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Home My WebLink AboutCity of Phoenix - Public Financial Report City of Phoenix 1 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report City of Phoenix, AZ Popular Annual Financial Report (PAFR) The information included in this report contains an overview of the City of Phoenix (City) economic condition and outlook, an analysis of the City’s financial position, and information concerning the City’s assets and debt. The purpose of this report is to provide our residents with easily understandable information about how their tax dollars are spent. This report is based on the City of Phoenix Annual Compre- hensive Financial Report (ACFR) for the fiscal year ended June 30, 2021. This report contains more detailed infor- mation and focuses on the primary government and excludes the discretely presented component units of the City. The ACFR may be viewed in its entirety online at: hƩps://www.phoenix.gov/ﬁnance/annualreports City of Phoenix Finance Department 251 W. Washington St., 9th Floor Phoenix, AZ 85003 COMMUNITY PROFILE Phoenix Population 1,652,815 Maricopa County Population 4,845,832 Phoenix Area (in square miles) 519.9 Per Capita Income $48,065 City of Phoenix 2 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Popular Annual Financial Report For the Fiscal Year Ended June 30, 2021 TABLE OF CONTENTS Page Message from the City Manager 3 Message from the Chief Financial Officer 4 About Phoenix City Council 5 Award for Outstanding Achievement 6 Where We've Been 7 Where We're Headed 8 Basis of AccounƟng 9 Government‐Wide Statement of Net PosiƟon 10 Capital Assets 11 Debt 12 Where the Money Comes From 14 Where the Money Goes 17 Business‐Type Net PosiƟon 21 Pension Plans 23 Key StaƟsƟcs 24 City of Phoenix 3 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Message from the City Manager GreeƟngs: This marks our 11th annual City of Phoenix Popular Annual Financial Report which will provide an overview of the City’s ﬁnancial outlook, ﬁnancial posiƟon, assets and debt for the ﬁscal year ended June 30, 2021. The 2020‐2021 budget provided a balanced General Fund with several key service addiƟons reﬂecƟng the comments received from the community and the Mayor and City Council regarding the importance of maintaining current City services and a strong City organizaƟon. Phoenix conƟnues to be an aƩracƟve place to live and work and is the naƟon’s most rapidly growing large city. Recent years have seen steady, diversiﬁed economic growth. The City conƟnues to implement policies and standards to remain ﬁnancially balanced and maintain or improve current service levels. Over the last few years, the City has taken necessary acƟons to protect city services while facing very challenging ﬁnancial condiƟons. The City has iniƟated many ﬁscal reform measures, including $134 million in innovaƟon and efficiency savings to date since 2010, net reducƟon in city employee count of approximately 2,700 posiƟons since 2007‐08 resulƟng in the smallest government per capita since 1970‐71, balanc‐ ing the deﬁcit in the Public Safety Funds without sworn layoffs, and creaƟng a $35 million Pension Reserve Fund. The City conƟnues to maintain high quality credit raƟngs on General ObligaƟon, Excise Tax, Water Revenue, Sewer Revenue and General Airport Revenue Bonds. These high‐ quality credit raƟngs provided an opportunity to favorably issue new Excise Tax and Water Revenue Bonds in ﬁscal year 2021 and will provide addiƟonal opportuniƟes in the future. I want to thank the Mayor and City Council for their leadership in balancing the City budget, establishing a strategic plan for pandemic‐related federal funds and focusing on services that make Phoenix a desirable city. I also want to thank all City depart‐ ments and staff for their dedicaƟon to the community, especially in response to the global pandemic and its impact on our city. We value working smart, spending wisely and being kind to our customers. Most of all, thanks to the residents who care in‐ tensely about the city they live in. Sincerely, Jeffrey J. Barton City Manager Phoenix Strategic Plan Focus Areas: Financial Excellence ‐ Maintaining ﬁscally sound and sustainable ﬁnancial plans and budgets that reﬂect community values and residents’ prioriƟes. Infrastructure ‐ CreaƟng and maintaining high‐quality and diverse infrastructure systems. Public Safety ‐ Maintaining safe neighborhoods through‐ out the City. InnovaƟon and Efficiency ‐ Seeking conƟnuous improve‐ ment and maintaining our culture of innovaƟon and efficiency, including right‐sourcing. Neighborhoods and Livability ‐ Ensuring healthy, safe and beauƟful neighborhoods that enhance the quality of life for all residents. Economic Development and EducaƟon ‐ Ensuring a sustainable and forward‐looking economic development strategy that encourages high‐wage jobs. Social Services Delivery ‐ Encouraging new methods of social services that support independence, quality of life, and sustainable service. Phoenix Team ‐ SupporƟng our employees, volunteers, and community partners to work together in order to serve our residents with the highest standard of quality and customer service. Sustainability ‐ Securing environmental and economic livability for future generaƟons in the region, with an emphasis on solar energy. Technology ‐ Focusing on a "web‐enabled City" that embraces technological innovaƟon and automated City services. Jeffrey J. Barton, City Manager City of Phoenix 4 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Message from the Chief Financial Officer Kathleen Gitkin Chief Financial Officer Dear Reader: In an effort toward complete transparency, I am pleased to submit to residents the City of Phoenix Popular Annual Financial Report (PAFR) for the fiscal year ended June 30, 2021. The information presented in this report is based primarily on the City of Phoenix Annual Comprehensive Financial Report (ACFR) which is available in its entirety online at https://www.phoenix.gov/finance/ annualreports. The objective of the PAFR is to provide an easily understandable summary of the City’s financial status. This report focuses on the entire financial picture of the City for all functions provided to our residents. The report includes information about City management, an overview of the City’s eco- nomic outlook and key financial information concerning the City’s revenues, expenditures, capital assets, and debt. I hope that you find the information helpful and encourage you to access our audited ACFR on the City’s website for more detailed information on the City’s finances. Your questions, comments and suggestions regarding this report are welcome. You can contact the Finance Department at 602- 262-7166. Sincerely, Kathleen Gitkin, Chief Financial Officer Finance Department Mission: To provide citywide financial leadership through the management of best in class business practices that safeguard the public’s assets and provide our customers with transparency, information and financial expertise. Financial Excellence Strategic Plan: - Maintain high bond ratings - Develop capital and funding plans for critical infrastructure - Provide accurate and reliable revenue and expenditure fore- casting - Maintain a transparent financial environment, free of fraud, waste, and abuse City of Phoenix, Arizona Bond RaƟngs: DescripƟon Moody's S & P Fitch* General Obligation Aa1 AA+ AAA Senior Lien Excise Tax Revenue Aa2 AAA AA+ Senior Lien Airport Revenue Aa3 A+ - Junior Lien Water Revenue Aa2 AAA - Senior Lien Wastewater System Revenue Aa2 AAA - *Currently, Fitch does not rate the City's Enterprise or Special Revenue credits. Note: See Exhibit H-11 in City ACFR for a comprehensive list of all bond ratings. City of Phoenix 5 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report About Phoenix City Council Phoenix operates under a Council‐Manager form of government. Under this organizaƟonal structure, the Mayor and Council ap‐ point a City Manager to act as the Chief OperaƟng Officer. The Mayor and City Council set policy direcƟon and the City Manager implements those policies. In 1982, an iniƟaƟve was passed by the City voters creaƟng a district system for elecƟng council mem‐ bers. The Mayor is elected at‐large, while Council members are elected by voters in each of eight separate districts they represent for four‐year terms. The Mayor and each Council member have equal voƟng power. City of Phoenix 6 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Award for Outstanding Achievement The Government Finance Officers AssociaƟon of the United States and Canada (GFOA) has given an Award for Outstanding Achievement in Popular Annual Financial ReporƟng to the City of Phoenix for its Popular Annual Financial Report for the ﬁscal year ended June 30, 2020. The Award for Outstanding Achievement in Popular Annual Financial ReporƟng is a presƟgious naƟonal award recognizing conformance with the highest standards for preparaƟon of state and local government popular reports. In order to receive an Award for Outstanding Achievement in Popular Annual Financial ReporƟng, a government unit must publish a Popular Annual Financial Report, whose contents conform to program standards of creaƟvity, presentaƟon, under‐ standability and reader appeal. We believe our current report conƟnues to conform to the Popular Annual Financial ReporƟng requirements, and we are sub‐ miƫng it to GFOA to determine its eligibility for another Award. City of Phoenix 7 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Where We've Been Phoenix conƟnues to be an aƩracƟve place to live and work, Phoenix has been one of the most rapidly growing metropolitan areas in the country in recent decades. Recent years have seen substanƟal growth in terms of