Comprehensive Annual Financial Report

Transcription

1 Comprehensive Annual Financial Report For the Year Ended December 31, 2013

2 Comprehensive Annual Financial Report For the fiscal year ended December 31, 2013 Prepared by the Finance Department: Charles Seest, Finance Director Maria Ostrom, Assistant Finance Director JoAnn Koenig, Senior Accountant Kim Newhart, Senior Accountant Jamie Miller, Accountant Dawn Cartier, Accountant Mindy Gallo, Accounting Specialist Vanessa Bernal, Accounting Specialist Carla Montoya, Accounting Specialist

3 Table of Contents Introductory Section Letter of Transmittal City Officials Organizational Chart Certificate of Achievement for Excellence in Financial Reporting Financial Section Page v x xi xii Report of Independent Certified Public Accountants 1 Management s Discussion & Analysis 5 Basic Financial Statements Government-wide Financial Statements Statement of Net Position 14 Statement of Activities 15 Fund Financial Statements Balance Sheet - Governmental Funds 18 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 19 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds 20 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 21 Statement of Net Position Proprietary Funds 22 Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds 24 Statement of Cash Flows Proprietary Funds 26 Notes to Financial Statements 28 Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund Non US GAAP Basis 54 Schedule of Funding Progress for the City Fire Pension Plan 55 Schedule of Funding Progress for the City Retiree Health Care Plan 56 Combining and Individual Statements and Schedules Fund Descriptions Non-Major Governmental Funds 58 Combining Balance Sheet Non-Major Governmental Funds 60 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governmental Funds 64 Thornton Arts, Sciences, and Humanities Council Fund (TASHCO) Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual 67 Cash in Lieu Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual 68 Conservation Trust Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual 69 i

4 Table of Contents (Continued) Financial Section (Continued) Combining and Individual Statements and Schedules (Continued) Page Parks Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual 70 Open Space Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual 71 Parks and Open Space Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual 72 Adams County Open Space Sales Tax Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual 73 Adams County Road & Bridge Sales Tax Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual th Avenue General Improvement District Tax Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual 75 E911 Authority Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual 76 Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual 77 Governmental Capital Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual 78 Thornton Development Authority South Capital Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual Non US GAAP Basis 79 Thornton Development Authority North Capital Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual 80 Thornton Development Authority 144 th Capital Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual 81 Fund Descriptions Major Enterprise Funds 82 Water Fund Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual Non US GAAP Basis 83 Sewer Fund Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual Non US GAAP Basis 84 Fund Descriptions Non-Major Enterprise Funds 85 Combining Statement of Net Position Non-Major Enterprise Funds 86 Combining Statement of Revenues, Expenses, and Changes in Net Position - Non-Major Enterprise Funds 87 Combining Statement of Cash Flows Non-Major Enterprise Funds 88 Sanitation Fund Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual Non US GAAP Basis 90 Golf Course Fund Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual Non US GAAP Basis 91 Fund Descriptions Internal Service Funds 92 ii

5 Table of Contents (Continued) Financial Section (Continued) Combining and Individual Statements and Schedules (Continued) Page Combining Statement of Net Position Internal Service Funds 93 Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds 94 Combining Statement of Cash Flows Internal Service Funds 96 Risk Management Fund Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual Non US GAAP Basis 98 Information Technology Fund Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual Non US GAAP Basis 99 Reprographics Fund Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual Non US GAAP Basis 100 Consolidated Service Center Fund Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual 101 Maintenance Services Fund Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual Non US GAAP Basis 102 Other Schedules Schedule of Investments 105 Local Highway Finance Report 106 Statistical Section (Un-audited) Schedule 1 Net Position by Component 111 Schedule 2 Changes in Net Position 112 Schedule 3 Fund Balances of Governmental Funds 114 Schedule 4 - Changes in Fund Balances of Governmental Funds 115 Schedule 5 General Government Tax and Assessment Revenues by Source 116 Schedule 6 Sales Tax Revenue by Type of Industry 118 Schedule 7 Direct and Overlapping Sales Tax Rates 120 Schedule 8 Principal Sales Taxpayers 121 Schedule 9 Ratios of Outstanding Debt by Type 122 Schedule 10 Ratios of General Bonded Debt Outstanding 124 Schedule 11 Direct and Overlapping Governmental Activities Debt 125 Schedule 12 Legal Debt Margin Information 126 Schedule 13 Pledged-Revenue Coverage 127 Schedule 14 Demographic and Economic Statistics 128 Schedule 15 Principal Employers 129 Schedule 16 Full-time Equivalent City Government Employees by Function 130 Schedule 17 Operating Indicators by Function 131 Schedule 18 Capital Asset Statistics by Function 132 iii

6 This Page Left Intentionally Blank iv

7 v

8 vi

9 vii

10 viii

11 ix

12 CITY OFFICIALS December 31, 2013 Mayor and City Council Mayor: Council Members: Ward 1 Ward 1 Ward 2 Ward 2 Ward 3 Ward 3 Ward 4 Ward 4 Heidi Williams Mack Goodman Jenice Dove Eric Montoya Val Vigil Sam Nizam Beth Martinez Humenik Janifer Kulmann Eric Tade Administrative City Manager: City Attorney: Presiding Municipal Judge: Assistant City Manager: Deputy City Manager - Management Services: Deputy City Manager - Infrastructure: Deputy City Manager - City Development: Police Chief: Fire Chief: Community Services Executive Director: Economic Development Director: Finance Director: Assistant Finance Director: City Clerk: Jack Ethredge Margaret Emerich Charles Rose Joyce Hunt Charles W. Long Bud Elliot Jeff Coder Randy Nelson John Staley Mike Soderberg John Cody Charles Seest Maria Ostrom Nancy Vincent x

13 2013 City of Thornton Organizational Chart THORNTON CITIZENS MAYOR AND CITY COUNCIL Boards and Commissions City Attorney City Manager Utilities Director Municipal Judge Management Services City Development Infrastructure Police Community Services Fire Economic Development Finance Management and Budget City Clerk xi

14 xii

15 Independent Auditor s Report To the Mayor and City Council City of Thornton, Colorado Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Thornton, Colorado, as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise the City s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Thornton, Colorado, as of December 31, Indiana St., Ste. 200 Golden, CO TF T F EOE 1

16 2013, 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. Adoption of New Accounting Standard As described in Note A18 to the financial statements, the City adopted the provisions of GASB Statement No. 65, Items Previously Reported as Assets and Liabilities. As discussed in Note A19 to the financial statements, the City has retroactively restated the previously reported net position to account for bond issuance costs in accordance with this Statement. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that management s discussion and analysis and budgetary comparison information on pages 5 through 11 and 54 and the schedule of funding progress on pages 55 through 56 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Thornton, Colorado s financial statements. The introductory section, combining and individual fund financial statements, individual budget schedules, schedule of investments, Local Highway Finance Report, and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements, budget schedules, schedule of investments and Local Highway Finance Report on pages 58 through 107 were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, this information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 2

17 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 23, 2014 on our consideration of the City of Thornton s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Thornton s internal control over financial reporting and compliance. Golden, Colorado May 23,

18 This Page Left Intentionally Blank 4

19 Management s Discussion and Analysis December 31, 2013 As management of the City of Thornton ( the City ), we offer readers of the City s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal at the front of this report, and the City s financial statements which follow this section. Financial Highlights The City s assets exceeded its liabilities at the close of the most recent fiscal year by $981,021,322. This total is divided between Governmental Activities of $361,575,788 and Business-type Activities of $619,445,534. The City s total net position increased by $5,099,321. This total is divided between a decrease in Governmental Activities of $4,362,316 and an increase in Business-type Activities of $9,461,637. The City s Governmental Activities show revenues of $132,794,688. The largest revenue source is sales and use taxes ($78,188,772) followed by charges for services ($14,437,608) and property taxes ($11,858,574). Charges for services consists of the administrative fee charged to the enterprise funds ($4,210,979, 29%), recreation and related charges ($2,859,272, 20%), license, permits and inspection fees ($2,602,394, 18%), fines and forfeitures ($2,597,693, 18%), ambulance charges ($1,602,725, 11%), and other miscellaneous charges ($564,545, 4%). The Governmental expenses were $137,157,004. More details are provided in the Government-wide Financial Analysis section. The City s Business-type Activities show revenues of $60,119,363. The largest revenue source is charges for services ($47,594,693) followed by capital grants and contributions ($9,205,225). Capital grants and contributions consists of payments for connections to the City s water and sewer systems ($8,057,340, 88%) and infrastructure donated to the City by developers ($1,147,885, 12%). The Business-type expenses were $50,657,726. More details are provided in the Government-wide Financial Analysis section. General Fund total fund balance increased by $5,413,197 (20%) from prior year. City Council policy requires the General Fund to maintain a total fund balance at an amount equal to specified percentages of the current year General Fund budget. (Catastrophic 7%, Stabilization 7%, other 3% and TABOR reserve per State Statute). At the end of the current fiscal year, total fund balance was $32,907,103 or 36% of General Fund budgeted expenditures. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City s basic financial statements. The City s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad view of the City s finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the City s assets and liabilities, 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 position of the City is improving or deteriorating. The statement of activities presents information showing how the government s net position changed 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 and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City 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 City include general government, police, fire, ambulance, city development, infrastructure, and community services. The business-type activities of the City include water, sewer, sanitation, and the golf course. The government-wide financial statements can be found on pages 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 City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. 5

20 Management s Discussion and Analysis December 31, 2013 Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government s near-term financing requirements. 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, readers 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 City maintains 16 individual governmental funds. 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, the Governmental Capital Project Fund, and the Thornton Development Authority 144 th Capital Fund which are considered to be major funds. Data from the other 13 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget for its General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with this budget, which can be found on page 54 of this report. The basic governmental fund financial statements can be found on pages of this report. Proprietary funds. The City maintains two different types of proprietary funds; enterprise and internal service. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for water, sewer, sanitation, and the golf course. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City s various functions. The City uses five internal service funds: Risk Management to account for the costs related to a comprehensive program to manage the City s property, liability, work related injury risk, dental and vision; Information Technology to account for computer support and maintenance; Reprographics to account for copying and mailing; the Consolidated Service Center to account for fuel purchased and utilized by Adams County School District 12; and Maintenance Services to account for custodial and building maintenance service costs. Because these services predominately benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water, Sewer, Sanitation and Golf Course Funds. Only the Water and Sewer Funds are considered to be major funds of the City. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on pages of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain supplementary information. The combining statements referred to earlier in connection with non-major governmental funds and proprietary funds are presented immediately following the basic financial statements. Combining and individual fund statements and schedules can be found on pages of this report. Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government s financial position. Assets exceeded liabilities by $981,021,322 at the close of the most recent fiscal year (see Table 1). By far the largest portion of the City s net position (79.5%) reflects its net investment in capital assets (e.g., land, buildings, machinery, and equipment), less any related debt used to acquire those assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. 6

21 Management s Discussion and Analysis December 31, 2013 An additional portion of the City s net position (1.2%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position ($189,086,349) may be used to meet the government s ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances of net position; both for the government as a whole, as well as for its separate governmental and business-type activities. Table 1 Net Position As of December 31, Governmental activities Business-type activities Total restated restated restated Current and other assets $ 132,259,765 $ 128,728,202 $ 117,989,467 $ 120,794,381 $ 250,249,232 $ 249,522,583 Capital assets 323,054, ,797, ,077, ,414, ,131, ,212,338 Total assets 455,314, ,525, ,066, ,209,347 1,138,380,918 1,144,734,921 Deferred Outflows of Resources 532, ,165 2,564, ,167 3,097, ,332 Long-term liabilities outstanding 53,478,448 57,972,877 53,866,453 58,981, ,344, ,954,793 Other liabilities 28,755,318 28,490,925 12,318,961 12,478,701 41,074,279 40,969,626 Total liabilities 82,233,766 86,463,802 66,185,414 71,460, ,419, ,924,419 Deferred Inflows of Resources 12,037,757 11,789, ,037,757 11,789,833 Net position: Net investment in capital assets 271,137, ,932, ,956, ,107, ,093, ,039,821 Restricted 5,360,319 5,098,730 6,480,661 15,431,413 11,840,980 20,530,143 Unrestricted 85,077,988 82,907, ,008,361 97,444, ,086, ,352,037 Total net position $ 361,575,788 $ 365,938,104 $ 619,445,534 $ 609,983,897 $ 981,021,322 $ 975,922,001 The government s net position increased by $5,099,321 during the current fiscal year. This increase is due to revenues exceeding expenses (119%) for business-type activities which are explained below. Governmental activities. Below is information regarding Governmental activities (see Table 2). Governmental activities decreased the City s net position by $4,362,316. Sales and use taxes ($78,188,772, 59% of total revenues), charges for services ($14,437,608, 11% of total revenues) and property taxes ($11,858,574, 9% of total revenues) represent the three largest inflows. In 2013, governmental revenues increased by $7,778,882 (6%) from Capital grants and contributions represented the largest increase ($4,678,149) due to the timing of grant revenue recognized related to projects completed by the City. Sales and use taxes also increased ($4,582,366) due to continued improvement in the economy and new retail development within the 144 th urban renewal area. Some areas of the government experienced a decrease in expenses and others an increase. Overall, there was a net increase in expenses of $761,609 (0.6%) over Business-type activities. Below is information regarding Business-type activities (see Table 2). Business-type activities increased the City s net position by $9,461,637, accounting for 186% of the total growth in the government s net position. Charges for services ($47,594,693, 79% of total revenues), miscellaneous revenue ($2,750,108, 5% of total revenues) and tap fees, which are included in grants and contributions, ($8,057,340, 13% of total revenues) represent the three largest inflows to business-type activities. 7

22 Management s Discussion and Analysis December 31, 2013 Table 2 Changes in Net Position For Years Ended December 31, Revenues: Program revenues: Governmental activities Business-type activities Total restated restated restated Charges for services $ 14,437,608 $ 15,853,276 $ 47,594,693 $ 50,894,288 $ 62,032,301 $ 66,747,564 Operating grants and contributions 5,704,876 5,572, ,704,876 5,572,187 Capital grants and contributions 12,577,779 7,899,630 9,205,225 15,501,147 21,783,004 23,400,777 General revenues: Sales and use taxes 78,188,772 73,606, ,188,772 73,606,406 Property taxes 11,858,574 11,719, ,858,574 11,719,559 Franchise taxes 5,258,367 4,818, ,258,367 4,818,327 E911 taxes 1,037,053 1,080, ,037,053 1,080,585 Other taxes 1,861,731 1,606, ,861,731 1,606,794 Earnings on investments 206, , ,078 1,198, ,534 2,162,200 Gain on sale of assets 24,402 16,259 28,964 16,259 53,366 Miscellaneous 1,663,472 1,871,200 2,750,108 11,558,397 4,413,580 13,429,597 Total revenues 132,794, ,015,806 60,119,363 79,181, ,914, ,197,362 Expenses: General government 20,193,979 31,840, ,193,979 31,840,827 Police 28,044,137 26,295, ,044,137 26,295,237 Fire 12,758,169 12,188, ,758,169 12,188,210 City development 14,459,695 13,467, ,459,695 13,467,929 Streets, traffic, and engineering 36,991,096 26,533, ,991,096 26,533,674 Community services 22,066,524 22,473, ,066,524 22,473,148 Interest on long-term debt 2,643,404 3,596, ,643,404 3,596,370 Water ,722,025 32,611,461 32,722,025 32,611,461 Sewer ,254,003 12,132,240 12,254,003 12,132,240 Sanitation - - 4,454,606 4,692,187 4,454,606 4,692,187 Golf - - 1,227,092 1,375,657 1,227,092 1,375,657 Total expenses 137,157, ,395,395 50,657,726 50,811, ,814, ,206,940 Increase (decrease) in net position before transfers (4,362,316) (11,379,589) 9,461,637 28,370,011 5,099,321 16,990,422 Transfers - (1,890,206) - 1,890, Increase (decrease) in net position (4,362,316) (13,269,795) 9,461,637 30,260,217 5,099,321 16,990,422 Net position, Jan 1 365,938, ,207, ,983, ,723, ,922, ,931,579 Net position, Dec 31 $ 361,575,788 $ 365,938,104 $ 619,445,534 $ 609,983,897 $ 981,021,322 $ 975,922,001 8

23 Management s Discussion and Analysis December 31, 2013 Business-type activities (Continued). (see Table 2). Revenues decreased by $19,062,193 (24%) in 2013 compared to A decrease in resident sale of water ($3,997,707), a decrease in oil and gas revenue (which is included in miscellaneous revenue) received on property owned by the City ($9,192,244), and a decrease in grants and contributions ($6,295,922) account for the decrease in total revenues. Weather plays a significant role in outdoor water use by residents, and the Denver metro area experienced a wet spring and fall season in 2013 which led to a decline in outdoor water use and therefore a decline in revenue related to the resident sale of water. The bulk of revenue related to oil and gas was received in 2012 at the time the agreements were signed, therefore, the decline in revenue in 2013 related to these oil and gas agreements was anticipated. In 2012, the City received $6,840,000 from an intergovernmental agreement with Metro Wastewater related to reimbursement for improvements made in the system; this was a one-time payment as required per the agreement, therefore, contributions declined in Expenses decreased $153,819 (0.3%) from This decrease in expenses was primarily due to the decrease in operating expenses in the Sanitation fund. Financial Analysis of the Government s Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The following details are contained in the fund financial statements. Governmental funds. The focus of the City s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City governmental funds reported combined ending fund balances of $94,637,205, an increase of $3,454,793 in comparison with the prior year as a result of revenues exceeding expenses. The reasons for increases in revenues and decreases in expenses are outlined above under the Governmental Activities section. Approximately 58% of year end fund balance ($54,527,413) is available for spending at the government s discretion. The remainder of fund balance ($40,109,792) is nonspendable, restricted or committed to indicate that it is not available for new spending. The two largest components are advances ($13,288,335, 33%) and commitments made by Council ($17,432,000, 43%). The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the General Fund was 35% ($11,628,514) of total fund balance ($32,907,103). As a measure of the General Fund s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 13% of total actual General Fund expenditures, while total fund balance represents 37% of that same amount. The Governmental Capital Projects Fund is funded primarily with sales and use taxes and provides for the repair, replacement and planned growth of infrastructure and other capital assets of the City government. At the end of the current fiscal year, assigned fund balance was 49% ($13,757,541) of total fund balance ($28,083,428). Proprietary funds. The City s proprietary funds provide the same type of information found in the governmentwide financial statements, but in more detail. Unrestricted net position of the Water, Sewer, Sanitation, and Golf Funds at the end of the year amounted to $81,814,422, $14,835,775, $6,345,715, and $1,012,449 respectively. The change in net position for the funds was $7,174,816, $1,567,790, $460,564, and $258,467, respectively. General Fund Budgetary Highlights Revenues and other financing sources were less than budgetary estimates and expenditures were less than appropriations. Expenditures were under budget by $3,295,775. There were multiple vacancies throughout the year in the general fund which accounted for 37% or $1,221,103 of the total savings. Amounts spent on contracted services and utilities were less than anticipated in 2013 primarily due to lower litigation costs and less park irrigation water usage respectively which accounted for 36% or $1,196,962 of the total savings. Various expenses across all other categories in the general fund accounted for 27% or $877,710 of the total savings. 9

24 Capital Asset and Debt Administration City of Thornton, Colorado Management s Discussion and Analysis December 31, 2013 Capital assets. The City s investment in capital assets for its governmental and business-type activities as of December 31, 2013, amounts to $888,131,686 (net of accumulated depreciation). This investment in capital assets includes land and water rights, building and improvements, leisure areas and improvements, general equipment, and infrastructure (see Table 3). Major capital asset events during the current fiscal year included the following: Governmental capital assets decreased in the current year by $11,742,758 net of accumulated depreciation. The City s capital spending was relatively flat over Of the $30,090,513 spent on capital outlay in 2013, only $5,926,040 (20%) was capitalized or carried in construction in progress with the remaining $24,164,473 of capital outlay being directly expensed, as the projects were ineligible for capitalization under the City s policies and procedures. The majority of these expenditures were for the street maintenance program, of which $8, was related to infrastructure pertaining to development of the Grove retail area. The largest portion of the spending that did get capitalized at year-end, was related to land purchased for a total of $1,342,857. The primary decrease in capital asset value was due to depreciation expense ($18,617,222) with the infrastructure in streets, traffic and engineering ($12,235,304, 66%) contributing the largest amount. Proprietary capital assets increased by $4,662,106 net of accumulated depreciation, with the largest increase occurring in construction in progress ($4,478,689). In 2013, the City began the development of two reservoirs that were acquired in 2010 and Shoring to prevent erosion control was installed at the Hammer location ($3,480,820 capitalized improvement). Design for structural improvements and the pump station continued at the Hammer location while construction of the pump station at the Rogers location began (total increase of $3,426,684 to construction in progress for both projects). The City also began updating existing reservoirs with shoring and other structural improvements ($443,840 capitalized improvement and $640,497 increase to construction in progress), and continued to replace outdated water and sewer lines and upgrade treatment facilities ($2,856,031 capitalized improvements and $531,094 increase to construction in progress). Additional information on the City s capital assets can be found in note E on pages of this report. Table 3 Capital Assets (net of depreciation) As of December 31, Governmental activities Business-type activities Total Land, water and land rights $ 47,439,564 $ 46,296,896 $ 183,476,357 $ 183,106,058 $ 230,915,921 $ 229,402,954 Source of supply ,980, ,265, ,980, ,265,784 Water treatment plant ,959,132 65,692,535 63,959,132 65,692,535 Collection, transmission, & distribution ,052, ,403, ,052, ,403,943 Streets, traffic, and engineering 172,276, ,331,649 80, ,356, ,331,649 Buildings, structures and improvements 45,867,593 47,508,027 13,368,724 13,721,000 59,236,317 61,229,027 Leisure areas and improvements 39,362,315 30,462, , ,728 40,116,904 31,261,319 General equipment 10,467,318 10,390,677 4,351,261 3,852,035 14,818,579 14,242,712 Construction in progress 7,641,384 16,807,532 8,053,572 3,574,883 15,694,956 20,382,415 Total $ 323,054,614 $ 334,797,372 $ 565,077,072 $ 560,414,966 $ 888,131,686 $ 895,212,338 Long-term debt. At the end of the current fiscal year, the City had total debt outstanding of $108,035,000 (see Table 4). Of this amount, $16,175,000 comprises general obligation debt backed by the full faith and credit of the government. However, per City charter, the general obligation bonds issued for the City s municipal water system are excluded from the legal debt limitation because the bonds are being serviced by water operations. The remainder of the City s debt represents certificates of participation of $27,295,000 and revenue bonds of $64,565,000 supported by a pledge of the City s general sales and use tax collections ($24,610,000) and a pledge of charges for services of the Water and Sewer Funds ($39,955,000). 10

