected by the county. StoneRidge and Quailwood Meadows have $18,200,000 and $18,060,000 respectively of approved (but un‐issued) general obligation bond authority. The Raven Ridge Community Facilities District has entered into an agreement with WIFA in the amount of $925,446 to finance wastewater collection facilities, payable from assessments against property within the district. The Parkway Community Facilities District No. 1 involves commercial property for which parking areas have been constructed, based on general obligation bonds issued in the amount of $3.4 million, payable from ad valorem taxes levied directly on property within the district and collected by the county. The Southside Community Facilities District No. 1 has issued bonds in the amount of $3.0 million for the purpose of financing certain public infrastructure improvements within the district, payable from assessments against property within the district.
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Pronghorn Ranch issued $6,150,000 in general obligation bonds with an interest rate of 4.18%. The proceeds, along with a $198,065 developer deposit, were used to advance refund $5,920,000 of outstanding Series 2002 and 2004 Pronghorn Ranch General Obligation Bonds. The net proceeds of $6,167,115 were deposited in an irrevocable trust with an escrow agent to provide for the future debt service payment on the refunded bonds. As a result, the Series 2002 and 2004 Pronghorn Ranch General Obligation Bonds are considered defeased and the liability for those bonds has been removed from the statement of net position.
Quailwood Meadows issued $5,810,000 in general obligation bonds with an interest rate of 4.21%. The proceeds, along with a $568,501 developer deposit, were used to advance refund $5,865,000 of outstanding Series 2004 Quailwood Meadows General Obligation Bonds. The net proceeds of $6,219,800 were deposited in an irrevocable trust with an escrow agent to provide for the future debt service payment on the refunded bonds. As a result, the Series 2004 Quailwood Meadows General Obligation Bonds are considered defeased and the liability for those bonds has been removed from the statement of net position.
The operator of the Prescott Valley Events Center (PVEC, LLC) filed for Chapter 11 Bankruptcy on August 14, 2015. On June 2, 2017, a Plan of Reorganization, which included the Entertainment Center Community Facilities District (ECCFD) and the Town, was initially filed with the Bankruptcy Court. The Court held a hearing on the Plan on July 12, 2017, in Phoenix, after which the modified Plan was again filed and sent out to creditors and other interested parties for voting. The bankruptcy plan was subsequently approved in early October and had a final settlement date of October 27, 2017. Part of the Plan involved issuance by ECCFD of two bond series in order to acquire the Events Center and related personal property interests and make needed improvements to the Center and related parking areas. The first series is revenue bonds in the amount of $16,000,000 with an interest rate of 4.00%. It is a part of the bankruptcy estate used to purchase the Center and related property interests. The second series is revenue bonds in the amount of $2,000,000 with an interest rate of 2.50% and was used to make necessary repairs and upgrades.
Financed Purchase Payables
On September 23, 2021, Town Council approved a purchase agreement with Yavapai County for the fairgrounds property, including the Exhibition Center, for the total purchase price of $3,033,000 paid over five (5) annual installments.
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Changes in Long‐Term Liabilities
The following is a summary of changes in long‐term liabilities reported in the government‐wide financial statements for the year ended June 30, 2022:
Balance BalanceDue within 06/30/2021*IncreasesDecreases06/30/2022One Year
Governmental activities: Bonds payable: Revenue bonds $ 20,730,000 $ ‐ $ 4,145,000 $ 16,585,000 $ 4,360,000
Community facilities districts: General obligation bonds 16,240,000 ‐ 1,410,000 14,830,000 1,470,000 Revenue bonds 15,840,000 ‐ 720,000 15,120,000 745,000 Special assessments 1,530,000 ‐ 125,000 1,405,000 89,000 Long‐term loan payable 3,997 ‐ 2,985 1,012 506 Premium 2,503,483 ‐ 227,590 2,275,893 ‐
Total bonds payable 56,847,480 ‐ 6,630,575 50,216,905 6,664,506 Leases 61,432 ‐ 17,077 44,355 17,799 Net pension liability 13,300,134 3,967,273 10,063,206 7,204,201 ‐Financed purchase payable ‐ 3,033,000 606,600 2,426,400 606,600 Compensated absences 1,596,950 1,497,982 1,548,553 1,546,379 311,325
Governmental activity long‐term liabilities $ 71,805,996 $ 8,498,255 $ 18,866,011 $ 61,438,240 $ 7,600,230
Business‐type activities:
Long‐term loan payable $ 4,322,112 $ ‐ $ 872,163 $ 3,449,949 $ 901,049 Leases 824,040 ‐ 84,547 739,493 77,274
Business‐type activity long‐term liabilities $ 5,146,152 $ ‐ $ 956,710 $ 4,189,442 $ 978,323
Total long‐term liabilities $ 76,952,148 $ 8,498,255 $ 19,822,721 $ 65,627,682 8,578,553 $
*Long‐term debt balance as of June 30, 2021 is reinstated (incr eased by $885,472) due to GASB 87 implementation.
Other Long‐Term Obligations
Under Arizona statutes, municipalities may make expenditures for economic development purposes. Based on development agreements, the Town has entered into a number of agreements to make expenditures towards construction of necessary public improvements for certain commercial, industrial or institutional uses that coincide with the Town’s General Plan. Such expenditures are either in specified amounts (one‐time or over time) or in amounts defined as percentages of excise tax revenues collected (paid overtime). Since the Town collects no property taxes, all such expenditures are ultimately made from excise tax revenues regardless of the mechanism used to define the expenditures.
Details of bonded debt as of June 30, 2022, are as follows:
Revenue Bonds
Details of revenue bonds as of June 30, 2022, are as follows:
$20,730,000 Revenue Refunding Bonds, Series 2020, dated November 19, 2020, is due in annual installments of $4,145,000 to $255,000 through January 1, 2032, with interest at 5.00% to 4.00% per annum (Payable from excise tax revenues – refunding prior bonds for streets and related improvements, for the Town’s share of costs for land with an underground water source, for the construction of Library and Police buildings, and for the purchase of the joint facility from Yavapai College).
$16,585,000 Total Revenue Bonds $16,585,000
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CFD Bonds/Loans
Details of bonds and loans payable as of June 30, 2022, are as follows:
$6,150,000 Pronghorn Ranch Community Facilities District General Obligation Bonds, Series 2013, is due in annual payments of $235,000 to $530,000 through July 15, 2029, with interest at 4.18% per annum (Payable from revenues generated through an ad valorem tax assessed by the district against the properties located within the boundaries of the district. The Town has no contingent obligation with respect to these bonds – streets, parks, utilities, and related improvements).
$925,446 Raven Ridge Community Facilities District long‐term loan. A loan agreement with the Water Infrastructure Financing Authority (WIFA) dated January 21, 2003, for a maximum principal amount of $925,446, at an interest rate of 3.188%. The total loan debt service was determined at the completion of the project after final loan drawdowns were submitted for a payback period of twenty (20) years with annual principal and semi‐annual interest payments (Payable from revenues generated through an assessment by the district against the properties located within the boundaries of the district. The Town has no contingent obligation with respect to these bonds – wastewater collection system).
$5,810,000 Quailwood Meadows Community Facilities District General Obligation Bonds, Series 2013, is due in annual payments of $165,000 to $560,000 through July 15, 2029, with interest at 4.2125% per annum (Payable from revenues generated through an ad valorem tax assessed by the district against the properties located within the boundaries of the district. The Town has no contingent obligation with respect to these bonds – streets, parks, utilities, and related improvements).
$3,425,000 Parkway Community Facilities District No. 1 General Obligation Bonds, Series 2006, is due in annual payments of $90,000 to $255,000 through July 15, 2031, with interest at 4.85% to 5.35% per annum (Payable from revenues generated through an ad valorem tax assessed by the district against the properties located within the boundaries of the district.
The Town has no contingent obligation with respect to these bonds – parking facilities).
$3,025,000 Southside Community Facilities District No. 1 Special Assessment Revenue Bonds, Series 2008, is due in annual payments of $55,000 to $245,000 through July 1, 2032, with interest at 6.125% to 7.25% per annum (Payable from revenues generated through an assessment by the district against the properties located within the boundaries of the district.
The Town has no contingent obligation with respect to these bonds – streets, utilities, and related improvements). Several property owners have paid off the assessments levied against their properties, which allowed for partial defeasance of the bonds. After the partial defeasance, the original repayment schedule changed to annual payments of $89,000 to $176,000 through July 1, 2032.
$8,540,000 StoneRidge Community Facilities District General Obligation Bonds, Series 2013, is due in annual payments of $330,000 to $680,000 through July 15, 2030, with interest at 4.00% per annum (Payable from revenues generated through an ad valorem tax assessed by the district against the properties located within the boundaries of the district. The Town has no contingent obligation with respect to these bonds – streets, parks, utilities, and related improvements).
$16,000,000 Entertainment Center Community Facilities District Revenue Bonds, Series 2017, is due in annual payments of $555,000 to $1,120,000 through July 1, 2037, with interest at 4.00% per annum (Payable from operating revenues generated by the Entertainment Center – purchase of the Entertainment Center and related property interests).
1,012
3,875,000
2,030,000
1,405,000
5,240,000
13,580,000
Town of Prescott Valley, Arizona
$3,685,000
66
$2,000,000 Entertainment Center Community Facilities District Revenue Bonds, Series 2018, is due in annual payments of $110,000 to $160,000 through January 1, 2033, with interest at 2.50% per annum (Payable from operating revenues generated by the Entertainment Center – improvements to the Entertainment Center and related parking areas).
1,540,000
Total Community Facilities District Bonds and Loans $31,356,012
Classified in Business‐Type Activities on the Government‐Wide Financial Statements
Loans
Details of loans payable as of June 30, 2022, are as follows:
$9,317,470 Wastewater Enterprise Fund long‐term loan. A loan agreement was entered into between the Town and WIFA dated January 28, 2005, for a maximum principal amount of $9,317,470, at an interest rate of 3.408%, the proceeds of which are designated for capital construction for expansion of the wastewater treatment plant. The payback period is twenty (20) years with annual principal and semi‐annual interest payments (Payable solely from Town wastewater system revenue charges).
$1,899,787 $5,000,000 Wastewater Enterprise Fund long‐term loan. A loan agreement was entered into between the Town and WIFA dated March 16, 2007, for a maximum principal amount of $5,000,000, at an interest rate of 3.112%, the proceeds of which are designated for capital construction for expansion of the wastewater treatment plant. The payback period is for twenty (20) years with annual principal and semi‐annual interest payments (Payable solely from Town wastewater system revenue charges).
1,550,162
Total Loans $3,449,949
Statutory Debt Limitation
Under the provisions of the Arizona Constitution, outstanding general obligation bonded debt for water, artificial light, sewer, open space preserves, parks, playgrounds and recreational facilities, public safety, law enforcement, fire and emergency services facilities, and streets and transportation facilities purposes may not exceed 20% of a municipality’s net secondary assessed valuation. Outstanding general obligation debt for all other purposes may not exceed 6% of a municipality’s net secondary assessed valuation. [Note that general obligation bonds of CFDs are not included.] The following summarizes the Town’s general obligation debt capacity as of June 30, 2022:
Town of Prescott Valley, Arizona
20% Constitutional Limit115,653,666$ 6% Constitutional Limit34,696,100 $ Less General Obligation Less General Obligation 20% Bond Outstanding ‐ 6% Bond Outstanding ‐Available 20% Limitation Available 6% Limitation Borrowing Capacity $ 115,653,666 Borrowing Capacity $ 34,696,100 20% Constitutional Limit 6% Constitutional Limit 67
Debt Service Requirements to Maturity
The following is a summary of debt service requirements to maturity for long‐term liabilities as of June 30, 2022. Deferred issuance costs and deferred amounts on refunding are not included.
Fiscal Year
EndingPrincipalInterestPrincipalInterestPrincipalInterest
20234,360,000$ 791,650$ 17,799$ 418$ 4,377,799$ 792,068$ 20243,950,000 573,650 10,608 280 3,960,608 20254,515,000 376,150 5,334 187 4,520,334 2026 1,265,000 150,400 5,397 123 1,270,397 150,523 20271,315,000 2,851 69 1,317,851 99,869 2028‐321,180,000 145,800 2,366 34 1,182,366 $ 16,585,000 2,137,450$ 44,355 $ 1,111 $ 16,629,355 $ 2,138,561 $
2023495,000$ 199,700$ $ 395,000 $ 420,000 $ 506 $ 43 2024 515,000 179,500 415,000 435,000 506 17 2025 535,000 158,500 430,000 455,000
2026 555,000 136,700 450,000 92,796 475,000 98,046
2027 580,000 114,000 470,000 73,568 490,000 77,721
2028‐322,560,000 209,800 1,525,000 1,600,000
2033‐37
2038‐42
Fiscal Year EndingPrincipalInterestPrincipalInterestPrincipalInterestPrinci
2023160,000$ 104,020$ 89,000$ 98,636 $ $ 745,000 $ 569,300 $ 2,304,506 1,271,865 $ 2024 170,000 93,000 770,000 540,875 2,398,506 1,172,935 2025 175,000 99,000 805,000 511,350 2,499,000 1,069,884 2026 185,000 76,592 108,000 830,000 480,600 2,603,000 962,039 2027 195,000 119,000 69,346 865,000 448,750 2,719,000 849,858 2028‐321,145,000 159,832 721,000 201,803 4,835,000 12,386,000 2,492,940 2033‐37
Town of Prescott Valley, Arizona
Revenue Bonds Leases Primary Government
palInterest
‐
‐
‐ ‐
‐ ‐ ‐ ‐
‐ ‐ ‐ ‐
998,200$ $ 3,685,000
Raven Ridge CFD Pronghorn Ranch CFDQuailwood Meadows CFD Governmental Activities (continued) Community Facilities Districts StoneRidge CFD
‐ ‐ ‐ 1,120,000
$ 2,030,000 588,325$ $ 1,405,000 $ 15,120,000 31,356,012
Total Government Activities Bonded and Long‐Term Debt $ 47,985,367 10,729,662 $ Governmental Activities (continued) Community Facilities Districts (continued) Total Debt Parkway CFD No. 1 Southside CFD No. 1 Entertainment Center CFDCommunity Facilities Districts Fiscal Year EndingPrincipalInterestPrincipalInterestPrincipalInterest 2023901,049$ 98,063$ 77,274 $ 11,292 $ $ 978,323 2024 930,894 78,454 1,009,348 77,835 2025 969,306 79,652 1,048,958 45,159 2026 319,381 15,218 80,868 7,698 400,249 22,916 2027 329,319 5,123 82,103 411,422 11,586 2028‐32 ‐ ‐ 341,142 341,142 13,122 $ 3,449,949 222,372$ $ 739,493 57,601 $ 4,189,442 Total Business‐Type Activity Bonded and Long‐Term Debt 4,189,442 $ Business‐Type Activities Prescott Valley Total Debt Wastewater Leases Business‐Type Activities 68
Total Debt
Governmental Activities Fiscal Year EndingPrincipalInterestPrincipalInterestPrincipalInterestPrinci
‐
‐
‐ ‐
$ 5,240,000
$ 649,678 3,875,000 $ $ 1,012 $ 60
palInterest
‐ ‐ 176,000 5,150,000 742,800 5,326,000 749,180 2038‐42
22,400 1,120,000 22,400
8,591,101
IV. OTHER INFORMATION
A. Risk Management
The Town is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets, errors and omission, injuries to employees and natural disasters. As of July 1, 1987, the Town joined the Arizona Municipal Risk Pool (Pool) as an alternative to escalating general liability insurance costs. The Pool is made up of various towns and cities within Arizona that operates a common risk management and insurance program.