populaƟon, employment, afforda‐ ble housing and retail sales. The City conƟnues to implement policies and standards to remain structurally balanced, maintain or improve current service levels and aƩract wealth generaƟng companies. Due to a strong economy before the COVID‐19 pandemic, the City has maintained a strong ﬁnancial posiƟon. The CARES Act in addiƟon to the American Rescue Plan Act conƟnue to provide much‐needed services to the most vulnerable residents and busi‐ nesses. Phoenix remains among the fastest growing ciƟes in the coun‐ try. During the period of 2010 to 2020, populaƟon growth was an esƟmated 11.2% in Phoenix as compared to esƟmated 7.4% for the U.S. In that same Ɵme frame, employment in the Phoenix area has grown 25.4% while employment in the U.S. grew 8.9%. As of June 2021, the non‐seasonally adjusted un‐ employment rate for both the Phoenix area and the U.S. was 6.6% and 6.1% respecƟvely. The Phoenix area has a mix of industry that mirrors the U.S. The primary employment sec‐ tors and their share of total employment consist of the ser‐ vice industry including ﬁnancial acƟviƟes (55.3%); trade, transportaƟon, and uƟliƟes (20.2%); government (10.1%); manufacturing (6.3%); construcƟon (6.3%); informaƟon (1.7%); and natural resources and mining (0.1%). Secondary assessed valuaƟon is a measure of taxable property val‐ ue. For ﬁscal year 2015‐16, the primary assessed valuaƟon and the secondary assessed valuaƟon were combined into a single valua‐ Ɵon of $10.6 billion. Between ﬁscal years 2015‐16 and 2020‐21, the assessed valuaƟon increased by 31.1% to $13.9 billion. The as‐ sessed valuaƟon increased another 6.3% to $14.8 billion for ﬁscal year 2021‐22. City total property tax rate (Primary and Secondary) for ﬁscal year 2021‐22 was set to $2.12 per $100 assessed valua‐ Ɵon. City of Phoenix 8 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Where We're Headed The PHX Sky Train® is an electrically‐powered, automated people mover located at Sky Harbor internaƟonal airport that operates 24‐hours a day, 365 days a year. It provides a seamless connecƟon among the three terminal buildings. Stage 2 of the sky train is underway, in works is the 24th street staƟon, addiƟonal parking, plus 2.5 miles of track have been added. When complete and op‐ eraƟonal in 2022, the total of 5 miles of track will connect the 44th street staƟon, East Economy Parking, the Valley Metro Light rail, and the Sky Harbor Rental Car Center. The City of Phoenix Parks, RecreaƟon, and Mountain Preserves program has $212.7 Million allocated for various projects such as Land acquisiƟon for new recreaƟonal sites and preserves, improvements and rehabilitaƟon of exisƟng parks, improvement and creaƟon of hiking trails, maintenance of sports courts and pools, and installaƟon and replacement of park lighƟng city wide. In 2021 the City of Phoenix Parks, RecreaƟon, and Mountain Preserves program has begun works on three brand new parks. The parks will be located at 55th Ave and Samantha way, 87th Ave and Lower Buckeye Rd, and 71st Ave and Meadows Loop Rd. The Park will also be a place of leisure for local families, in addiƟon to providing open areas for the local community to relish. City of Phoenix 9 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Basis of AccounƟng The term “basis of accounƟng” is used to describe the Ɵming of recogniƟon, or when the effects of transacƟons or events should be recognized. The ﬁnancial statements presented in this report were prepared using the Generally Accepted AccounƟng Princi‐ ples (GAAP) basis of accounƟng. Other reports issued by the City may use the budget basis of accounƟng. The City maintains budgetary controls, which are designed to ensure com‐ pliance with legal provisions of the annual budget adopted by the City Council. An operaƟng budget is legally adopted by ordinance each ﬁscal year and sets limits on the amount the City is able to spend on City func‐ Ɵons. Some reports issued by the City use the budget basis of accounƟng to compare City ﬁnancial acƟviƟes to the adopted budget. Most of the state‐ ments in this report were taken from the City’s ACFR, which is prepared using the GAAP basis of accounƟng. The Ɵming of revenue and expenditures may be different under the GAAP basis of accounƟng than under the budgetary basis of accounƟng. For example in GAAP accounƟng, revenues are recog‐ nized in governmental funds as soon as they are both measurable and available. Under the budgetary basis of accounƟng, revenue may be deferred unƟl amounts are actually received in cash. Another difference occurs in the recogniƟon of an encum‐ brance, which is an amount for which there is a legal obliga‐ Ɵon to spend in the future, such as entering into a contract with a business to supply the City a product or service. Under the budgetary basis of accounƟng, the encumbered amount can be classiﬁed as an expense when