25 Management s Discussion and Analysis December 31, 2013 Long-term debt (continued). The City s total debt decreased by $13,955,000 (11%) during the current fiscal year due to debt service payments throughout the year. In 2013, the Standard & Poor s rating on the Sales and Use Tax Bonds, Series 2002 was AA+; on the City s General Obligation Bonds, Series 2002, the Water Enterprise Revenue Bonds, Series 2013, and the Sewer Revenue Bonds, Series 2005 was AA; on the Water G.O. Capital Appreciation Bonds and the Certificates of Participation was AA-, and the Tax Increment Bonds, Series 2004 was A. In 2013, Moody s rated the City s General Obligation Bonds, Series 2002, the Sewer Revenue Bonds, Series 2005, the Water Revenue Bonds, Series 2004, and the Water G.O. Capital Appreciation Bonds Aa2; the Sales and Use Tax, Series 2002, and the certificates of participation Aa3; and the Tax Increment Bonds, Series 2004 A2. Table 4 Outstanding Debt (G.O. and Revenue Bonds, and Certificates of Participation) As of December 31, Governmental activities Business-type activities Total General obligation bonds $ - $ - $ 16,175,000 $ 24,250,000 $ 16,175,000 $ 24,250,000 Revenue bonds 24,610,000 26,780,000 39,955,000 40,850,000 64,565,000 67,630,000 Certificates of participation 27,295,000 30,110, ,295,000 30,110,000 Total $ 51,905,000 $ 56,890,000 $ 56,130,000 $ 65,100,000 $ 108,035,000 $ 121,990,000 Economic Factors and Next Year s Budgets and Rates The December 31, 2013 unemployment rate for the City was 6.9%, which is lower than last year. The City is lower than the county s (Adams) rate of 7.6%, and slightly higher than the state s annual unemployment rate of 6.8%, but lower than the national rate of 7.4%. Inflation has increased from 2012 s rate of 1.9%; the Consumer Price Index for the Denver-Boulder-Greeley area was 2.8% in 2013 compared to the national inflation rate of 1.5%. In 2013, the City s occupancy rate is approximately 93% for retail space, 75% for office space and 83% for industrial space. The City s population has increased approximately 1,432 people and is expected to continue to grow at approximately the same pace in In 2013, the City s Water Fund had a rate increase of 3.0% and 6.0% in the Sewer Fund. In 2014, the City s water rates will remain flat and increase 3.5% for the Sewer Fund. The City s investment earnings have declined for the seventh straight year. The City s average pooled rate was 4.90% in 2007, 3.93% in 2008, 2.18% in 2009, 2.02% in 2010, 1.42% in 2011, 1.12% in 2012, and 1.01% in The current projection for 2014 s rate is 1.00%. The City invests available funds with safety as the primary goal. Instability in the financial markets along with the recent recession created an unprecedented flight to quality putting downward pressure on yields. Investment vehicles utilized by the City to ensure safety first are yielding interest rates at historic lows. All of these factors were considered in preparing the City s budget for the 2014 fiscal year. Ending unassigned fund balance in the General Fund was $11,628,514. Anticipated revenues and the use of this fund balance are expected to be adequate to fund necessary governmental operations and to keep the fund balance in harmony with the City Council s fund balance policy. Requests for Information This financial report is designed to provide a general overview of the City s finances for all those with an interest in the government s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City Treasurer, City of Thornton, 9500 Civic Center Drive, Thornton, CO or visit the City s website at 11

26 This Page Left Intentionally Blank 12

27 BASIC FINANCIAL STATEMENTS 13

28 Statement of Net Position December 31, 2013 Governmental Business-type Activities Activities Total ASSETS Equity in pooled cash and investments $ 112,914,106 $ 93,314,786 $ 206,228,892 Receivables, net Taxes 21,112,868-21,112,868 Accounts 5,585,353 4,718,152 10,303,505 Notes 246, ,926 Interest and other 271, , ,664 Internal balances (12,618,670) 12,618,670 - Inventory of supplies 120, ,768 Prepaids and other assets 147, ,022 Land held for resale 2,762, ,379 2,905,203 Restricted assets Equity in pooled cash and investments 1,716,805 6,615,579 8,332,384 Capital assets Land, water rights, and construction in progress 55,080, ,510, ,591,342 Depreciable buildings, property, and equipment, net 267,973, ,566, ,540,344 Total assets 455,314, ,066,539 1,138,380,918 DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding 532,932 2,564,409 3,097,341 Total deferred outflows of resources 532,932 2,564,409 3,097,341 LIABILITIES Accounts payable 8,858,846 2,734,293 11,593,139 Retainage payable 66, , ,926 Accrued interest payable 224, , ,445 Third party development advances 7,102,760-7,102,760 Unearned revenue 643, , ,041 Other 2,174, ,707 2,290,238 Noncurrent liabilities Due within one year 9,684,094 9,010,636 18,694,730 Due in more than one year 53,478,448 53,866, ,344,901 Total liabilities 82,233,766 66,185, ,419,180 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property tax 12,037,757-12,037,757 Total deferred inflows of resources 12,037,757-12,037,757 NET POSITION Net investment in capital assets 271,137, ,956, ,093,993 Restricted for Debt service 1,579,308 3,728,560 5,307,868 Construction pledge - 2,752,101 2,752,101 Emergencies 3,781,011-3,781,011 Unrestricted 85,077, ,008, ,086,349 Total net position $ 361,575,788 $ 619,445,534 $ 981,021,322 The accompanying notes are an integral part of these financial statements. 14

29 Statement of Activities For the year ended December 31, 2013 Program Revenues Net (Expense) Revenue and Operating Capital Changes in Net Position Charges for Grants and Grants and Governmental Business-Type Functions/Activities Expenses Services Contributions Contributions Activities Activities Total Governmental: General government $ 20,193,979 $ 4,624,849 $ - $ - $ (15,569,130) $ (15,569,130) Police 28,044,137 2,699, ,649 17,256 (24,386,425) (24,386,425) Fire 12,758,169 1,617, (11,140,172) (11,140,172) City development 14,459,695 2,607,403 33,902 61,169 (11,757,221) (11,757,221) Streets, traffic & engineering 36,991,096-4,061,913 6,879,289 (26,049,894) (26,049,894) Community services 22,066,524 2,887, ,412 5,620,065 (12,890,495) (12,890,495) Interest on long-term debt 2,643, (2,643,404) (2,643,404) Total governmental activities 137,157,004 14,437,608 5,704,876 12,577,779 (104,436,741) (104,436,741) Business-type: Water 32,722,025 28,765,602-8,063,782 $ 4,107,359 4,107,359 Sewer 12,254,003 12,645,386-1,141,443 1,532,826 1,532,826 Other enterprise funds 5,681,698 6,183, , ,007 Total business-type activities 50,657,726 47,594,693-9,205,225 6,142,192 6,142,192 Total City of Thornton $ 187,814,730 $ 62,032,301 $ 5,704,876 $ 21,783,004 (104,436,741) 6,142,192 (98,294,549) General revenues: Sales and use taxes 78,188,772-78,188,772 Property taxes 11,858,574-11,858,574 Franchise taxes 5,258,367-5,258,367 E911 taxes 1,037,053-1,037,053 Other taxes 1,861,731-1,861,731 Earnings on investments 206, , ,534 Gain on sale of assets - 16,259 16,259 Miscellaneous 1,663,472 2,750,108 4,413,580 Total general revenues 100,074,425 3,319, ,393,870 Change in net position (4,362,316) 9,461,637 5,099,321 Net position, January 1, restated 365,938, ,983, ,922,001 Net position, December 31 $ 361,575,788 $ 619,445,534 $ 981,021,322 The accompanying notes are an integral part of these financial statements. 15

30 This Page Left Intentionally Blank 16

31 FUND FINANCIAL STATEMENTS 17

32 Balance Sheet Governmental Funds December 31, 2013 Governmental Other Total General Capital TDA 144th Governmental Governmental Fund Fund Capital Fund Funds Funds ASSETS Equity in pooled cash and investments Unrestricted $ 31,731,666 $ 20,819,563 $ 665,099 $ 53,084,668 $ 106,300,996 Restricted - 137,552-1,579,253 1,716,805 Receivables, net Taxes 15,469, , ,592 4,793,922 21,112,868 Accounts 1,846, ,133-2,099,643 4,471,973 Notes - 246, ,926 Interest and other 71,290 60, , ,634 Inventory of supplies 120, ,768 Prepaid items and other assets 55, ,888 Advance to other funds 100,000 13,188, ,288,335 Land held for resale ,762,824 2,762,824 Total assets $ 49,394,944 $ 35,482,780 $ 1,011,213 $ 64,442,080 $ 150,331,017 LIABILITIES Accounts payable $ 6,304,065 $ 730,831 $ - $ 826,064 $ 7,860,960 Retainage payable 1,814 36,612-28,406 66,832 Third party development advances - 6,541, ,801 7,102,760 Unearned revenue 643, ,967 Advance from other funds ,807,005-25,807,005 Other 417,916 89, ,926 1,419,739 2,174,531 Total liabilities 7,367,762 7,399,352 26,053,931 2,835,010 43,656,055 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes 9,120, ,979 2,771,699 12,037,757 Total deferred inflows of resources 9,120, ,979 2,771,699 12,037,757 FUND BALANCES Nonspendable Advances 100,000 13,188, ,288,335 Inventories 120, ,768 Land held for resale ,762,824 2,762,824 Prepaids 55, ,888 Restricted Communications 451, ,305 Debt service - 9-1,579,299 1,579,308 Emergencies - TABOR 3,781, ,781,011 Public safety 9, ,325 Other purposes , ,193 Committed Emergencies 16,432,000 1,000, ,432,000 Other purposes 328, , ,835 Assigned Capital projects - 13,757,541-36,353,133 50,110,674 Debt service , ,953 Parks and open space ,380,603 17,380,603 Public safety , ,711 Other purposes , ,655 Unassigned 11,628,514 - (25,188,697) - (13,560,183) Total fund balances (deficit) 32,907,103 28,083,428 (25,188,697) 58,835,371 94,637,205 Total liabilities, deferred inflows of resources and fund balances $ 49,394,944 $ 35,482,780 $ 1,011,213 $ 64,442,080 $ 150,331,017 The accompanying notes are an integral part of these financial statements. 18

33 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position December 31, 2013 Total fund balances for governmental funds (page 18) $ 94,637,205 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Those assets consist of: Land and land rights 47,439,564 Construction in progress 7,641,384 Streets, Traffic & Engineering, net of $181,781,684 accumulated depreciation 172,276,440 Buildings and improvements, net of $22,360,734 accumulated depreciation 45,867,593 Leisure areas & improvements, net of $26,636,978 accumulated depreciation 39,362,315 General equipment, net of $21,531,939 accumulated depreciation 9,646,809 Total capital assets 322,234,105 Other long-term assets are not available to pay for current-period expenditures and, therefore, are not included in the funds. 797,113 The City's defined benefit pension plan has a net pension asset 91,134 Internal service funds are used by the City to account for the financing of goods or services provided by one department or agency to other departments or agencies. The assets and liabilities of the internal service funds are included in the governmental activities in the statement of net position. 3,518,332 Governmental funds report the effect of deferred charges on debt when it is first issued, whereas these amounts are amortized over the life of the bonds. 532,932 Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. All liabilities - both current and long-term - are reported in the statement of net position. Balances at December 31, 2013 are: Accrued interest on bonds and certificates of participation (224,288) Bonds payable, net of unamortized premium (25,299,092) Obligation under certificates of participation (27,150,973) Post employment benefits (2,096,000) Compensated absences (5,464,680) Total long-term liabilities (60,235,033) Total net position governmental activities (page 14) $ 361,575,788 19

34 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the year ended December 31, 2013 Governmental Other Total General Capital TDA 144th Governmental Governmental Fund Fund Capital Fund Funds Funds REVENUES Taxes Sales and use $ 55,278,678 $ 7,320,201 $ 864,241 $ 14,725,652 $ 78,188,772 Property 9,040, ,818,030 11,858,574 Franchise 5,258, ,258,367 E ,037,053 1,037,053 Other 1,861, ,861,731 Licenses and permits 2,602, ,602,394 Intergovernmental 5,364,008 2,801,655-4,765,565 12,931,228 Governmental grants 694,288 1,147,796-3,506,772 5,348,856 Charges for services 8,952, ,952,084 Fines and forfeitures 2,597, ,597,693 Lease - 207, ,581 Interest 44,925 84, , ,456 Miscellaneous 769, , ,742 1,077,349 Total revenues 92,464,308 11,743, ,815 27,055, ,128,138 EXPENDITURES Current General government 13,280, ,280,383 Police 26,345, ,345,134 Fire and ambulance 12,195, ,195,742 City development 7,010, ,010,772 Streets, traffic and engineering 10,858, ,926-11,105,807 Community services 16,440, ,813 16,521,970 Capital outlay 2,556,672 5,309,148 8,716,528 13,508,165 30,090,513 Debt service Principal retirement - 2,815,000-2,170,000 4,985,000 Interest and bond fees - 1,155, ,323 1,140,563 2,683,295 Total expenditures 88,687,741 9,279,557 9,350,777 16,900, ,218,616 Excess (deficiency) of revenues over (under) expenditures 3,776,567 2,463,892 (8,485,962) 10,155,025 7,909,522 OTHER FINANCING SOURCES (USES) Transfers in 1,682, ,850,687 3,532,854 Transfers out (45,537) - - (3,487,317) (3,532,854) Loss on land held for resale (4,454,729) (4,454,729) Total other financing sources (uses) 1,636, (6,091,359) (4,454,729) Net change in fund balances 5,413,197 2,463,892 (8,485,962) 4,063,666 3,454,793 Fund balances, January 1 27,493,906 25,619,536 (16,702,735) 54,771,705 91,182,412 Fund balances, December 31 $ 32,907,103 $ 28,083,428 $ (25,188,697) $ 58,835,371 $ 94,637,205 The accompanying notes are an integral part of these financial statements. 20

35 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the year ended December 31, 2013 Net change in fund balances - total governmental funds (page 20) $ 3,454,793 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capitalized capital outlays ($5,926,040) less work in progress deletions ($0), did not exceed depreciation ($18,340,873) in the current period. (12,414,833) The net effect of various miscellaneous transactions involving capital assets is to increase net position (contributions of $805,152 less the loss of $55,805 less the revenue recognized at the fund level of $138,602 on the sale of capital assets). 610,745 Decrease in long term receivable (netted against revenue recognized at the fund level) (326,074) Repayment of bond and lease principal is reported as an expenditure in the governmental funds. However, the repayment reduces long-term liabilities on the statement of net position, so this transaction has no effect on net position. Repayments: To bond holders 2,170,000 To Capital Asset Finance Corporation for certificates of participation 2,815,000 Net adjustment 4,985,000 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. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. (14,427) Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for transactions that are not normally paid with expendable available financial resources. In the statement of activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are available. In addition, interest on long-term debt is not recognized under the modified accrual basis of accounting until due, rather than as it accrues. This adjustment combines the net changes of two balances. Adjustment to compensated absences 165,557 Adjustment to post employment benefit obligation (569,000) Accrued interest on bonds 54,318 Combined adjustment (349,125) The City has a defined benefit pension plan that currently carries a net pension asset which decreased in the current year, increasing the City's pension expense at the governmental activities level. (2,041) Internal service funds are used by the City to account for the financing of goods or services provided by one department or agency to other departments or agencies. The net revenues of the internal service funds are reported with governmental activities. (306,354) Change in net position governmental activities (page 15) $ (4,362,316) 21

36 Statement of Net Position Proprietary Funds December 31, 2013 Business-type Activities Enterprise Funds Governmental Activities Other Internal Enterprise Service Water Sewer Funds Total Funds ASSETS Current assets Equity in pooled cash and investments - unrestricted $ 72,286,019 $ 13,858,892 $ 7,169,875 $ 93,314,786 $ 6,613,110 Equity in pooled cash and investments - restricted 6,438, ,409-6,615,579 - Receivables, net Accounts 2,751,489 1,431, ,701 4,718, ,267 Interest and other 234,236 34,549 18, ,650 18,129 Land held for resale 142, ,379 - Total current assets 81,852,293 15,502,812 7,723, ,078,546 6,947,506 Noncurrent assets Advances receivable 12,618, ,618,670 - Loan receivable, net of current portion 292, ,251 - Capital assets Land and water rights 183,339,783 55,930 80, ,476,357 - Source of supply 123,980, ,980,465 - Water treatment plant 83,614, ,614,201 - Collection, transmission, and distribution 183,850,682 72,702, ,553,062 - Streets, traffic and engineering ,571 80,571 - Transportation equipment 1,580,773 1,040,545 3,572,642 6,193,960 20,114 General equipment 6,800,289 1,050, ,568 8,384,721 1,810,150 Buildings and improvements 20,070,410 2,095, ,559 22,525,413 - Leisure areas and improvements - - 5,715,292 5,715,292 - Less accumulated depreciation (90,291,626) (35,706,079) (7,502,837) (133,500,542) (1,009,755) Construction in progress 7,388, ,169-8,053,572 - Total noncurrent assets 533,244,301 41,904,253 2,839, ,987, ,509 Total assets 615,096,594 57,407,065 10,562, ,066,539 7,768,015 DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding 2,553,815 10,594-2,564,409 - Total deferred outflows of resources 2,553,815 10,594-2,564,409 - The accompanying notes are an integral part of these financial statements. 22

37 Business-type Activities Enterprise Funds Governmental Activities Other Internal Enterprise Service Water Sewer Funds Total Funds LIABILITIES Current liabilities Accounts payable $ 2,041,785 $ 415,113 $ 277,395 $ 2,734,293 $ 997,886 Retainage payable 153,068 30, ,094 - Other 115, ,707 - Unearned revenue 137, ,074 - Payable from restricted assets Accrued bond interest payable 132,508 2, ,917 - Accrued note and other obligations interest payable 3, ,240 - General obligation bonds payable 8,330, ,330,000 - Revenue bonds payable - 280, ,000 - Notes/Lease payable 37, ,876 - Compensated absences 300,479 33,570 28, ,760 43,515 Outstanding reserves and incurred but not reported claims ,261,855 Total current liabilities 11,251, , ,106 12,318,961 2,303,256 Long-term liabilities General obligation bonds payable, excluding current portion, net of other unamortized costs 49,700, ,700,809 - Revenue bonds payable, excluding current portion, net of other unamortized costs - 295, ,000 - Notes payable, excluding current portion 41, ,284 - Compensated absences 238,168 10,919 59, , ,726 Advances from other funds ,000 Other obligations 3,521, ,521,102 - Outstanding reserves and incurred but not reported claims ,620,701 Total long-term liabilities 53,501, ,919 59,171 53,866,453 1,946,427 Total liabilities 64,753,100 1,067, ,277 66,185,414 4,249,683 NET POSITION Net investment in capital assets 464,777,226 41,339,847 2,839, ,956, ,509 Restricted for debt service 3,553, ,000-3,728,560 - Restricted pledge 2,752, ,752,101 - Unrestricted 81,814,422 14,835,775 7,358, ,008,361 2,697,823 Total net position $ 552,897,309 $ 56,350,622 $ 10,197,603 $ 619,445,534 $ 3,518,332 23

