HomeMy WebLinkAboutTown of Payson - Public Financial Report2021 POPULAR ANNUAL FINANCIAL REPORT
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TABLE OF CONTENTS
CONTENT PAGE NO.
INTRODUCTION
Town Manager Message ………………………………………….…………. 3
…………………………………………………….. 4 Payson Profile
About Payson …………………………………………………….. 5
Town of Payson Mission Statement ..………………………………………….. 6
Corporate Strategic Plan …………………………………………………….. 7
Town Services …………………………………………………….. 8
STATEMENT OF NET POSITION
Net Position …………………………………………………….. 9
CAPITAL ASSETS
Capital Assets …………………………………………………………….. 10
Capital Improvements ………………………………………………… 11
DEBT
How Capital Investments are Funded …………………………………….. 12
GOVERNMENTAL FUND
Revenues for Fiscal Year 2020/2021 ……………………………………... 13
Expenditures for Fiscal Year 2020/2021 …………………………………...… 15
ENTERPRISE FUND
Enterprise Fund for Fiscal Year 2020/2021 ……………………...……… 17
OTHER INFORMATION
More about the Town of Payson ………………………………………...…… 19
MESSAGE FROM TOWN MANAGER
2021 POPULAR ANNUAL FINANCIAL REPORT
www.paysonaz.gov
Members of the Town of Payson’s Financial Services Department are pleased to present
the Popular Annual Financial Report (PAFR) for the fiscal year ended June 30, 2021.
This report is intended to present an overview of the Town’s financial position and
emphasize its commitment to providing responsive services and programs for the
community in a fiscally responsible manner.
We share with you details of how the Town’s revenue is generated, where the dollars
are spent, and how Payson’s local economy influences our organization’s overall
financial status. Above all, our goal is to provide an opportunity to better understand the many financial aspects
that affect your local government.
The information provided here is drawn from detailed financial information found within the 2021 Annual
Comprehensive Financial Report (ACFR). The financial statements were prepared in conformance with
Generally Accepted Accounting Principles (GAAP) and audited by an independent accounting firm, receiving an
unmodified opinion. The numbers contained within the ACFR were obtained by employing the basis of
accounting principles as prescribed by the Governmental Accounting Standards Board (GASB).
In short, the highest standards of accounting principles have been utilized to ensure full financial disclosure and
accountability. The Government Finance Officers Association has presented the following awards to the Town in
recognition of our financial commitment: the Certificate of Achievement for Excellence in Financial Reporting
for 23 consecutive years, the Award for Outstanding Achievement in Popular Annual Financial Reporting for 15
consecutive years, and the Distinguished Budget Presentation Award for 23 consecutive years.
While the numbers in this Popular Report come from an audited source, they are presented in an abridged,
unaudited non-GAAP format. Citizens who wish to review audited GAAP-basis financial statements can refer to
the Town’s 2021 ACFR, which is available from the Financial Services Department, the Payson Public Library,
or online at www.paysonaz.gov.
Members of the Financial Services Department and Staff across the organization are proud to serve this fine
community. We hope that the 2021 Popular Annual Financial Report serves its purpose and helps demonstrate
that every effort is made to manage the community’s resources wisely for the benefit of all.
Sincerely,
Troy Smith
Town Manager
TOWN MANAGER MESSAGE
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www.paysonaz.gov
Payson is called the
“Heart of Arizona”
because it is located almost exactly in the geographic center of the state.
...PAYSON FACTS…
Incorporated: 1973 Rainfall: Avg. 22 in. Median Age: 60.0
Area: 20.46 Snowfall: Avg. 15 in. Average Household Size: 2.3 Elevation: 4,921 ft. Precipitation Days: 65 Median Housing Value: $328,700 Population: 16,351 Sunny Days: Avg. 286 Unemployment Rate: 6.7%
PAYSON PROFILE
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State Routes 87 and 260 intersect within Payson, just 90 miles North of Phoenix, Arizona. The Town’s boundaries encompasses 20.46 square miles in Northern Gila County. Payson is nestled below Arizona’s Mogollon Rim at an elevation of approximately 5,000 feet and enjoys a moderate four-season climate. The Town is surrounded by
the Tonto National Forest and the world’s largest stand of virgin Ponderosa Pines.
The Payson Town site was established in 1882 with a population of 40. It was first known as Union Park, although residents referred to the Town as Green Valley. The first post office was opened in 1884 and the postmaster officially changed the name of the town to Payson, in honor of Senator Louis Edward Payson who was the
congressional head of the Post Office and Post Roads at the time. Payson was incorporated in 1973.