the contract is signed, but under the GAAP basis of accounƟng encumbrances are not classiﬁed as expenditures unƟl the service has been performed. City of Phoenix 10 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Government‐Wide Statement of Net PosiƟon June 30, 2021 and 2020 Total City Government (in thousands) 2021 2020 Assets: Cash and investments $ 3,074,279 $ 2,673,749 Current and other assets 4,025,730 3,720,254 Capital assets, net of depreciaƟon 13,252,596 12,757,460 Total assets 20,352,605 19,151,463 Deferred ouƞlows of resources 777,252 756,463 LiabiliƟes: Long‐term liabiliƟes 12,556,419 12,665,699 Other liabiliƟes 1,541,250 1,265,095 Total liabiliƟes 14,097,669 13,930,794 Deferred inﬂows of resources 431,686 195,962 Net posiƟon: Net investment in capital assets 6,731,809 6,781,877 Restricted 1,688,060 1,473,651 Unrestricted (1,819,367) (2,474,358) Total net posiƟon $ 6,600,502 $ 5,781,170 Current and other assets ‐ Assets that one can reasonably expect to convert to cash, sell, or use within one year. Capital assets ‐ The City’s long‐term investments in land, buildings, equipment, improvements, infrastructure, and construcƟon in progress. The City uses these capital assets to provide services to ciƟzens; consequently, these assets are not available for future spending. Page 11 provides more detailed informaƟon on capital assets. Deferred ouƞlows of resources ‐ A consumpƟon of net assets by the government that is applicable to a future reporƟng period. It has a posiƟve effect on net posiƟon, similar to assets. Long‐term liabiliƟes ‐ Represents mainly debt obligaƟons and net pension liability of the City. The proceeds from various debt issues are used to ﬁnance large projects such as road construcƟon and major equipment purchases. Net pension liability is the total pension obligaƟon for cur‐ rent and reƟred employees minus assets held in trust to meet those obligaƟons. Other liabiliƟes ‐ These are primarily debts that can be paid off in one year or less. This includes accounts payable, accrued payroll, and accrued interest payable. Deferred inﬂows of resources ‐ An acquisiƟon of net assets by the government that is applicable to a future reporƟng period. It has a negaƟve effect on net posiƟon, similar to liabiliƟes. Net investment in capital assets ‐ This represents the City’s investment in its capital assets less accumulated depreciaƟon and any outstanding debt aƩributable to the acquisiƟon, construcƟon, or improvement of these assets. Restricted net posiƟon ‐ Resources whose use is subject to externally imposed restricƟons. The City has resources set aside for debt service payments, development impact fees restricted to growth‐related projects, other capital projects, and required reserves. Unrestricted net posiƟon ‐ Resources available to the City to provide services to the ciƟzens and creditors if there were no addiƟonal revenues or resources available. City of Phoenix 11 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Capital Assets The City invests in capital assets to provide services to and enhance the quality of life of our residents. As shown on the pre‐ vious page, the City’s total capital assets (net of depreciaƟon) was $13.3 billion and $12.8 billion for the ﬁscal years ended. June 30, 2021 and 2020, respecƟvely. This total is made up of the following asset categories: Asset Category DeﬁniƟons: Buildings include police and ﬁre staƟons, courts, libraries, recreaƟon faciliƟes and sports faciliƟes. Improvements include upgrades such as parking lots, fences, bus shelters, playgrounds, sports courts and ﬁelds, and water treatment faciliƟes. Equipment includes garbage and recycling trucks, police cars, ﬁre engines, and light rail cars. Land means real estate purchased to provide services to residents like parks or police staƟons. ConstrucƟon in Progress reﬂects the cost of all projects for construcƟon of buildings, other improvements, and equip‐ ment that are in progress and not yet completed. Miscellaneous Assets include artwork, soŌware, and water rights. Infrastructure includes water and sewer lines, streets, bridges and storm drains. Major AddiƟons to Capital Assets during the Fiscal Year 2020‐2021: Design and construcƟon related to the light rail extension projects valued at $253.6 million. ConstrucƟon for the PHX Sky Train at Sky Harbor InternaƟonal Airport valued at $172.9 million. Various street and storm sewer projects throughout the City valued at $151.0 million. Footprint Center (formerly Talking SƟck Resort Arena) renovaƟon project valued at $136.2 million. New and replacement water and sewer mains throughout the City valued at $122.1 million. AviaƟon terminal 4 improvements valued at $112.0 million. Water and wastewater distribuƟon and collecƟon faciliƟes projects valued at $92.5 million. Transit bus purchases valued at $57.2 million. City of Phoenix 12 