The agreement provides that the Pool will be self‐sustaining through member premiums. The Town pays an annual premium to the Pool for its general insurance coverage. If the Pool becomes insolvent or is otherwise unable to discharge its legal obligations, the Town (and all other participants) may be assessed an additional contribution based on the Town’s current year’s contribution divided by the current year’s contributions of all participants times the deficiency. The assessment may not exceed the original contribution to the Pool for the year in which the assessment is made.
At the end of the tenth (10th) year of the Pool’s existence and each year thereafter, any surplus fund in the Pool shall be distributed among the then existing participants in the Pool who were participating during the previous ten (10) years. The allocation shall be based on the proportion of contributions made by each participant.
The Town continues to carry commercial insurance for all other risks of loss, including workers’ compensation and health and accident insurance. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three (3) fiscal years.
B. Contingent Liabilities
The Town is party to several lawsuits’ incidental to its normal operation. Management, with concurrence of the Town Attorney, is of the opinion that settlement of these lawsuits will not have a material effect on the financial position of the Town. Therefore, no litigation or administrative action or proceeding has been reflected in the accompanying basic financial statements for these matters.
C. Commitments
The Town has entered into several agreements whereby it will reimburse developers a portion of the sales tax collected on their sites for a time period and/or maximum dollar amount as specified by the development agreements. The funding source for the reimbursements will come from sales tax collected on the site over the life of the agreement. The Town does not become liable under the agreements until the retailers within the prescribed areas have collected and remitted the tax to the Department of Revenue and subsequently submitted to the Town. The Town’s probable contingent liability on June 30, 2022, is approximately $16.7 million.
D. Tax Abatements
In accordance with GASB Statement No. 77, Tax Abatement Disclosures, and as stated in section C. Commitments above, the Town of Prescott Valley has entered Transaction Privilege Tax Abatement Programs with various business entities. These agreements were made under the authority of the Town Council who determined the agreements are consistent with the Town’s General Plan and that public purpose is served. These reimbursements were designed to assist with infrastructure development thereby attracting and retaining local businesses within the jurisdiction.
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For the fiscal year ended June 30, 2022, the Town abated Transaction Privilege Tax under the abatement agreements in the amount of $2,903,905. This was comprised of developer reimbursements for the following agreements:
Amount of Taxes Abated during the Fiscal Year
Crossroads intersection infrastructure/draina ge $ 1,622,566
Glassford Hill Road public infrastructure 1,258,509 Quailwood public infrastructure 22,831 $ 2,903,906
E. Community Facilities District Debt and Related Activities
The Parkway Community Facilities District No. 1 and Southside Community Facilities District No. 1 have situations in which contributions and assessments collected may not be sufficient to pay the annual debt service obligations. Separately issued financial statements for each community facilities district are available from the Town of Prescott Valley, Finance Department, 7501 E. Skoog Boulevard, Prescott Valley, AZ 86314. These separate reports discuss in more detail the impact of each situation on the particular District. F. Retirement and Pension Plans
Defined Contribution Plans
Plan description In lieu of participating in FICA‐Social Security, the Town has a defined contribution plan created in accordance with Internal Revenue Code Section 401(a). The plan is available to all full‐time employees of the Town, except Police personnel who are covered under the Arizona Public Safety Personnel Retirement System (APSPRS). The plan requires participants to contribute 9% of their earnings, with 8% being applied to the employee’s retirement account and 1% applied to their retirement health savings account. The Town is required to contribute 15%, with 13% being applied to the employee’s retirement account and 2% applied to their retirement health savings account. The plan is administered through ICMA Retirement Corporation, and participants can choose from various investment funds offered by the company. Normal retirement age is 65. There are no securities of the Town included in the plan assets.
Summary of significant accounting policies – basis of accounting and valuation of investments. The financial statements of ICMA Retirement Corporation are prepared using the accrual basis of accounting. Member and employer contributions are recognized in the period that the contributions are due. All plan investments are reported at fair value. Short‐term investments are reported at cost, which approximates fair value. Fair value of other securities is determined by the mean of the most recent bid and asked prices as obtained from dealers that make markets in such securities. Investments for which market quotations are not readily available are valued at their fair values as determined by the custodian under the direction of the ICMA Board of Trustees, with the assistance of a valuation service.
The employee’s contribution is always 100% vested. The employer’s contribution vests at the rate of 20% per year of service, thus employees are 100% vested after five (5) years of service. The following describes the payroll and contribution requirements for the year ended June 30, 2022:
Town of Prescott Valley, Arizona
Purpose
Total Payroll Covered Payroll % of Covered Payroll Required Contribution Actual Contribution Employer $ 17,145,495 $ 10,420,417 13%$ 1,354,654 $ 1,354,655 EmployeeN/A 10,420,417 8%
70
833,633 833,634
Deferred Compensation Plans
The Town also offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan is available to all Town employees and permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. A 1996 federal law now requires all assets and income of Internal Revenue Code Section 457 deferred compensation plans to be held in trust, custodial accounts, or annuity contracts for the exclusive benefit of the participants and their beneficiaries. Assets of the Town’s plan are administered by a private corporation under contract with the Town.
Pensions and Other Postemployment Benefits ‐ Public Safety Personnel Retirement System
Plan description Town public safety employees (police) who are regularly assigned hazardous duty participate in the Public Safety Personnel Retirement System (PSPRS) or employees who became members on or after July 1, 2017, may participate in the Public Safety Personnel Defined Contribution Retirement Plan (PSPDCRP). The PSPRS administers an agent multiple‐employer defined benefit pension plan and an agent multiple‐employer defined benefit health insurance premium benefit (OPEB) plan. A nine‐member board known as the Board of Trustees and the participating local boards govern the PSPRS according to the provisions of A.R.S. Title 38, Chapter 5, Article 4.
Employees who were PSPRS members before July 1, 2017, participate in the agent plans, and those who became PSPRS members on or after July 1, 2017, participate in the cost‐sharing plans (PSPRS Tier 3 Risk Pool) which are not further disclosed because of their relative insignificance to the Town’s financial statements. The PSPRS issues a publicly available financial report that includes their financial statements and required supplementary information. The report is available on the PSPRS website at www.psprs.com.
Aggregate amounts. On June 30, 2022, the Town reported the following aggregate amounts related to pensions and other postemployment benefits (OPEB) for all plans to which it contributes.
Net pension and OPEB liability7,009,559$ ‐$ 7, 009,559 $
Deferred outflows of resources6,070,988 ‐ 6, 070,988
Deferred inflows of resources3,609,901 ‐ 3, 609,901
Pension and OPEB expense1,330,202 ‐ 1, 330,202
The Town’s accrued payroll and employee benefits includes $67,807 of outstanding pension and OPEB contribution amounts payable to all plans for the year ended June 30, 2022. The Town reported $1,662,494 of pension and OPEB contributions as expenditures in the governmental funds related to all plans to which it contributes. The amount is employer contributions for pension only, health benefit, and LTD contributions for all plans of the Town.
Employees covered by benefit terms. On June 30, 2022, the following employees were covered by the agent pension plan’s benefit terms:
Benefits Provided. PSPRS provides retirement, health insurance premium supplemen t, disability, and survivor benefits. State statute establishes benefits terms. Certain retirement, disability, and survivor benefits are calculated on the basis of age, average monthly compensation, and service credit as displayed below. See the publicly available PSPRS financial report for additional benefits information.
Town of Prescott Valley, Arizona
Activities Business‐type ActivitiesTotal
Governmental
PensionOPEB Inactive employees or beneficiaries currently receiving benefits 3434 Inactive employees entitled to but not yet receiving benefits 161 Active employees5353 Total10388 71
Years of service and age required to receive benefit
Tier 1 ‐ Before January 1, 2012
20 years of service, any age 15 years of service, age 62
Tier 2 ‐ On or after January 1, 2012 and before July 1, 2017
15 years of service, age 52.5
Final average salary is based onHighest 36 months of last 20 yearsHighest 60 months of last 20 years
Normal retirement:(Not to exceed 80%)(Not to exceed 80%)
Less than 20 years of service50% less 4.0% for each year under 20 1.5% to 2.0% per year of service 20‐25 years of service50% plus 2.0% for each year over 202.0% to 2.25% per year of service 25 or more years of service50% plus 2.5% for each year over 20 2.5% per year of service
50% or normal retirement, whichever is greater
90% for the first 60 months, then reduced to 62.5% or normal retirement, whichever is greater
Retirement Initial Membership Date: 80% to 100% of retired member’s pension benefit
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
Retirement and survivor benefits are subject to automatic cost‐of‐living adjustments based on inflation. PSPRS also provides temporary disability benefits of 50% of the member's compensation for up to twelve (12) months.
Health insurance premium benefits are available to retired or disabled members with 5 years of credited service. The benefits are payable only with respect to allowable health insurance premiums for which the member is responsible. Benefits range from $100 per month to $260 per month depending on the age of the member and dependents.
Contributions. State statutes establish the pension contribution requirements for active PSPRS employees. In accordance with State statutes, annual actuarial valuations determine employer contribution requirements for PSPRS pension and health insurance premium benefits. The combined active member and employer contribution rates are expected to finance the costs of benefits employees earn during the year, with an additional amount to finance any unfunded accrued liability. Contributions rates for the year ended June 30, 2022, are displayed on the following page. Rates are a percentage of active members’ annual covered payroll.
Normal retirement with actual service or 20 years of service, whichever is greater, multiplied by years of service (not to exceed 20) divided by 20 Active members ‐ pension 7.65%to11.65% Town of Prescott Valley:Tier 1 /Tier 2Tier 3 Pension 30.52%29.96% Health insurance 0.30% 0.13%
In addition, statute required the Town to contribute at the actuarially determined rate indicated below of annual covered payroll of retired members who worked for the Town in positions that an employee who contributes to PSPRS would typically fill and employees participating in the PSPRS Tier 3 Risk Pool and PSPDCRP members in addition to the Town’s required contributions to the PSPRS Tier 3 Risk pool and PSPDCRP.
Town of Prescott Valley, Arizona
Accidental disability retirement Catastrophic disability retirement Ordinary disability retirement Survivor benefit ‐ Retired members Survivor benefit ‐ Active members
72
Town of Prescott Valley: Pension20.15% Health insurance0.00%
The contributions to the pension and OPEB plans for the year ended June 30, 2022, were:
PensionHealth Insurance
Retirees and beneficiaries38,000$ ‐$ Inactive, non‐retired members‐ ‐Active Members3,909,649 13,937 $ 3,947,649 $ 13,937
During fiscal year 2022, the Town paid for PSPRS and OPEB contributions as follows: 98.5% from the General Fund, 1.5% from major funds and 0.0% from other funds.
Pension and OPEB assets/liability. On June 30, 2022, the Town reported the following assets and liabilities:
Net (Assets) Liability
Pension7,204,201 $ Health insurance(194,642)
The net pension and OPEB assets/liability were measured as of June 30, 2021. The total liability used to calculate the net asset or liability was determined by an actuarial valuation as of that date. The total liability as of June 30, 2021, reflects changes of actuarial assumptions including changes in the amortization method for Tiers 1 and 2.
Actuarial assumptions. The significant actuarial assumptions used to measure the total pension/OPEB liability are as follows:
Pension OPEB
Actuarial valuation dateJune 30, 2021 June 30, 2021
Actuarial cost method Entry age normal Entry age normal
Investment rate of return7.30% 7.30%
Projected salary increases 3.50% 3.50%
Inflation 2.50% 2.50% Cost‐of‐Living Adjustment1.75% 1.75%
The long‐term expected rate of return on PSPRS plan investments was determined to be 7.3% using a building‐block method in which best‐estimate ranges of expected future real rates of return (expected returns, net of plan investment expenses and inflation) are developed for each major asset class.
The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table:
Mortality rates PubS‐2010 tables using MP‐PubS‐2010 tables using MP‐2019 improvement scale with adjustments 2019 improvement scale with adjustments Asset Class Target Allocation Long‐Term Expected Real Rate of Return U.S. public equity24%4.08% Private credit20%5.74% Global private equity20%7.67% International public equity16%5.20% Diversifying strategies10%3.99% Other assets (capital appreciation)7%5.43% Core Bonds2%0.42% Cash ‐ Mellon1%‐0.31% Total100%
Town of Prescott Valley, Arizona
73
Pension discount rates. On June 30, 2021, the discount rate used to measure the total pension and OPEB liability was 7.3%, which is the same as the discount rate used on June 30, 2020. The projection of cash flows used to determine the PSPRS discount rates assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the actuarially determined contribution rate and the member rate. Based on those assumptions, the plans’ fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long‐term expected rate of return on plan investments was applied to all periods of projected benefit payments for these plans to determine the total pension and OPEB liability.