38 Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds For the year ended December 31, 2013 Business-type Activities Enterprise Funds Governmental Activities Other Internal Enterprise Service Water Sewer Funds Total Funds OPERATING REVENUES Charges for services pledged for debt $ 28,765,602 $ 12,645,386 $ - $ 41,410,988 $ - Charges for services - - 6,183,705 6,183,705 - Interfund services ,762,401 Total operating revenues 28,765,602 12,645,386 6,183,705 47,594,693 13,762,401 OPERATING EXPENSES Source of supply 5,105, ,105,350 - Water treatment 7,069, ,069,188 - Collection, transmission, distribution, trash removal and golf services 2,499,539 1,484,987 2,497,580 6,482,106 - Sewage treatment-metro Wastewater - 7,171,105-7,171,105 - Insurance premiums ,245 Claims and reserves for claims ,603,577 Other operating expenses 438, ,005 1,264,166 1,879,689 4,898,204 Administration 5,018,491 1,291,661 1,580,586 7,890,738 5,244,627 Depreciation 6,184,458 1,980, ,644 8,520, ,349 Total operating expenses 26,315,544 12,104,780 5,697,976 44,118,300 13,549,002 Operating income 2,450, , ,729 3,476, ,399 NONOPERATING REVENUES (EXPENSES) Gain on sale of capital assets 8,104 8,155-16,259 - Interest income 516,952 23,818 12, ,078 13,181 Interest and bond amortization expense (3,524,305) (30,767) - (3,555,072) - Miscellaneous, net (339,775) (115,465) 220,994 (234,246) (532,934) Total nonoperating revenues (expenses) (3,339,024) (114,259) 233,302 (3,219,981) (519,753) Income (loss) before capital contributions (888,966) 426, , ,412 (306,354) Capital contributions 8,063,782 1,141,443-9,205,225 - Change in net position 7,174,816 1,567, ,031 9,461,637 (306,354) Net position, January 1, restated 545,722,493 54,782,832 9,478, ,983,897 3,824,686 Net position, December 31 $ 552,897,309 $ 56,350,622 $ 10,197,603 $ 619,445,534 $ 3,518,332 The accompanying notes are an integral part of these financial statements. 24

39 This Page Left Intentionally Blank 25

40 Statement of Cash Flows Proprietary Funds For the year ended December 31, 2013 Business-type Activities Enterprise Funds Governmental Activities Other Internal Enterprise Service Water Sewer Funds Total Funds CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 28,449,314 $ 12,528,033 $ 6,389,919 $ 47,367,266 $ - Receipts from interfund services ,679,944 Payments to suppliers (15,864,694) (9,500,224) (3,482,620) (28,847,538) (8,541,748) Payments to employees (6,749,421) (960,493) (2,242,047) (9,951,961) (4,812,445) Net cash provided by operating activities 5,835,199 2,067, ,252 8,567, ,751 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Advance (to) from other funds (8,871,214) - - (8,871,214) - Receipts from nonoperating leases 2,365, ,365,496 - Net cash used in noncapital financing activities (6,505,718) - - (6,505,718) - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases and construction of capital assets (10,183,179) (1,036,629) (876,092) (12,095,900) (337,679) Proceeds from sale of capital assets 8,104 13,031-21,135 - Principal paid on bonds and other obligations (8,075,000) (275,000) - (8,350,000) - Principal paid on notes (34,748) - - (34,748) - Interest and fees paid on capital debt (2,386,125) (23,920) - (2,410,045) - Capital contributions 7,261, ,233-8,057,340 - Net cash used in capital and related financing activities (13,409,841) (526,285) (876,092) (14,812,218) (337,679) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investments 48,546,833 7,011,859 3,857,642 59,416,334 3,892,543 Purchases of investments (36,023,847) (8,629,162) (3,718,717) (48,371,726) (3,946,024) Interest on investments 611,330 31,711 18, ,369 17,452 Net cash provided (used) in investing activities 13,134,316 (1,585,592) 157,253 11,705,977 (36,029) Net decrease in cash and cash equivalents (946,044) (44,561) (53,587) (1,044,192) (47,957) Cash and cash equivalents, Jan. 1 2,879, , ,778 3,499, ,325 Cash and cash equivalents, Dec. 31 $ 1,933,466 $ 344,731 $ 177,191 $ 2,455,388 $ 163,368 Cash and cash equivalents $ 1,933,466 $ 344,731 $ 177,191 $ 2,455,388 $ 163,368 Investments 76,790,723 13,691,570 6,992,684 97,474,977 6,449,742 Total cash and investments $ 78,724,189 $ 14,036,301 $ 7,169,875 $ 99,930,365 $ 6,613,110 Equity in pooled cash and investments $ 72,286,019 $ 13,858,892 $ 7,169,875 $ 93,314,786 $ 6,613,110 Restricted cash and investments 6,438, ,409-6,615,579 - Total cash and investments $ 78,724,189 $ 14,036,301 $ 7,169,875 $ 99,930,365 $ 6,613,110 The accompanying notes are an integral part of these financial statements. 26

41 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Business-type Activities Enterprise Funds Governmental Activities Other Internal Enterprise Service Water Sewer Funds Total Funds Operating income $ 2,450,058 $ 540,606 $ 485,729 $ 3,476,393 $ 213,399 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation expense 6,184,458 1,980, ,644 8,520, ,349 Miscellaneous receipts - 2, , ,032 25,340 Other expenses (2,734,831) (120,935) (41,809) (2,897,575) (450,269) Noncash reserves for claims Cash paid for claims Change in assets and liabilities: (Increase) decrease in accounts receivable, net (428,276) (120,326) 2,155 (546,447) (92,957) Decrease in notes receivable 25, ,485 - Increase (decrease) in accounts payable 432,723 (215,042) (340,526) (122,845) 506,571 Increase (decrease) in other liabilities (6,720) 18 - (6,702) (152,682) Decrease in unearned revenue (87,698) - - (87,698) - Net cash provided by operating activities $ 5,835,199 $ 2,067,316 $ 665,252 $ 8,567,767 $ 325,751 NON-CASH TRANSACTIONS: Water and sewer lines contributed by developers $ 802,675 $ 345,210 $ - $ 1,147,885 $ - Decrease in the fair value of investments (678,459) (106,324) (58,753) (843,536) (58,641) Bond amortization expense (1,212,318) (7,947) - (1,220,265) - Loss on disposal of capital assets (56,679) - - (56,679) - Increase (decrease) in compensated absences 86,238 (2,479) (58,744) 25,015 75,275 27

42 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Thornton, Colorado ( the City ) was incorporated May 26, The citizenry voted to become a home rule city in 1967 under the provisions of Article XX of the Constitution of the State of Colorado. The City operates under a Council-Manager form of government and provides the following services, as authorized by its charter: public safety (police, fire, and ambulance), highways and streets, public improvements, water, sewer, and sanitation, culture and recreation, debt service and general administrative services, including financial, planning and zoning, and municipal court services. The accounting policies of the City conform to accounting principles generally accepted in the United States of America as applicable to governments in accordance with those promulgated by the Governmental Accounting Standards Board (GASB). The following is a summary of the more significant policies: 1. Reporting Entity The accompanying financial statements present the activities of the City and its four component units; organizations for which the City is financially accountable. These component units are so intertwined with the City that they are, in substance, the same as the City and, therefore, are blended and reported as if they were part of the City. None of the component units listed below report their financial statements independent from the City. Component units included within the reporting entity (in blended presentation): Thornton Development Authority (TDA) - The TDA, an Urban Renewal Authority organized pursuant to Part 1, Article 25, Title 31 of the Colorado Revised Statutes, was established to finance the design and construction of the Thornton Parkway highway interchange, as well as various other improvements within the TDA's boundaries. The City Council is the TDA's governing board. The debt of the TDA is disclosed as tax increment bonds, but is neither a general nor a limited obligation of the City. There are three urban renewal areas within the City, the South Capital Fund, the North Capital Fund, and the 144 th Capital Fund. For ease of financial management, separate funds were established for the improvements in each geographical area. Thornton Arts, Sciences, and Humanities Council, Inc. (TASHCO) - TASHCO, a legally separate, nonprofit corporation, was established to expand the Cultural Arts and Scientific program offerings within the City of Thornton. TASHCO is funded by a local grant, donations, ticket sales, and contribution from the General Fund. In March 2007, the City Council appointed an advisory board consisting of citizens to serve as liaison for the City Council to the community at large to ensure programming services are meeting the needs and desires of the public. The City Council is the governing board of the TASHCO and approves the annual budget, making all substantive decisions regarding the operations of the TASHCO. 136 th Avenue General Improvement District (GID) 136 th Avenue GID was established to account for the collection of assessment revenues to be used exclusively for the purpose of constructing an interchange at 136 th Avenue and Interstate 25. The City Council is the GID s governing board. E911 Authority Fund E911 was established to account for E911 surcharges received from telecommunications companies doing business within the City to pay for a portion of the costs authorized by State statute for the City to provide emergency telephone service. The City Council is the E911 s governing board. 2. Basis of Presentation Government-wide Statements: The statement of net position and the statement of activities display information about the primary government (the City). These statements include the financial activities of the overall government. Eliminations have been made to minimize the double-counting of internal activities. These statements distinguish between the governmental and business-type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. The statement of activities presents comparisons between direct expenses and program revenues for the different business-type activities of the City and for each function of the City s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expense allocations that have been made in the funds have been reversed for the statement of activities. Program revenues include (a) charges to customers who purchase, use, or directly benefit from goods, services, or privileges provided by a given program and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. 28

43 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2. Basis of Presentation (Continued) Fund Financial Statements: The fund financial statements provide information about the City s funds, including its blended component units. Separate statements are provided for governmental and proprietary funds. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as non-major funds. The City reports the following major governmental funds: General Fund. This is the City s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Governmental Capital Fund. This fund accounts for capital improvement projects financed by current resources (investment income, sales and use tax), as well as by restricted grant and intergovernmental revenues, developer contributions, and bond proceeds. TDA 144 th Capital Fund. This fund accounts for redevelopment projects currently financed through current resources (sales and use tax) and advances from other funds. The City reports the following major enterprise funds: Water Utility Fund. This fund accounts for the provision of water services to residents of the City and some residents of unincorporated Adams County. Sewer Utility Fund. This fund accounts for the provision of sewer services to residents of the City and some residents of unincorporated Adams County. Fund types that do not meet the criteria of major funds have been summarized and presented as other governmental funds and other enterprise funds within the fund financial statements as appropriate. Additionally, the City reports the following fund type: Internal Service Funds. These funds account for the costs related to providing the departments of the City with a comprehensive program to manage its property, liability, and work-related injury risk; computer support of all information technology; copying and mailing; fuel purchased and utilized by Adams County School District 12; and building maintenance, repairs and custodial services; all on a cost-reimbursement basis. 3. Measurement Focus, Basis of Accounting Government-wide and Proprietary Fund Financial Statements. The government-wide and proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes and grants. Property taxes 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 imposed by the provider have been satisfied. Amounts reported as program revenues include 1) charges to customers 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. Governmental Fund Financial Statements. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within ninety days after year end, with the exception of sales tax, for which revenues collected and held by vendors at year end on behalf of the City is recognized as revenue if collected within thirty days after year end, and property taxes, for which revenues collected within thirty days after year end are recognized. 29

44 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 3. Measurement Focus, Basis of Accounting (Continued) Those revenues susceptible to accrual are property, franchise, cigarette, sales and some use taxes, interest revenue, and charges for services. Fines and forfeitures, licenses and permits, and building use tax revenues are not susceptible to accrual because generally they are not measurable until received in cash. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. All other revenue items are considered to be measurable and available only when cash is received by the City. Expenditures are recorded when the related fund liability is incurred. Principal and interest on long-term debt are recorded as fund liabilities when due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of long-term debt and acquisitions under capital leases are reported as other financing sources. When both restricted and unrestricted resources are available for use, it is the City s policy to use restricted resources first, then unrestricted resources as they are needed. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund s principal ongoing operations. The principal operating revenues of the enterprise funds and internal service funds are charges to customers for sales or services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this rule are the charges between the City s utility functions and various other functions, as well as an administrative fee charged by the General government activity to the other activities. Elimination of these charges would distort the costs and program revenues reported for the various functions. 4. Budgets and Budgetary Accounting The City Council follows these procedures in establishing the budgetary data reflected in the financial statements: a. The City Manager submits to the Mayor and the City Council a proposed budget for the fiscal year commencing the following January 1. The budget includes proposed expenditures of all funds and the means of financing them. b. A public hearing is conducted to obtain taxpayer comments. c. Prior to the end of the fiscal year, the budget for the next fiscal year is legally adopted through passage of a resolution. An appropriation ordinance, based on the adopted budget, is enacted on or before the last day of December. d. The City Manager is authorized to transfer budgeted amounts between departments within any fund; however, any revisions that alter the total appropriations of any fund must be approved by the City Council. e. The level on which expenditures may not legally exceed appropriations is the legally adopted annual operating budget for each fund in total. All appropriations for operating budgets lapse at year end. f. Budgets for governmental funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual budgets are legally adopted for most governmental funds. In any given year, an individual fund may not be budgeted if expenditures for the year are not anticipated. In 2013, all governmental funds had legally adopted annual budgets. Notes 4g. and 4h. explain funds with budgets that are on a non-gaap basis. Note 4i. explains budgetary practices for capital project funds/accounts. 30

45 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 4. Budgets and Budgetary Accounting (Continued) g. Budgets for governmental capital projects funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America, except that the City includes the capital outlay costs for purchases of land intended for resale and excludes subsequent gains or losses on the resale of the land. In addition, any balances transferred due to closure of a fund and miscellaneous non-cash adjustments are not budgeted. h. Budgets for proprietary funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America, except that the City excludes depreciation, amortization, gain or loss on disposal of fixed assets, and incurred but not reported claims and includes debt service principal and interest payments and capital outlay. In addition, any balances transferred due to closure of a fund and miscellaneous non-cash adjustments are not budgeted. Budget to Actual schedules for each proprietary fund can be found in the Combining & Individual Statements & Schedules section. i. Prior to 2007, all capital projects were budgeted annually, and unspent appropriations expired at the end of the fiscal year. If the project was incomplete, funds had to be re-appropriated in the annual fiscal budget process for the following year. Effective with the 2007 budget, the City has adopted a multi-year appropriation for certain capital projects, identified as long term in nature, where unexpended funds will not automatically lapse at year end, but remain appropriated until project completion. Unspent and unencumbered appropriations for those projects that remain short term in nature (annual) will continue to lapse at year end. j. The City Council may legally amend the budget by ordinance or resolution once it has been approved. Budgeted amounts, including all amendments, are shown as adopted by the City Council. In 2013, six budget amendments were approved by ordinance or resolution. The effect of these amendments was an overall increase in appropriations of $7,733,444 broken down by fund type as follows: 5. Investments General Fund $ 150,000 Special Revenue Funds 1,007,610 Capital Project Funds 3,595,879 Enterprise Funds 2,979,955 $ 7,733,444 Investments in securities are carried at fair value. Unrealized gains resulting from increases in fair value between January 1 and December 31 are recognized as a component of interest income; unrealized losses resulting from decreases in fair value reduce interest income. Realized gains or losses on securities included in the investment portfolio are recognized only when the related security is sold prior to the stated maturity. Certain investments are restricted for debt service, capital and pledge commitments. 6. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either due to/from other funds (i.e., the current portion of interfund loans) or advances to/from other funds (i.e., the non-current portion of interfund loans). All 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. 7. Inventories Inventories are valued at weighted average cost. Inventory in the General Fund consists of fuel held for consumption. In the General Fund cost of inventory is recorded as expenditures when consumed, rather than when purchased. The General Fund reserve for inventory, included in nonspendable inventories, is equal to the amount of inventory on hand to indicate that a portion of the General Fund fund balance is not available for future expenditures. 31

46 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 8. Construction Advances Third party development advances for construction represent the non-refundable deposits made by developers for specific improvements to be made by the City. The deposits will be recognized as revenue as costs are incurred on the improvements. 9. Capital Assets Capital assets, which include property, plant, equipment, water rights, and infrastructure assets (e.g. roads, bridges, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. The government defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Property, plant and equipment purchased or acquired is carried at historical cost or estimated historical cost. Donated or contributed capital assets are recorded at their estimated fair value on the date received. General infrastructure assets are valued based on estimated original cost. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. GASB 51 Accounting and Financial Reporting for Intangible Assets requires that all intangible assets be classified as capital assets and recognized in the statement of net position. The term depreciation includes amortization of intangible assets. Land, water rights, source of supply assets related to tributary water rights and permanent easements are capitalized and not depreciated. Temporary easements are capitalized and depreciated over the appropriate period. All other capital assets are depreciated using the straight-line method over the following estimated useful lives: Estimated Asset Class useful lives Infrastructure Buildings, structures and improvements Leisure areas and improvements Collection, transmission, and distribution Equipment years 7-50 years 5-50 years years 2-20 years 10. Compensated Absences Eligible City employees earn vacation leave at a variable rate, dependent on years of service, and sick leave at the rate of 8 hours per month. Vacation and sick leave accumulate on a monthly basis and are fully vested when earned. Accumulated vacation leave cannot exceed 240 hours at the end of the year and any excess cannot be carried forward to the next year unless pre-authorized by the City Manager. For employees hired before January 1, 1995, 50% of unused sick leave over 384 hours plus accumulated vacation leave are paid upon termination, retirement or death. After 20 years of service or at age 62 and 10 years of service, 100% of the unused sick leave over 384 hours plus accumulated vacation leave are paid upon termination, retirement or death. Although sick leave hours earned after 2002 accrue, they are not compensable upon termination, retirement, or death. The liability for compensated absences reported in the government-wide and proprietary fund statements consists of unpaid, accumulated vacation and sick leave balances, as described above. Compensated absences are liquidated by the respective fund where the liability was originally accrued. 11. Long-Term Obligations In the government-wide financial statements and the proprietary 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 type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest or straight line method. Bonds payable are reported net of the applicable bond premium or discount. 32

47 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 11. Long-Term Obligations (Continued) In the governmental fund financial statements, funds recognize bond premiums and discounts 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. GASB 49 addresses accounting and financial reporting for pollution remediation obligations. The Thornton Development Authority, a component unit of the City, owns property which falls under voluntary remediation and had a plan with the State to actively treat subsurface contamination. The total amount spent as of year end 2010 on remediation was $1,437,056. In 2010, the City received approval from the State to stop remediation and only monitor these sites. The City has spent a total of $185,871 as of year end 2013 to monitor these sites. 12. Fund Equity In the fund financial statements, fund equity of the City s governmental funds are classified as nonspendable, restricted, committed, assigned, or unassigned. A governmental fund may not have all five components of fund balance. The five classifications describe the relative strength of the spending constraints: Nonspendable fund balances indicate amounts that cannot be spent either due to form (for example inventories or prepaids) or due to legal or contractual requirements. Restricted fund balances indicate amounts constrained for a specific purpose by external parties, constitutional provision or enabling legislation. Committed fund balances indicate amounts constrained for a specific purpose by a government using its highest level of decision-making authority. It would require an ordinance by the City Council to remove or change the constraints placed on the resources. Assigned fund balances indicate amounts of any remaining positive amounts not classified in the above categories for governmental funds, other than the general fund. For the general fund, amounts constrained for the intent to be used for a specific purpose has been delegated to the City Manager, Finance Director, and Budget Director. Unassigned fund balances indicate amounts in the general fund that are not classified as nonspendable, restricted, committed, or assigned. The general fund is the only fund that would report a positive amount in unassigned fund balance. When expenditures are incurred for purposes for which both restricted and unrestricted amounts are available, restricted amounts are deemed to be used first. When expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used, committed amounts are considered to be reduced first, followed by assigned amounts and then by unassigned amounts. City Council establishes (and modifies or rescinds) fund balance commitments by passage of an ordinance. Assigned fund balance is established by City Council through adoption or amendment of the budget as intended for specific purpose (such as the purchase of capital assets, construction, debt service, etc.). 13. Interfund Transactions Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. All other interfund transactions are reported as transfers. 14. Statement of Cash Flows For purposes of the statement of cash flows, the City considers all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. 33

48 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 15. Contraband Forfeitures In accordance with the Colorado Contraband Forfeiture Act (C.R.S to 511) and the Controlled Substances Act (21 USC 881(e)(3)), forfeitures from the seizure of contraband are used for the specific purpose of law enforcement activities. These funds are included in the City's General Fund. 16. Use of Estimates The preparation of 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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates. 17. Sales Tax As a home rule city, Thornton collects its own sales taxes. Within the City, the ten largest retailers remit approximately 48% of the sales tax collected. 18. Implementation of New GASB Statements Beginning in fiscal year 2013, the City implemented the following statements issued by the Governmental Accounting Standards Board (GASB): GASB Statement 61, The Financial Reporting Entity: Omnibus this statement improves accounting and financial reporting for a governmental financial reporting entity by modifying certain requirements for inclusion of component units in the financial reporting entity. As a result of implementation, the City was not required to change the reporting of current or past transactions. GASB Statement 65, Items Previously Reported as Assets and Liabilities this statement establishes accounting and financial reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes, as outflows of resources or inflows of resources, certain items that were previously reported as assets and liabilities. As a result of implementing this statement, the City was required to add these relevant classifications to the governmentwide Statement of Net Position, Balance Sheet Governmental Funds and Statement of Net Position Proprietary Funds. Implementation also required the City to restate beginning net positions, in both the government-wide and Proprietary Funds Statement of Net Position, for the elimination of bond issuance costs, net of accumulated amortization that were previously reported. GASB Statement 66, Technical Corrections 2012 an amendment of GASB Statements No. 10 and No. 62 this statement improves accounting and financial reporting for a governmental financial reporting entity by resolving conflicting guidance that resulted from the issuance of two pronouncements, Statements No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, and No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 20, 1989 FASB and AICPA Prounouncements. As a result of the implementation, the City was not required to change the reporting of current or past transactions. 19. Prior Period Adjustment The City s implementation of GASB Statement 65 required a restatement of prior year ending net position for both the government-wide and proprietary funds, for the elimination of previously reported bond issuance costs, net of amortization. The impact to net position for governmental activities was a decrease of$1,003,452 to $365,938,104 and business-type activities was a decrease of $635,990 to $609,983,897. Net position, as of January 1, has been restated for both governmental and business-type activities in the Statement of Activities and Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds accordingly. The net position, as of January 1, for the Statement of Revenues, Expenses and Changes in Net Position for both the Water and Sewer Funds were decreased by $616,324 to $545,722,493 and $19,666 to$54,782,832, respectively. 34