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Debt The City uƟlizes general obligaƟon bonds, revenue bonds, loans from direct borrowing, and for long‐term ﬁnancing of faciliƟes. General ObligaƟon Bonds The City typically issues general obligaƟon bonds to fund the capital projects of general government (non‐enterprise) depart‐ ments. These projects include cultural faciliƟes, ﬁre, police, library, parks and recreaƟon, mountain preserves, storm sewers, streets, and transportaƟon. The annual debt service on these bonds is paid from secondary property taxes. State law dictates that revenue collected for the City's secondary property tax levy be used solely to pay principal and interest on long‐term debt. The law imposes two limits on the total of general obligaƟon debt; an amount equal to 20% of the City’s secondary assessed valuaƟon can be issued to fund capital projects for water, sewer, arƟﬁcial light, open space preserves, parks, playgrounds, streets, and faciliƟes for recreaƟon, law enforcement, ﬁre, emergency services, and transportaƟon. An amount equal to 6% of the secondary assessed valuaƟon can be issued for all other purposes. These limits are known as the Legal Debt Limit. Municipal CorporaƟon ObligaƟons Revenue bonds are secured by taxes, user fees, and charges for services and are not considered a general obligaƟon of the City. This includes Municipal CorporaƟon bonds issued by the City of Phoenix Civic Improvement CorporaƟon (the “CIC”), an affiliated nonproﬁt corporaƟon that issues bonds or cerƟﬁcates of parƟcipaƟon to ﬁnance certain faciliƟes and equipment. The City makes lease purchase payments to cover the principal and interest on these obligaƟons. Revenue Bonds State law authorizes the City to issue voter‐approved highway user revenue and uƟlity revenue bonds. The City currently has no outstanding voter‐approved revenue bonds. Loans from Direct Borrowings The loan from direct borrowings is payable from and secured by a subordinated lien on the City's excise tax revenues on parity with all other outstanding subordinated excise tax obligaƟons and is subordinate to the pledge on all outstanding senior lien and junior lien excise tax obligaƟons. The loan from direct borrowings is not issued through CIC. The loan is the City’s debt. Community FaciliƟes Districts The Park Central Community FaciliƟes District ("PCCFD") was formed on August 29, 2018, by the Mayor and Council of the City in order to provide public infrastructure within the boundaries of PCCFD for development of a mulƟ‐use residenƟal, commercial and retail project known as "Park Central." The bonds issued in June 2019 by the PCCFD are payable solely from amounts collected pursuant to the special assessments and are not an obligaƟon of the City. Proceeds of the bonds are for the construcƟon of a parking garage. City of Phoenix 13 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Debt (conƟnued) City of Phoenix 14 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Where the Money Comes From Governmental Revenues Governmental funds are used to account for the basic funcƟons of the City, such as police, ﬁre, courts, streets, parks, libraries and public housing. The major governmental revenue categories are: City Taxes: Includes sales taxes, property taxes, franchise fees, special taxing district revenues, and payments in‐lieu of taxes. State Shared Revenues: The state of Arizona shares certain revenues with ciƟes, such as income tax, state sales tax, vehicle license tax, and highway user revenues, as required by various state statutes. Other Intergovernmental Revenues: Federal grants and revenues from other government sources. Charges for Services: Revenues collected for services such as building inspecƟons, court and police fees and public transit fares. Miscellaneous: Investment income, dwelling rentals, concession sales, ﬁnes, licenses and permits. Business–Type Revenues Business‐type funds are used to account for acƟviƟes that are ﬁnanced and operated in a manner similar to private business‐ es. These funds are considered self‐supporƟng in that the services rendered are generally ﬁnanced through user charges or fees. The operaƟng revenues shown in the chart do not include grants or transfers. In general, business‐type revenues can only be used to support the expenditures of the business‐type fund in which it was earned. The major business‐type revenues are Water System, AviaƟon, Wastewater, Solid Waste and ConvenƟon Center. City Taxes State Shared Other Intergov’t Charges for Services Governmental Revenues—2021 $ 1,410,625 $ 674,518 $ 958,339 $ 178,652 Governmental Revenues—2020 $ 1,287,094 $ 597,310 $ 514,522 $ 197,396 Business‐Type OperaƟng Rev—2021 $ 467,576 $ 292,068 $ 216,830 $ 185,699 Miscellaneous $ 161,926 $ 190,189 $ 27,114 Business‐Type OperaƟng Rev—2020 $ 425,390 $ 346,852 $ 213,562 $ 154,685 $ 43,040 Water System AviaƟon Wastewater Solid Waste