Changes in Net (Assets)/Liability
Pension
Health Insurance (OPEB)
Total (Assets) Liability Plan Fiduciary Net Position Net (Assets) Liability Balances at June 30, 2020 $ 37,857,130 $ 24,556,996 $ 13,300,134 $ 690,382 $ 704,594 $ (14,212) ‐ ‐ ‐ ‐ ‐ ‐ ‐ 748,599 ‐ 748,599 18,919 ‐ 18,919 2,741,891 ‐ 2,741,891 50,775 ‐ 50,775
Total (Assets) Liability Plan Fiduciary Net Position Net (Assets) Liability
442,688 ‐ 442,688 (49,682) ‐ (49,682) ‐ ‐ ‐ ‐ ‐ ‐
‐ 2, 395,444 (2,395,444) ‐ 10,200 (10,200) ‐ 393,218 (393,218) ‐ ‐ ‐ ‐ 7, 274,544 (7,274,544) ‐ 191,027 (191,027)
(2,091, 166) (2,091,166) ‐ (27,504) (27,504) ‐ ‐ (34, 095) 34, 095 ‐ (785) 785 1,842,012 7,937,945 (6,095,933) (7, 492) 172,938 ( 180,430) Balances atJune 30, 2021 $ 39,699,142 $ 32,494,941 $ 7,204,201 $ 682,890 $ 877,532 $ (194,642)
Sensitivity of the Net Pension and OPEB Assets (Liability) to Changes in the Discount Rate. The following table presents the Town’s net pension and OPEB assets (liability) calculated using the discount rate of 7.3%, as well as what the net assets (liability) would be if it were calculated using a discount rate that is 1‐percentage‐point lower (6.3%) or 1‐percentage‐point higher (8.3%) than the current rate:
Plan fiduciary net position. Detailed information about the pension plan’s fiduciary net position is available in the separately issued PSPRS financial report. The report is available on the PSPRS website at www.psprs.com
Expense. For the year ended June 30, 2022, the Town recognized the following as pension and OPEB expense:
Town of Prescott Valley, Arizona
Service cost Net changes Administrative expense Benefit payments, including refunds of employee contributions Net investment income Contributions – employee Contributions – employer Changes of assumptions or other inputs Differences between expected and actual experience Interest on the total liability Adjustment to Beginning of Year 1% Decrease Current Discount Rate1% Increase Rate6.30%7.30%8.30% Net pension (assets) liability$ 13,312,638 $ 7,204, 201 $ 2,311,168 Net OPEB (assets) liability$ (109,963)$ (194,642)$ (265,229) Expense Pension1,358,154 $ Health insurance(27,952) 74
Increase/(Decrease) Increase/(Decrease) Changes for the year:
Deferred outflows/inflows of resources. On June 30, 2022, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions and OPEB from the following sources:
PensionHealth Insurance
Deferred Outflows of Resources Deferred Inflows of Resources
Deferred Outflows of Resources Deferred Inflows of Resources
Differences between expected and actual experience$ 1,416,385 $ ‐ $ 51, 495 $ 142,929 Changes of assumptions or other inputs 635,242 ‐ 6, 280 9,040 Net difference between projected and actual earnings on pension plan investments ‐ 3, 377,267 ‐ 80,665
Contributions subsequent to the measurement date 3,947,649 ‐ 13, 937 ‐ Total $ 5,999,276 $ 3, 377,267 $ 71, 712 $ 232,634
The amounts of deferred outflows of resources resulting from contributions subsequent to the measurement date as reported in the table above will be recognized as an adjustment of the net pension and OPEB assets/liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions and OPEB will be recognized in pension and OPEB expense as follows:
Fiscal Year Ended: Pension Health Insurance June 30, 2023(8,453)$ (42,736) $ June 29, 2024(173,688) (43,270) June 30, 2025(343,921) (42,513) June 30, 2026(799,578) (48,359) June 30, 2027‐
Thereafter ‐$ (1,325,640) $ (174,859)
G. Subsequent Events
On September 22, 2022, Town Council approved transitioning the Town to the Arizona State Retirement System with an expected enrollment date of January 1, 2023.
Town of Prescott Valley, Arizona
75
Required Supplementary Information
Schedule of Pension Contributions
Public Safety Personnel Retirement System 2022202120202019
Reporting Fiscal Year
Statutorily required contribution1,712,693$ 1,595,444$ 3,272,738$ 2,961,390 $
Contributions in relation to the actuarially required contribution 3,912,693 2,395,444 3,272,738 2,961,390 Contribution deficiency (excess) $ (2,200,000) (800,000) $ ‐ $ ‐ $
Town's covered payroll $ 5,702,466 4,028,380 $ 3,988,513 $ $ 3,973,655
Contributions as a percentage of covered payroll 68.61% 59.46% 82.05% 74.53%
Schedule of OPEB Contributions
Public Safety Personnel Retirement System 2022 2021 2020 2019
Reporting Fiscal Year
Statutorily required contribution 14,399 $ 10,200 $ 14,779 $ $ 16,698
Contributions in relation to the actuarially required contribution 14,399 10,200 14,779 16,698 Contribution deficiency (excess) ‐ $ ‐ $ ‐ $ ‐ $
Town's covered payroll $ 5,702,466 4,028,380 $ 3,988,513 $ $ 3,973,655
Contributions as a percentage of covered payroll 0.25% 0.25% 0.37% 0.42%
See accompanying notes to the schedule.
Town of Prescott Valley, Arizona
76
Ended June 30,
2012 through
2018 2017 2016 2015 2014 2013
$ 2,142,845 $ 1,215,061 948,215 $ 653,581 $ 739,690 $ 2,142,845 1,215,061 948,215 653,581 739,690 Information $ ‐ $ ‐ ‐ $ ‐ $ ‐ $ not available
$ 4,329,230 $ 4,258,780 4,007,347 $ 3,784,804 $ 3,889,757 $ 49.50% 28.53% 23.66% 17.27% 19.02%
Ended June 30,
2018 2017
$ 9,229 $ 20,223 9,229 20,223 $ ‐ $ ‐$ 4,329,230 $ 4,258,780 0.21% 0.47%
See accompanying notes to the schedule.
2012 through 2016
Information not available
Town of Prescott Valley, Arizona
77
Schedule of Changes in the Net Pension Liability and Related Ratios
Public Safety Personnel Retirement System 2021202020192018
Total pension liability
Service cost748,599 $ 776,554 $ 897,948 $ 853,724 $
Interest on the total pension liability2,741,891 2,557,289 2,397,841 2,218,961
Benefit changes‐ ‐ ‐ ‐Differences between expected & actual exp.442,688 1,220,507 120,123 115,880 Assumption changes‐ ‐ 936,093 ‐
Benefit payments*(2,091,166) (1,904,053) (1,300,973) (1,183,731)
Net change in total pension liability1,842,012 2,650,297 3,051,032 2,004,834
Total pension liability ‐ beginning37,857,130 35,206,833 32,155,801 30,150,967
Total pension liability ‐ ending 39,699,142$ 37,857,130$ 35,206,833$ 32,155,801 $
Plan fiduciary net position
Employer contributions2,395,444$ 3,272,738$ 2,961,390$ 1,557,558 $
Employee contributions393,218 376,479 374,976 488,803
Net investment income7,274,544 309,212 1,177,776 1,237,439
Benefit payments*(2,091,166) (1,904,053) (1,300,973) (1,183,731)
Administrative expense (34,095) (25,215) (21,459) (19,533) Other ‐ ‐ ‐ (6,578)
Net change in plan fiduciary net position 7,937,945 2,029,161 3,191,710 2,073,958
Plan fiduciary net position ‐ beginning 24,556,996 22,623,865 19,443,807 17,369,849 Adjustment to beginning balance ‐ (96,030) (11,652) ‐
Plan fiduciary net position ‐ ending 32,494,941 $ $ 24,556,996 $ 22,623,865 $ 19,443,807
Net pension liability ‐ ending 7,204,201 $ $ 13,300,134 $ 12,582,968 $ 12,711,994
Plan fiduciary net position as a percentage of the total pension liability 81.85%64.87%64.26%60.47% Covered valuation payroll 4,028,380 $ 3,988,513$ 3,973,655$ 4,329,230 $
Net pension liability as a percentage of covered valuation payroll 178.84%333.46%316.66%293.63%
* Including refunds of employee contributions
See accompanying notes to the schedule.
Town of Prescott Valley, Arizona
Reporting Fiscal Year
78
$ 965,040 $ 772,216 $ 735,387 727,967 $ 2,008,469 1,746,683 1,570,906 1,292,899 251,053 1,898,893 ‐ 203,115 669,850 75,202 810,867 608,324 593,973 1,054,561 ‐ 1,559,117 (1,268,981) (961,244) (831,501) (875,793) 3,219,404 4,586,311 2,285,659 3,515,629 26,931,563 22,345,252 20,059,593 16,543,964 30,150,967 $ 26,931,563$ 22,345,252$ 20,059,593 $
Information
$ 1,215,061 $ 948,215 $ 653,581 739,690 $ not 586,692 519,203 496,178 644,582 available 1,800,958 84,955 496,084 1,557,510 (1,268,981) (961,244) (831,501) (875,793) (16,335) (12,625) (12,489) ‐197 245,931 145,792 (388,806) 2,317,592 824,435 947,645 1,677,183 15,052,257 14,227,822 13,280,177 11,602,994 ‐ ‐ ‐ ‐$ 17,369,849 $ 15,052,257 $ 14,227,822 $ 13,280,177 $ 12,781,118 $ 11,879,306 $ 8,117,430 6,779,416 $ 57.61% 55.89% 63.67% 66.20% $ 4,258,780 $ 4,007,347 $ 3,784,804 3,889,756 $ 300.11% 296.44% 214.47% 174.29%
Ended June 30, See accompanying notes to the schedule.
Town of Prescott Valley, Arizona
2012 through 20172016201520142013
79
Schedule of Changes in the Net OPEB Liability and Related Ratios
Public Safety Personnel Retirement System 2021202020192018
Total pension liability
Service cost18,919$ 20,004$ 15,585$ 16,451 $
Interest on the total OPEB liability50,775 43,978 52,379 49,338
Benefit changes‐ ‐ ‐ ‐Differences between expected and actual expe(49,682) 72,091 (167,285) (12,772)
Assumption changes‐ ‐ 10,990 ‐Benefit payments, including refunds of employe (27,504) (39,968) (19,270) (19,289)
Net change in total OPEB liability(7,492) 96,105 (107,601) 33,728
Total OPEB liability ‐ beginning690,382 594,277 701,878 668,150
Total OPEB liability ‐ ending 682,890 $ 690,382 $ 594,277 $ $ 701,878
Plan fiduciary net position
Employer contributions10,200$ 14,779$ 16,698$ 9,229 $
Employee contributions‐ ‐ ‐ ‐
Net investment income191,027 8,964 36,588 44,500
Benefit payments*(27,504) (39,968) (19,270) (19,289) Administrative expense(785) (729) (632) (677) Net change in plan fiduciary net position172,938 (16,954) 33,384 33,763
Plan fiduciary net position ‐ beginning704,594 721,548 676,511 642,748
Adjustment to beginning balance‐ ‐ 11,653 ‐Plan fiduciary net position ‐ ending 877,532 $ 704,594 $ 721,548 $ $ 676,511
Net pension liability ‐ ending (194,642)$ (14,212)$ (127,271)$ 25,367 $
Plan fiduciary net position as a percentage of the total pension liability 128.50%102.06%121.42%96.39% Covered valuation payroll 4,028,380 $ 4,577,917$ 3,973,655$ 4,329,230 $
Net pension liability as a percentage of covered valuation payroll ‐4.83%‐0.31%‐3.20%0.59%
* Including refunds of employee contributions
See accompanying notes to the schedule.
Town of Prescott Valley, Arizona
Reporting Fiscal Year
80
Ended June 30, 2017
$ 17,887 48,266 5,887 (2,411) (28,570) (15,027) 26,032 642,118 $ 668,150
2012 through 2016
Information
Town of Prescott Valley, Arizona
$ 20,223 ‐67,547 (15,027) (598) 72,145 570,603 ‐$ 642,748 $ 25,402 96.20% $ 4,258,780 0.60% not available
81
See accompanying notes to the schedule.
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
Factors that Affect Trends. The actuarial assumptions used in the June 30, 2022 valuation for PSPRS were based on the results of an actuarial experience study for the 5‐year period ended June 30, 2016. The total pension liability used to calculate the net pension liability for PSPRS was determined by an actuarial valuation as of that date. The total pension liability as of June 30, 2022 reflects changes of benefit terms and actuarial assumptions including changes in the amortization method for Tiers 1 and 2.
Town of Prescott Valley, Arizona
82
Non‐major Governmental Funds
Special Revenue Funds
Special Revenue funds are established to finance particular activities and are created out of receipts of specific taxes or other earmarked revenue. Such funds are authorized by statutory or charter provisions to pay for certain activities with some form of continuing revenue.
UNS Facilities Relocation Fund was established to accumulate funds specifically for the purpose of relocating gas lines.
Impoundment Fee Fund was established to accumulate funds that are collected from vehicle impoundment per State Statute 28‐3511.
Police Safety Fund was established to accumulate funds that are collected for public safety per State Statute 41‐1723.
Donation Fund was established to account for and accumulate funds that are donated to the Town for a variety of purposes.
Maranda Donation Fund was established to account for and accumulate funds that were donated from the estate of Joseph R. Maranda for the purpose of founding a boys’ choir.
Smart and Safe Arizona Fund was established to account for the portion of state‐shared sales tax on all marijuana and marijuana products for the purpose of supplementing Police department personnel cost per State Statute 36‐2856.
Debt Service Funds
Debt Service funds are used to account for the accumulation of resources for, and the payment of, general long‐term debt principal, interest, and related costs.
Revenue Bonds Fund is used to account for the refunding debt associated with the acquisition and financing of municipal projects and facilities, the construction of the Library, Police buildings, and purchase of the joint facility from Yavapai College.
Capital Project Funds
Capital Project funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds.
Capital Project Growth Fund is used to acquire, construct, and improve major street projects that are proposed due to growth.