49 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE B STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY 1. Compliance with Finance-Related Legal and Contractual Provisions The City believes it has no material violations of finance-related legal and contractual provisions. 2. Excess of Expenditures Over Appropriations in Individual Funds The City has no excess of expenditures over appropriations at the fund level within each of the individual funds. The actual to budget comparisons included may reflect immaterial excess expenditures at the program level within an individual fund. 3. Deficit in Unassigned Fund Balance The TDA 144 th Capital Fund had a deficit in unassigned fund balance in 2013 of $25,188,697. This fund was created in 2012 for redevelopment in the 144 th corridor. The deficit exists due to an advance from other funds for improvements to allow retail development in the urban renewal area. The retail development began generating revenues in 2013 that are available to help eliminate the deficit over the next several years. NOTE C - DEPOSITS AND INVESTMENTS 1. Equity in Pooled Cash and Investments Except when required by trust agreements, the operating cash in each fund is pooled and cash in excess of operating requirements is invested. 2. Deposits The Colorado Public Deposit Protection Act (PDPA) requires that all units of local government deposit cash in eligible public depositories, with eligibility determined by state regulators. Amounts on deposit in excess of federal insurance levels must be collateralized. The eligible collateral is determined by the PDPA. PDPA allows the institution to create a single collateral pool for all public funds. The pool is to be maintained by another institution or held in trust for all the uninsured public deposits as a group. The market value of the collateral must be at least equal to 102% of the uninsured deposits. At December 31, 2013, the City s deposits had a carrying amount of $88,380,067 and a bank balance of $89,238,928. Of the bank balance, $1,750,000 was covered by federal depository insurance. The remainder of the bank balance, $87,488,928, was uninsured and collateralized with securities held by the pledging financial institution and covered by eligible collateral as determined by the PDPA. 3. Investments The City s Charter allows investment in one or more of the securities permitted by the statutes of Colorado for the investment of state funds or municipal funds, bonds payable out of the revenues of any service or facility furnished by the City, or in general obligation bonds of the City. The City s internal investment policy further restricts investments to the following securities: United States Treasury, Government Sponsored Enterprises, State & Local Government taxable general or revenue obligations, Corporate Bonds and Commercial Paper, Local Government Investment Pools, Money Market Mutual Funds, Repurchase Agreements, Reverse Repurchase Agreements, Securities Lending Agreements, and Deposits in State or Nationally Chartered Depository Institutions. Additional investment and deposit disclosures for credit risk, interest rate risk, and foreign currency risk, as required by GASB Statement No. 40, Deposit and Investment Risk Disclosures, are included in the notes below. At December 31, 2013, the City had the following investments and maturities: Investment Type Fair Value < 1 Year 2-3 Years 4-5 Years U.S. Government Treasuries $ 5,010,940 $ - $ - $ 5,010,940 Corp Securities 10,063,405-10,063,405 - U.S. Government Agencies 110,716,559 10,152,340 4,975,420 95,588,799 Money Market Funds 51,411 51, Local Gov't Investment Pools 338, , Total $ 126,181,209 $ 10,542,645 $ 15,038,825 $ 100,599,739 35

50 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE C - DEPOSITS AND INVESTMENTS (CONTINUED) 3. Investments (Continued) Unrealized gains or losses resulting from changes in the fair value of the investment portfolio are recognized as increases to or reductions from interest income in the financial statements. The only time a realized gain or loss is recognized on investment transactions is when they are sold prior to their stated maturity. Present cash flow needs of the City are being met without premature liquidation of investments. The City generally holds investments until maturity and redeem them at par. Interest Rate Risk The City s internal investment policy is designed to reduce interest rate risk. The maximum duration of the portfolio is limited to 4.0 years. At December 31, 2013, the weighted-average maturity of the City s portfolio was 38.4 months. Credit Risk The City minimizes credit risk, the risk of loss due to the failure of the security issuers or banker, by diversifying the investment portfolio so that potential losses on individual securities are minimized and by limiting investments to specified credit ratings. No security may be purchased unless the security is rated AA-/Aa3 or better by Standard & Poor s and Moody s respectively. As of December 31, 2013, the City s investment in U.S. Treasuries, FHLB, FFCB, FNMA, FHLMC, and Corporates were all rated AA- or better by Standard & Poor s and Aa3 or better by Moody s. Custodial Credit Risk At December 31, 2013, no investment securities were held by a counterparty, and all investment securities were registered in the City s name. Concentration of Credit Risk The City s internal investment policy limits the amount the City may invest in one issuer except for U.S. Treasuries. Allowed investment in U.S. Treasuries is unlimited because they are backed by the full faith and credit of the U.S. Government. As of December 31, 2013, the City s investment in U.S. Treasuries was 4.0%, FHLB was 27.8%, FFCB was 18.7%, FNMA was 25.5%, FHLMC was 15.7%, Corporate Securities was 8.0%, Local Government Investment Pools were 0.3%. Local Government Investment Pools As of December 31, 2013, the City had $100,136 invested in the Colorado Local Government Liquid Asset Trust (Colotrust) and $238,758 invested in the Colorado Surplus Asset Fund Trust (CSAFE). These investment vehicles were established for local government entities in Colorado to pool surplus resources; it is overseen by the Colorado Securities Commissioner and governed by CRS A designated custodial bank provides safekeeping and depository services. The custodian s internal records identify the investments owned by the participating governments. Both pools operate similarly to a money market fund and each share is equal to $1.00 in value. Colotrust and CSAFE are rated AAAm by Standard & Poor s. NOTE D - PROPERTY TAXES AND RECEIVABLES Property taxes are collected on behalf of the City by Adams County and then remitted to the City. The property tax is levied and certified in December of the year prior to the year the taxes are collected on all taxable property in the City. Property taxes become an enforceable lien on January 1 of each year. Secured property taxes are due in two equal installments, on the last day of February and June 16, and are delinquent after March 1 and June 17, respectively. The entire balance may be paid on April 30 without penalty. Property taxes levied are recorded as deferred inflows in the year levied, as they are not due until the following year. Property tax revenue is recognized in the subsequent tax year. For governmental receivables, available means when due or past due and receivable within the current period, and collected within the current period or expected to be collected soon thereafter to be used to pay liabilities of the current period, generally within thirty days. Receivables and revenues of the Ambulance division are reported net of uncollectible amounts. As of December 31, 2013, total accounts receivable was $3,500,079 with an allowance for bad debt of $2,333,695. Total uncollectible amounts related to revenues of the current period are $2,340,

51 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE E - CAPITAL ASSETS Capital asset activity for the year ended December 31, 2013 was as follows: Beginning Additions & Deletions & Ending balances transfers transfers balances Governmental activities: Capital assets not being depreciated: Land and land rights $ 46,296,896 $ 1,202,669 $ (60,001) $ 47,439,564 Construction in progress 16,807,532 1,814,053 (10,980,201) 7,641,384 Total capital assets not being depreciated 63,104,428 3,016,722 (11,040,202) 55,080,948 Capital assets being depreciated: Streets, traffic, and engineering 353,252, ,654 (96,768) 354,058,124 Buildings and improvements 68,228, ,228,327 Leisure areas and improvements 54,562,262 11,503,671 (66,640) 65,999,293 General equipment - government 30,217,402 2,288,347 (1,327,001) 31,178,748 General equipment - internal service 1,581, ,679 (88,478) 1,830,264 Total capital assets being depreciated 507,841,292 15,032,351 (1,578,887) 521,294,756 Less accumulated depreciation for: Streets, traffic, and engineering 169,920,589 11,882,684 (21,589) 181,781,684 Buildings and improvements 20,720,300 1,640,434-22,360,734 Leisure areas and improvements 24,099,671 2,603,947 (66,640) 26,636,978 General equipment - government 20,585,904 2,213,808 (1,267,773) 21,531,939 General equipment - internal service 821, ,349 (88,478) 1,009,755 Total accumulated depreciation 236,148,348 18,617,222 (1,444,480) 253,321,090 Total capital assets being depreciated, net 271,692,944 (3,584,871) (134,407) 267,973,666 Governmental activity capital assets, net $ 334,797,372 $ (568,149) $ (11,174,609) $ 323,054,614 Business-type activities: Capital assets not being depreciated: Land and water rights $ 183,106,058 $ 385,299 $ (15,000) $ 183,476,357 Source of supply 120,265,784 3,714, ,980,465 Construction in progress 3,574,883 4,676,590 (197,901) 8,053,572 Total capital assets not being depreciated 306,946,725 8,776,570 (212,901) 315,510,394 Capital assets being depreciated: Water treatment plant 83,614, ,614,201 Collection, transmission, and distribution 253,441,686 3,600,165 (488,789) 256,553,062 Transportation equipment 6,014, ,043 (804,278) 6,193,960 General equipment 8,181, ,789 (105,140) 8,384,721 Buildings and improvements 22,525, ,525,413 Streets, traffic, and engineering - 80,571-80,571 Leisure areas and improvements 5,715, ,715,292 Total capital assets being depreciated 379,491,859 4,973,568 (1,398,207) 383,067,220 Less accumulated depreciation for: Water treatment plant 17,921,666 1,733,403-19,655,069 Collection, transmission, and distribution 84,037,743 5,657,418 (194,676) 89,500,485 Transportation equipment 4,534, ,014 (799,401) 4,153,651 General equipment 5,809, ,698 (49,123) 6,073,769 Buildings and improvements 8,804, ,276-9,156,689 Streets, traffic, and engineering Leisure areas and improvements 4,916,564 44,139-4,960,703 Total accumulated depreciation 126,023,618 8,520,124 (1,043,200) 133,500,542 Total capital assets being depreciated, net 253,468,241 (3,546,556) (355,007) 249,566,678 Business-type capital assets, net $ 560,414,966 $ 5,230,014 $ (567,908) $ 565,077,072 37

52 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE E - CAPITAL ASSETS (CONTINUED) Depreciation expense was charged to functions/activities as follows: Governmental activities: General government $ 1,133,481 Police 1,321,187 Fire 448,568 City development 27,356 Streets, traffic & engineering 12,235,304 Community services 3,174,977 Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets. 276,349 Total governmental activities depreciation $ 18,617,222 Business-type activities: Water $ 6,184,458 Sewer 1,980,022 Sanitation 309,742 Golf Course 45,902 Total business-type activities depreciation $ 8,520,124 NOTE F INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS The outstanding interfund receivable and payable balances below are for long term capital loans between funds for the year ended December 31, Advances to/from other funds: Receivable Fund Payable Fund Amount General Consolidated Service Center $ 100,000 Governmental Capital TDA 144th Capital 13,188,335 Water TDA 144th Capital 12,618,670 $ 25,907,005 Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, (3) to close an existing fund, or (4) to move funds related to a prior year expense error. The composition of transfers at December 31, 2013 is as follows: Transfers in: Transfers out: General TASHCO Debt Service Total Parks $ - $ - $ 816,663 $ 816,663 Open Space , ,592 Parks and Open Space , ,895 General - 45,537-45, th GID 6, ,000 E911 1,000, ,000,000 TDA Capital 43, ,308 TDA North 632, ,859 $ 1,682,167 $ 45,537 $ 1,805,150 $ 3,532,854 38

53 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE G - LONG-TERM DEBT The general obligation refunding water bonds are being serviced by water operations, and thus are carried as a liability of the Water Utility Fund and not included in the general obligations of the governmental activities. The bonds are, however, also backed by the full faith and credit of the City in the event that utility revenues are not sufficient to meet debt service payments. 1. Bonds Payable Bonds payable at December 31, 2013 are comprised of: General Obligation Bonds $58,775,000, March 14,1991 Water Refunding Capital Appreciation $6,720,000 due December 1, 2014, and $6,720,000 due December 1, 2015, zero coupon bonds with interest at 6.85% $40,390,000, September 15, 2002 General Obligation Water Refunding Bonds, annual installments of $1,325,000 to $1,410,000 through December 1, 2015, interest at 5.00% $ 13,440,000 2,735,000 Less unamortized discount (1,215,347) Plus unamortized premium 218,636 $ 15,178,289 Revenue Bonds $39,380,000, April 29, 2013 Water Enterprise Revenue Refunding Bonds, annual installments beginning December 1, 2014 of $200,000 to $2,765,000 through December 1, 2034, interest at 2.00% to 5.00% $2,530,000, May 15, 2005 Sewer Revenue Refunding Bonds, annual installments of $280,000 to $295,000 through May 15, 2015, interest at 3.30% to 3.40% $ 39,380, ,000 Plus unamortized premium 3,472,520 $ 43,427,520 Tax Increment Bonds $21,195,000, September 1, 2004 Thornton Development Authority (component unit) Tax Increment Revenue Bonds, Series 2004, annual installments of $740,000 to $1,430,000 through December 1, 2029, interest at 3.625% to 5.00% (This issue will be serviced solely by 50% of the property tax increment and 50% of the sales tax collected within the boundaries of the North Washington Urban Renewal Area. Although the obligation is reported within the governmental activities funds, it is neither a general nor a limited obligation of the City.) $ 16,545,000 Plus unamortized premium 54,261 $ 16,599,261 Sales and Use Tax Bonds $12,170,000, September 1, 2010 Open Space and Parks Sales and Use Tax Revenue Refunding Bonds, Series 2010, annual installments of $1,510,000 to $1,730,000 through September 1, 2018, interest at 3.00% to 4.00% $ 8,065,000 Plus unamortized premium 634,831 $ 8,699,831 There are limitations and restrictions in the various bond indentures. As of December 31, 2013 the City believes it is in compliance with all significant limitations and restrictions. 39

54 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE G - LONG-TERM DEBT (CONTINUED) 2. Certificates of Participation During 2002, the City entered into a Master Lease Purchase Agreement with the Capital Asset Finance Corporation (CAFC), an independent Colorado nonprofit corporation. Under this agreement, the Thornton Finance Authority (TFA) assigned all of its rights and obligations under Certificates of Participation (COPs) issued in 1998 to the CAFC and the CAFC issued 2002 COPs totaling $41,690,000, the proceeds of which were used to purchase the City s Civic Center and the property on which the City s Justice Center was constructed and to provide funds to construct the Justice Center. The proceeds from the sale of City assets were used by the City to construct an interchange. The Justice Center and Civic Center are leased back to the City by the CAFC with the lease payments matching the COP payment terms. During 2007, the City entered into an Amended and Restated Master Lease Purchase Agreement with the CAFC and the CAFC issued 2007 COPs totaling $32,820,000, the proceeds of which were used to refund the outstanding 1998 COPs maturing on and after December 1, 2009 and the 2002 COPs maturing on and after December 1, The 2007 Amended and Restated Master Lease Purchase Agreement totaling $32,820,000, is due in annual installments of $2,765,000 to $3,255,000 through December 1, 2022 with interest at 3.625% to 4.0% and currently amounts to $27,295,000. The 2007 Amended and Restated Lease Agreement discount was $144,027 at 12/31/ Notes and Loan Payable The City entered into an agreement to purchase water rights. The note payable bears interest at the rate of 9.0%, and matures in various amounts through As of December 31, 2013, the outstanding principal balance was $79, Other Obligations In 1986, the City entered into a settlement agreement with the Water Supply and Storage Company ( the Company ), a mutual ditch company. Among the terms and conditions of the settlement, the City agreed to make certain capital contributions to the Company in the form of direct payments in the years 1987, 1988, and 1989, and committed to contribute an additional $5,000,000 toward future mutually beneficial capital projects or improvements to the system. As of December 31, 2013 the remaining amount owed under this portion of the agreement is $3,521,102. This balance does not accrue interest and is not required to be paid before any specific date in accordance with the agreement. 5. Leases Operating Leases The government leases motorcycles to be used in public safety operations. The Golf Fund (an enterprise fund) leases golf and beverage carts for use in operation of the golf course. The Reprographics Fund (an internal service fund) leases multi-function printers and copiers to provide goods and services to other City departments. Total costs for the leases were $25,882 for the governmental funds, $67,200 for the Golf Fund, and $27,134 for the Reprographics Fund for the year ended December 31, The table below presents the future minimum lease payments by year for each of these leases: Year Ended December 31 Governmenal Activities Golf Fund Reprographics Fund 2014 $ 13,882 $ 67,200 $ 27, ,882 67,200 27, ,400 27, ,522 $ 27,764 $ 156,800 $ 85,924 Capital Leases As of December 31, 2013, the City had no capital leases. 40

55 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE G - LONG-TERM DEBT (CONTINUED) 6. Industrial Revenue Bonds From time to time, the City has issued Industrial Revenue Bonds to provide financial assistance to private-sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the City, the State nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2013, there was one series of Industrial Revenue Bonds outstanding. The aggregate principal amount payable cannot be determined; however, the original issue amount totaled $8,400, Long-Term Obligation Activity Long-term liability activity for the year ended December 31, 2013 was as follows: Beginning Balances Increases Decreases Ending Balances Due within one year Governmental activities: Sales and use tax bonds $ 9,520,000 $ - $ 1,455,000 $ 8,065,000 $ 1,510,000 Tax increment bonds 17,260, ,000 16,545, ,000 Add: unamortized premium 823, , ,092 - Total bonds payable 27,603,901-2,304,809 25,299,092 2,250,000 Certificates of participation 30,110,000-2,815,000 27,295,000 2,910,000 Less unamortized discount (160,030) - (16,003) (144,027) - Compensated absences: Government 5,630,237 2,936,406 3,101,963 5,464,680 3,218,724 Internal service 161, , , ,241 43,515 Risk 3,035, ,682 2,882,556 1,261,855 OPEB Obligation 1,527, ,000-2,096,000 - Governmental activities: Total long-term liabilities $ 67,907,582 $ 3,881,378 $ 8,626,418 $ 63,162,542 $ 9,684,094 Business-type activities: General obligation bonds $ 24,250,000 - $ 8,075,000 $ 16,175,000 $ 8,130,000 Add: unamortized premium 332, , ,636 - Less unamortized amounts: Unamortized discount (2,413,937) - (1,198,590) (1,215,347) - Revenue bonds 40,850,000 39,380,000 40,275,000 39,955, ,000 Add: unamortized premium 409,674 3,472, ,674 3,472,520 - Total bonds payable 63,428,443 42,852,520 47,675,154 58,605,809 8,610,000 Notes payable 113,908-34,748 79,160 37,876 Compensated absences 818, , , , ,760 Other 3,521, ,521,102 - Business-type activities: Total long-term liabilities $ 67,881,932 $ 43,315,146 $ 48,319,989 $ 62,877,089 $ 9,010,636 Governmental activities, claims and judgments are generally liquidated by the general fund. Compensated absences, net pension obligation and net postemployment benefit obligation would be liquidated by the respective fund where the liablity accrued. 41

56 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE G - LONG-TERM DEBT (CONTINUED) 8. Debt Service Requirements Debt service requirements on long-term debt at December 31, 2013 are as follows: GOVERNMENTAL ACTIVITIES Sales and use tax bonds Tax increment bonds Certificates of participation Year ending Dec 31, Principal Interest Principal Interest Principal Interest 2014 $ 1,510,000 $ 291,950 $ 740,000 $ 763,688 $ 2,910,000 $ 1,051, ,555, , , ,863 3,025, , ,605, , , ,175 3,140, , ,665, , , ,363 3,255, , ,730,000 69, , ,237 2,765, , ,920,000 2,601,425 12,200,000 1,240, ,205,000 1,315, ,430,000 71, $ 8,065,000 $ 943,600 $ 16,545,000 $ 7,516,688 $ 27,295,000 $ 5,378,129 BUSINESS-TYPE ACTIVITIES General obligation bonds Revenue bonds Notes payable Year ending Dec 31, Principal Interest Principal Interest Principal Interest 2014 $ 8,130,000 $ 136,750 $ 480,000 $ 1,467,994 $ 37,876 $ 7, ,045,000 66, ,000 1,454,359 41,284 3, ,410,000 1,442, ,455,000 1,400, ,500,000 1,356, ,545,000 5,731, ,670,000 3,604, ,610,000 1,662, ,765,000 89, $ 16,175,000 $ 203,000 $ 39,955,000 $ 18,210,815 $ 79,160 $ 10, Utility Revenues Pledged for Debt Service The City has pledged future water customer revenues, net of specified operating expenses, to repay $39,380,000 in water revenue refunding bonds. Proceeds from the bonds were used for rejuvenation of the water treatment facilities, improving and expanding water storage, and various other projects. The bonds are payable solely from water customer net revenues and are payable through Annual principal and interest payments on the bonds are expected to require less than 9 percent of net revenues. The total principal and interest remaining to be paid on the bonds is $57.6 million. Principal and interest paid for the current year and total customer net revenues were $1.7 million and $19.0 million, respectively. The City has pledged future sewer customer revenues, net of specified operating expenses, to repay $2.5 million in sewer revenue bonds. Proceeds from the bonds were used for improving sewer lines and various other projects. The bonds are payable solely from sewer customer net revenues and are payable through Annual principal and interest payments on the bonds are expected to require less than 9 percent of net revenues. The total principal and interest remaining to be paid on the bonds is $0.6 million. Principal and interest paid for the current year and total customer net revenues were $297,570 and $3.3 million, respectively. 10. Advance Refunding In 2013, the City issued $39,380,000 of Water Enterprise Revenue Refunding Bonds for an advance refunding of $40,000,000 of the 2004 Water Revenue Bonds to reduce total future debt service payments. Interest rates on the refunding bonds range from 2.0% to 5.0%, versus the 4.5% to 5.0% on the original issue. The 2013 transaction resulted in an economic gain of $6.7 million and a reduction of debt service payments of $9.5 million. 42