In its early years, Payson’s economy was based on logging, ranching and mining. This western heritage still lives on through its many festivals and events. The Payson Rodeo, now billed as the “World’s Oldest Continuous Rodeo”, started in 1884. The Hashknife Pony Express also makes its annual historic run through the Town,
picking up letters for delivery. Other events include arts & crafts fairs, classic car shows, Mountain High Days
Festival, Annual Monster Mudda, Farmer’s Markets, and the State Championship Fiddlers Contest.
Tourism, home building, and the retirement industries dominate the current economy with a growing emphasis on manufacturing and service firms. Light industry that is compatible with the community’s “High Quality of
Life” is also being encouraged. Payson’s major employers include Payson Unified School District, Mazatzal
Hotel & Casino, Walmart, Gila County, and Banner Medical Center.
The Town operates under the council-manager form of government. The Town Council, which has policy-making and legislative authority, consists of a mayor and a six-member council. The Town Council is responsible for,
among other things, passing ordinances, resolutions, and adopting the Town’s annual budget. They also appoint
committees and hire the Town Manager and Town Attorney. The Council is elected on a nonpartisan “at large” basis. Council members are elected to four-year staggered terms with three Council members elected every two years. The qualified voters of the Town directly elect the Mayor for a two-year term. The Town Manager is responsible for carrying out the policies, ordinances and resolutions of the Council, and for overseeing the day-
to-day operations of the Town.
ABOUT PAYSON
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To Accomplish this, We…
♦Value open communication
♦Encourage citizen participation
♦Operate honestly and fairly
♦Conduct ourselves through unity and teamwork
♦Respect our differences
♦Treasure our natural resources and unique
environment
The Town of Payson is dedicated to enhancing the
quality of life for our citizens by working hard to
provide a superior level of service in the most
effective and efficient manner while exercising
fiscal responsibility.
Town of Payson Mission
MISSION STATEMENT
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KRA1: Economic Development, Tourism and Economic Vitality KRA 2: Financial Excellence
KRA 3: Infrastructure
KRA 4: Innovation and Efficiency
KRA 5: Neighborhoods and Livability
KRA 6: Social Services
KRA 7: The Payson Team
KRA 8: Public Safety
KRA 9: Sustainability
KRA 10: Technology
Payson has been, and will continue to be, very proactive in encouraging quality community and organizational
development. Each year, the Town Council, citizens and the management staff participate in a strategic planning
process to update and enhance the Corporate Strategic Plan (CSP) to accommodate changes in the community’s
needs. The CSP carries out the Town’s Mission Statement and General Plan by establishing Key Result Areas
(KRAs). The Corporate Strategic Plan is divided into ten Key Results Areas (KRAs). Each KRA is specifically
defined and includes priorities and strategies that help guide the Town’s operation. Funding is allocated during
the subsequent budgeting process. The complete CSP document can be viewed on the Town of Payson website
at http://www.paysonaz.gov
The following KRA’s were established for fiscal year 2020/2021:
CORPORATE STRATEGIC PLAN
We Continue to Build On Our Core Values:
Customer Focus, Empowered Employees,
Leadership, & Continuous
Improvement
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Visit the Town of Payson Financial Services Department, Payson Library, or www.paysonaz.gov to obtain
additional planning, and financial information.
Annual Comprehensive Financial Report (ACFR) - This audited report provides detailed information
on the financial condition and activities of the Town.
Annual Budget Document - The Budget is a policy document, financial plan, operations guide, and
communications medium.
Capital Improvement Plan (CIP) - Outlines the Town’s five-year Capital Improvement Plan, sources of
funds and associated debt. The document includes descriptions of the capital projects and purchase plan
for machinery & equipment.
Corporate Strategic Plan (CSP) - Highlights the Town’s overall direction and priorities using Key
Result Areas that focus on strategic goals.
TOWN SERVICES
Town Council -provides clear policy direction with afocusonmakingtheTown of Payson the premiercommunityinwhichtolive,work and raise a family.
Town Manager-provides management direction. Responsibilities include implementing policies, overseeing Town operations and evaluating Town programs.
Town Clerk,Human Resources,Information Services,Financial Services andTownAttorney-all play a vital role with providing a wide range of skills &expertise necessary for the successful day-to-day operations.
Payson's Library -provides information toeducate, inform, enrich, entertain, andinspire the community.
Fire Department -provides emergency services which include fire suppression,medical emergencies,technical rescues and first responder operations to hazardousmaterialincidents.
Police Department -enforces local,state andfederallaws in addition to protecting the citizensand their property.