Community Facilities Districts Funds
These funds account for the principal and interest of debt obligations issued by community facilities districts. Although these bonds are not obligations of the Town, generally accepted accounting principles indicate that the bonds should be disclosed herein. The community facilities districts funds are as follows:
StoneRidge Pronghorn Ranch Quailwood Meadows Parkway No. 1 Raven Ridge Entertainment Center Entertainment Center Community Facilities District is used to account for the operation of the Findlay Toyota Cen ter. 83
Town of Prescott Valley, Arizona
Combining Balance Sheet Non‐major Governmental Funds June 30, 2022
UNS
Special Revenue Funds
FacilitiesImpoundment PoliceMarandaSmart and RelocationFeeSafetyDonationDonationSafe FundFundFundFundFundArizona
ASSETS
Cash and investments263,998$ ‐$ 58,118$ 330,739$ 235,948$ 202,031$ Restricted cash and investments
Receivables: Interest 27 Intergovernmental ‐ 1,645 Special assessments Miscellaneous 46,445 Prepaid items ‐ 2,326 Total assets 310,443$ ‐$ 59,763$ 333,065$ 235,975$ 202,031$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES
Liabilities: Accounts payable 312$ 17,080$ ‐$ ‐$
Unearned revenues Advance from other funds Total liabilities 312 17,080
Deferred inflows of resources: Unavailable revenues ‐ special assessments ‐Total deferred inflows of resources
Fund balances: Nonspendable: Prepaid items ‐ 2,326 Restricted for: Capital projects Community facilities districts ‐ ‐Debt service Grantor and contributor purposes 310,443 ‐ 59,451 313,659 235,975 202,031 Unassigned Total fund balances 310,443 ‐ 59,451 315,985 235,975 202,031
Total liabilities, deferred inflows of resources and fund balances 310,443$ ‐$ 59,763$ 333,065$ 235,975$ 202,031$
84
Community Facilities Districts
Capital Projects Capital Total Project Non‐major RevenueGrowthPronghornQuailwoodParkwayEntertainmentGovernmental BondsFundStoneRidgeRanchMeadowsDistrict No. 1Raven RidgeCenterFunds
‐$ 500,000$ ‐$ ‐$ ‐$
‐$ 576,760$ $ 2,167,594 30 ‐ 762,901 911,991 499,835 360,673 23,451 ‐ 2,558,881 27 1,645 ‐ 1,983 1,983 12,748 9,542 14,127 32,664 ‐ 156,640 272,166 2,326 30$ 500,000$ 775,649$ 921,533$ 513,962$ 393,337$ 25,434$ $ 733,400 $ 5,004,622 ‐$ ‐$
‐$ 420,111$ $ 437,713 ‐ ‐ 344,643 344,643 ‐ 775,477 299,905 111,956 117,409 ‐ 1,304,747 775,490 299,905 111,956 117,606 ‐ 764,754 2,087,103 ‐ 1,983 1,983 ‐ 1,983 1,983 2,326 ‐ 500,000 ‐ 500,000 ‐ 23,451 23,451 30 159 621,628 402,006 275,731 ‐ 1,299,554 ‐ 1,121,559 ‐ ‐ (31,354) (31,354) 30 500,000 159 621,628 402,006 275,731 23,451 (31,354) 2,915,536 $ 500,000 775,649$ 921,533$ 513,962$ 393,337$ 25,434$ $ 733,400 $ 5,004,622
Debt
85
Service
Town of Prescott Valley, Arizona
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Non‐major Governmental Funds
For the Year Ended June 30, 2022
UNS
Special Revenue Funds
FacilitiesImpoundment PoliceMarandaSmart and RelocationFeeSafetyDonationDonationSafe FundFundFundFundFundArizona
REVENUES
Taxes ‐ local240,033$ ‐$ ‐$ ‐$
Taxes ‐ intergovernmental ‐ 165,494
Taxes ‐ property ‐Charges for services ‐Fines and forfeitures ‐ 9,150 13,793
Special assessments ‐Property rental ‐Interest earnings ‐Contributions ‐ 337,987 Total revenues 240,033 9,150 13,793 337,987 165,494
EXPENDITURES
Current: General government ‐Public safety ‐ 9,150 ‐ 8,211
Culture and recreation ‐ ‐ 33,023 140,960
Debt service: Principal ‐Interest and fiscal charges ‐Capital outlay 200,000 ‐ 8,702 153,586 Total expenditures 200,000 9,150 194,820 140,960
Excess (deficiency) of revenues over expenditures 40,033 ‐ 5,091 143,167 (140,247) 165,494
OTHER FINANCING SOURCES (USES)
Transfers in ‐
Transfers out ‐Total other financing sources and uses ‐
Net change in fund balances 40,033 ‐ 5,091 143,167 (140,247) 165,494
Fund balances ‐ beginning 270,410 ‐ 54,360 172,818 376,222 36,537
Fund balances ‐ ending $ 310,443 ‐$ 59,451$ $ 315,985 $ 235,975 $ 202,031
86
Debt Service
Community FacilitiesDistricts
Capital Projects Capital Total Project Non‐major RevenueGrowthPronghorn QuailwoodParkwayEntertainmentGovernmental BondsFundStoneRidgeRanchMeadowsDistrict No. 1Raven RidgeCenterFunds ‐$ ‐$ ‐$ ‐$ ‐$ $ ‐ $ 240,033 ‐ 165,494 ‐ 656,913 609,577 613,847 200,277 ‐ 2,080,614 ‐ ‐ 2,443,854 2,443,854 ‐ 22,943 ‐ ‐ 3,131 3,131 ‐ 168,609 168,609 30 77 820 ‐ 102,997 ‐ 18,360 459,344 30 825,522 712,574 613,847 218,714 3,131 2,443,854 5,584,842 ‐ 12,103 3 ,655 8,273 27,813 ‐ 17,361 ‐ ‐ 3,235,323 3,409,306 4,145,000 475,000 380,000 405,000 150,000 2,985 720,000 6,277,985 1,001,799 219,100 161,975 171,765 112,735 596,700 2,264,201 ‐ ‐ 33,966 396,254 5,146,799 706,203 545,630 580,547 271,008 3,112 4,585,989 12,392,920 (5,146,769) 119,319 166,944 33,300 (52,294) 19 (2,142,135) (6,808,078) 5,141,844 ‐ 70,00 0 ‐ 2,016,700 7,228,544 ‐ ‐5,141,844 ‐ 70,000 ‐ 2,016,700 7,228,544 (4,925) 119,319 166,944 33,300 17,706 19 (125,435) 420,466 4,955 500,000 (119,160) 454,684 368,706 258,025 23,432 94,081 2,495,070 $ 30 $ 500,000 $ 159 $ 621,628 $ 402,006 275,731 $ 23,451 $ $ (31,354) $ 2,915,536
87
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Town of Prescott Valley, Arizona
UNS Facilities Relocation Fund ‐ Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual ‐ GAAP Basis
Governmental Funds
For the Year Ended June 30, 2022
Variance Between
Budgeted Amounts Final Budget and Actual Amounts,Actual Amounts
Original FinalBudgetary BasisBudgetary Basis
REVENUES
Taxes ‐ local: Taxes ‐ franchise $ 200,000 $ 200,000 $ 240,033 $ 40,033 Total revenues 200,000 200,000 240,033 40,033
EXPENDITURES
Capital outlay 500,000 500,000 200,000 300,000 Total expenditures 500,000 500,000 200,000 300,000
Excess (deficiency) of revenues over expenditures (300,000) (300,000) 40,033 340,033
OTHER FINANCING SOURCES (USES)
Transfers in ‐ ‐ ‐ ‐
Transfers out ‐ ‐ ‐ ‐Total other financing sources and uses ‐ ‐ ‐ ‐
Net change in fund balances (300,000) (300,000) 40,033 340,033
Fund balances ‐ beginning 300,000 300,000 270,410 (29,590)
Fund balances ‐ ending ‐$ ‐$ 310,443$ 310,443 $
89
Town of Prescott Valley, Arizona
Impoundment Fee Fund ‐ Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual ‐ GAAP Basis
Governmental Funds
For the Year Ended June 30, 2022
Variance Between
Budgeted Amounts Final Budget and Actual Amounts,Actual Amounts
Original
FinalBudgetary BasisBudgetary Basis
REVENUES
Fines and forfeitures: Court fines $ 20,000 $ 20,000 $ 9,150 $ (10,850) Total revenues 20,000 20,000 9,150 (10,850)
EXPENDITURES
Current: Public safety 20,000 20,000 9,150 10,850 Total expenditures 20,000 20,000 9,150 10,850
Excess (deficiency) of revenues over expenditures ‐ ‐ ‐ ‐
OTHER FINANCING SOURCES (USES)
Transfers in ‐ ‐ ‐ ‐Transfers out ‐ ‐ ‐ ‐
Total other financing sources and uses ‐ ‐ ‐ ‐
Net change in fund balances ‐ ‐ ‐ ‐
Fund balances ‐ beginning ‐ ‐ ‐ ‐
Fund balances ‐ ending ‐$ ‐$ ‐$ ‐$
90
Town of Prescott Valley, Arizona
Police Safety Fund ‐ Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual ‐ GAAP Basis
Governmental Funds
For the Year Ended June 30, 2022
Variance Between
Budgeted Amounts Final Budget and Actual Amounts,Actual Amounts
Original FinalBudgetary BasisBudgetary Basis
REVENUES
Fines and forfeitures: Court fines $ 12,000 $ 12,000 $ 13,777 $ 1,777 Other ‐ ‐ 16 16
Total revenues 12,000 12,000 13,793 1,793
EXPENDITURES
Current: Public safety 20,000 10,169 ‐ 10,169 Capital outlay 9,831 8,702 1,129 Total expenditures 20,000 20,000 8,702 11,298
Excess (deficiency) of revenues over expenditures (8,000) (8,000) 5,091 13,091
OTHER FINANCING SOURCES (USES)
Transfers in ‐ ‐
Transfers out ‐ ‐
Total other financing sources and uses ‐ ‐
Net change in fund balances (8,000) (8,000) 5,091 13,091
Fund balances ‐ beginning 58,000 58,000 54,360 (3,640)
Fund balances ‐ ending 50,000 $ 50,000 $ $ 59,451 9,451 $
91
Town of Prescott Valley, Arizona
Donation Fund ‐ Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual ‐ GAAP Basis
Governmental Funds
For the Year Ended June 30, 2022
REVENUES
Contributions
EXPENDITURES
Budgeted Amounts
Variance Between Actual Amounts,Final Budget and OriginalFinalBudgetary BasisActual Amounts
$ 650,000 $ 650,000 $ 337,987 $ (312,013) Total revenues (312,013)
Current: Public safety ‐ 8,211 Culture and recreation 33,023 216,977 Capital outlay 400,000 400,000 246,414 Total expenditures 455,180
Excess (deficiency) of revenues over expenditures ‐ 143,167
OTHER FINANCING SOURCES (USES)
Transfers in ‐ ‐ ‐
Transfers out ‐ ‐ ‐ Total other financing sources and uses ‐ ‐ ‐
Net change in fund balances ‐ 143,167
Fund balances ‐ beginning ‐ 172,818
Fund balances ‐ ending ‐ $ ‐ $ $ 315,985 315,985 $
92
Town of Prescott Valley, Arizona
Maranda Donation Fund ‐ Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual ‐ GAAP Basis
Governmental Funds
For the Year Ended June 30, 2022
Variance Between Budgeted AmountsFinal Budget and Actual Amounts,Actual Amounts OriginalFinalBudgetary BasisBudgetary Basis
REVENUES
Interest earnings $ 1,000 $ 1,000 713 $ (287) $ Total revenues 1,000 1,000
EXPENDITURES
Current: Culture and recreation 47,514 Capital outlay 188,474 188,474 ‐ 188,474 Total expenditures 235,988
Excess (deficiency) of revenues over expenditures (375,948) (140,247) 235,701
OTHER FINANCING SOURCES (USES)
Transfers in ‐
Transfers out ‐ Total other financing sources and uses ‐
Net change in fund balances (375,948) (140,247) 235,701
Fund balances ‐ beginning 274
Fund balances ‐ ending ‐ $ ‐ $ $ 235,975 $ 235,975
93
Town of Prescott Valley, Arizona
Smart and Safe Arizona Fund ‐ Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual ‐ GAAP Basis
Governmental Funds
For the Year Ended June 30, 2022
Budgeted Amounts
Original
REVENUES
Variance Between
Final Budget and Actual Amounts,Actual Amounts
FinalBudgetary BasisBudgetary Basis
Intergovernmental: Smart and Safe Arizona ‐ $ ‐ $ $ 165,494 $ 165,494 Total revenues ‐ 165,494
EXPENDITURES
Current: Public safety ‐ ‐ Total expenditures ‐ ‐
Excess (deficiency) of revenues over expenditures ‐ 165,494
OTHER FINANCING SOURCES (USES)
Transfers in ‐ ‐
Transfers out ‐ ‐
Total other financing sources and uses ‐ ‐
Net change in fund balances ‐ 165,494
Fund balances ‐ beginning ‐ 36,537 36,537
Fund balances ‐ ending ‐ $ ‐ $ $ 202,031 $ 202,031
94
Town of Prescott Valley, Arizona
Revenue Bonds ‐ Debt Service Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual ‐ GAAP Basis
Governmental Funds
For the Year Ended June 30, 2022
Variance Between Budgeted AmountsFinal Budget and Actual Amounts,Actual Amounts OriginalFinalBudgetary BasisBudgetary Basis
REVENUES
Interest earnings‐$ ‐$ 30 $ 30 $ Total revenues ‐ ‐
EXPENDITURES
Debt service: Principal 4,145,000 4,145,000 4,145,000 ‐ Interest and fiscal charges 1,003,900 1,003,900 1,001,799 2,101 Total expenditures 5,148,900 5,148,900 5,146,799 2,101
Excess (deficiency) of revenues over expenditures (5,148,900) (5,148,900) (5,146,769) 2,131
OTHER FINANCING SOURCES (USES)
Transfers in 5,148,900 5,148,900 5,141,844 Transfers out ‐ ‐ ‐ ‐ Total other financing sources 5,148,900 5,148,900 5,141,844
Net change in fund balances ‐ ‐
Fund balances ‐ beginning 5,000 5,000 4,955 (45)
Fund balances ‐ ending 5,000 $ 5,000 $ 30 $ (4,970) $
95
Town of Prescott Valley, Arizona
Streets Capital Improvement Fund ‐ Capital Projects Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual ‐ GAAP Basis
Governmental Funds
For the Year Ended June 30, 2022
Variance Between Budgeted AmountsFinal Budget and Actual Amounts,Actual Amounts OriginalFinalBudgetary BasisBudgetary Basis
REVENUES
Taxes‐local: Transaction privilege $ 3,203,904 $ 3,203,904 $ 4,154,995 $ 951,091 Interest earnings 2,000 2,000 7,599 5,599
Total revenues 3,205,904 3,205,904 4,162,594 956,690
EXPENDITURES
Capital outlay 1,840,000 1,840,000 214,790 1,625,210
Total expenditures 1,840,000 1,840,000 1,625,210
Excess (deficiency) of revenues over expenditures 1,365,904 1,365,904 3,947,804 2,581,900
OTHER FINANCING SOURCES (USES)
Transfers in ‐ ‐ ‐
Transfers out (2,024,875) (2,024,875) (2,024,875) ‐
Total other financing sources (2,024,875) (2,024,875) (2,024,875) ‐
Net change in fund balances 1,922,929 2,581,900
Fund balances ‐ beginning 1,365,000 1,365,000 2,367,770 1,002,770
Fund balances ‐ ending 706,029 $ 706,029$ 4,290,699$ 3,584,670 $
96
Town of Prescott Valley, Arizona
Capital Project Growth Fund ‐ Capital Projects Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances ‐ Budget and Actual ‐ GAAP Basis
Governmental Funds
For the Year Ended June 30, 2022
Variance Between Budgeted AmountsFinal Budget and Actual Amounts,Actual Amounts OriginalFinalBudgetary BasisBudgetary Basis
REVENUES
Interest earnings ‐ $ ‐ $ ‐ $ ‐ $ Total revenues ‐ ‐ ‐
EXPENDITURES
Capital outlay ‐ ‐ ‐ Total expenditures ‐ ‐ ‐
Excess (deficiency) of revenues over expenditures ‐ ‐ ‐
OTHER FINANCING SOURCES (USES)
Transfers in ‐ ‐ ‐ Transfers out ‐ ‐ ‐
Total other financing sources and uses ‐ ‐ ‐
Net change in fund balances ‐ ‐ ‐
Fund balances ‐ beginning ‐
Fund balances ‐ ending 500,000 $ 500,000$ 500,000$ ‐$
97
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This part of the Town of Prescott Valley’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information says about the Town’s overall financial health.