57 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE H - DEFERRED REVENUE The General Fund includes unearned revenue of $643,967 which is related to funds received for the future dissolution of a metropolitan district and a protested audit assessment. The Water Fund has $137,074 for water and farm lease and easement agreements. NOTE I - PENSION PLANS City employees are covered under one or two of five different pension plans, depending on occupation and date of hire. The various plans are the Employee Pension Plan, the Police Pension Plan, and three Fire Pension Plans. Additionally, the City Manager, the City Attorney, and the presiding Municipal Judge are covered under their own separate pension plans. All plans and plan amendments are approved by City Council as single-employer, defined contribution plans, qualified under IRS guidelines, except two of the fire pension plans, an agent multiple-employer defined benefit plan and a cost sharing multiple-employer defined benefit plan. All plans are administered by outside trustees and do not meet the standards of accounting principles generally accepted in the United States of America for inclusion as part of the reporting entity. A description of each plan and selected financial information follows. 1. Employee Pension Plan A defined contribution pension plan is maintained for regular employees. Police officers and firefighters are excluded from the plan and are covered by separate plans, as described in I2. and I3. below. The plan requires mandatory employee pre-tax contributions to the plan of 5% of base pay. The City also contributes 5.85% of employees base pay to the plan. Voluntary employee contributions for regular employees are made to the deferred compensation plan described in Note J. The City s match for voluntary contributions is made to the Employee Pension Plan. The plan requires employee participation in the plan immediately upon date of hire. Vesting of employer contributions is as follows: 0% in employer contributions for the first 2 years, 30% at 3 years, 40% at 4 years, and 100% at 5 years of service. Employer contributions are funded by the governmental and proprietary funds. The City's contributions for 2013 were $2,290,534 or 7.2% (which includes the City s 1.4% match for voluntary contributions) calculated using the base salary amount of $31,652,460. City employees mandatory contributions for 2013 were $1,582,623 or 5% calculated using the base salary amount of $31,652,460. The City's total payroll was $58,589,126. The fair value of assets held by the ICMA Retirement Corporation, the trustee for the Employee Pension Plan, was $71,064,854 as of December 31, Police Pension Plan A defined contribution pension plan is maintained for all full-time, sworn police officers. The plan requires mandatory employee contributions of 9% of base pay. The City s contribution is also 9% of base pay. Vesting of employer contributions is as follows: 0% in employer contributions for the first 2 years, 30% at 3 years, 40% at 4 years, and 100% at 5 years of service. Voluntary contributions for police officers are made to the deferred compensation plan, described in Note J below. Matching of voluntary contributions by the City is made to the Police Pension Plan. Employer contributions are funded every pay period from the General Fund. The City's contributions for 2013 were $1,303,283 or 10.7% (which includes the City s 1.7% match for voluntary contributions) calculated using the base salary amount of $12,194,811. The City police employees' mandatory contributions for 2013 were $1,097,533 or 9% calculated using the base salary amount of $12,194,811. The City's total payroll was $58,589,126. The fair value of assets held by ICMA Retirement Corporation, the trustee for the Police Pension Plan, was $55,857,730 as of December 31, Fire Pension Plans a. City Fire Pension Plan Plan Description. The City Fire Pension Plan (the Old Hire Plan), a defined benefit pension plan, established in accordance with Colorado law, covers all full-time firefighters hired prior to April 8, All plan assets held by the City were transferred in January 1986 to the Fire and Police Pension Association of Colorado, an agent multiple-employer defined benefit pension plan. The City s fire department transferred out of the City, into a joint venture fire district in The fire district dissolved on December 31, 1999, and the fire department rejoined the City on January 1, The maintenance of total plan assets sufficient to pay the benefits 43

58 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE I - PENSION PLANS (CONTINUED) 3. Fire Pension Plans (Continued) a. City Fire Pension Plan (Continued) relating to contributions prior to January 1, 1994 was the responsibility of the City while the firefighters were members of the fire district. Participants are eligible for plan benefits at the age of 50 and after completing twenty years of active service. Plan benefits consist of a monthly pension of up to 70.0% of monthly salary as of the date of retirement. Additional surviving spouse benefits of lesser amounts are also available. In accordance with a 1976 decision by the Colorado Supreme Court, the City must return all individual employee contributions upon termination. The Fire and Police Pension Association of Colorado issues a publicly available financial report that includes financial statements for the Old Hire Plan. That report may be obtained by writing to the Fire and Police Pension Association, 5290 DTC Parkway, Suite 100, Greenwood Village, Colorado 80111, or by calling Funding Policy. The Old Hire Plan funding policy provides for periodic City and participant contributions. As required by the plan, Old Hire Plan participants are currently required to contribute 5.0% of covered payroll and the City is also required to contribute 5.0%. This contribution requirement was not actuarially determined. Firefighters covered under this plan may elect an optional account known as the deferred retirement option plan or DROP within five years prior to retirement. The purpose of DROP is to allow an eligible participant to elect, in lieu of immediate termination of employment and receipt of a service retirement benefit, to continue employment for a specified period of time not to exceed five years, coupled with the deferral of actual receipt of retirement benefits until the end of such specified period, at which time employment shall cease. Once a participant elects a DROP, the City is no longer required to match that participant s contribution. As of December 31, 2013, there is one active participant. Annual Pension Cost and Net Pension Asset. For 2013, the City made contributions of $2,711 and participants made contributions of $5,195. The annual required contribution for the current year was determined as part of the January 1, 2012 actuarial valuation using the Entry Age Actuarial Cost Method. Actuarial value of assets is based on the Asset Valuation Method, which utilizes a three year moving average of expected and actual market values. Under the current statutes, the unfunded actuarial accrued liability must be amortized under a level dollar, open method in the maximum of 10 years or the number of years remaining until 2022, but not more than the average remaining life expectancy of the group. The actuarial assumptions included (a) inflation at 3.0%, (b) a rate of return of 7.5% per year, compounded annually, (c) projected salary increases of 4.0% annually, attributable to inflation and merit increases, and (d) no post-retirement benefit increases. The City s annual pension cost and the net pension asset for the year ended December 31, 2013 based on estimates from the January 1, 2012 (latest) actuarial are as follows: Annual required contribution $ 192,152 Interest on net pension asset (6,988) Adjustment to annual required contribution 9,029 Annual pension cost 194,193 C ontributions made 192,152 Decrease in net pension asset (2,041) Net pension asset, beginning of year 93,175 Net pension asset, end of year $ 91,134 44

59 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE I - PENSION PLANS (CONTINUED) 3. Fire Pension Plans (Continued) a. City Fire Pension Plan (Continued) Net Pension Asset History and Future Estimates Annual Percentage Net Fiscal year pension cost of APC pension ending (APC) contributed asset 12/31/13 $ 194,193 99% $ 91,134 12/31/12 95,498 97% 93,175 12/31/11 96,545 10% 95,834 Funded Status and Funding Progress. As of January 1, 2012, the most recent actuarial valuation date, the plan was 76.7% funded. The actuarial accrued liability for benefits was $8,288,176 and the actuarial value of assets was $6,354,083, resulting in a shortage of assets over the actuarial accrued liability (AAL) of $1,934,093. The covered payroll (annual payroll of active employees covered by the plan) was $99,019 and the ratio of the shortage of assets over the actuarial accrued liability to the covered payroll was (1,953%). The schedule of funding progress, presented as RSI following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets are increasing over time relative to the actuarial accrued liability for benefits. b. Fire and Police Pension Association Statewide Defined Benefit Plan Plan Description. The Fire and Police Pension Association Statewide Defined Benefit Plan (the New Hire Plan), a cost sharing multiple-employer public employee retirement system administered by the Fire and Police Pension Association of Colorado (FPPA), covers all full-time firefighters of the City who were hired on or after April 8, 1978, and before January 1, Death and disability coverage is provided for members through the Statewide Death and Disability Plan, which is also administered by FPPA. Firefighters hired before April 8, 1978 may voluntarily associate with the New Hire Plan under certain circumstances, while those hired on or after April 8, 1978, and before January 1, 1994 are automatically associated with it. The New Hire Plan provides retirement and death benefits to its members. The City s fire department transferred out of the City, into a joint venture fire district in The fire district dissolved on December 31, 1999, and the fire department rejoined the City on January 1, The New Hire Plan was not the responsibility of the City while the firefighters were members of the fire district. The Normal Retirement Date (NRD) of firefighters hired before April 8, 1978, who voluntarily participate in the New Hire Plan, is the date on which they have attained the age of 50 and completed 25 years of service. The NRD of all other firefighters is the date on which they have attained the age of 55 and completed at least 25 years of active service. The retirement benefit of firefighters hired before April 8, 1978 who retire on their NRD is equal to one half of their monthly salary at the date of retirement. Each year of service beyond the member s NRD increases his or her pension by 2% of salary up to a maximum monthly pension of 60% of the monthly salary at retirement. There are no early retirement benefits for this class of firefighters. The retirement benefit of all other firefighters who retire at or after their NRD is 2% of the average of the member s highest three years base salary multiplied by the member s years of service prior to age 65, not to exceed 25 years. A member shall be eligible for early retirement after completion of 30 years of service or the attainment of age 50. The benefit for early retirement is the normal benefit reduced by one-half of one percent for each month that the benefit commences prior to age 55. The monthly Post-Retirement Death Benefit available for spouses of retired employees, hired before April 8, 1978, who voluntarily participate in the New Hire Plan, is two-thirds of the monthly benefit of the member at the time of death. This benefit is paid until the spouse dies or remarries. The FPPA issues a publicly available financial report that includes financial statements and required supplementary information for the New Hire Plan. That report may be obtained by writing to Fire and Police Pension Association, 5290 DTC Parkway, Suite 100, Greenwood Village, Colorado 80111, or by calling

60 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE I - PENSION PLANS (CONTINUED) 3. Fire Pension Plans (Continued) b. Fire and Police Pension Association Statewide Defined Benefit Plan (Continued) Funding Policy. New Hire Plan members are required to contribute 8.0% of their base salary and the City is required to contribute at an actuarially determined rate. The current rate is 8.0% of base salary. The contribution requirements of New Hire Plan members and the City are established and may be amended by the FPPA. Firefighters covered under this plan may elect an optional account known as the deferred retirement option plan or DROP within five years prior to retirement. The purpose of DROP is to allow an eligible participant to elect, in lieu of immediate termination of employment and receipt of a service retirement benefit, to continue employment for a specified period of time not to exceed five years, coupled with the deferral of actual receipt of retirement benefits until the end of such specified period, at which time employment shall cease. Once a participant elects a DROP, the City is no longer required to match that participant s contribution. As of December 31, 2013, two out of fourteen participants in this plan had elected a DROP. The City s contributions to the New Hire Plan for the years ending December 31, 2013, 2012, and 2011 were $91,710, $90,336, and $91,270 respectively, equal to the required contribution for each year. c. City of Thornton Firefighters Pension Plan 401(a) Plan A defined contribution pension plan is maintained for all full-time firefighters hired on or after January 1, The plan requires mandatory employee contributions of 8.0% of base pay. The City s contribution is also 8.0% of base pay. Vesting of employees is as follows: 0% in employer contributions for the first 3 years, 30% at 3 years, 40% at 4 years, and 100% at 5 years of service. Voluntary, after-tax contributions are allowed to be made to this plan by the firefighters. Voluntary contributions for all fire employees are made to the deferred compensation plan, described in Note J. Matching of voluntary contributions by the City is made to the City of Thornton Firefighters Pension Plan 401(a). Employer contributions are funded every pay period from the General Fund. The City s contributions for 2013 were $611,468 or 10.0% (which included the City s 2.0% match for voluntary contributions) calculated using the base salary amount of $6,090,913. The City firefighters mandatory contributions for 2013 were $487,273 or 8.0% calculated using the base salary amount of $6,090,913. The City s total payroll was $58,589,126. Fair value of assets held by ICMA Retirement Corporation, the trustee for the City of Thornton Firefighters Pension Plan, was $11,431,482 as of December 31, City Manager/City Attorney/Municipal Judge Pension Plans The City Manager, City Attorney, and presiding Municipal Judge are covered under individual pension plans. The terms of each plan are negotiated every year as a part of their employment contract. The City s contributions for 2013 were $78,404. The employees contributions for 2013 were $43,621. As of December 31, 2013, fair value of assets for the combined plans was $2,393,851. NOTE J - DEFERRED COMPENSATION The City offers all regular City employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan permits participants to defer a portion of their salary until future years. The general employees, police, and fire voluntary contributions are made to the 457 plan. Employees can contribute a maximum of $17,500 per year ($23,000 if age 50 or more). The City matches 50% of employee contributions up to a maximum of 2% of base pay. The contributions for the City's match are made to either the Employee Pension Plan, the Police Pension Plan or the Fire Pension Plan described in Notes I1., I2., or I3., respectively. For 2013, the general employees voluntary contributions were $1,633,111, the police employees voluntary contributions were $601,850 and the fire employees voluntary contributions were $357,710 for a total of $2,592,671 or 4.4% of base salary amount of $58,589,126. Fair value of assets held by the trustee as of December 31, 2013 was $46,230,612. Deferred compensation is available for withdrawal any time after the participant reaches age 59-1/2, and must begin at age 70½. Withdrawals can also be made upon termination of employment, death, or unforeseeable emergency. Such withdrawals may be subject to IRS penalties for early withdrawal. Withdrawals can also be made upon termination of the plan. 46

61 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE J - DEFERRED COMPENSATION (CONTINUED) Additionally, the City offers employees a retirement health savings plan. Participation in the plan is mandatory and the City s annual contribution is determined each year by city council, for 2013 the annual amount was $350. As of December 31, 2013, fair value of assets held by the trustee was $4,352,512. An independent trustee administers funds in both of these plans. The City maintains accounting records. The trustee provides participants with quarterly statements of contributions, withdrawals and earnings. NOTE K HEALTH CARE PLAN Plan Description. The Retiree Health Care Plan (Plan) is a single employer defined benefit OPEB plan administered by the City of Thornton. The Plan provides healthcare benefits for eligible employees, eligible retirees, and employees designated as permanently disabled. Employees must be a minimum of age 62 with 10 or more years of continuous service or have at least 20 years of continuous service at any age to be eligible for retiree benefits. The City provides a direct contribution subsidy to disabled retirees only. There are five fully-insured medical plans, including prescription drugs, used by the City: Cigna Open Access Plus In- Network, Cigna High Deductible Health Plan with an Health Reimbursement Arrangement (HRA), Kaiser HMO, Kaiser High Deductible Health Plan with an Health Reimbursement Arrangement (HRA) and Kaiser Senior Advantage. Retirees over 65 may participate in either the Senior Advantage or either of the Cigna plans without the HRA benefit. The medical providers do not issue a publicly available financial report for the City of Thornton. Funding Policy. The City negotiates its rates annually with each of the healthcare providers (Kaiser and Cigna). In addition to the premium, other factors, such as co-payments, deductibles, etc. are reviewed and may be changed. Premiums vary depending on the number of family members covered and the healthcare provider chosen but are identical for all three classes of employees. The City Council approves the healthcare providers and plans annually. City Council established benefits to the permanently disabled through a personnel code ordinance adopted June 25, In 2013, eligible employees who were enrolled in single coverage paid 10% and eligible retirees paid 100% of the individual premium. Disabled retirees receive a contribution subsidy equal to 90% of the retiree individual premium. The healthcare plans are funded on a pay as you go basis with the City paying premiums monthly. Expected premiums for permanently disabled and retired employees for all medical plans totaled $480,683 in Retired and permanently disabled employees paid $249,683 in actual premiums. The City s pay as you go funding totaled $231,000 during the year. Annual OPEB Cost and Net OPEB Obligation. The City s annual OPEB cost is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions (GASB 45). The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover current year costs plus amortization for a portion of the unfunded accrued actuarial liability for health benefits. The City implemented GASB 45, prospectively on January 1, 2008, and reports the net OPEB obligation at transition as zero in accordance with the provisions of the statement. The following table shows the components of the City s annual OPEB cost for the year, the amount actually contributed, and changes in the City s net OPEB obligation Annual Required C ontribution $ 792,000 Interest on net OPEB obligation 49,000 Adjustment to ARC (41,000) Annual OPEB cost (expense) 800,000 Contributions Made (231,000) Increase in net OPEB obilgation 569,000 Net OPEB obligation - beginning of year 1,527,000 Net OPEB obligation - end of year $ 2,096,000 47

62 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE K HEALTH CARE PLAN (CONTINUED) The city s annual OPEB cost, the percentage of annual OPEB cost contributed, and the net OPEB obligation for 2013 and the two preceding years were as follows: Funded Status and Funding Progress. As of January 1, 2012, the most recent actuarial valuation date, the Plan was not funded. The unfunded actuarial accrued liability (UAAL) was $5,761,000. The covered payroll in 2013 (annual payroll of eligible employees covered by the Plan) was $56,508,812. The ratio of the UAAL to covered payroll was 10.2 percent. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future, such as future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the Plan and the annual required contributions of the City are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents information about the actuarial accrued liability or benefits relative to the covered payroll of employees covered by the Plan. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the City and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefits costs between the City and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities, consistent with the long term perspective of the calculations. In the January 1, 2012, actuarial valuation, the projected unit credit attribution method was used. The actuarial assumptions included a 4.5 percent discount rate to calculate the ARC on a pay-as-you-go basis. The Unfunded Actuarial Accrued Liability is amortized over the maximum acceptable period of 30 years. The health CPI is assumed to increase at a rate of 3% each year. It is calculated assuming a level percentage of projected payroll on an open basis. Payroll is assumed to increase 3.5% per year. The annual trend rates for health care costs applied on a select and ultimate basis are 10% and 5%, respectively. Select trends are reduced 0.5% each year until reaching the ultimate trend. NOTE L - RISK MANAGEMENT 1. General Liability Insurance Pool Fiscal Percentage of Net OPEB Year Annual Annual OPEB OPEB Ended OPEB Cost Cost Contribution Obligation 12/31/2013 $ 800, % $ 2,096,000 12/31/ , % 1,527,000 12/31/ , % 1,086,000 The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the government carries insurance with the Colorado Intergovernmental Risk Sharing Agency (CIRSA). CIRSA is a separate and independent governmental and legal entity. The purposes of CIRSA are to provide members defined liability, property and workers' compensation coverages through joint self-insurance, insurance, reinsurance, or any combination thereof, and to assist members to prevent and reduce losses and injuries to municipal property and to persons or property which might result in claims being made against members of CIRSA, or their employees or officers. All operating funds of the City participate in the program and make payments to the Risk Management Fund based on actuarial estimates of the amounts needed to pay current-year claims and to establish a reserve for catastrophe losses. The City pays claims up to the self-insured retention. In 2013, the self-insured retention (deductible amount) set by the City was $250,000 per claim. The City purchases commercial insurance for claims in excess of $250,000. Every third year the City hires an independent actuary to calculate incurred but not reported claims (IBNR). The City reserves a liability for property/casualty claims of $1,215,020. There has been no significant reduction in insurance coverage from the prior year. 48

63 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE L - RISK MANAGEMENT(CONTINUED) 1. General Liability Insurance Pool (Continued) The City s respective share of CIRSA s member fund balances for the most recently available statements are as follows: Year* Fund PC Pool surplus (deficit) December 31, 2012 ** City of Thornton's contribution ratio City of Thornton's share of surplus as of December 31, Loss Fund $ 47, % $ Loss Fund % Loss Fund 91, % Loss Fund 191, % Loss Fund 193, % Loss Fund 465, % Loss Fund 45, % Loss Fund 143, % Loss Fund % Loss Fund % Loss Fund % Loss Fund 77, % Loss Fund % Loss Fund 413, % Loss Fund 1,303, % 10, Loss Fund 3,038, % 10, Loss Fund 2,414, % 8, Loss Fund 3,330, % Loss Fund 2,184, % Loss Fund 1,565, % Loss Fund 635, % Loss Fund (2,033,311) 0.000% Loss Fund (2,134,011) 0.000% - ALL Operating fund 4,755, % 177,166 ALL Excess fund 3,937, % 99,192 ALL Reserve fund 8,572, % 70,370 * Years 1982 through 1989 no longer have balances remaining $ 29,240,609 $ 376,036 ** Surpluses or deficits for any year are subject to change for reasons which include: interest earnings or invested amounts for those years and funds, reestimation of losses for those years and funds, and credits or distributions from surplus for those years and funds. 49