ConvenƟon Center Total $ 3,384,060 $ 2,786,511 Total $ 1,189,287 $ 1,183,529 Governmental Revenues—2019 $ 1,261,164 $ 575,278 $ 373,465 $ 208,584 $ 169,762 $ 2,588,253 Business‐Type OperaƟng Rev—2019 $ 382,915 $ 384,400 $ 209,415 $ 148,728 $ 47,381 $ 1,172,839 City of Phoenix 15 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Where the Money Comes From (conƟnued) Governmental Revenues Fiscal Year 2021 City taxes account for 42% of governmental fund revenues. Some revenues are earmarked for speciﬁc uses, while others are available for general use. Property Taxes ‐ Arizona’s property tax system provides for two separate tax systems ‐ 1) a primary system for taxes levied to pay current operaƟon and maintenance expenses; and ‐ 2) a secondary system for taxes levied to pay principal and interest on bonded indebtedness as well as for the determinaƟon of the maximum permissible bonded indebtedness. City Sales Taxes ‐ Sales tax revenues are either earmarked for speciﬁc uses, such as public safety, transit, the convenƟon cen‐ ter, or are available for general use. This category not only includes retail sales tax, but also hotel/motel taxes, commercial rental, construcƟon contracƟng, and motor vehicle rentals among others. UƟlity, Franchise and Other Taxes ‐ These taxes include franchise fees paid by public uƟliƟes, telecommunicaƟons companies, and cable television businesses. These taxes are available for general use. On average, for every tax dollar the City receives, $0.08 is spent on debt service and $0.45 is earmarked for speciﬁc spending purposes, such as public safety or transportaƟon. That leaves $0.47 of every tax dollar to spend on general fund programs. City of Phoenix 16 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Where the Money Comes From (conƟnued) TransacƟon Privilege Taxes are imposed on various business acƟviƟes. Revenues from these acƟviƟes or tax categories are distributed to various funds depending on the tax allocaƟon structure approved by voters. The retail sales tax fund distribu‐ Ɵon is shown on the following page. Other tax categories include hotel/motel lodging, apartment/residenƟal rental, motor vehicle rental, amusements, adver‐ Ɵsing, job prinƟng, publishing, use tax, jet fuel, and retail food sales. City of Phoenix 17 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Where the Money Goes Where Your Retail Sales Tax Dollar Goes EffecƟve January 1, 2016, the City of Phoenix implemented a mulƟ‐level tax rate which impacted Retail Tax: 1) Level 1 at 2.3% for ﬁrst amount equal to or less than $10,000 for a single item, 2) Level 2 at 2.0% for amounts greater than $10,000 for a single item. Adding in the state and county sales tax rates, the total tax rate for most items purchased at retail in the City is 8.6%. 2.3% City of Phoenix 5.6% State of Arizona 0.7% Maricopa County 8.6% Total Phoenix Sales Tax Rate Where the Phoenix 2.3% Goes: 1.2% General Fund — The General Fund provides for many of the major funcƟons of the City including public safety (police and ﬁre), courts, street maintenance, park & recreaƟon services, preserving & revitalizing Phoenix neighbor‐ hoods, and advancing environmental protecƟon & sustainability programs. It is the primary operaƟng fund of the City. 0.7% TransportaƟon 2050 — Phoenix voters approved TransportaƟon 2050, a 0.7% sales tax, effecƟve January 1, 2016, to fund the City’s Comprehensive TransportaƟon Plan including new light rail lines, bus expansion and street improvements. This tax supersedes the 0.4% Transit 2000 sales tax approved by voters in March 2000. 0.2% Public Safety Expansion — This ordinance, approved by voters in 2007, provides for the funding of addiƟonal police officers and ﬁreﬁghters. 0.1% Neighborhood ProtecƟon — Fund Created in 1993 as a result of the enactment of the Neighborhood Protec‐ Ɵon Ordinance (ProposiƟon 301), this fund expanded Police, Fire, and Neighborhood Block Watch Programs. 0.1% Parks and Desert Preserves — In 2007, Phoenix voters reauthorized the Phoenix Parks and Preserve IniƟaƟve that provides funds to save thousands of acres of state trust land, make improvements to neighborhood and commu‐ nity parks, and build regional parks. City of Phoenix 18 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Where the Money Goes (conƟnued) Governmental and Business‐Type Expenses For the Years Ended June 30, 2021 and 2020 (in thousands) Total Expenses: FY21 ‐ $ 4,141,988 Total Expenses: FY20 ‐ $ 4,117,422 People ‐ the cost of employees including wages and beneﬁts Capital ‐ costs of property, plant and equipment; primarily depreciaƟon and interest Services ‐ contractual services provided by external enƟƟes Goods ‐ inventories, supplies, and materials City of Phoenix 19 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report People Services Goods Capital Total % of Subtotal % of Total General Government Public Safety $ 1,130,363 $ 60,054 $ 24,742 $ 125,219 $ 1,340,379 48.85% 32.55% TransportaƟon 83,960 257,504 23,836 208,839 574,139 20.93% 13.94% Community Enrichment 124,079 90,782 12,628 97,063 324,553 11.83% 7.88% Community Development 88,494 134,212 2,059 26,443 251,207 9.16% 6.10% General Support AcƟviƟes 56,596 24,284 4,444 26,098 111,422 4.06% 2.71% Interest on Debt ‐ ‐ ‐ 53,629 53,629 1.95% 1.30% Environmental Services 8,038 12,950 8,005 23,375 52,369 1.91% 1.27% Criminal JusƟce 29,169 5,769 560 553 36,050 1.31% 0.88% Subtotal 1,520,700 585,554 76,274 561,220 2,743,748 100% 66.64% Business‐Type AviaƟon 94,678 150,799 11,983 290,130 547,590 39.86% 13.30% Water System 108,584 23,560 53,388 236,009 421,541 30.69% 10.24% Wastewater 24,873 29,306 2,255 117,825 174,259 12.69% 4.23% Solid Waste 58,690 38,485 3,592 25,534 126,301 9.19% 3.07% ConvenƟon Center 22,943 25,794 1,261 53,985 103,983 7.57% 2.53% Subtotal 309,768 267,944 72,479 723,483 1,373,674 100% 33.36% TOTAL $ 1,830,468 $ 853,498 $ 148,753 $ 1,284,703 $ 4,117,422 100% 2020 Where the Money Goes (conƟnued) 2021 People Services Goods Capital Total % of Subtotal % of Total General Government Public Safety $ 1,120,946 $ 71,157 $ 26,532 $ 148,365 $ 1,367,004 48.93% 33% TransportaƟon 55,105 80,087 7,745 284,946 427,982 15.32% 10.33% Community Enrichment 110,217 153,453 15,785 139,582 419,047 15% 10.12% Community Development 70,807 149,675 1,413 37,288 259,183 9.28% 6.26% General Support AcƟviƟes 65,514 39,471 12,771 53,351 171,106 6.12% 4.13% Interest on Debt ‐ ‐ ‐ 53,532 53,532 1.92% 1.29% Environmental Services 9,995 9,259 6,807 33,168 59,224 2.12% 1.43% Criminal JusƟce 30,608 5,276 351 578 36,812 1.32% .89% Subtotal 1,463,204 509,889 71,45 750,727 2,793,890 100% 67.45% Business‐Type AviaƟon 87,670 113,727 8,241 367,019 576,657 42.78% 13.92% Water System 95,289 23,147 53,732 200,838 373,006 27.67% 9.01% Wastewater 65,767 31,040 2,624 76,631 176,062 13.06% 4.25% Solid Waste 29,788 67,716 4,376 31,963 133,843 9.93% 3.23% ConvenƟon Center 9,322 22,177 909 56,122 88,530 6.57% 2.14% Subtotal 287,836 257,807 69,882 732,573 1,348,098 100% 32.55% TOTAL 1,751,040 767,285 141,287 1,483,377 4,141,988 100% City of Phoenix 20 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Where the Money Goes (conƟnued) TransportaƟon Expenses —> FY21 = $427,982 (in thousands) TransportaƟon expenses include costs incurred by the Street Trans‐ portaƟon and Public Transit departments. The Street TransportaƟon expenditures are primarily capital costs for designing, building and maintaining City streets. AddiƟonally, Street TransportaƟon also ad‐ ministers street lights, parking meters and traffic management. The majority of Public Transit expenditures are for service contracts relat‐ ed to bus and light rail operaƟons. <—Water Expenses FY21 = $373,006 (in thousands) The City’s Water Program provides a safe and adequate domesƟc water supply to all residents in the Phoenix water service area. All of Phoenix’s water is treated at one of ﬁve water treatment plants be‐ fore traveling through 7,000 miles of distribuƟon lines to customers’ taps within a 540‐square‐mile service area. Public Safety Expenses —> FY21 = $1,367,004 (in thousands) The City’s largest expense category is Public Safety. This includes the Police and Fire departments. The Police Department provides law en‐ forcement and community resources for police services and the pro‐ tecƟon of the lives and property of our residents. The Fire Department provides safety of life and property through ﬁre prevenƟon, ﬁre con‐ trol and emergency medical and public educaƟon services. <— AviaƟon Expenses FY21 = $576,657 (in thousands) The AviaƟon Department provides the Phoenix metropolitan area with a self‐supporƟng system of airports and aviaƟon faciliƟes that accommodate general and commercial aviaƟon in a safe, efficient and convenient manner. Major faciliƟes include Sky Harbor InternaƟonal Airport, Deer Valley Airport, Goodyear Airport and the Rental Car Center at Sky Harbor. City of Phoenix 21 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Business‐Type Net PosiƟon Business‐type funds (or Enterprise Funds) are used to report acƟvity for which a fee is charged to users for goods or services, similar to private business. These funds can only be used to pay for the operaƟonal expenses of each business‐type acƟvity, including most of the capital improvements. Therefore, fees are set to recover all costs associated with providing these services. The graphs on the next two pages show the net posiƟon balances for the City's four largest business‐type funds. The net posiƟon balance is the difference between the assets and liabiliƟes of each fund. The largest porƟon of the City’s net posiƟon reﬂect investments in capital as‐ sets, such as land, buildings, and equipment. The excess of revenues over expenses in a ﬁscal year contribute to the net posiƟon of a fund. Over Ɵme, increases or de‐ creases in net posiƟon may serve as a useful indicator of changes in a fund’s ﬁnancial posiƟon. 