Contents Page
Financial Trends 100
These schedules contain trend information to help the reader understand how the Town’s financial performance and well‐being have changed over time.
Revenue Capacity 108
These schedules contain information to help the reader assess the Town’s most significant local revenue sources, sales and use tax.
Debt Capacity 118
These schedules contain information to help the reader assess the affordability of the Town’s current levels of outstanding debt and the Town’s ability to issue additional debt in the future.
Demographic and Economic Information 128
These schedules offer demographic and economic indicators to help the reader understand the environment within which the Town’s financial activities take place.
Operating Information 134
These schedules contain service and infrastructure data to help the reader understand how the information in the Town’s financial report relates to the services the Town provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.
Statistical Section
99
Town of Prescott Valley, Arizona
Net Position by Component
Last Ten Fiscal Years (accrual basis of accounting)
Governmental activities
Net investment in capital assets
Fiscal Year
2013 (1) 2014 2015 2016 (2)
91,468,927 $ 86,491,264 $ $ 93,910,316 94,799,822 $
Restricted 26,715,333 28,137,124 28,447,755 30,560,824
Unrestricted 6,589,211 13,739,445 5,810,673 5,272,787
Total governmental activities net position124,773,471 $ 128,367,833 $ 128,168,744 $ 130,633,433 $
Business‐type activities
Net investment in capital assets 83,514,122 $ 81,656,499 $ $ 85,197,880 86,172,806 $
Unrestricted 6,854,559 10,108,555 7,424,206 10,904,819
Total business‐type activities net position90,368,681 $ 91,765,054 $ $ 92,622,086 97,077,625 $
Primary government
Net investment in capital assets 174,983,049 $ 168,147,763 $ 179,108,196 $ 180,972,628 $
Restricted 26,715,333 28,137,124 28,447,755 30,560,824
Unrestricted 13,443,770 23,848,000 13,234,879 16,177,606
Total primary government net position $ 215,142,152 220,132,887 $ 220,790,830 $ 227,711,058 $
(1) Net Position for fiscal year 2013 is restated due to the implementation of the provisions of GASB Statement No. 65.
(2) Restricted and unrestricted governmental activities were restated for fiscal year 2016.
100
Fiscal Year
201720182019202020212022
98,094,902 $ 98,522,476$ 104,330,421$ 123,737,351$ 131,166,088$ 137,196,695 $ 27,444,969 31,169,696 28,688,519 23,713,423 10,541,003 15,473,845 5,870,550 10,867,269 13,611,741 17,741,943 49,339,682 61,954,924 131,410,421 $ 140,559,441$ 146,630,681$ 165,192,717$ 191,046,773$ 214,625,464 $
85,891,621 $ 88,151,502$ 93,091,525$ 101,055,654$ 108,269,565$ 104,865,815 $ 13,895,578 17,234,790 14,878,086 16,866,146 16,715,829 25,031,941 99,787,199 $ 105,386,292$ 107,969,611$ 117,921,800$ 124,985,394$ 129,897,756 $
183,986,523 $ 186,673,978$ 197,421,946$ 224,793,005$ 239,435,653$ 242,062,510 $ 27,444,969 31,169,696 28,688,519 23,713,423 10,541,003 15,473,845 19,766,128 28,102,059 28,489,827 34,608,089 66,055,511 86,986,865 231,197,620 $ 245,945,733$ 254,600,292$ 283,114,517$ 316,032,167$ 344,523,220 $
Table 1
101
Town of Prescott Valley, Arizona
Changes in Net Position
Last Ten Fiscal Years (accrual basis of accounting)
Expenses
20132014 2015 2016 2017
Governmental activities: General government11,245,821 $ 10,053,941 $ 11,232,735 $ $ 11,571,863 12,507,954 $ Public safety9,689,545 10,207,382 10,567,773 11,769,755 14,934,853
Culture and recreation4,908,858 5,126,785 5,233,436 5,414,150 5,631,243
Public works3,661,770 3,212,354 3,192,335 3,166,830 3,370,764
Highway and streets6,388,801 5,797,407 5,914,736 6,990,689 8,102,747
Interest on long‐term debt3,860,771 3,257,938 2,923,358 2,781,513 2,497,731
Total governmental activities expenses39,755,566 37,655,807 39,064,373 41,694,800 47,045,292
Business‐type activities:
Wastewater utility6,081,358 6,213,772 6,805,036 6,431,493 6,437,945
Prescott Valley water system7,572,437 7,395,511 8,111,728 8,084,460 8,367,193
Total business‐type activities expenses13,653,795 13,609,283 14,916,764 14,515,953 14,805,138
Total primary government expenses53,409,361 $ 51,265,090 $ 53,981,137 $ $ 56,210,753 61,850,430 $
Program Revenues
Governmental activities: Charges for services: General government2,331,028 $ $ 2,984,647 $ 3,254,576 $ 2,631,988 $ 2,389,745 Public safety14,378 15,454 60,724 21,970 45,376
Culture and recreation226,889 234,580 234,966 263,569 271,736 Highways and streets8,777 8,354 7,217 7,558 12,297
Operating grants and contributions 4,652,649 2,735,533 1,505,325 1,461,383 1,063,598
Capital grants and contributions2,467,175 4,679,348 4,842,756 4,760,330 3,162,059
Total governmental activities program revenues9,700,896 10,657,916 9,905,564 9,146,798 6,944,811
Business‐type activities:
Charges for services:
Wastewater utility4,703,453 4,980,242 4,981,299 5,226,444 5,223,927
Prescott Valley water system7,800,224 8,038,134 7,832,523 7,984,963 8,636,892
Capital grants and contributions 1,395,909 1,788,914 2,764,541 3,919,386 2,526,323
Total business‐type activities program revenues13,899,586 14,807,290 15,578,363 17,130,793 16,387,142
Total primary government program revenues23,600,482 $ 25,465,206 $ 25,483,927 $ $ 26,277,591 23,331,953 $
Net (expense)/revenue
Governmental activities $ (30,054,670) (26,997,891) $ (29,158,809) $ (32,548,002) $ $ (40,100,481)
Business‐type activities245,791 1,198,007 661,599 2,614,840 1,582,004
Total primary government net expense(29,808,879) (25,799,884) (28,497,210) (29,933,162) (38,518,477)
Governmental activities: Taxes: Sales and use taxes11,602,664 13,442,182 15,577,231 18,283,099 21,847,447 Franchise taxes611,841 584,602 610,627 583,413 565,906 Property taxes1,925,702 1,725,304 1,754,815 1,572,449 1,553,600 Intergovernmental13,555,792 14,509,668 15,415,689 15,814,917 17,094,109 Interest and investment income(60,726) 255,481 213,461 287,549 (183,593) Other revenues1,444,900 75,016 ‐ ‐ ‐Transfers (8,532) ‐ ‐ ‐ ‐Total governmental activities 29,071,641 30,592,253 33,571,823 36,541,427 40,877,469
Business‐type activities: Interest and investment income252,080 132,069 183,599 204,097 245,015 Proceeds from sale of effluent water ‐ ‐ ‐ ‐ 762,150 Miscellaneous35,120 66,297 11,834 107,866 120,405 Transfers 8,532 ‐ ‐ ‐ ‐Total business‐type activities 295,732 198,366 195,433 311,963 1,127,570 Total primary government29,367,373 30,790,619 33,767,256 36,853,390 42,005,039
Special Items Property owner assessment adjustment‐ ‐ ‐ ‐ ‐Total primary government‐ ‐ ‐ ‐ ‐Change in Net Position Governmental activities
Business‐type activities541,523 1,396,373
Total primary government(441,506)$ 4,990,735 $
102
(983,029) 3,594,362 4,413,014 3,993,425 776,988
857,032 2,926,803 2,709,574
$ 5,270,046 $ 6,920,228 $ 3,486,562 Fiscal Year
$ 11,281,930 $ 10,898,884 $ 11,218,327 12,128,632 $ 12,487,378 $ 13,624,377 14,258,651 15,746,775 16,225,329 15,625,064 9,367,302 9,976,052 10,890,671 9,672,141 10,842,623 3,548,322 3,596,700 3,931,751 3,645,389 3,540,657 8,648,500 8,943,378 9,360,398 9,632,912 9,981,662 2,610,509 3,036,703 2,814,283 2,960,863 2,244,636 49,080,940 50,710,368 53,962,205 54,265,266 54,722,020
6,564,074 6,463,578 6,545,327 7,391,686 7,247,353 8,509,957 8,802,503 8,256,346 8,647,085 13,552,176 15,074,031 15,266,081 14,801,673 16,038,771 20,799,529 $ 64,154,971 $ 65,976,449 $ 68,763,878 70,304,037 $ 75,521,549 $
$ 2,766,783 $ 2,663,620 $ 2,864,788 $ 3,424,675 $ 3,502,132 42,598 40,634 37,220 38,776 42,964 1,816,012 2,077,408 2,384,787 1,657,580 2,687,386 7,587 9,655 9,791 5,770 ‐886,376 1,086,260 3,192,945 4,416,308 1,189,641 9,698,512 4,706,127 13,933,315 8,232,982 8,879,460 15,217,868 10,583,704 22,422,846 17,776,091 16,301,583
5,517,587 5,360,366 5,309,839 5,578,690 5,833,415 9,321,254 8,979,745 9,846,638 10,651,306 10,032,528 5,292,201 3,037,689 8,406,436 6,704,850 5,620,904 20,131,042 17,377,800 23,562,913 22,934,846 21,486,847 $ 35,348,910 $ 27,961,504 $ 45,985,759 40,710,937 $ 37,788,430 $ $ (33,863,072) $ (40,126,664) $ (31,539,359) (36,489,175) $ (38,420,437) $ 5,057,011 2,111,719 8,761,240 6,896,075 687,318 (28,806,061) (38,014,945) (22,778,119) (29,593,100) (37,733,119)
22,867,641 24,275,358 26,404,855 31,091,413 35,936,066 540,361 566,233 579,603 572,205 627,113 1,669,334 1,765,605 1,819,466 2,014,927 2,080,614 18,239,232 18,222,048 20,532,070 22,033,886 23,026,202 (152,419) 1,368,660 619,535 (46,187) (268,335) ‐ ‐ 145,866 6,677,389 597,468
43,164,149 46,197,904 50,101,395 62,343,633 61,999,128 388,373 470,206 413,133 155,846 196,916 ‐ ‐ 705,769 ‐ 1,672,629 153,709 1,394 72,047 11,673 2,355,499 ‐ ‐ ‐ ‐ ‐542,082 471,600 1,190,949 167,519 4,225,044 43,706,231 46,669,504 51,292,344 62,511,152 66,224,172 (152,057) ‐ ‐ (402) ‐(152,057) ‐ ‐ (402) ‐9,149,020 6,071,240 18,562,036 25,854,056 23,578,691 5,599,093 2,583,319 9,952,189 7,063,594 4,912,362 $ 14,748,113 $ 8,654,559 $ 28,514,225 32,917,650 $ 28,491,053 $
Table 2
20182019202020212022
103
‐ ‐ ‐ ‐ ‐
Fiscal Year
Town of Prescott Valley, Arizona
Fund Balances of Governmental Funds
Last Ten Fiscal Years (modified accrual basis of accounting) 2013 2014 2015 2016 2017
General fund
Nonspendable
Fiscal Year
$ 2,730,483 5,178,749 $ 5,938,850 $ $ 5,970,989 6,789,979 $
Committed 2,716,578 2,989,059 3,113,835 3,262,627 3,741,753
Unassigned 7,349,190 5,959,693 7,424,030 7,298,425 8,283,694
Total general fund $ 12,796,251 $ 14,127,501 $ 16,476,715 $ 16,532,041 $ 18,815,426
All other governmental funds
Nonspendable
$ 20,469 3,607 $ 3,385 $ $ 2,617 $ 43,170
Restricted 23,845,139 25,989,310 26,694,270 28,404,177 25,500,620 Unassigned (3,202,617) (3,409,591) (3,995,331) (3,982,409) (2,702,890)
Total all other governmental funds 20,662,991 $ 22,583,326$ 22,702,324$ 24,424,385$ 22,840,900 $
104
Fiscal Year
20182019202020212022
6,576,514 $ 6,793,941$ 6,756,842$ 16,521,213$ 16,331,514 $ 4,056,865 4,178,207 4,617,377 5,870,382 5,801,691 11,064,312 12,625,728 17,762,799 36,115,424 46,720,462 21,697,691 $ 23,597,876$ 29,137,018$ 58,507,019$ 68,853,667 $
14 $ 600$ 7,235$ 13,919$ 3,216 $ 29,460,449 27,063,366 22,165,904 9,079,160 14,155,202 (549,112) (877,102) (2,808,152) (428,423) (397,948) 28,911,351 $ 26,186,864$ 19,364,987$ 8,664,656$ 13,760,470 $
Table 3
105
Town of Prescott Valley, Arizona
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting) 2013201420152016
Revenues
Fiscal Year
Taxes‐local12,214,505$ 14,026,784$ 16,187,858$ 18,866,512 $
Taxes‐intergovernmental13,555,792 14,509,668 15,415,689 15,814,917
Taxes‐property1,925,702 1,725,304 1,754,815 1,572,449
Licenses and permits959,474 1,767,289 2,296,788 1,255,568
Charges for services334,586 354,378 307,098 371,597
Fines and forfeitures715,189 663,483 551,451 633,214
Special assessments741,650 690,091 562,637 488,963
Investment earnings190,652 118,289 165,143 207,952 Intergovernmental1,698,761 2,206,463 2,073,222 1,586,677 Miscellaneous6,529,574 3,330,260 2,059,652 3,134,519
Total revenues38,865,885 39,392,009 41,374,353 43,932,368
Expenditures
General government10,888,502 9,632,124 10,666,389 11,124,672 Public safety 9,162,837 9,729,079 10,053,933 10,975,828
Culture and recreation3,394,827 3,541,111 3,751,545 3,903,972
Public works1,393,947 1,441,527 1,380,856 1,265,946
Highway and streets2,775,243 2,230,497 2,162,262 2,953,920
Debt service: Principal3,786,248 3,372,248 3,736,248 4,304,024
Interest and fiscal charges3,684,970 2,852,151 2,811,285 2,513,311
Bond issuance costs260,926 331,335 ‐ 156,130
Payment to advance refunding escrow agent ‐ 766,566 ‐ ‐Capital outlay 2,520,129 2,583,437 4,343,623 3,585,328
Total expenditures37,867,629 36,480,075 38,906,141 40,783,131
Excess of revenues over (under)
expenditures998,256 2,911,934 2,468,212 3,149,237
Other financing sources (uses)
Transfers in3,148,462 3,952,741 5,454,139 4,488,203
Transfers out(3,156,994) (3,952,741) (5,454,139) (4,488,203)
Payments to advanced refunding escrow agent(12,836,919) (11,620,349) ‐ (8,688,114) Other debt proceeds8,540,000 11,960,000 ‐ 8,845,000 Financing of leases
Total other financing sources and (uses) (4,305,451) 339,651 ‐ 156,886 Net change in fund balances (3,307,195) $ $ 3,251,585 $ 2,468,212 $ 3,306,123
(1) Debt service as a percentage of noncapital expenditures is restated for fiscal years 2013‐2021.