64 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE L - RISK MANAGEMENT (CONTINUED) 1. General Liability Insurance Pool (Continued) Reserve for unpaid claims, January 1, $ 1,416,238 $ 1,251,417 Incurred claims (including IBNRs) 468, ,432 C laim payments (670,049) (384,611) Reserve for unpaid claims, December 31, $ 1,215,020 $ 1,416,238 Unpaid claims to be paid in 1 year $ 412,803 $ 612,920 Summary of the most recently available financial information for CIRSA (December 31, 2012) is as follows: Assets $ 51,745,775 Liabilities, including incurred but not reported claims $ 22,505,166 Members' fund balance Accumulated members' equity 29,240,609 Total liabilities and fund balance $ 51,745,775 Revenues $ 16,534,381 Expenses 12,546,527 Net increase in members' fund balance $ 3,987, Workers' Compensation In 1991, an insurance risk management consultant conducted a feasibility study to determine if a limited risk program was a viable option for workers' compensation coverage. The study indicated that the City would benefit from such a program. City Council voted to proceed with the new program based on this information. The City established a limited risk management program for workers' compensation on January 1, Prior to that date, workers' compensation coverage was through the Colorado Intergovernmental Risk Sharing Agency (CIRSA). All past deductible plans with CIRSA are now complete and closed, with no further exposure to the City. The City's program was tailored to meet an annual exposure predicted from ten years of claims history. A risk retention of $500,000 per accident is maintained and funded through the Risk Management Fund, based on an annual estimated claims cost. The City purchases commercial insurance for claims in excess of $500,000. Claims administration and medical services are provided through contract and the City's Risk Management Administrator is responsible for overall program management. The State of Colorado has a strict application and annual renewal process that includes funding verification, excess insurance coverage verification, claims data review and provision of a comprehensive loss prevention and control program. The application includes a required surety bond of $801,000 to cover the City's risk retention portion. All operating funds of the City participate in the program and make payments to the Risk Management Fund based on actuarial estimates of the amounts needed to pay current year claims and to establish a reserve for catastrophe losses. Every third year the City hires an independent actuary to calculate incurred but not reported claims (IBNR). The City reserves a liability for workers' compensation of $1,559,536. There have been no significant reductions in insurance coverage from the prior year. There have been no settlements of claims exceeding the ceiling of the City s insurance coverage for the last ten years. 50

65 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE L - RISK MANAGEMENT (CONTINUED) 2. Workers' Compensation (continued) Reserve for unpaid claims, January 1, $ 1,500,000 $ 1,021,763 Incurred claims (including IBNRs) 1,253,914 1,324,156 Claim payments (1,194,378) (845,919) Reserve for unpaid claims, December 31, $ 1,559,536 $ 1,500,000 Unpaid claims to be paid in 1 year $ 741,052 $ 769, Self-Funded Dental Insurance The City established two self-funded dental programs effective January 1, 2007: Delta EPO and Delta Premier. The purpose of these programs is to pay the dental claims of eligible City employees and their covered dependents. As of January 1, 2007 the City entered into an administrative services only arrangement with Delta Dental of Colorado, whereby the City pays Delta Dental a separate amount for administrative costs and claim servicing fees. The City agrees to provide monthly funding for the payment of claims. At the end of the year, the City retains any money not spent on claims. The City has recorded a liability in this fund totaling $92,000 for open and estimated claims not yet reported at December 31, Reserve for unpaid claims, January 1, $ 101,000 $ 96,426 Incurred claims (including IBNRs) 651, ,309 Claim payments (660,738) (709,735) Reserve for unpaid claims, December 31, $ 92,000 $ 101,000 Unpaid claims to be paid in 1 year $ 92,000 $ 101, Self-Funded Vision Insurance The City established a self-funded vision program effective January 1, 2009: Vision Service Plan. The purpose of this program is to pay the vision claims of eligible City employees and their covered dependents. As of January 1, 2009 the City entered into an administrative services only arrangement with Vision Service Plan, whereby the City pays Vision Service Plan a separate amount for administrative costs and claim servicing fees. The City agrees to provide monthly funding for the payment of claims. At the end of the year, the City retains any money not spent on claims. The City has a recorded liability in this fund totaling $16,000 for open and estimated claims not yet reported at December 31, Reserve for unpaid claims, January 1, $ 18,000 $ 22,993 Incurred claims (including IBNRs) 109, ,140 Claim payments (111,140) (114,133) Reserve for unpaid claims, December 31, $ 16,000 $ 18,000 Unpaid claims to be paid in 1 year $ 16,000 $ 18,000 51

66 NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE M - LEGAL RESTRICTION At the November 3, 1992 general election, Colorado voters approved an amendment to the Colorado Constitution commonly known as the Taxpayer's Bill of Rights (TABOR). TABOR was effective December 31, 1992, and its provisions limit government taxes, spending revenues and debt without electoral approval. On November 6, 2001, the City s voters chose to permit the City to collect, retain and spend the full amount of the City s past and future taxes and other revenue above the TABOR amendment limitations. TABOR by its terms applies to local governments such as the City but excludes "enterprises," which are defined as (1) a government owned business, (2) authorized to issue its own debt and (3) receives less than 10% of its annual revenue in grants from all state and local governments. The City considers its Water, Sewer, Sanitation, and Golf funds to be "enterprise" funds, and therefore considers them excluded from the terms of TABOR. All other government activities are presumably covered under the limitations of TABOR. TABOR also requires the City to set aside a portion of its spending for an emergency reserve. In 2013, the required reserve of 3% of current year spending, excluding voter approved amounts, federal revenues, bond proceeds, and other restrictions under TABOR, totaled $3,781,011. The City is not allowed to use the emergency reserve to compensate for economic conditions, revenue shortfalls, or salary or benefit increases. NOTE N - COMMITMENTS AND CONTINGENT LIABILITIES 1. Litigation The City is a defendant in several lawsuits, including various claims related to activities or employees of the City. The City maintains a self-funded reserve in the Risk Management fund of $1,215,020 for general liability and $1,559,536 for worker's compensation claims. The City believes that final disposition of matters not covered by insurance will not have a material adverse effect on the City's financial condition. 2. Contracts The City has $19,785,479 in outstanding contracts with various contractors. Enterprise fund type contracts comprise $12,199,096 and Governmental fund type contracts comprise $7,586,383 of the total. The City has a collective bargaining agreement between the City of Thornton and the Thornton Firefighters Local Number 2376, International Association of Firefighters for the line firefighters. The current agreement is for 1 year and expires December 31, Certain City employees have contracts through the fiscal year Some contracts include severance packages, not exceeding nine months, if the employee is involuntarily terminated. 3. Arbitrage As a result of significant revenue from private oil companies related to mineral extraction on lands owned by the City s Water Utility, the City resolved an arbitrage liability for $402,000 in

67 REQUIRED SUPPLEMENTARY INFORMATION 53

68 General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Non US GAAP Basis For the year ended December 31, 2013 Positive (negative) Budgeted Amounts variance - Actual actual from Original Final Amounts final REVENUES Taxes Sales and use $ 53,941,000 $ 53,941,000 $ 55,278,678 $ 1,337,678 Property 9,142,000 9,142,000 9,040,544 (101,456) Franchise 5,274,377 5,274,377 5,258,367 (16,010) Other 1,438,000 1,438,000 1,861, ,731 Licenses and permits 1,730,000 1,730,000 2,602, ,394 Intergovernmental 5,176,000 5,176,000 5,364, ,008 Governmental grants 925, , ,288 (230,712) Charges for services 9,446,979 9,446,979 8,952,084 (494,895) Fines and forfeitures 2,981,000 2,981,000 2,597,693 (383,307) Interest 335, ,000 44,925 (290,075) Miscellaneous 538, , , ,596 Total revenues 90,927,356 90,927,356 92,464,308 1,536,952 EXPENDITURES Current General government Legislative 1,928,809 1,928,809 1,661, ,873 City manager 2,224,530 2,224,530 2,140,653 83,877 Management services 7,685,052 7,685,052 7,567, ,512 Miscellaneous 2,706,833 2,706,833 1,910, ,579 Police 26,762,209 26,782,209 26,322, ,763 Fire and ambulance 12,175,739 12,175,739 12,195,742 (20,003) City development 7,579,155 7,579,155 7,010, ,383 Streets, traffic and engineering 11,009,196 11,009,196 10,858, ,315 Community services 17,062,552 17,192,552 16,440, ,395 Capital outlay 2,676,753 2,676,753 2,556, ,081 Total expenditures 91,810,828 91,960,828 88,665,053 3,295,775 Excess (deficiency) of revenues over (under) expenditures (883,472) (1,033,472) 3,799,255 4,832,727 OTHER FINANCING SOURCES Transfers in 1,682,167 1,682,167 1,682,167 - Transfers out (45,537) (45,537) (45,537) - Total other financing sources 1,636,630 1,636,630 1,636,630 - Excess of revenues and other sources over expenditures and other uses before reconciling items $ 753,158 $ 603,158 5,435,885 $ 4,832,727 RECONCILIATION TO US GAAP BASIS RHS & sick payout (22,688) Net change in fund balances 5,413,197 Fund balances, January 1 27,493,906 Fund balances, December 31 $ 32,907,103 54

69 Schedule of Funding Progress for the City Fire Pension Plan Excess/ Actuarial Excess/ (shortage) as Actuarial Actuarial accrued (shortage) a percentage valuation value of liability (AAL) of assets Funded Covered of covered date assets -entry age over AAL ratio payroll payroll 1/1/2012 $ 6,354,083 $ 8,288,176 $ (1,934,093) 76.7% $ 99, % 1/1/2010 7,378,054 8,235,354 (857,300) 89.6% 80, % 1/1/2008 9,122,277 8,284, , % 74, % 55

70 Schedule of Funding Progress for the City Retiree Health Care Plan Actuarial Accrued UAAL as Actuarial Actuarial Liability Unfunded a % of Valuation Value of (AAL)- AAL Funded Covered Covered Date Assets Unit Credit (UAAL) Ratio Payroll Payroll 1/1/2012 $ - $ 5,761,000 $ 5,761, % $ 54,283, % 1/1/2010-4,935,000 4,935, % 53,247, % 1/1/2008-3,151,000 3,151, % 53,930, % 56

71 COMBINING AND INDIVIDUAL STATEMENTS 57

72 Combining and Individual Fund Statements and Schedules Fund Descriptions Non-Major Governmental Funds Special Revenue Funds Special Revenue funds are used to account for specific revenues that are legally restricted to expend for particular purposes. Thornton Arts, Sciences and Humanities Council (TASHCO) Fund (Component Unit) to account for monies received from grants and program revenues for purposes of cultural enhancements. Cash in Lieu Fund to account for monies contributed by land developers in lieu of providing an improvement such as parks or drainage. Conservation Trust Fund to account for monies received from the State government for purposes of developing new parks and park improvements. Parks Fund to account for one-third of the.25% open space tax to be used exclusively for the purchase and development of parks in the City. Open Space Fund to account for one-third of the.25% open space tax to be used exclusively for the purchase and development of open space in the City. Parks and Open Space Fund to account for one-third of the.25% open space tax to be used exclusively for the purchase and development of parks and open space in the City, based on the recommendations of the Parks and Open Space Advisory Committee (POSAC). Adams County Open Space Sales Tax Fund to account for open space monies from Adams county to be used exclusively for the purchase and development of open space in the City. Adams County Road and Bridge Sales Tax Fund to account for road and bridge monies from Adams County to be used exclusively for transportation related projects in the City. 136 th Avenue GID Fund to account for the collection of assessment revenues to be used exclusively for payment of the construction of the interchange at 136 th Avenue and Interstate 25. E911 Authority Fund to account for E911 surcharges received from telecommunication companies doing business within the City. The Authority was established by City Council in 2004, and funds collected are used to pay for a portion of costs authorized by State statute for the City to provide emergency telephone services. Debt Service Funds Debt Service funds are used to account for the accumulation of resources and payment of debt principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment. Debt Service Fund to accumulate monies for payment of the following bond issues: $12,170,000 Open Space and Parks Sales and Use Tax Revenue Refunding Bonds, Series 2010 financed solely by the 0.25% open space sales and use tax. The bonds are due in annual payments until maturity in

73 Combining and Individual Fund Statements and Schedules Fund Descriptions (Continued) Non-Major Governmental Funds Capital Projects Funds Capital Projects Funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds. Thornton Development Authority Capital Fund (Component Unit) to account for capital improvement projects within the Authority boundaries financed by existing resources. Thornton Development Authority North Washington Fund (TDA North) (Component Unit) to account for debt services and capital improvement projects within the Authority boundaries financed by current resources (property tax, sales tax, investment income) and by bond proceeds. The debt services payments are for the following bond issue: $21,195,000 Thornton Development Authority Tax Increment Revenue Bonds (North Washington Street Urban Renewal Project), Series 2004 financed by sales tax and property tax incremental increases within the boundaries of the North Washington Urban Renewal Area. The bonds are due in semi-annual payments until maturity in

74 Combining Balance Sheet Non-Major Governmental Funds December 31, 2013 Special Revenue Funds Cash in Conservation Open TASHCO Lieu Trust Parks Space ASSETS Equity in pooled cash and investments Unrestricted $ 375,865 $ 863,018 $ 2,944,820 $ 3,676,139 $ 4,409,838 Restricted Receivables, net Taxes , ,099 Accounts Interest 891 2,161 7,164 8,397 9,068 Land held for resale Total assets $ 376,756 $ 865,179 $ 2,951,984 $ 3,856,635 $ 4,591,005 LIABILITIES Accounts payable $ 18,908 $ - $ 226,738 $ - $ 142,341 Retainage payable ,879 6,042 Third party advances - 547, Other Total liabilities 18, , ,738 12, ,383 DEFERRED INFLOWS Unavailable revenue - property taxes Total deferred inflows of resources FUND BALANCES Nonspendable Land held for resale Restricted Debt service Other purposes 163, Assigned Capital projects Debt service Parks and open space - 317,878 2,725,246 3,843,756 4,442,622 Public safety Other purposes 194, Total fund balances 357, ,878 2,725,246 3,843,756 4,442,622 Total liabilities, deferred inflows of resources and fund balances $ 376,756 $ 865,179 $ 2,951,984 $ 3,856,635 $ 4,591,005 60

75 Special Revenue Funds Adams County Adams County Total Parks & Open Space Road & Bridge 136th Special Open Space Sales Tax Sales Tax Avenue GID E911 Revenue $ 2,690,713 $ 1,091,290 $ 4,091,512 $ 892 $ 187,859 $ 20,331, , ,015-90,864 1,068,176 21,800 2,076, ,097,922 6,152 1,445 10, , $ 2,890,764 $ 3,168,857 $ 4,562,573 $ 896 $ 279,711 $ 23,544,360 $ 3,850 $ 2,280 $ 317,663 $ - $ - $ 711, ,412 7, , , ,828 3, , ,287, , ,237, ,238, ,885,936 3,165, ,380, , , ,655 2,885,936 3,165,165 4,237, ,711 22,256,873 $ 2,890,764 $ 3,168,857 $ 4,562,573 $ 896 $ 279,711 $ 23,544,360 61

76 Combining Balance Sheet Non-Major Governmental Funds December 31, 2013 Debt Service Funds Capital Funds Total Total Total Non-major Debt Debt TDA TDA North Capital Governmental Service Service Capital Washington Projects Funds ASSETS Equity in pooled cash and investments Unrestricted $ 121,008 $ 121,008 $ 6,633,883 $ 25,997,831 $ 32,631,714 $ 53,084,668 Restricted 72,987 72,987-1,506,266 1,506,266 1,579,253 Receivables, net Taxes ,803 3,690,943 3,725,746 4,793,922 Accounts ,721 1,721 2,099,643 Interest ,664 63,845 74, ,770 Land held for resale - - 2,762,824-2,762,824 2,762,824 Total assets $ 194,940 $ 194,940 $ 9,442,174 $ 31,260,606 $ 40,702,780 $ 64,442,080 LIABILITIES Accounts payable $ - $ - $ 19,113 $ 95,171 $ 114,284 $ 826,064 Retainage payable ,406 Third party advances ,500-13, ,801 Other ,419,739 1,419,739 1,419,739 Total liabilities ,613 1,514,910 1,547,523 2,835,010 DEFERRED INFLOWS Unavailable revenue - property taxes ,803 2,736,896 2,771,699 2,771,699 Total deferred inflows of resources ,803 2,736,896 2,771,699 2,771,699 FUND BALANCES Nonspendable Land held for resale - - 2,762,824-2,762,824 2,762,824 Restricted Debt service 72,987 72,987-1,506,312 1,506,312 1,579,299 Other purposes ,193 Assigned Capital projects - - 6,611,934 25,502,488 32,114,422 36,353,133 Debt service 121, , ,953 Parks and open space ,380,603 Public safety ,711 Other purposes ,655 Total fund balances 194, ,940 9,374,758 27,008,800 36,383,558 58,835,371 Total liabilities, deferred inflows of resources and fund balances $ 194,940 $ 194,940 $ 9,442,174 $ 31,260,606 $ 40,702,780 $ 64,442,080 62

77 This Page Left Intentionally Blank 63

78 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governmental Funds For the year ended December 31, 2013 Special Revenue Funds Cash in Conservation Open Parks & TASHCO Lieu Trust Parks Space Open Space REVENUES Taxes Sales and use $ - $ - $ - $ 1,737,529 $ 1,737,529 $ 1,737,529 Property E Intergovernmental - - 1,247, Governmental grants 56,016-1, ,338 21,800 Interest 563 1,319 5,158 5,631 6,468 (778) Miscellaneous Other 13,029 - (298) - 1,400 2,600 Total revenues 69,608 1,319 1,253,995 1,743,160 2,659,735 1,761,151 EXPENDITURES Current Community services 81, Capital outlay 24,593-1,110, ,503 1,085, ,906 Debt service Principal retirement Interest Bond fees Total expenditures 106,406-1,110, ,503 1,085, ,906 Excess (deficiency) of revenues over (under) expenditures before other sources (uses) (36,798) 1, ,438 1,568,657 1,574,172 1,103,245 OTHER FINANCING SOURCES (USES) Transfers in 45, Transfers out (816,663) (469,592) (518,895) Loss on land held for resale Total other financing sources (uses) 45, (816,663) (469,592) (518,895) Net change in fund balances 8,739 1, , ,994 1,104, ,350 Fund balances, January 1 349, ,559 2,581,808 3,091,762 3,338,042 2,301,586 Fund balances, December 31 $ 357,848 $ 317,878 $ 2,725,246 $ 3,843,756 $ 4,442,622 $ 2,885,936 64

79 Special Revenue Funds Adams County Adams County Open Space Road & Bridge 136th Total Sales Tax Sales Tax Avenue GID E911 Special Revenue $ - $ - $ - $ - $ 5,212, ,482-5, ,037,053 1,037, ,288 2,647, ,731,663 2,512, ,506,772 1,084 6, , , ,737 3,351,088 2,763,126 5,483 1,037,764 14,646, , ,848 2,144, ,458, ,848 2,144, ,540,402 3,090, ,507 5,483 1,037,764 9,106, , (6,000) (1,000,000) (2,811,150) (6,000) (1,000,000) (2,765,613) 3,090, ,507 (517) 37,764 6,340,414 74,925 3,619,308 1, ,947 15,916,459 $ 3,165,165 $ 4,237,815 $ 896 $ 279,711 $ 22,256,873 65

80 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Non-Major Governmental Funds For the year ended December 31, 2013 Debt Service Funds Capital Funds Total Total Total Non-major Debt Debt TDA TDA North Capital Governmental Service Service Capital Washington Projects Funds REVENUES Taxes Sales and use $ - $ - $ - $ 9,513,065 $ 9,513,065 $ 14,725,652 Property ,812,548 2,812,548 2,818,030 E ,037,053 Intergovernmental ,902-33,902 4,765,565 Governmental grants ,506,772 Interest ,547 43,853 49,400 76,752 Miscellaneous Other ,742 Total revenues ,449 12,369,471 12,408,920 27,055,566 EXPENDITURES Current Community services ,813 Capital outlay - - 1,051,493 6,998,083 8,049,576 13,508,165 Debt service Principal retirement 1,455,000 1,455, , ,000 2,170,000 Interest 350, , , ,713 1,138,863 Bond fees ,450 1,450 1,700 Total expenditures 1,805,400 1,805,400 1,051,493 8,503,246 9,554,739 16,900,541 Excess (deficiency) of revenues over(under) expenditures before other sources (uses) (1,805,183) (1,805,183) (1,012,044) 3,866,225 2,854,181 10,155,025 OTHER FINANCING SOURCES (USES) Transfers in 1,805,150 1,805, ,850,687 Transfers out - - (43,308) (632,859) (676,167) (3,487,317) Loss on land held for resale - - (4,454,729) - (4,454,729) (4,454,729) Total other financing sources (uses) 1,805,150 1,805,150 (4,498,037) (632,859) (5,130,896) (6,091,359) Net change in fund balances (33) (33) (5,510,081) 3,233,366 (2,276,715) 4,063,666 Fund balances, January 1 194, ,973 14,884,839 23,775,434 38,660,273 54,771,705 Fund balances, December 31 $ 194,940 $ 194,940 $ 9,374,758 $ 27,008,800 $ 36,383,558 $ 58,835,371 66