Parks,Recreation,&Tourism -provides a variety of cultural events and recreational programs for citizens ofallages,hosting special events including the Old Time Fiddlers' Contest,Mogollon Monster Mud Run, Trunk-or-Treat,Turkey Trot 5k Run,Electric Light Parade,Rodeos and a fabulous 4th of July Fireworks Event.
Highways & Streets -is responsible for providing safe and efficientinfrastructuresystemsincluding the construction and maintenance of theTown's approximately 112 miles of roadway..
Payson Airport -is a public use airport designed toaccommodatepiston engine aircraft,turboprop aircraftandsmallbuisnessjetaircraft.
Community Development -protects the public health and safety by ensuring that all structures are built inaccordancewithadopted building codes.They also provide comprehensive long-range planning and current land useservices.The Economic Division provides assistance to businesses getting started,expanding,or relocating to Payson.
Water Department -is a public waterutilitythatsupplieshighqualitydrinkingwatertoapproximately8,600 accounts.
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The Statement of Net Position provides a “snapshot” of where we stood financially as of June 30, 2021, the last
day of the fiscal year. Net Position represents the Town’s ownership (equity) in the assets within its possession.
Government-Wide Statement of Net Position
ASSETS represent the economic resources
owned by the Town. Current and Other Assets
include cash, investments and receivables
(money due to the Town). Capital Assets consist
of land, buildings, infrastructure, water system,
vehicles, machinery and equipment.
LIABILITIES represent what the Town owes
that will be settled over time through the transfer
of money, goods or services. Current Liabilities
consist of payables (money due from the Town
to pay within one year). Noncurrent Liabilities
represent debt that the Town will pay back but
not due for settlement within one year
.
DEFERRED INFLOWS / OUTFLOWS OF RESOURCES are separated as they relate to future periods
(revenue not earned or expenditures not chargeable in the current fiscal period in which they are collected or
made). For example, a grant payment may be deferred in the current fiscal year if the Town has not yet met all
of the requirements necessary to be eligible for the grant.
NET POSITION serves as a useful indicator of a government’s financial health and consists of three components.
The largest portion of the Town’s net position reflects its Net Investment in Capital Assets less any outstanding
related debt used to acquire those assets. An additional portion of net
position represents resources that are subject to Federal and State
restrictions. Unrestricted net position is reported as a deficit due to the
Town’s benefit obligations. At the end of the current fiscal year, the Town
of Payson was able to report positive balances and total assets exceeded total
liabilities by nearly $119 million.
STATEMENT OF NET POSITION
Total Town Government June 30, 2021 June 30, 2020
Assets
Current & Other Assets 41,789$ 32,356$
Capital Assets 167,204$ 167,978$
Total Assets 208,993$ 200,334$
Deferred Outflows of Resources 11,758$ 9,449$
Liabilities
Current Liabilities 2,941$ 2,477$
Noncurrent Liabilities 98,124$ 92,102$
Total Liabilities 101,065$ 94,579$
Deferred Inflows of Resources 764$ 2,037$
Net Position
Net Investment in Capital Assets 130,825$ 132,357$
Restricted 5,126$ 4,462$
Unrestricted (17,029)$ (23,652)$
Total Net Position 118,922$ 113,167$
(in thousands)
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The Town of Payson invests in capital assets to provide services that will enhance the quality of life for our
citizens, such as our Fire and Police Departments, Parks, Streets, Library, Airport, etc.. The Town’s total
investment in capital assets (net of depreciation) as of June 30, 2021 was $167.2 million.
CAPITAL ASSETS
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Capital Improvements for Fiscal Year 2020-2021
Payson is a mountain town whose water is obtained from deep wells within its corporate boundaries. For many
years, the Town Council and staff have been actively seeking additional water sources. Recent agreements with
the Federal Government and the Salt River Project have given the Town of Payson and surrounding areas water
rights from the C.C. Cragin Reservoir, which will provide Payson with its water needs for many years into the
future.
During the 2019-2020 fiscal year, the Town completed the C.C. Cragin Water Treatment Facility and successfully
delivered water for the first season. This project was secured through the Bureau of Reclamation Rural Water
Fund and the Water Infrastructure Financing Authority of Arizona. This project provides a renewable surface
water supply that is an essential part of Payson’s water resource portfolio. We were able to upgrade our municipal
software platform to provide more efficient service delivery to customers. This included a new generator at Town
Hall and critical disaster recovery upgrades that protect our data from physical and cyber threats. With a grant
from the Arizona Water Protection Fund, the Town completely restored a portion of the American Gulch
watercourse to enhance the flood control properties of this vital drainage infrastructure project.