‐ ‐ ‐ ‐
Debt service as a percentage of noncapital expenditures (1) 20.7% 18.3% 18.8% 18.1%
106
Fiscal Year
201720182019202020212022
22,413,353 $ 23,408,002$ 24,841,591$ 26,984,458$ 31,663,618$ 36,563,179 $ 17,094,109 18,239,232 18,222,048 20,532,070 22,033,886 23,026,202 1,553,600 1,669,334 1,765,605 1,819,466 2,014,525 2,080,614 1,085,016 1,363,270 1,221,989 1,309,417 1,904,874 1,874,570 389,963 1,993,197 2,287,894 2,575,604 1,891,800 2,899,645 680,019 735,834 605,100 689,814 632,901 526,723 313,801 169,669 149,687 143,892 152,452 184,788 223,106 331,197 551,194 425,458 104,308 223,814 1,228,120 901,881 1,653,124 2,962,917 4,746,815 3,146,356 3,150,112 4,494,442 4,112,013 5,595,095 11,774,807 5,660,002 48,131,199 53,306,058 55,410,245 63,038,191 76,919,986 76,185,893
11,790,593 10,048,161 10,006,443 9,957,820 11,035,001 11,577,697 11,641,160 12,386,037 14,222,830 14,458,128 15,004,280 17,284,873 4,120,458 7,388,165 7,090,829 7,698,572 7,437,715 8,583,526 1,424,724 1,466,922 1,464,435 1,500,326 1,648,001 1,759,587 4,294,630 4,615,967 4,867,085 4,844,182 4,799,005 4,500,484 4,189,283 4,573,481 5,818,845 5,716,424 5,473,049 7,009,585 2,340,376 2,316,134 2,919,982 2,659,942 2,074,909 2,376,358 ‐ ‐ ‐ 371,895 ‐‐ ‐ ‐ 2,298,819 ‐7,630,075 22,861,975 14,374,098 17,485,532 8,484,472 10,745,753 47,431,299 65,656,842 60,764,547 64,320,926 58,627,146 63,837,863 699,900 (12,350,784) (5,354,302) (1,282,735) 18,292,840 12,348,030 6,310,570 8,442,106 9,245,955 9,432,082 22,309,127 9,773,225 (6,310,570) (8,442,106) (9,245,955) (9,432,082) (22,309,127) (9,773,225) ‐ ‐ ‐ ‐ (26,458,369) ‐‐ 21,303,500 4,530,000 ‐ 26,835,199 3,033,000 ‐ ‐ ‐ ‐ 61,432 ‐ 21,303,500 4,530,000 376,830 3,094,432 699,900 $ $ 8,952,716 $ (824,302) (1,282,735) $ 18,669,670 $ $ 15,442,462 16.4% 15.6% 18.3% 17.0% 14.8% 17.3%
Table 4
107
Town of Prescott Valley, Arizona
General Governmental Tax Revenues by Source
Last Ten Fiscal Years
(modified accrual basis of accounting) 2013201420152016
Fiscal Year
Transaction privilege tax (1)*11,602,664$ 13,442,182$ 15,577,231$ 18,283,099 $ Franchise tax (2)*611,841 584,602 610,627 583,413 State‐shared sales tax (3)**3,184,232 3,379,174 3,547,894 3,694,109 Urban revenue sharing tax (4)**3,965,584 4,327,205 4,699,643 4,674,164 Auto in lieu tax (5)**2,025,147 2,142,326 2,259,164 2,454,015 Highway user tax (6)**2,684,968 2,779,050 3,024,969 3,165,763 Other tax (7)**1,695,861 1,881,913 1,884,019 1,826,866 Property tax (8)***1,925,702 1,725,304 1,754,815 1,572,449 Total27,695,999$ 30,261,756$ 33,358,362$ 36,253,878 $
* Reported as taxes ‐ local on the financial statements.
** Reported as taxes ‐ intergovernmental on the financial statements.
*** Reported as taxes ‐ property on the financial statements.
(1) The transaction privilege taxes consist of many classifications of tax; see Table 6 for category breakdown
(2) Includes cable TV and light and power franchise taxes.
(3)Aportionof transactionprivilegetaxescollectedbytheStateof Arizonathatisreturnedtoincorporatedcities and towns.
(4)Ashareof thenetindividualandcorporateincometaxcollectionsthatisdistributedamongincorporated cities and towns.
(5) A share of the vehicle license tax collected by the State of Arizona in lieu of personal property tax on vehicles.
(6)Aportionof gasolineandusefueltaxescollectedoncertainhighwaymotorvehicleswhichisdistributedto the State of Arizona and then to incorporated cities and towns.
(7) Other taxes ‐ intergovernmental.
(8) Property taxes collected for community facilities districts.
108
Fiscal Year
21,847,447 $ 22,867,641$ 24,275,358$ 26,404,855$ 31,091,413$ 35,936,066 $ 565,906 540,361 566,233 579,603 572,205 627,113 3,869,615 4,154,137 4,483,551 4,732,268 5,554,756 6,777,936 5,162,499 5,342,309 5,384,827 5,916,267 6,647,643 6,153,321 2,700,357 2,936,417 3,142,327 3,248,966 3,945,360 3,820,660 3,498,007 3,605,598 3,905,452 4,099,261 4,474,878 4,743,649 1,863,631 2,200,771 1,305,891 2,535,308 1,411,249 1,530,636 1,553,600 1,669,334 1,765,605 1,819,466 2,014,525 2,080,614 41,061,062 $ 43,316,568$ 44,829,244$ 49,335,994$ 55,712,029$ 61,669,995 $
Table 5
201720182019202020212022
109
Town of Prescott Valley, Arizona
General Governmental Taxable Sales by Category and Business Class
Last Ten Fiscal Years (modified accrual basis of accounting)
Category
Fiscal Year
2013201420152016
Mining4,075$ 24,357$ 3,172$ 46 $ Construction641,648 1,151,159 975,051 1,027,769 Manufacturing254,715 272,067 293,780 421,205 Transportation, comm., utilities1,469,176 1,445,413 1,504,656 1,698,355 Wholesale261,521 304,538 283,895 314,724 Retail6,379,260 7,374,901 9,179,114 10,971,517 Restaurant and bars1,027,210 1,140,585 1,231,961 1,466,497 Finance, insurance, real estate516,190 687,351 838,902 1,043,037 Hotels255,711 290,610 317,122 376,607 Services385,219 369,094 453,167 551,296 Government298,645 304,284 301,831 333,406 Others49,475 61,859 80,005 78,640 City sales tax audit59,819 15,964 114,575 ‐Total $ 11,602,664 $ 13,442,182 $ 15,577,231 18,283,099 $ 2013 2014 2015 2016
Business Class (1)
Fiscal Year
Amusement 147,490 $ Communications 384,357 Construction 1,837,578 Hotel/Motel 220,936 Hotel/Motel Bed Tax 86,964 Printing, publishing, advertising 169,636 Restaurant 1,561,800 Retail 11,628,315 Tangible personal property rental 256,491 Use Tax 497,555 Utilities 1,426,913 Other 65,064 City sales tax audit ‐Total ‐ $ ‐ $ ‐ $ $ 18,283,099
Source: Arizona Department of Revenue
N/A N/A N/A
Note: Town direct sales tax rate was 2.33% effective December 1, 2002 to December 31, 2015.
Note:Taxablesalesarepresentedby businesscategoryinsteadofbyindividualtaxpayerduetotheconfidentialand privilegednatureoftheinformationpresentedandthelegalrestrictionsondisclosingthisinformationpursuantto Section 8A‐510 of the Town of Prescott Valley Transaction Privilege Tax Code.
(1) Business class was available starting in fiscal year 2015‐2 016.
110
Fiscal Year
201720182019202020212022
50 $ 1,287$ 3,896$ 50,410$ 49,089 $ $ 140,230 1,480,527 1,850,778 2,809,943 3,235,278 3,565,023 4,918,575 552,185 603,246 506,998 534,059 637,880 862,213 1,866,960 1,951,092 2,080,378 2,033,534 1,978,381 2,071,522 403,641 433,590 598,127 614,785 806,438 917,997 12,857,987 13,189,597 13,388,034 15,210,113 18,882,277 20,860,407 1,768,684 1,892,680 2,129,567 2,178,405 2,522,703 2,987,611 1,307,300 1,247,643 1,155,912 433,362 488,895 711,798 461,249 500,380 515,943 442,025 491,207 510,559 696,685 741,613 889,440 957,690 1,130,440 1,438,520 377,627 402,536 398,421 415,354 467,830 434,200 74,552 53,199 41,872 49,954 58,673 82,434 ‐ ‐ 6,713 ‐ 12,577 ‐$ 21,847,447 $ 22,867,641 $ 24,525,244 $ 26,154,969 $ 31,091,413 $ 35,936,066 2017 2018 2019 2020 2021 2022
Fiscal Year
$ 202,485 $ 178,833 160,917 $ 152,724 $ 128,916 $ $ 268,947 351,894 332,210 346,466 341,772 236,678 208,742 2,373,193 2,612,970 3,475,351 3,152,363 3,432,191 4,810,934 228,367 255,192 261,324 229,033 264,060 308,961 233, 810 252,400 260,991 227,752 259,441 303,840 166,654 157,773 126,914 122,412 93,265 147,971 1,927,643 2,050,798 2,274,376 2,313,440 2,595,326 3,108,098 13,814,582 14,279,256 14,595,192 16,679,623 20,898,103 23,197,523 315,259 362,143 474,861 412,270 432,963 642,905 610,746 652,620 743,466 777,195 875,835 1,022,607 1,603,469 1,722,930 1,746,348 1,730,785 1,840,731 1,907,350 19,345 10,516 52,325 15,600 21,327 8,188 ‐ ‐ 6,713 ‐ 12,577 ‐$ 21,847,447 $ 22,867,641 $ 24,525,244 $ 26,154,969 $ 31,091,413 $ 35,936,066
Table 6
111
Town of Prescott Valley, Arizona
Transaction Privilege Tax (Sales Tax) Rates of Direct and Overlapping Governments
Last Ten Fiscal Years
Fiscal Year
2013201420152016 (3)
General fund sales tax rate2.00%2.00%2.00%2.50% Street improvements sales tax rate0.33%0.33%0.33%0.33%
Total Town of Prescott Valley sales tax rate 2.33%2.33%2.33%2.83%
Yavapai County sales tax rate (1)0.75%0.75%0.75%0.75%
State of Arizona sales tax rate (1)6.60%5.60%5.60%5.60% Total sales tax rate9.68%8.68%8.68%9.18%
Auto in lieu tax per $100 of assessed valuation (2)4.00%4.00%4.00%4.00%
Source:
(1) Arizona Department of Revenue
(2) Arizona Department of Transportation
(3) Town direct sales tax rate is 2.83% effective January 1, 2016.