81 Thornton Arts, Sciences, and Humanities Council Fund (TASHCO) Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Governmental grants $ 48,000 $ 56,016 $ 8,016 Interest 3, (2,437) Miscellaneous Other 13,335 13,029 (306) Total revenues 64,335 69,608 5,273 EXPENDITURES Community services 123,792 81,813 41,979 Capital outlay 139,890 24, ,297 Total expenditures 263, , ,276 Excess (deficiency) of revenues over (under) expenditures (199,347) (36,798) 162,549 OTHER FINANCING SOURCES Transfer in 45,537 45,537 - Total other financing sources 45,537 45,537 - Net change in fund balance $ (153,810) 8,739 $ 162,549 Fund balance, January 1 349,109 Fund balance, December 31 $ 357,848 67

82 Cash in Lieu Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Interest $ - $ 1,319 $ 1,319 Total revenues - 1,319 1,319 EXPENDITURES Capital outlay 24,532-24,532 Total expenditures 24,532-24,532 Net change in fund balance $ (24,532) 1,319 $ 25,851 Fund balance, January 1 316,559 Fund balance, December 31 $ 317,878 68

83 Conservation Trust Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Intergovernmental - State lottery $ 1,000,000 $ 1,247,230 $ 247,230 Governmental grants - 1,905 1,905 Interest 1,000 5,158 4,158 Miscellaneous Other - (298) (298) Total revenues 1,001,000 1,253, ,995 EXPENDITURES Capital outlay 3,131,425 1,110,557 2,020,868 Total expenditures 3,131,425 1,110,557 2,020,868 Net change in fund balance $ (2,130,425) 143,438 $ 2,273,863 Fund balance, January 1 2,581,808 Fund balance, December 31 $ 2,725,246 69

84 Parks Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Taxes - sales and use $ 1,591,000 $ 1,737,529 $ 146,529 Interest 37,000 5,631 (31,369) Total revenues 1,628,000 1,743, ,160 EXPENDITURES Capital outlay 1,667, ,503 1,492,860 Total expenditures 1,667, ,503 1,492,860 Excess (deficiency) of revenues over (under) expenditures (39,363) 1,568,657 1,608,020 OTHER FINANCING USES Transfers out (816,663) (816,663) - Total other financing uses (816,663) (816,663) - Net change in fund balance $ (856,026) 751,994 $ 1,608,020 Fund balance, January 1 3,091,762 Fund balance, December 31 $ 3,843,756 70

85 Open Space Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Taxes - sales and use $ 1,591,000 $ 1,737,529 $ 146,529 Governmental grants - 914, ,338 Interest 33,000 6,468 (26,532) Miscellaneous Other - 1,400 1,400 Total revenues 1,624,000 2,659,735 1,035,735 EXPENDITURES Capital outlay 4,242,189 1,085,563 3,156,626 Total expenditures 4,242,189 1,085,563 3,156,626 Excess (deficiency) of revenues over (under) expenditures (2,618,189) 1,574,172 4,192,361 OTHER FINANCING USES Transfers out (469,592) (469,592) - Total other financing uses (469,592) (469,592) - Net change in fund balance $ (3,087,781) 1,104,580 $ 4,192,361 Fund balance, January 1 3,338,042 Fund balance, December 31 $ 4,442,622 71

86 Parks and Open Space Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Taxes - sales and use $ 1,591,000 $ 1,737,529 $ 146,529 Governmental grants - 21,800 21,800 Interest 100,000 (778) (100,778) Miscellaneous Other - 2,600 2,600 Total revenues 1,691,000 1,761,151 70,151 EXPENDITURES Capital outlay 1,389, , ,463 Total expenditures 1,389, , ,463 Excess of revenues over expenditures 301,631 1,103, ,614 OTHER FINANCING USES Transfers out (518,895) (518,895) - Total other financing uses (518,895) (518,895) - Net change in fund balance $ (217,264) 584,350 $ 801,614 Fund balance, January 1 2,301,586 Fund balance, December 31 $ 2,885,936 72

87 Adams County Open Space Sales Tax Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Intergovernmental $ 780,000 $ 837,288 $ 57,288 Governmental grants - 2,512,713 2,512,713 Interest 1,000 1, Miscellaneous Other Total revenues 781,000 3,351,088 2,570,088 EXPENDITURES Capital outlay 2,572, ,848 2,312,044 Total expenditures 2,572, ,848 2,312,044 Net change in fund balance $ (1,791,892) 3,090,240 $ 4,882,132 Fund balance, January 1 74,925 Fund balance, December 31 $ 3,165,165 73

88 Adams County Road and Bridge Sales Tax Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Intergovernmental $ 2,085,000 $ 2,647,145 $ 562,145 Interest 5,000 6,978 1,978 Miscellaneous Other - 109, ,003 Total revenues 2,090,000 2,763, ,126 EXPENDITURES Capital outlay 2,937,656 2,144, ,037 Total expenditures 2,937,656 2,144, ,037 Net change in fund balance $ (847,656) 618,507 $ 1,466,163 Fund balance, January 1 3,619,308 Fund balance, December 31 $ 4,237,815 74

89 136th Avenue General Improvement District Tax Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Taxes Property $ 6,000 $ 5,482 $ (518) Interest Total revenues 6,000 5,483 (517) OTHER FINANCING USES Transfers out (6,000) (6,000) - Total other financing uses (6,000) (6,000) - Net change in fund balance $ - (517) $ (517) Fund balance, January 1 1,413 Fund balance, December 31 $

90 E911 Authority Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Taxes - E911 $ 1,055,000 $ 1,037,053 $ (17,947) Interest Total revenues 1,055,000 1,037,764 (17,236) OTHER FINANCING USES Transfers out (1,000,000) (1,000,000) - Total other financing uses (1,000,000) (1,000,000) - Net change in fund balance $ 55,000 37,764 $ (17,236) Fund balance, January 1 241,947 Fund balance, December 31 $ 279,711 76

91 Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Interest $ 5,000 $ 217 $ (4,783) Total revenues 5, (4,783) EXPENDITURES Debt service Principal retirement 1,455,000 1,455,000 - Interest 350, ,150 - Bond fees 3, ,750 Total expenditures 1,808,150 1,805,400 2,750 Deficiency of revenues under expenditures (1,803,150) (1,805,183) (2,033) OTHER FINANCING SOURCES Transfers in 1,805,150 1,805,150 - Total other financing sources 1,805,150 1,805,150 - Net change in fund balance $ 2,000 (33) $ (2,033) Fund balance, January 1 194,973 Fund balance, December 31 $ 194,940 77

92 Governmental Capital Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Taxes - sales and use $ 4,737,700 $ 7,320,201 $ 2,582,501 Intergovernmental 2,412,000 2,801, ,655 Governmental grants 4,961,000 1,147,796 (3,813,204) Lease 207, ,581 (19) Interest 181,000 84,205 (96,795) Miscellaneous Developers' contributions 275, ,500 (135,500) Other 50,000 42,511 (7,489) Total revenues 12,824,300 11,743,449 (1,080,851) EXPENDITURES Capital outlay 14,786,427 5,309,148 9,477,279 Debt service Principal retirement 2,815,000 2,815,000 - Interest 1,153,959 1,153,959 - Bond fees - 1,450 (1,450) Total expenditures 18,755,386 9,279,557 9,475,829 Net change in fund balance $ (5,931,086) 2,463,892 $ 8,394,978 Fund balance, January 1 25,619,536 Fund balance, December 31 $ 28,083,428 78

93 Thornton Development Authority South Capital Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual - Non US GAAP Basis For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Intergovernmental $ - $ 33,902 $ 33,902 Interest 25,000 5,547 (19,453) Total revenues 25,000 39,449 14,449 EXPENDITURES Capital outlay 4,239,571 1,051,493 3,188,078 Total expenditures 4,239,571 1,051,493 3,188,078 Excess (deficiency) of revenues over (under) expenditures (4,214,571) (1,012,044) 3,202,527 OTHER FINANCING USES Transfers out (43,308) (43,308) - Total other financing uses (43,308) (43,308) - Excess (deficiency) of revenues over (under) expenditures and other uses before reconciling items $ (4,257,879) (1,055,352) $ 3,202,527 RECONCILIATION TO US GAAP BASIS Loss on disposal of land held for resale (4,454,729) Total reconciling items (4,454,729) Net change in fund balance (5,510,081) Fund balance, January 1 14,884,839 Fund balance, December 31 $ 9,374,758 79

94 Thornton Development Authority North Capital Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Taxes Sales and use $ 8,800,000 $ 9,513,065 $ 713,065 Property 2,760,000 2,812,548 52,548 Interest 200,000 43,853 (156,147) Miscellaneous Other Total revenues 11,760,000 12,369, ,471 EXPENDITURES Capital outlay 26,566,858 6,998,083 19,568,775 Debt service Principal retirement 715, ,000 - Interest 788, ,713 - Bond fees 5,000 1,450 3,550 Total expenditures 28,075,571 8,503,246 19,572,325 Excess (deficiency) of revenues over (under) expenditures (16,315,571) 3,866,225 20,181,796 OTHER FINANCING USES Transfers out (632,859) (632,859) - Total other financing uses (632,859) (632,859) - Net change in fund balance $ (16,948,430) 3,233,366 $ 20,181,796 Fund balance, January 1 23,775,434 Fund balance, December 31 $ 27,008,800 80

95 Thornton Development Authority 144th Capital Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual REVENUES Taxes - sales and use $ - $ 864,241 $ 864,241 Interest Total revenues - 864, ,815 EXPENDITURES Streets, traffic and engineering 194, ,926 (52,676) Capital outlay 11,411,922 8,716,528 2,695,394 Debt service Interest 440, ,323 52,677 Total expenditures 12,046,172 9,350,777 2,695,395 Excess (deficiency) of revenues over (under) expenditures (12,046,172) (8,485,962) 3,560,210 Net change in fund balance $ (12,046,172) (8,485,962) $ 3,560,210 Fund balance, January 1 (16,702,735) Fund balance, December 31 $ (25,188,697) 81

96 Combining and Individual Fund Statements and Schedules Fund Descriptions Major Enterprise Funds Enterprise Funds Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises where the intent of the City Council is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or where the City Council has decided that periodic determination of net income is appropriate for accountability purposes. Water Utility Fund to account for the provision of water services to residents of the City and some residents of Adams County. Sewer Utility Fund to account for the provision of sewer services to residents of the City and some residents of Adams County. 82

97 Water Fund Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual - Non US GAAP Basis For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual OPERATING REVENUES Charges for services $ 32,780,000 $ 28,765,602 $ (4,014,398) Total operating revenues 32,780,000 28,765,602 (4,014,398) OPERATING EXPENSES Source of supply 5,164,428 5,105,350 59,078 Water treatment 6,902,575 7,069,188 (166,613) Collection, transmission, and distribution 2,424,941 2,499,539 (74,598) Other operating expenses 639, , ,507 Administration 5,045,670 5,018,491 27,179 Total operating expenses 20,176,639 20,131,086 45,553 Operating income 12,603,361 8,634,516 (3,968,845) NONOPERATING REVENUES (EXPENSES) Interest income 1,000, ,952 (483,048) Capital outlay (55,341,152) (13,092,212) 42,248,940 Debt service Principal payment (8,109,749) (8,109,748) 1 Interest (2,207,252) (1,947,577) 259,675 Bond fees (3,000) (750) 2,250 Bond Issuance Expense (531,523) (531,253) 270 Miscellaneous revenue 1,736,000 2,542, ,401 Miscellaneous expense (668,447) (2,703) 665,744 Total nonoperating revenues (expenses) (64,125,123) (20,624,890) 43,500,233 Income (loss) before capital contributions and transfers (51,521,762) (11,990,374) 39,531,388 Capital contributions 6,000,000 7,261,107 1,261,107 Excess (deficiency) of revenues over (under) expenditures before reconciling items $ (45,521,762) (4,729,267) $ 40,792,495 RECONCILIATION TO US GAAP BASIS Miscellaneous non-cash adjustments 29,559 Add back principal payment 8,109,748 Change in accrued interest payable 74,138 Gain on sale of capital assets 8,104 Depreciation (6,184,458) Capital asset additions (from the City's capital projects) 10,183,180 Capital assets from developers 802,675 Bond deferred charges amortized (1,118,863) Total reconciling items 11,904,083 Change in net position 7,174,816 Net position, January 1, restated 545,722,493 Net position, December 31 $ 552,897,309 83

98 Sewer Fund Schedule of Revenues, Expenses, and Changes in Net Position - Budget and Actual - Non US GAAP Basis For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual OPERATING REVENUES Charges for services $ 12,125,000 $ 12,645,386 $ 520,386 Total operating revenues 12,125,000 12,645, ,386 OPERATING EXPENSES Collection, transmission, and distribution 1,470,110 1,484,987 (14,877) Sewage treatment-metro Wastewater 7,134,191 7,171,105 (36,914) Other operating expenses 324, , ,313 Administration 1,291,661 1,291,661 - Total operating expenses 10,220,280 10,124,758 95,522 Operating income 1,904,720 2,520, ,908 NONOPERATING REVENUES (EXPENSES) Interest income 130,000 23,818 (106,182) Capital outlay (2,316,066) (1,157,565) 1,158,501 Debt service Principal payment (275,000) (275,000) - Interest payment (23,670) (23,670) - Bond fees (3,000) (250) 2,750 Miscellaneous revenue 20,000 2,991 (17,009) Total nonoperating revenues (expenses) (2,467,736) (1,429,676) 1,038,060 Income (loss) before contributions (563,016) 1,090,952 1,653,968 Capital contributions 600, , ,233 Excess of revenues over expenditures before reconciling items $ 36,984 1,887,185 $ 1,850,201 RECONCILIATION TO US GAAP BASIS Miscellaneous non-cash adjustments 2,479 Add back principal payment 275,000 Change in accrued interest payable 1,100 Gain on sale of capital assets 8,155 Depreciation (1,980,022) Capital asset additions (from the City's capital projects) 1,036,630 Capital assets from developers 345,210 Bond deferred charges amortized (7,947) Total reconciling items (319,395) Change in net position 1,567,790 Net position, January 1, restated 54,782,832 Net position, December 31 $ 56,350,622 84

99 Combining and Individual Fund Statements and Schedules Fund Descriptions Non-Major Enterprise Funds Enterprise Funds Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises where the intent of the City Council is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or where the City Council has decided that periodic determination of net income is appropriate for accountability purposes. Sanitation Fund to account for rubbish removal and recycling services provided to City residents. Golf Course Fund to account for the activities of the City s golf course. 85

100 ASSETS City of Thornton, Colorado Combining Statement of Net Position Non-Major Enterprise Funds December 31, 2013 Total Non-major Enterprise Sanitation Golf Course Funds Current assets Equity in pooled cash and investments - unrestricted $ 6,045,133 $ 1,124,742 $ 7,169,875 Receivables, net Accounts 521,875 12, ,701 Interest and other 16,285 2,580 18,865 Total current assets 6,583,293 1,140,148 7,723,441 Noncurrent assets Capital assets Land and water rights - 80,644 80,644 Streets, traffic and engineering - 80,571 80,571 Transportation equipment 3,572,642-3,572,642 General equipment 507,190 26, ,568 Buildings and improvements 359, ,559 Leisure areas and improvements - 5,715,292 5,715,292 Less accumulated depreciation (2,540,135) (4,962,702) (7,502,837) Total noncurrent assets 1,899, ,183 2,839,439 Total assets 8,482,549 2,080,331 10,562,880 LIABILITIES Current liabilities Accounts payable 149, , ,395 Compensated absences 28,711-28,711 Total current liabilities 178, , ,106 Long-term liabilities Compensated absences 59,171-59,171 Total liabilities 237, , ,277 NET POSITION Net investment in capital assets 1,899, ,183 2,839,439 Unrestricted 6,345,715 1,012,449 7,358,164 Total net position $ 8,244,971 $ 1,952,632 $ 10,197,603 86

101 Combining Statement of Revenues, Expenses, and Changes in Net Position Non-Major Enterprise Funds For the year ended December 31, 2013 Total Non-major Enterprise Sanitation Golf Course Funds OPERATING REVENUES Charges for services $ 4,900,812 $ 1,282,893 $ 6,183,705 Total operating revenues 4,900,812 1,282,893 6,183,705 OPERATING EXPENSES Trash removal and golf services 1,697, ,833 2,497,580 Other operating expenses 972, ,325 1,264,166 Administration 1,530,779 49,807 1,580,586 Depreciation 309,742 45, ,644 Total operating expenses 4,511,109 1,186,867 5,697,976 Operating income 389,703 96, ,729 NONOPERATING REVENUES Interest income 10,299 2,009 12,308 Miscellaneous, net 60, , ,994 Total nonoperating revenues 70, , ,302 Change in net position 460, , ,031 Net position, January 1 7,784,407 1,694,165 9,478,572 Net position, December 31 $ 8,244,971 $ 1,952,632 $ 10,197,603 87

102 Combining Statement of Cash Flows Non-Major Enterprise Funds For the year ended December 31, 2013 Total Non-major Enterprise Sanitation Golf Course Funds CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 4,907,026 $ 1,482,893 $ 6,389,919 Payments to suppliers (2,877,637) (604,983) (3,482,620) Payments to employees (1,736,082) (505,965) (2,242,047) Net cash provided by operating activities 293, , ,252 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Net cash used in noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases and construction of capital assets (774,733) (101,359) (876,092) Net cash used in capital and related financing activities (774,733) (101,359) (876,092) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investments 3,395, ,555 3,857,642 Purchases of investments (2,984,778) (733,939) (3,718,717) Interest on investments 16,294 2,034 18,328 Net cash provided by (used in) investing activities 426,603 (269,350) 157,253 Net increase (decrease) in cash and cash equivalents (54,823) 1,236 (53,587) Cash and cash equivalents, Jan ,298 27, ,778 Cash and cash equivalents, Dec. 31 $ 148,475 $ 28,716 $ 177,191 Cash and cash equivalents $ 148,475 $ 28,716 $ 177,191 Investments 5,896,658 1,096,026 6,992,684 Total cash and investments $ 6,045,133 $ 1,124,742 $ 7,169,875 88

103 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Total Non-major Enterprise Sanitation Golf Funds Operating income $ 389,703 $ 96,026 $ 485,729 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation expense 309,742 45, ,644 Miscellaneous receipts 4, , ,059 Other expenses (2,241) (39,568) (41,809) Change in assets and liabilities: Decrease in accounts receivable, net 2,155-2,155 Increase (decrease) in accounts payable (410,111) 69,585 (340,526) Net cash provided by operating activities $ 293,307 $ 371,945 $ 665,252 NON-CASH TRANSACTIONS: Decrease in the fair value of investments $ (51,044) $ (7,709) $ (58,753) Decrease in compensated absences (58,744) - (58,744) 89

104 Sanitation Fund Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual - Non US GAAP Basis For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual OPERATING REVENUES Charges for services $ 4,813,000 $ 4,900,812 $ 87,812 Total operating revenues 4,813,000 4,900,812 87,812 OPERATING EXPENSES Trash removal 1,704,508 1,697,747 6,761 Other operating expenses 1,001, ,841 28,921 Administration 1,652,135 1,530, ,356 Total operating expenses 4,358,405 4,201, ,038 Operating income 454, , ,850 NONOPERATING REVENUES (EXPENSES) Interest income 75,000 10,299 (64,701) Capital outlay (1,046,352) (776,973) 269,379 Miscellaneous - 4,059 4,059 Total nonoperating expenses (971,352) (762,615) 208,737 Excess (deficiency) of revenues over (under) expenditures before reconciling items $ (516,757) (63,170) $ 453,587 RECONCILIATION TO US GAAP BASIS Miscellaneous non-cash adjustments 58,744 Depreciation (309,742) Capital asset additions 774,732 Total reconciling items 523,734 Change in net position 460,564 Net position, January 1 7,784,407 Net position, December 31 $ 8,244,971 90

105 Golf Course Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual - Non US GAAP Basis For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual OPERATING REVENUES Charges for services $ 1,350,000 $ 1,282,893 $ (67,107) Total operating revenues 1,350,000 1,282,893 (67,107) OPERATING EXPENSES Golf Services 915, , ,803 Other operating expenses 354, ,325 63,026 Administration 49,807 49,807 - Total operating expenses 1,319,794 1,140, ,829 Operating income 30, , ,722 NONOPERATING REVENUES (EXPENSES) Interest income - 2,009 2,009 Capital outlay (153,424) (141,584) 11,840 Miscellaneous - 200, ,657 Total nonoperating revenue (expenses) (153,424) 61, ,506 Excess of revenues over expenditures before reconciling items $ (123,218) 203,010 $ 326,228 RECONCILIATION TO US GAAP BASIS Depreciation (45,902) Capital asset additions (from the City's capital projects) 101,359 Total reconciling items 55,457 Change in net position 258,467 Net position, January 1 1,694,165 Net position, December 31 $ 1,952,632 91

106 Combining and Individual Fund Statements and Schedules Fund Descriptions Internal Service Funds Internal Service Funds Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City and to other government units, on a cost reimbursement basis. Risk Management Fund to account for the costs related to providing the City with a comprehensive program to manage the City s property, liability and work related injury risk, and to manage the City s self-funded dental and vision insurance programs. Information Technology Fund to account for computer support and maintenance of all information technology for the City. Reprographics Fund to account for copying, printing and mailing costs for all City departments. Consolidated Service Center Fund to account for fuel purchased and utilized by Adams County School District 12. Maintenance Services Fund to account for custodial and building maintenance service costs for all City Departments. 92