For more info, contact Payson Water Dept. at (928) 474-5242, Option #4 or visit www.paysonaz.gov
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2021 POPULAR ANNUAL FINANCIAL REPORT
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How Capital Investments Are Funded
The Town’s Debt Policy provides a set of criteria to help determine when it’s best to fund capital
projects and which method of funding to use. The Town enjoys favorable bond ratings which allow
for very competitive interest rates when issuing debt.
DEBT TYPE DEFINITIONS
Debt Type 2021 2020
General Obligation Bonds -$ -$
Special Assessment Bonds 80,000$ 155,000$
Notes Payable 32,880,510$ 34,146,163$
Capital Leases 3,418,408$ 1,320,793$
Total Debt 36,378,918$ 35,621,956$
TWO YEAR DEBT SUMMARY
(All Funds)
General Obligation Bonds – long-term debt
that is backed by the full faith and credit of
the Town. These bonds require voter
approval and are typically repaid by a
property tax levy.
Special Assessment Bonds – long-term debt
with repayment assessed to homeowners
Revenue Bonds - long-term debt with
repayment to come from a pledged Town
revenue stream
Notes Payable - long-term debt that does not
include bonds, but a contract for repayment
Capital Leases – long & short-term debt used
for equipment
•The Town typically issues General Obligation
(G.O.) Bonds to fund capital projects of general
government departments. The last bond was paid
off in July 2020. The Town currently does not have
any bonds.
•Special assessments imposed on certain parcels of
land within the assessment district are used to pay
the Westerly Drive Improvement District bonds.
•The Town has entered into lease agreements for the
acquisition of public safety vehicles, various
equipment, vector truck, field lighting and turf.
General fund revenue is used to pay the capital
lease obligations.
•The Town has obtained Water Infrastructure
Finance Authority of Arizona (WIFA) loans for
improvements to the water system and construction
of the C.C. Cragin Pipeline Project.
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The Town accounts for the basic functions such as police, fire, parks, community development and general administration using governmental funds. The following list consist of the types of governmental revenues.
The revenues used to fund governmental activities are as follows:
Local Sales Tax / Bed Tax—a local sales tax of 2.88% is charged on most goods purchased in Town, and a 5% tax is charged for transient lodging (Bed Tax).
Property Tax—a primary property tax is charged based on assessed
property valuation Franchise Tax—fees paid by public utilities, telecommunication companies and cable television businesses State Shared Taxes—state revenue-sharing programs include sales tax, income tax and vehicle
license fees Other Intergovernmental Revenues—monies received from other governments or entities Fines & Forfeitures—revenues received from library and court fines Licenses & Permits—fees for building permits, business licenses, liquor licenses, etc. Charges for Service—revenues received for services provided
Miscellaneous—contributions, investment earnings, special assessments and other revenues that
don’t fit under the any of the above classifications
Sources of Governmental Revenue
Total Government revenues improved by 22.5% due to increases in local sales taxes and state shared
taxes.
REVENUES FOR FY2020/2021
Where Government
Fund Money Comes
Revenue 2021 % of Total
Local Sales/Bed Tax 13,965,923$ 46.6%
Property Tax/Library Dist 919,699$ 3.1%
Franchise Fees 405,155$ 1.3%
State Shared Taxes 5,447,522$ 18.2%
Other Intergovernmental 6,938,729$ 23.2%
Fines & Forfeitures 184,392$ 0.6%
Licenses & Permits 465,158$ 1.6%
Charges for Service 1,170,444$ 3.9%
Miscellaneous 451,330$ 1.5%
Total Revenues 29,948,352$ 100.0%
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Transaction Privilege Taxes by Category
The Transaction Privilege Tax, commonly called Sales Tax, is the primary source of governmental fund revenue. It is collected on the gross receipts of business activities that occur within the Town of Payson. The Town adopted the Model City Tax Code and has an Intergovernmental Agreement (IGA) with the
State Department of Revenue to administer and collect the tax for the Town.
The chart below shows a ten-year history of the Town of Payson’s sales tax activity by category. This clearly illustrates the impact of the nationwide economic downturn and its upturn to recovery.
The “Other Categories” classification includes Transportation & Warehousing, Manufacturing, Finance & Insurance, Wholesale Trade, Arts and Entertainment, and other.
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EXPENDITURE TYPE DEFINITIONS
Governmental Funds
Two-Year Expenditures by Type
EXPENDITURES FOR FY2020/2021
General Government—Functions serving
Town operations as a whole include Town
Council, Town Manager, Town Attorney,
Town Clerk, Finance, Human Resources,
and Central Services.