112
Fiscal Year
201720182019202020212022
2.50%2.50%2.50%2.50%2.50%2.50%
0.33%0.33%0.33%0.33%0.33%0.33%
2.83%2.83%2.83%2.83%2.83%2.83%
0.75%0.75%0.75%0.75%0.75%0.75%
5.60%5.60%5.60%5.60%5.60%5.60%
9.18%9.18%9.18%9.18%9.18%9.18%
4.00%4.00%4.00%4.00%4.00%4.00%
Table 7
113
Town of Prescott Valley, Arizona
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
Primary TaxRatio of Net
LimitedNetAssessed ValuePrimary Full FiscalPropertyAssessedto LimitedTax CashCentrally YearValue (1)Value (2)Property ValueRateValue (3)Valued (4)
20132,235,369,361$ 266,797,761$ 11.94%7.8297$
2,254,186,906 $ 12,040,867 $ 20142,095,522,260 245,761,269 11.73% 2,159,596,482 12,607,451 20152,252,153,569 258,722,097 11.49% 2,315,468,942 12,194,903 20162,470,761,752 272,718,987 11.04% 2,879,437,432 11,925,283 20172,634,436,642 285,332,386 10.83% 3,178,787,493 11,355,844 20182,836,847,620 306,047,574 10.79% 3,509,535,481 11,555,409 20193,052,121,374 328,846,320 10.77% 3,887,527,369 13,223,252 20203,320,662,273 356,582,369 10.74% 4,436,416,133 13,160,718 20213,633,690,005 384,698,492 10.59% 5,064,705,555 14,331,597 20223,944,663,066 416,479,439 10.56% 5,520,846,860 15,199,170
Source: Yavapai County Assessor (2) Assessed values are based on property use effective 2022: Commercial17.5% Agricultural/vacant land15% Residential ‐ owner occupied10% Residential ‐ rental10% Utilities/government5% Different legal class assessment ratios apply for previous years (4) Utilities and railroads. Note: The Town of Prescott Valley does not levy property taxes at this time. (1) Limited value relates to primary taxes and annual changes are restricted by statute. (3) Full cash value relates to secondary taxes and is an assessor's approximation of market value. 114
Secondary TaxRatio of Net NetAssessed ValueSecondary RealPersonalAssessed to FullTax Property (2)Property (2)ValueCash ValueRate
247,537,903 $ 9,984,341$ 269,563,111$ 11.96%9.1713$ 232,535,255 8,889,313 254,032,019 11.76% 245,490,896 7,773,713 265,459,512 11.46% 296,940,963 6,706,683 315,572,929 10.96% 323,612,528 6,284,927 341,253,299 10.74% 357,746,584 6,578,297 375,880,290 10.71% 395,386,783 6,234,527 414,844,562 10.67% 448,666,152 7,788,795 469,615,665 10.59% 509,376,191 6,934,678 530,642,466 10.48% 555,444,607 7,624,554 578,268,331 10.47%
Table 8
115
Town of Prescott Valley, Arizona
Property Tax Rates
Direct and Overlapping Governments
Last Ten Fiscal Years
Fiscal State of Year Town Arizona
2013 ‐$ P 2.1143 $ ‐$ P 4.0429 $ P1.6725 $ S 0.5623 S 1.1451 S0.2150
2014 ‐ P 2.4431 ‐ P 4.4117 P1.8241 S0.4653 S1.1412 S0.2227
2015 ‐ P 2.4669 ‐ P 4.5000 P1.8606 S 0.4636 S 1.0765 S0.2231
2016 ‐ P 2.4371 ‐ P 4.5261 P1.8721 S 0.4727 S 1.0749 S0.2180
2017 ‐ P 2.4037 ‐ P 4.2880 P1.8439 S 0.4883 S 1.0374 S0.2122
2018 ‐ P 2.3270 ‐ P 4.2110 P1.7827 S 0.5161 S 1.0021 S0.2001
2019 ‐ P 2.2529 ‐ P 4.0553 P1.7584 S 0.4908 S 0.9019 S0.1892
2020 ‐ P 2.4718 ‐ P 3.9008 P1.6883 S 0.4754 S 0.9102 S0.1525
2021 ‐ P 2.3681 ‐ P 3.7706 P1.6131 S 0.4520 S 0.8910 S0.0760
2022 ‐ P 2.2833 ‐ P 3.9154 P1.5557 S 0.4327 S 0.8146 S0.0131
Source: Yavapai County Assessor
Note: The basis for property tax rate calculation is per $100 of net assessed value.
P ‐ Primary S ‐ Secondary
(1) Pronghorn Ranch Special District has a rate of $4.80 per $100 Secondary Assessed Value, StoneRidge has a rate of $4.47, Parkway No. 1 has a rate of $13.69, and Quailwood Meadows has a rate of $5.55.
(2) Pronghorn Ranch Special District has a rate of $4.80 per $100 Secondary Assessed Value, StoneRidge has a rate of $3.64, Parkway No. 1 has a rate of $16.24, and Quailwood Meadows has a rate of $5.55.
(3) Pronghorn Ranch Special District has a rate of $4.00 per $100 Secondary Assessed Value, StoneRidge has a rate of $3.18, Parkway No. 1 has a rate of $16.51, and Quailwood Meadows has a rate of $4.60.
(4) Pronghorn Ranch Special District has a rate of $3.12 per $100 Secondary Assessed Value, StoneRidge has a rate of $2.74, Parkway No. 1 has a rate of $17.18, and Quailwood Meadows has a rate of $3.58.
(5) Pronghorn Ranch Special District has a rate of $2.81 per $100 Secondary Assessed Value, StoneRidge has a rate of $2.59, Parkway No. 1 has a rate of $15.04, and Quailwood Meadows has a rate of $3.13.
(6) Pronghorn Ranch Special District has a rate of $2.81 per $100 Secondary Assessed Value, StoneRidge has a rate of $2.59, Parkway No. 1 has a rate of $13.94, and Quailwood Meadows has a rate of $3.13.
(7) Pronghorn Ranch Special District has a rate of $2.67 per $100 Secondary Assessed Value, StoneRidge has a rate of $2.43, Parkway No. 1 has a rate of $12.74, and Quailwood Meadows has a rate of $2.98.
(8) Pronghorn Ranch Special District has a rate of $2.50 per $100 Secondary Assessed Value, StoneRidge has a rate of $2.31, Parkway No. 1 has a rate of $12.12, and Quailwood Meadows has a rate of $2.83.
(9) Pronghorn Ranch Special District has a rate of $2.45 per $100 Secondary Assessed Value, StoneRidge has a rate of $2.25, Parkway No. 1 has a rate of $11.60, and Quailwood Meadows has a rate of $3.17.
(10) Pronghorn Ranch Special District has a rate of $2.27 per $100 Secondary Assessed Value, StoneRidge has a rate of $2.12, Parkway No. 1 has a rate of $11.31, and Quailwood Meadows has a rate of $3.05.
YavapaiHumboldtCommunity
CountyUSDCollege
116
Table 9
Special District
Yavapai Total Fire District
P7.8297 $
S2.4489 S4.8000 (1)S9.1713 P8.6789
S2.6298 S4.8000 (2)S9.2590 P8.8275
S2.6205 S4.0000 (3)S8.3837 P8.8353
S2.7363 S3.1200 (4)S7.6219 P8.5356
S2.7538 S2.8100 (5)S7.3017 P8.3207
S2.7786 S2.8100 (6)S7.3069 P8.0666
S2.8029 S2.6700 (7)S7.0548 P8.0609
S2.8014 S2.5000 (8)S6.8395 P7.7518
S2.7966 S2.4500 (9)S6.6656 P7.7544
S2.7956 S2.2700 (10)S6.3260
117
Town of Prescott Valley, Arizona
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Municipal
Fiscal Year
Property Corporation Bonds (1) Certificates of Participation Private Placement
Special Assessment Bonds (2)
General Obligation Bonds (3)Loans (4) Revenue Bonds (5)(6)
201329,703,868$ 12,810,000$ ‐$ 3,603,000$ 23,895,000$ 220,645 $ $ ‐201428,049,796 12,115,000 ‐ 2,996,000 23,545,000 200,397 201526,105,724 11,390,000 ‐ 2,655,000 22,710,000 180,149 201624,061,652 2,445,000 8,645,000 2,268,000 21,790,000 53,125 201721,817,580 1,660,000 8,520,000 2,090,000 20,825,000 31,842 201819,493,508 845,000 11,660,000 1,894,000 19,780,000 19,361 18,000,000 201917,089,436 ‐ 15,630,000 1,684,000 18,660,000 10,516 17,200,000 202014,580,364 ‐ 14,230,000 1,611,000 17,470,000 7,092 16,530,000 2021 ‐ ‐ ‐ 1,530,000 16,240,000 3,997 39,073,483 2022 ‐ ‐ ‐ 1,405,000 14,830,000 1,012 33,980,893
(1) MPC bonds for fiscal years 2012‐2014 were restated to recognize outstanding bond issuance premiums.
(2) Community facilities districts special assessment bonds.
(3) Community facilities districts general obligation bonds
(4) Community facilities districts long‐term loan payable.
(5) Town and community facilities districts revenue bonds.
(6) Revenue bonds for fiscal years 2021 were restated to recognize outstanding bond issuance premiums
(7) Long‐term obligations are not included on the schedule
(8) Full cash value from Table 8 used in this calculation.
(9) Personal income (not in thousands) from Table 15 used in this calculation
(10) Estimated Population from Table 15 used in this calculation.
118
Governmental Activities
Business‐Type Activities
Revenue Bonds Loans
Total Primary Government (7)
Percentage of Taxable Property (8)
Percentage of Personal Income (9)
Total Debt per Capita (10)
15,115,000 $ 10,364,763$ 95,712,276$ 4.25%11.51%2,447 $ 12,831,057 9,692,691 89,429,941 4.14% 10.72% 2,247 11,446,467 8,998,369 83,485,709 3.61% 9.62% 2,033 9,318,991 8,281,060 76,862,828 2.67% 8.45% 1,822 7,086,515 7,540,001 69,570,938 2.19% 7.61% 1,613 4,774,039 6,774,404 83,240,312 2.37% 8.48% 1,872 2,376,563 5,983,457 78,633,972 2.02% 7.60% 1,719 1,802,421 5,166,314 71,397,191 1.61% 6.26% 1,535 ‐ 4,322,112 61,169,592 1.21% 4.97% 1,307 ‐ 3,449,949 53,666,854 0.97% 3.35% 1,114
Table 10
119
Town of Prescott Valley, Arizona
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Fiscal Year
Municipal Property Corporation Bonds (1)
Less: Amounts Available in Debt Service FundsTotal Certificates of Participation
Less: Amounts Available in Debt Service FundsTotal Private Placement
Less: Amounts Available in Debt Service Funds
201329,703,868$ (3,882,678)$ 25,821,190$ 12,810,000$ (270,156)$ 12,539,844$ ‐$ 201428,049,796 (4,007,881) 24,041,915 12,115,000 (256,256) 11,858,744 ‐ 201526,105,724 (3,983,033) 22,122,691 11,390,000 (241,756) 11,148,244 ‐ 201624,061,652 (3,576,687) 20,484,965 2,445,000 (48,900) 2,396,100 8,645,000 201721,817,580 (4,051,553) 17,766,027 1,660,000 (440,700) 1,219,300 8,520,000 (102,876) 201819,493,508 (4,075,561) 15,417,947 845,000 (439,400) 405,600 11,660,000 (185,708) 201917,089,436 (3,896,862) 13,192,574 ‐ 15,630,000 (687,184) 202014,580,364 (3,809,646) 10,770,718 ‐ 14,230,000 (681,278) 2021
(1) MPC bonds for 2012‐2014 were restated to recognize outstanding bond issuance premiums.
(2) Revenue bonds for the Town.
(3) Revenue bonds for fiscal years 2021 were restated to recognize outstanding bond issuance premiums
(4) Amount of restricted cash and investements available in debt service funds
(5) General obligation bonds and revenue bonds for community facilities districts.
(6) Amount of cash and investments available for community facilities districts principal repayments
(7) Full cash value (Table 8) used in the calculation.
‐ ‐
‐ ‐ ‐
‐
2022
120
Total Revenue Bonds (2)(3)
‐$ ‐$ ‐$
‐
‐
‐
‐
‐
‐ ‐
Less: Amounts Available in Debt Service Funds (4)Total
Community Facilities Districts Bonds (5)
Percentage of Taxable Property (7)Per Capita
Table 11
Less: Amounts Available in Debt Service Funds (6)Total 121
‐$ 23,895,000 $ (1,090,000) $ 22,805,000 $ 2.71% 1,564 $ ‐
‐ 23,545,000 (835,000) 22,710,000 2.71% 1,473 ‐
‐ 22,710,000 (920,000) 21,790,000 2.38% 1,340 8,645,000
‐ 21,790,000 (965,000) 20,825,000 1.82% 1,241 8,417,124
‐ 20,825,000 (1,045,000) 19,780,000 1.48% 1,094 11,474,292 ‐ ‐ 37,780,000 (1,920,000) 35,860,000 1.80% 1,420 14,942,816
‐ 35,860,000 (1,860,000) 34,000,000 1.60% 1,358 13,548,722
‐ 34,000,000 (1,920,000) 32,080,000 1.27% 1,213 ‐ 23,233,483 (4,955) 23,228,528 32,080,000 (2,130,000) 29,950,000 1.05% 1,137 ‐ 18,860,893 (30) 18,860,863 29,950,000 (2,215,000) 27,735,000 0.84% 967
Town of Prescott Valley, Arizona
Direct and Overlapping Governmental Activities Debt As of June 30, 2022
Table 12
EstimatedEstimated DebtPercentageShare of OutstandingApplicable (1)Overlapping Debt
Direct debt
Town of Prescott Valley direct debt50,216,905$ 100.00%50,216,905 $
Overlapping debt
Central Yavapai Fire District 5,470,000 53.44%2,923,168 Humboldt Unified School District 21,205,000 78.23%16,588,672
Yavapai Community College District‐ 14.12%‐Total overlapping debt26,675,000 19,511,840
Total direct and overlapping debt 69,728,745 $
Total
AssessedValuation inPercentage in ValuationPrescott ValleyPrescott Valley
Taxing district
Central Yavapai Fire District
1,082,030,410 $ 578,268,331 $ 53.44% Humboldt Unified School District 739,232,335578,268,331 78.23% Yavapai Community College District4,096,285,296 578,268,331 14.12%
Source:YavapaiCountyAssessor,CentralYavapaiFireDistrict,YavapaiCommunityCollegeDistrict,andHumboldtUnified School District
(1) Debt allocation is based on distribution of assessed valuation within overlapping tax districts
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Town of Prescott Valley, Arizona
Legal Debt Margin Information
Last Ten Fiscal Years 2013201420152016
Fiscal Year
Debt limit70,086,409$ 66,048,325$ 69,019,473$ 82,048,962 $
Total net debt applicable to limit ‐
Legal debt margin 70,086,409 $ 66,048,325 $ 69,019,473 $ $ 82,048,962
Total net debt applicable to the limit as a percentage of debt limit 0.00% 0.00% 0.00% 0.00%
(1)UnderArizonalaw,citiescanissuegeneralobligationbondsforthepurposesofwater,artificiallight,sewer,openspace preserves,parks,playgroundsandrecreationalfacilities,publicsafety,lawenforcement,fireandemergencyservices facilities,andstreetsandtransportationfacilities,butoutstandingbondsissuedforsuchpurposesmaynotexceed20%of theTown'ssecondaryassessedvaluation.Outstandinggeneralobligationbondeddebtforallotherpurposesmaynot exceed 6% of the Town's secondary assessed valuation.