2018 2019 2020 2021 Scheduled Airlines 21 23 20 20 AircraŌ Traffic Movement (in thousands) 925 974 932 751 Passengers Arriving and DeparƟng (in thousands) 44,340 45,531 34,726 26,780 2017 19 923 43,533 The City’s Water System program provides a safe and adequate domesƟc water supply to all residents in the Phoenix water service area. The major component of the Water System’s net posiƟon is its investment in capital assets, which includes water mains, hydrants, meters, and service connecƟons. 2018 2019 2020 2021 ProducƟon (billions gallons) 102.7 94.9 97.5 106.2 Average Daily ProducƟon (million gallons) 281.4 260.7 266.3 290.9 Miles of Water Main 6,967 6,980 7,007 7,027 Number of Accounts 421,226 425,492 429,739 433,023 2017 97.8 268.1 6,888 423,569 City of Phoenix 22 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Business‐Type Net PosiƟon (conƟnued) The Wastewater program assists in providing a clean, healthy environment through the effecƟve management of all water borne wastes generated within the Phoenix drainage area. 2018 2019 2020 2021 Miles of Sewer Lines 4,890 4,906 4,896 4,954 Number of Accounts 414,559 413,967 417,633 421,521 2017 4,847 410,952 The Solid Waste Fund assists in providing a safe and aes‐ theƟcally acceptable environment through effecƟve, inte‐ grated management of the solid waste stream, including collecƟon, disposal, and recycling acƟviƟes. (in thousands) 2018 2019 2020 2021 Residences Served 405 408 410 414 City Disposal (in tons) 596 613 638 632 Total Disposal (in tons) 861 939 978 986 Total Recycling (in tons) 120 120 124 129 2017 403 623 943 120 City of Phoenix 23 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Pension Plans Virtually all full‐Ɵme employees and elected officials of the City are covered by one of three contributory pension plans. The City of Phoenix Employees' ReƟrement Plan (COPERS) covers general City employees. Sworn police and ﬁre employees are covered by the Arizona Public Safety Personnel ReƟrement System (APSPRS) and elected officials are covered by the Elected Officials' ReƟre‐ ment Plan of Arizona (EORPA). InformaƟon related to COPERS and the City's porƟon of APSPRS are shown below. The City contributes to each of the pension plans that covers its employees. An actuarially determined amount is contributed to fully fund beneﬁts for acƟve members and to amorƟze any un‐ funded actuarial liability. Per City Charter, the City contributes 100% of required contribuƟons, something not every City does. In 2018, General City contribuƟons increased due to a $70.0 million pay‐down of the unfunded pension liability in the Wastewater Enterprise Fund. In 2021, General City contribuƟons increased due to a $170.0 million pay‐down of the unfunded pension liability in the Avia‐ Ɵon Enterprise Fund. ContribuƟons by the City and the employees are held as assets by each of the respecƟve pension plans. These assets are used to pay current and future reƟrees. An independent actuary is hired each year to esƟmate the lia‐ bility of each of the pension plans. Plan assets divided by the determined liability equals the percent funded. The General City percentage increased in 2018 primarily due to an addiƟonal $70.0 million of pension contribuƟons from the Wastewater Enterprise Fund. In 2021, the percentage in‐ creased due to a $170.0 million pension contribuƟon from the AviaƟon Enterprise Fund, as well as high investment earnings. Both Police and Fire percentages decreased slightly in 2021 due to an increase in the actuarially calculated liability in this ﬁscal year. Employees also contribute a percentage of their pay to the pension plans. The percentage required depends on the pension plan to which they belong. The above graph shows historic contribuƟon informaƟon. Pension assets for all plans have remained steady, with the excepƟon of 2021 for the General City, which saw a signiﬁ‐ cant increase due to addiƟonal contribuƟons and invest‐ ment earnings. City of Phoenix 24 For the Fiscal Year Ended June 30, 2021 Popular Annual Financial Report Selected City Performance Measures FY 2021 FY 2020 COMMUNITY ENRICHMENT Libraries Book CirculaƟon (in thousands) 6,833 8,529 Total Stock (in thousands) 4,287 3,409 Number of Library Branches 17 17 Parks and RecreaƟon City Parks (number of acres) 45,146 45,636 Number of Playgrounds 283 279 PUBLIC SAFETY Police Police Precincts 7 7 Police Employees (Authorized) 3,271 3,271 Dispatched Calls for Service 656,000 680,834 Fire Fire StaƟons 59 59 Fire Employees 2,121 2,074 Calls for Service 217,992 212,988 TRANSPORTATION Public Transit Ridership (in thousands) Bus 15,122 27,837 Dial‐a‐Ride 274 302 Light Rail 4,032 8,008 Streets Total Miles 4,858 4,863 Miles Resurfaced and Sealed 445 359 Signalized IntersecƟons 1,162 1,153 Key StaƟsƟcs