Public Safety—Police Department & Fire
Departments including the Wildland
Program.
Public Works—Includes Airport and
Streets Division.
Culture & Recreation—Includes Parks
Maintenance, Recreation, Tourism, and the
Library.
Community Development—Includes
Planning/Zoning/Code Enforcement,
Economic Development, Housing, and
Building Services.
Health & Welfare—Encompasses
contributions to entities providing services
for the Town.
Debt Service Payments—Principal,
interest and other related costs associated
with the Town’s issuance of debt to
support various capital improvement
activities.
Capital Outlay—Expenditures for
projects and equipment for the Capital
Improvement Program.
Where Government Fund
Money Goes
The two-year comparison on the left shows
the change in total expenditures for
governmental funds. Last year, the Town
pulled back the reins due to the unknown
financial impact of COVID-19. This year
the Town increased funding for
investments for replacement of machinery
& equipment, including two fire engines.
This also included an airport project over
$960,000. Overall, Governmental Fund
expenditures for fiscal period 2020/2021
reflect an increase of $3,705,284 in
comparison to the fiscal period that ended
in June 2020.
Expenditures 2021 2020
General Government 4,280,038$ 3,590,979$
Public Safety 11,415,538$ 10,715,771$
Public Works 3,373,330$ 2,975,678$
Culture & Recreation 1,410,997$ 1,599,477$
Community Development 714,791$ 824,344$
Health & Welfare 215,869$ 195,917$
Subtotal 21,410,563$ 19,902,166$
Debt Service Payments 230,844$ 255,287$
Interest on long-term debt 38,102$ 58,798$
Capital Outlay 3,878,616$ 1,636,590$
Total Expenditures 25,558,125$ 21,852,841$
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Where does the money go?
The pie chart on the left reflects
the breakdown of Fiscal Year
2020/2021 expenditures by
percentage within the Town’s
operating budget. These
categories reflect the day-to-day
expenditures such as personnel
services, benefits and general
operating expenditures but
exclude capital outlay and debt
services.
2021 Governmental Fund Expenditures
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Enterprise Funds are business-type funds considered to be self-supporting in that the services rendered
are generally financed through user charges or fees.
The Town has one Enterprise Fund—The Water Fund. This fund is used to record revenues and expenses
related to the maintenance and improvement of the current water system infrastructure. The Town’s
Water Division provides a safe & adequate domestic water supply to Payson residents.
Water Fund Revenues
ENTERPRISE FUND
The above chart compares the major Water Fund revenues for the last five fiscal years. Since
there wasn’t a significant change in Payson’s population during this time period, the changes
in revenues were largely due to annual rate increases for water usage implemented to help
cover the debt service for the C.C. Cragin Pipeline Project. High quality, reliable water service
was provided to 8,642 water customers during the 2020/2021 fiscal year.
Where Enterprise Fund Money
Comes From
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Enterprise Fund for FY2020/2021
The Water Fund expenditures significantly increased by 34.2% in comparison with last fiscal period 2019/2020. Over the past few years, the funding requirements of various maintenance projects has caused fluctuations in Water Fund Operating Expenses.
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
2017 2018 2019 2020 2021
3,054,857 2,992,782
3,483,262
2,922,250
3,921,072
Water Fund Operating Expenses (Excluding Depreciation)
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The Town of Payson was awarded the Certificate of Achievement for Excellence in Financial Reporting
by Government Finance Officers Association of the United States and Canada (GFOA). The Certificate
of Achievement is the highest form of recognition for excellence in state and local government reporting.
A Certificate of Achievement is valid for a period of one year only.
CONTACT & LOCATION INFORMATION
To send an e-mail to the Mayor or any of the Council
Members, just visit the Town website at
www.paysonaz.gov and select the appropriate
Representative from the Town Council tab.
Payson Town Hall
303 N. Beeline Highway
Payson, AZ 85541
Phone: (929) 474-5242
Fax: (928) 474-4610
TDD: (928) 472-6449
Recreation & Tourism Department
1000 W. Country Club Drive
Payson, AZ 85541
(928) 474-5242 Option #7
Payson Public Library
328 N. McLane
Payson, AZ 85541
(928) 474-9260
Payson Police Department
303 N. Beeline Highway
Payson, AZ 85541
Emergency—Dial 9-1-1
Police Admin: (928) 472-5057
Non-Emergency: (928) 474-5177
Fire Department
400 E. Main Street
Payson, AZ 85541
(928) 474-5242 Option #9
CONTACT INFORMATION
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