(2)Generalobligationbondsofcommunityfacilitiesdistrictsarenotsubjecttoorincludedinthiscomputationsincethese bonds are not bonds of the Town of Prescott Valley.
(3)Forstatutorypurposes,theTown'soutstandingbondsarenotconsideredgeneralobligationbondssubjecttothe statutorylimitslistedabovebecausetheTown'sbondsoutstandingatJune30,2022weresecuredbysalestaxesandnotby property taxes.
124
201720182019202020212022
88,725,858 $ 97,728,875$ 107,859,586$ 122,100,073$ 137,967,041$ 150,349,766 $ ‐ ‐ ‐ ‐
$ 88,725,858 $ 97,728,875 $ 107,859,586 122,100,073 $ 137,967,041 $ $ 150,349,766 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Legal Debt Margin Calculation for Fiscal Year 2022
Assessed value $ 578,268,331
Debt limit (1):
Water and sewer 20% 115,653,666 All others 6% 34,696,100
Total debt limit 150,349,766
Debt applicable to limit (2)(3):
General obligation bonds ‐
Legal debt margin $ 150,349,766
Table 13
125
Fiscal Year
Town of Prescott Valley, Arizona
Pledged‐Revenue Coverage
Last Ten Fiscal Years
Wastewater System Revenue Bonds and Loans
Less: Less: Net Fiscal Gross ExcludedOperating Available YearRevenues Revenues (1)Expenses (2)Revenue 20135,599,246$ 238$ 2,864,712$ 2,734,296 $ 20145,788,251 710 2,812,590 2,974,951 20155,513,401 ‐ 3,413,331 2,100,070 20166,313,368 35,500 3,198,172 3,079,696 20176,333,149 10,613 3,278,220 3,044,316 20186,947,415 1,691 3,408,888 3,536,836 20196,831,792 500 3,340,388 3,490,904 20206,535,808 71 3,443,364 3,092,373 20217,752,650 ‐ 4,158,737 3,593,913 20227,654,163 ‐ 5,074,373 2,579,790
Source: Town of Prescott Valley Finance Department
(1) Total excluded revenues (including other revenues).
(2) Total operating expenses (including transfers out expenses, excluding depreciation and amortization expense).
126
Debt Service
PrincipalInterestTotalCoverage
1,155,536 $ 440,698$ 1,596,234$ 1.71 1,137,072 488,739 1,625,811 1.83 1,174,322 452,170 1,626,492 1.29 1,207,309 414,401 1,621,710 1.90 1,251,059 370,657 1,621,716 1.88 1,290,597 330,412 1,621,009 2.18 1,335,949 288,890 1,624,839 2.15 1,377,143 245,913 1,623,056 1.91 1,835,248 181,232 2,016,480 1.78 872,163 127,429 999,592 2.58
Table 14
127
Town of Prescott Valley, Arizona
Demographic and Economic Statistics
Last Ten Fiscal Years
Fiscal Year Estimated Population (1) Personal Income (thousands)
Per Capita Personal Income (1)Median Age (1)
Public School Enrollment (2)
201339,114831,916$ 21,269$ 40.05,745 201439,791834,417 20,970 41.85,860
201541,075867,709 21,125 41.4 5,869
201642,197 909,767 21,560 41.7 5,779 201743,132 913,622 21,182 41.9 5,740 201844,466 981,454 22,072 41.9 5,791 201945,751 1,035,162 22,626 42.3 5,666 202046,515 1,140,315 24,515 42.3 5,644 202146,785 1,231,615 26,325 42.6 5,120 202248,188 1,601,721 33,239 42.6 5,488 Source: (1) U.S. Census Bureau and ESRI (2) Humboldt Unified School District #22 (3) U.S. Bureau of Labor Statistics
0 2 4 6 8 10 12 2013201420152016201720182019202020212022 Unemployment Rate Prescott Valley State 128
Education Level in
Years of Schooling (1) Unemployment Rate ‐ Prescott Valley (3) Unemployment Rate ‐ State (3) Unemployment Rate ‐ Nation (3)
13 to 168.78.07.6
13 to 166.86.96.1
13 to 165.75.95.3
13 to 164.96.24.9
13 to 164.75.14.4
13 to 164.44.74.0
13 to 164.94.93.7
13 to 169.210.011.1
13 to 166.16.85.9
13 to 163.43.33.6
Table 15
129
Town of Prescott Valley, Arizona
Principal Employers
Current Year and Nine Years Ago
2022
EmployerProduct/ServiceEmployeesRank
Percentage of Total Town Employment
Yavapai Regional Medical CenterHospital756 12.91%
Humboldt Unified School DistrictEducation679 22.61%
MI Windows and Doors Manufacture aluminum products 440 31.69%
Ace Hardware, Inc. Regional distribution center 418 41.61%
Walmart Retail grocery 380 51.46%
Town of Prescott Valley Municipality 273 61.05%
Fry's Food Store Retail grocery 232 70.89%
Mountain Valley Regional* Rehabilitation hospital 225 80.86%
Home Depot Retail hardware 180 90.69%
Safeway Retail grocery 160 100.61%
3,743
Source: Town of Prescott Valley Economic Development, Town of Prescott Valley Human Resources Department
*Mountain Valley Regional Rehabilitation Hospital 130
2013
EmployeesRank
Percentage of Total Town Employment
Table 16
472 22.10% 712 13.17% 184 60.82% 191 50.85% ‐ N/A 165 90.74% 181 80.81% 183 70.82% ‐ N/A 135 100.60% 2,223 131
Town of Prescott Valley, Arizona
Full‐time Equivalent Town Government Employees by Function Last Ten Fiscal Years
Function
20132014201520162017
General government: Executive Management (1)6.63 8.00 7.00 Human Resources 2.56 3.56 Information Technology ‐ ‐ Town Clerk 3.00 3.00 Finance 19.23 18.00 Legal 5.50 5.50 Magistrate Court 7.00 8.00 Facilities and Fleet Maintenance 5.00 5.00
Public safety: Building/Safety 10.00 12.00 Police 75.60 83.50 Culture and recreation: Channel 56 (1) 2.00 Community Services ‐ Parks and Recreation22.57 21.42 Community Services ‐ Library 18.65 21.95
Public works: Transit Program ‐ ‐ Planning and Development 3.00 3.00 Neighborhood Services 2.00 2.00 3.00 3.00 Engineering and GIS 7 00 9.00 Streets 15.00 15.00 Total 204.74 220.93 256.64
Source: Town of Prescott Valley Human Resources and Finance Departments.
132
Full‐time Equivalent
Employees at June 30
8.00 8.00 4.00 4.70 ‐ 4.00 3.70 5.00 18.63 15.63 4.88 4.88 7.00 8.00 5.00 5.00 12.70 14.00 92.00 95.00 100.50 2.00 2.00 44.79 44.78 20.75 21.73 ‐ ‐ 3.00 3.00 3.00 3.00 10.00 9.00 14.88 15.93 1 3.45 254.33 263.65 265.13 266.78 267.14
Table 17
20182019202020212022
133
Town of Prescott Valley, Arizona
Operating Indicators by Function/Program
Last Ten Fiscal Years 2013201420152016
Function/Program
General government: Executive Management
Number of active capital projects30 26
Human Resources
Fiscal Year
Number of new hires 30 41 39 Town Clerk
Number of legal postings 75 155 114 130
Number of business licenses issued 473 529 449 578
Finance
Number of accounts payable checks issued 10,728 4,655 4,293
Purchase orders/field purchase orders issued 3,750 3,561 2,689 Sales tax growth (% annual change) 5.99%16.46%15.10%18.24% Magistrate Court
Charges filed/charges adjudicated (resolved) 21,776 15,185 7,645 8,550
Public safety: Building/Safety
Permits issued 1,427 1,916 4,093 Inspections performed 12,312 20,817 23,271
Police
Criminal arrests (1) 2,296 2,609 2,575 Calls for service 21,966 22,711 21,052
Culture and recreation: Community Services ‐ Parks and Recreation
Number of activities offered 63 79 89
Number of attendees ‐ all programs except aquatics 190,950 209,953 211,377 269,241
Number of attendees ‐ aquatics 19,856 23,877 30,476
Community Services ‐ Library
Number of visitors annually 241,388 247,357 268,601 267,503
Public works: Neighborhood Services
Number of code enforcement cases processed per year 5,417 5,490 4,772
Utilities:
Number of water service connections 18,401 18,855 19,725
Residential/commercial water billed (thousands of gallons)1,514 ,019 1,534,653 1,533,523
Reclaimed water supplied (thousands of gallons) 120,702 109,573 118,068 120,160
Number of sewer service connections 15,592 16,040 16,832
Sewage treated (thousands of gallons) 886,900 903,700 931,000 901,374
Source: Town of Prescott Valley
(1) Effective January 1, 2020 Police department no longer tracks PANT arrests
134
Fiscal Year
18 21 22
41 30 34 35 50 70 142 71157141124108 536497502474458337
4,1983,8593,8773,5443,3053,437 2,7752,0762,3172,3792,4682,696 19.50%4.86%7.02%6.67%18.83%15.63% 8,12910,57510,9719,61310,03110,036
3,0242,9852,7102,8163,7903,957 27,08333,70029,57825,95632,10336,522 2,8123,0152,3521,6241,6361,933 21,59321,13417,94516,00615,62715,313
94 95 96 53 51 44 259,431296,651218,66724,45320,79915,596 28,63825,73022,85813,92015,70022,304
286,864299,228270,041204,797125,176170,313 4,7744,9644,9505,2573,5781,332 20,33920,88221,36021,80422,36723,101 1,731,4081,847,9211,689,1001,756,3002,095,5672,129,780 113,600129,634119,470151,258145,046125,601 17,40817,96118,43618,89319,38120,253 904,137962,9781,050,326876,003942,955956,433
Table 18
201720182019202020212022
135
Town of Prescott Valley, Arizona
Capital Asset and Infrastructure Statistics by Function
Last Ten Fiscal Years
Fiscal Year
2013201420152016 Function
General government: Building (square feet)88,87288,87288,87288,872 Area of Town (square miles)38383838 Public safety: Police stations1111
Building (square feet)25,03825,03825,03825,038 Patrol Units81818686
Culture and recreation: Buildings (square feet)(1)53,01753,01753,01753,017 Parks 24272727 Area of parks (acres) 269 429 429 429 Swimming pools 1 1 1 1
Public works:
Buildings (square feett) (2) 6,6006,6006,6006,600 Roads (miles) 317 317 318 321 Traffic signals (3) 21 21 21 21 Storm pipe (miles) (4) 11 11 12 13 Waters mains (miles) 334 334 337 340 Fire hydrants 1,4981,5031,5241,556 Sanitary sewers (miles) 231 232 234 237
Source: Town of Prescott Valley
(1) Square footage occupied includes Aquatic Center, Senior Center, Boys & Girls Club, and Library buildings.
(2) Square footage occupied includes Public Works utility and shop buildings.
(3) Number of traffic signal intersections in fiscal years 2013 ‐2019, number of traffic signals starting with fiscal year 2020.
(4) Information for storm sewer pipe is provided by Town's GIS database starting in fiscal year 2022. 136
Fiscal Year
201720182019202020212022
82,73482,73482,73482,73482,73482,734 383838414141 111111
12,34012,34023,94423,94423,94423,944 837171787988
53,01753,01781,62681,62681,62681,626 292929292929 471471471471471471 111111
6,6006,6006,6006,6006,6006,600 321323323332334346 212222828184 131515171850 341344344354356382
Table 19
1,5561,5951,6011,6161,6551,668 237241241249251265 137
Town of Prescott Valley, Arizona
Retirement and Pension Plans
Last Ten Fiscal Years Table 20
Total PayrollCovered Payroll
Defined Contribution Plans
Fiscal Year 2013
% of Covered Payroll
Required Contribution Actual Contribution
Employer11,495,058$ 6,734,737$ 8%538,779$ 538,717 $ EmployeeN/A6,734,737 7%471,432 471,530
Fiscal Year 2014
Employer11,696,118 6,821,922 9%613,973 617,262 EmployeeN/A6,821,922 7%477,535 477,851
Fiscal Year 2015
Employer12,427,734 7,379,271 11%811,720 811,783 EmployeeN/A7,379,271 7%516,549 516,627
Fiscal Year 2016
Employer12,317,723 7,332,201 13%948,734 948,734 EmployeeN/A7,332,201 8%584,350 584,350
Fiscal Year 2017
Employer13,320,106 7,789,445 13%1,012,628 1,012,628 EmployeeN/A7,789,445 8%623,156 623,156
Fiscal Year 2018
Employer14,313,214 8,179,989 13%1,063,399 1,063,399 EmployeeN/A8,179,989 8%654,399 654,399
Fiscal Year 2019
Employer14,171,916 8,526,320 13%1,108,422 1,108,421 EmployeeN/A8,526,320 8%682,106 682,104
Fiscal Year 2020
Employer14,780,335 9,148,597 13%1,189,318 1,189,318 EmployeeN/A9,148,597 8%731,888 731,888
Fiscal Year 2021
Employer16,091,168 9,916,267 13%1,289,115 1,289,115 EmployeeN/A9,916,267 8%793,301 793,302
Fiscal Year 2022
Employer 17,145,495 10,420,417 13% 1,354,654 1,354,655 Employee N/A10,420,417 8% 833,633 833,634
Note:InlieuofparticipatinginFICA‐SocialSecurity,theTownhasadefinedcontributionplancreatedinaccordance with Internal RevenueCodeSection401(a).Theplanisavailabletoallfull‐timeemployeesoftheTown,exceptPolicepersonnel whoarecoveredundertheArizonaPublicSafetyPersonnelRetirementSystem(APSPRS).Theplanrequiresparticipantsto contribute8%oftheirearningsandtheTowntocontribute13%.TheplanisadministeredthroughICMARetirement Corporation,andparticipantsareallowedtochoosefromamongvariousinvestmentfundsofferedbythecompany.Thereare no securities of the Town included in the plan assets.
Note:Startinginfiscalyear2009,theTownbegancontributing1%andemployeesbegancontributing1%toaRetirement HealthSavingsAccountwhichisnotincludedinthetotalsabove.Effectiveinfiscalyear2017,theTowncontributionincreased to 2% and employee contributions remained at 1%.
138