107 Combining Statement of Net Position Internal Service Funds December 31, 2013 Internal Service Funds Consolidated Internal Risk Information Service Maintenance Service Funds Management Technology Reprographics Center Services Total ASSETS Current assets Equity in pooled cash and investments - unrestricted $ 4,101,712 $ 1,188,291 $ 638,894 $ 51,833 $ 632,380 $ 6,613,110 Receivables, net Accounts 172, ,762 2, ,267 Interest and other 11,116 3,683 1, ,364 18,129 Total current assets 4,285,031 1,191, , , ,046 6,947,506 Noncurrent assets Capital assets Transportation equipment - 20, ,114 General equipment - 1,728,982 71,808-9,360 1,810,150 Less accumulated depreciation - (951,954) (56,981) - (820) (1,009,755) Total noncurrent assets - 797,142 14,827-8, ,509 Total assets 4,285,031 1,989, , , ,586 7,768,015 LIABILITIES Current liabilities Accounts payable 145, ,571 27,691 91, , ,886 Compensated absences 6,727 23, ,590 43,515 Outstanding reserves/incurred but not reported claims 1,261, ,261,855 Total current liabilities 1,413, ,769 27,691 91, ,070 2,303,256 Long-term liabilities Compensated absences, excluding current portion - 147, , ,726 Advances from other funds - 100, ,000 - Outstanding reserves/incurred - but not reported claims 1,620, ,620,701 Total long-term liabilities 1,620, , ,000 78,050 1,946,427 Total liabilities 3,034, ,445 27, , ,120 4,249,683 NET POSITION Net investment in capital assets - 797,142 14,827-8, ,509 Unrestricted 1,250, , ,892 2, ,926 2,697,823 Total net position $ 1,250,475 $ 1,511,671 $ 627,719 $ 2,001 $ 126,466 $ 3,518,332 93

108 Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds For the year ended December 31, 2013 Internal Service Funds Consolidated Internal Risk Information Service Maintenance Service Funds Management Technology Reprographics Center Services Total OPERATING REVENUES Interfund services $ 2,950,767 $ 5,212,650 $ 715,490 $ 717,999 $ 4,165,495 $ 13,762,401 Total operating revenues 2,950,767 5,212, , ,999 4,165,495 13,762,401 OPERATING EXPENSES Insurance premiums 526, ,245 Claims/reserves for claims 2,603, ,603,577 Other operating expenses - 1,646, , ,999 1,976,925 4,898,204 Administration 177,130 3,004,942 97,239-1,965,316 5,244,627 Depreciation - 268,354 7, ,349 Total operating expenses 3,306,952 4,919, , ,999 3,943,061 13,549,002 Operating income (loss) (356,185) 292,710 54, , ,399 NONOPERATING REVENUES (EXPENSES) Interest income 7,066 2,147 1, ,742 13,181 Miscellaneous, net 9,405 (443,747) (98,710) (532,934) Total nonoperating revenues (expenses) 16,471 (441,600) 1, (95,968) (519,753) Change in net position (339,714) (148,890) 55, ,466 (306,354) Net position, January 1 1,590,189 1,660, ,079 1,857-3,824,686 Net position, December 31 $ 1,250,475 $ 1,511,671 $ 627,719 $ 2,001 $ 126,466 $ 3,518,332 94

109 This Page Left Intentionally Blank 95

110 Combining Statement of Cash Flows Internal Service Funds For the year ended December 31, 2013 Internal Service Funds Consolidated Internal Risk Information Service Maintenance Service Funds Management Technology Reprographics Center Services Total CASH FLOWS FROM OPERATING ACTIVITIES Receipts from interfund services $ 2,956,666 $ 5,212,650 $ 715,608 $ 630,713 $ 4,164,307 $ 13,679,944 Payments to suppliers (3,238,872) (2,224,215) (675,213) (717,999) (1,685,449) (8,541,748) Payments to employees (122,491) (2,852,396) - - (1,837,558) (4,812,445) Net cash provided by (used in) operating activities (404,697) 136,039 40,395 (87,286) 641, ,751 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Net cash provided by noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases and construction of capital assets - (322,874) (5,445) - (9,360) (337,679) Net cash used in capital and related financing activities - (322,874) (5,445) - (9,360) (337,679) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investments 2,422, , ,553 89, ,800 3,892,543 Purchases of investments (2,073,463) (718,932) (400,190) (5,631) (747,808) (3,946,024) Interest on investments 11,075 3,949 1, ,452 Net cash provided by (used in) investing activities 360, ,201 (35,969) 84,171 (617,568) (36,029) Net increase (decrease) in cash and cash equivalents (44,561) (13,634) (1,019) (3,115) 14,372 (47,957) Cash and cash equivalents, Jan ,315 42,826 18,813 4, ,325 Cash and cash equivalents, Dec. 31 $ 100,754 $ 29,192 $ 17,794 $ 1,256 $ 14,372 $ 163,368 Cash and cash equivalents $ 100,754 $ 29,192 $ 17,794 $ 1,256 $ 14,372 $ 163,368 Investments 4,000,958 1,159, ,100 50, ,008 6,449,742 Total cash and investments $ 4,101,712 $ 1,188,291 $ 638,894 $ 51,833 $ 632,380 $ 6,613,110 96

111 Internal Service Funds Consolidated Internal Risk Information Service Maintenance Service Funds Management Technology Reprographics Center Services Total RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Operating income (loss) $ (356,185) $ 292,710 $ 54,440 $ - $ 222,434 $ 213,399 Adjustments to reconcile operating income to net cash provided by (used in) operating activities: Depreciation expense - 268,354 7, ,349 Miscellaneous receipts 10,206 14, ,340 Other expenses - (443,023) - - (7,246) (450,269) Change in assets and liabilities: Increase in accounts receivable, net (4,307) - - (87,286) (1,364) (92,957) Increase (decrease) in accounts payable 98,271 3,158 (21,338) - 426, ,571 Decrease in other liabilities (152,682) (152,682) Net cash provided by (used in) operating activities $ (404,697) $ 136,039 $ 40,395 $ (87,286) $ 641,300 $ 325,751 NON-CASH TRANSACTIONS: Decrease in the fair value of investments $ (34,808) $ (11,725) $ (5,279) $ (897) $ (5,932) $ (58,641) Increase (decrease) in compensated absences (801) (15,564) ,640 75,275 97

112 Risk Management Fund Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual - Non US GAAP Basis For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual OPERATING REVENUES Interfund services $ 2,913,374 $ 2,950,767 $ 37,393 Total operating revenues 2,913,374 2,950,767 37,393 OPERATING EXPENSES Insurance premiums 571, ,245 44,791 Claims and reserves for claims 2,305,031 2,352,610 (47,579) Administration 239, ,130 62,739 Total operating expenses 3,115,936 3,055,985 59,951 Operating income (loss) (202,562) (105,218) 97,344 NONOPERATING REVENUES Interest income 40,000 7,066 (32,934) Miscellaneous - 10,206 10,206 Total nonoperating revenues 40,000 17,272 (22,728) Excess (deficiency) of revenues over (under) expenditures before reconciling items $ (162,562) (87,946) $ 74,616 RECONCILIATION TO US GAAP BASIS Incurred but not reported adjustment - property casualty (10,057) Incurred but not reported adjustment - worker's compensation (218,702) Incurred but not reported adjustment - dental (23,184) Incurred but not reported adjustment - vision 976 Miscellaneous non-cash adjustments (801) Total reconciling items (251,768) Change in net position (339,714) Net position, January 1 1,590,189 Net position, December 31 $ 1,250,475 98

113 Information Technology Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual - Non US GAAP Basis For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual OPERATING REVENUES Interfund services $ 5,212,650 $ 5,212,650 $ - Total operating revenues 5,212,650 5,212,650 - OPERATING EXPENSES Other operating expenses 1,661,355 1,646,644 14,711 Administration 3,190,128 3,047, ,162 Total operating expenses 4,851,483 4,694, ,873 Operating income 361, , ,873 NONOPERATING REVENUES (EXPENSES) Interest income 10,000 2,147 (7,853) Miscellaneous revenue - 14,840 14,840 Capital outlay (856,419) (722,873) 133,546 Total nonoperating revenues (expenses) (846,419) (705,886) 140,533 Excess (deficiency) of revenues over (under) expenditures before reconciling items $ (485,252) (187,846) $ 297,406 RECONCILIATION TO US GAAP BASIS Depreciation (268,354) Capital asset additions 279,850 Internally generated intangible asset additions 43,024 Miscellaneous non-cash adjustments (15,564) Total reconciling items 38,956 Change in net position (148,890) Net position, January 1 1,660,561 Net position, December 31 $ 1,511,671 99

114 Reprographics Fund Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual - Non US GAAP Basis For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual OPERATING REVENUES Interfund services $ 715,490 $ 715,490 $ - Total operating revenues 715, ,490 - OPERATING EXPENSES Printing/postage services 612, ,636 55,810 Administration 97,239 97,239 - Total operating expenses 709, ,875 55,810 Operating income 5,805 61,615 55,810 NONOPERATING REVENUES (EXPENSES) Interest income 5,000 1,082 (3,918) Capital outlay (5,879) (5,445) 434 Miscellaneous revenue Total nonoperating expenses (879) (4,245) (3,366) Excess of revenues over expenditures before reconciling items $ 4,926 57,370 $ 52,444 RECONCILIATION TO US GAAP BASIS Depreciation (7,175) Capital asset additions 5,445 Total reconciling items (1,730) Change in net position 55,640 Net position, January 1 572,079 Net position, December 31 $ 627,

115 Consolidated Service Center Fund Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual OPERATING REVENUES Interfund services $ 795,994 $ 717,999 $ (77,995) Total operating revenues 795, ,999 (77,995) OPERATING EXPENSES Contractual services 795, ,999 77,995 Total operating expenses 795, ,999 77,995 Operating income NONOPERATING REVENUES Interest income Total nonoperating revenues Change in net position $ $ 144 Net position, January 1 1,857 Net position, December 31 $ 2,

116 Maintenance Services Schedule of Revenues, Expenses, and Changes in Net Position Budget and Actual - Non US GAAP Basis For the year ended December 31, 2013 Positive (negative) variance Budget Actual from actual OPERATING REVENUES Interfund services $ 4,165,493 $ 4,165,495 $ 2 Total operating revenues 4,165,493 4,165,495 2 OPERATING EXPENSES Other operating expenses 2,101,644 1,976, ,719 Administration 2,037,769 1,965,316 72,453 Total operating expenses 4,139,413 3,942, ,172 Operating income 26, , ,174 NONOPERATING REVENUES (EXPENSES) Interest income - 2,742 2,742 Miscellaneous revenue Capital outlay (26,080) (16,606) 9,474 Total nonoperating revenues (expenses) (26,080) (13,688) 12,392 Excess of revenues over expenditures before reconciling items $ - 209,566 $ 209,566 RECONCILIATION TO US GAAP BASIS Depreciation (820) Capital asset additions 9,360 Miscellaneous non-cash adjustments (91,640) Total reconciling items (83,100) Change in net position 126,466 Net position, January 1 - Net position, December 31 $ 126,

117 OTHER SCHEDULES 103

118 This Page Left Intentionally Blank 104

119 Schedule of Investments December 31, 2013 Coupon Maturity Original Fair Par Description Rate Date Cost Value Value Federal Farm Credit 0.650% 05/17/17 $ 5,000,000 $ 4,945,275 $ 5,000, % 08/15/17 4,995,000 4,964,800 5,000, % 09/18/17 5,000,000 4,934,600 5,000, % 03/14/18 4,036,240 3,892,824 4,000, % 05/14/18 5,000,000 4,833,510 5,000,000 Federal Home 2.375% 03/14/14 5,181,150 5,022,435 5,000,000 Loan Bank 0.700% 02/21/17 5,019,650 4,965,825 5,000, % 03/10/17 5,047,950 4,988,025 5,000, % 06/06/17 4,996,200 4,970,110 5,000, % 06/09/17 5,033,438 4,981,365 5,000, % 06/16/17 4,994,100 4,958,070 5,000, % 09/08/17 5,210,450 5,173,635 5,000,000 Federal Home Loan 5.000% 07/15/14 5,616,800 5,129,905 5,000,000 Mortgage Corp % 08/07/17 4,997,500 4,935,215 5,000, % 12/28/17 4,988,750 4,890,675 5,000, % 01/16/18 5,000,000 4,898,650 5,000,000 Federal National 0.650% 12/27/16 5,000,000 4,975,420 5,000,000 Mortgage Assoc % 01/30/17 5,121,450 5,060,165 5,000, % 01/30/17 5,106,250 5,060,165 5,000, % 07/26/17 5,007,400 4,966,520 5,000, % 10/03/17 2,500,000 2,437,350 2,500, % 12/20/17 5,034,550 4,895,460 5,000, % 05/21/18 4,969,600 4,836,560 5,000,000 Treasury 1.000% 03/31/17 5,071,900 5,010,940 5,000,000 Corp Coupon 0.850% 10/09/15 5,031,200 5,023,350 5,000, % 12/11/15 5,016,250 5,040,055 5,000,000 Overnight Funds 390, , ,305 $ 128,366,133 $ 126,181,209 $ 126,890,

120 Financial Planning 02/01 The public report burden for this information collection is estimated to average 380 hours annually. Form # City or County: LOCAL HIGHWAY FINANCE REPORT City of Thornton, Colorado YEAR ENDING : December 2013 This Information From The Records Of (example - City of _ or County of Prepared By: Dawn Cartier, Accountant City of Thornton, Colorado Phone: I. DISPOSITION OF HIGHWAY-USER REVENUES AVAILABLE FOR LOCAL GOVERNMENT EXPENDITURE ITEM 1. Total receipts available 2. Minus amount used for collection expenses 3. Minus amount used for nonhighway purposes 4. Minus amount used for mass transit 5. Remainder used for highway purposes A. Local B. Local C. Receipts from D. Receipts from Motor-Fuel Motor-Vehicle State Highway- Federal Highway Taxes Taxes User Taxes Administration II. RECEIPTS FOR ROAD AND STREET PURPOSES III. DISBURSEMENTS FOR ROAD AND STREET PURPOSES ITEM AMOUNT ITEM AMOUNT A. Receipts from local sources: A. Local highway disbursements: 1. Local highway-user taxes 1. Capital outlay (from page 2) 7,411,602 a. Motor Fuel (from Item I.A.5.) 2. Maintenance: 3,851,842 b. Motor Vehicle (from Item I.B.5.) 3. Road and street services: c. Total (a.+b.) a. Traffic control operations 1,648, General fund appropriations 0 b. Snow and ice removal 938, Other local imposts (from page 2) 14,984,964 c. Other 2,383, Miscellaneous local receipts (from page 2) 5,017,879 d. Total (a. through c.) 4,970, Transfers from toll facilities 0 4. General administration & miscellaneous 772, Proceeds of sale of bonds and notes: 5. Highway law enforcement and safety 5,822,412 a. Bonds - Original Issues 0 6. Total (1 through 5) 22,828,541 b. Bonds - Refunding Issues 0 B. Debt service on local obligations: c. Notes 0 1. Bonds: d. Total (a. + b. + c.) 0 a. Interest 360, Total (1 through 6) 20,002,843 b. Redemption 753,564 B. Private Contributions 139,500 c. Total (a. + b.) 1,113,599 C. Receipts from State government 2. Notes: (from page 2) 4,143,827 a. Interest 0 D. Receipts from Federal Government b. Redemption 0 (from page 2) E. Total receipts (A.7 + B + C + D) 650,958 24,937,128 c. Total (a. + b.) 3. Total (1.c + 2.c) 0 1,113,599 C. Payments to State for highways 994,988 D. Payments to toll facilities E. Total disbursements (A.6 + B.3 + C + D) 0 24,937,128 IV. LOCAL HIGHWAY DEBT STATUS (Show all entries at par) Opening Debt Amount Issued Redemptions Closing Debt A. Bonds (Total) 8,060, ,564 7,306, Bonds (Refunding Portion) B. Notes (Total) V. LOCAL ROAD AND STREET FUND BALANCE Notes and Comments: A. Beginning Balance B. Total Receipts C. Total Disbursements D. Ending Balance E. Reconciliation 0 24,937,128 24,937, FORM FHWA-536 (Rev. 1-05) PREVIOUS EDITIONS OBSOLETE (Next Page) PBC 05 - Road - Bridge Report for CAFR 2013.xls 106

121 LOCAL HIGHWAY FINANCE REPORT STATE: Colorado YEAR ENDING (mm/yy): December 2013 II. RECEIPTS FOR ROAD AND STREET PURPOSES - DETAIL ITEM AMOUNT ITEM AMOUNT A.3. Other local imposts: A.4. Miscellaneous local receipts: a. Property Taxes and Assessments 9,040,544 a. Interest on investments 6,978 b. Other local imposts: b. Traffic Fines & Penalities 2,214, Sales Taxes 2,014,053 c. Parking Garage Fees 0 2. Infrastructure & Impact Fees 0 d. Parking Meter Fees 0 3. Liens 0 e. Sale of Surplus Property 0 4. Licenses 0 f. Charges for Services 0 5. Specific Ownership &/or Other 3,930,367 g. Other Misc. Receipts 0 6. Total (1. through 5.) 5,944,420 h. Other 2,796,526 c. Total (a. + b.) 14,984,964 i. Total (a. through h.) 5,017,879 (Carry forward to page 1) (Carry forward to page 1) ITEM AMOUNT ITEM AMOUNT C. Receipts from State Government D. Receipts from Federal Government 1. Highway-user taxes 3,474, FHWA (from Item I.D.5.) 2. State general funds 2. Other Federal agencies: 3. Other State funds: a. Forest Service 0 a. State bond proceeds b. FEMA 0 b. Project Match c. HUD 0 c. Motor Vehicle Registrations 381,574 d. Federal Transit Admin 0 d. Other (Specify) - DOLA Grant 0 e. U.S. Corps of Engineers 0 e. Other (Specify) 287,807 f. Other Federal 650,958 f. Total (a. through e.) 669,381 g. Total (a. through f.) 650, Total ( f) 4,143, Total ( g) (Carry forward to page 1) III. DISBURSEMENTS FOR ROAD AND STREET PURPOSES - DETAIL ON NATIONAL OFF NATIONAL HIGHWAY HIGHWAY TOTAL SYSTEM SYSTEM (a) (b) (c) A.1. Capital outlay: a. Right-Of-Way Costs 0 292, ,955 b. Engineering Costs 39,156 1,114,800 1,153,956 c. Construction: (1). New Facilities 0 253, ,033 (2). Capacity Improvements 1,511,638 1,053,274 2,564,912 (3). System Preservation 0 2,662,486 2,662,486 (4). System Enhancement & Operation 0 484, ,260 (5). Total Construction (1) + (2) + (3) + (4) 1,511,638 4,453,053 5,964,691 d. Total Capital Outlay (Lines 1.a. + 1.b. + 1.c.5) 1,550,794 5,860,808 7,411,602 (Carry forward to page 1) Notes and Comments: FORM FHWA-536 (Rev.1-05) PREVIOUS EDITIONS OBSOLETE 107

122 This Page Left Intentionally Blank 108

123 STATISTICAL SECTION This part of the City of Thornton 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 government s overall financial health. Contents Page Financial Trends 111 These schedules contain trend information to help the reader understand how the government s financial performance and well-being have changed over time. Revenue Capacity 116 These schedules contain information to help the reader assess the government s most significant local revenue source, the sales tax. Debt Capacity 122 These schedules present information to help the reader assess the affordability of the government s current levels of outstanding debt and the government 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 government s financial activities take place. Schedule of Principal Employers 129 The number of employees per business is confidential therefore the City is providing employee totals by sector. Operating Information 130 These schedules contain service and infrastructure data to help the reader understand how the information in the government s financial report relates to the services the government provides and the activities it performs. 109

124 This Page Left Intentionally Blank 110

125 City of Thornton Schedule 1 Net Position by Component (accrual basis of accounting) Fiscal Year restated 2013 Governmental activities Net investment in capital assets $ 231,045,605 $ 237,785,930 $ 248,109,994 $ 270,139,347 $ 282,364,410 $ 287,512,026 $ 281,917,836 $ 277,075,485 $ 277,932,039 $ 271,137,481 Restricted 34,191,807 8,627,411 8,854,775 6,946,474 7,222,855 6,577,027 5,028,764 5,064,308 5,098,730 5,360,319 Unrestricted 31,593,960 70,619,762 85,987,729 97,574,698 92,990,211 87,328,944 94,786,038 97,068,106 82,907,335 85,077,988 Total governmental activities net position $ 296,831,372 $ 317,033,103 $ 342,952,498 $ 374,660,519 $ 382,577,476 $ 381,417,997 $ 381,732,638 $ 379,207,899 $ 365,938,104 $ 361,575,788 Business-type activities Net investment in capital assets $ 267,365,014 $ 363,841,500 $ 408,959,737 $ 427,831,200 $ 440,509,204 $ 454,984,571 $ 476,417,765 $ 489,517,504 $ 497,107,782 $ 508,956,512 Restricted 752,241 4,439,904 4,330,383 4,335,385 4,325,730 4,329,370 4,130,833 4,141,250 15,431,413 6,480,661 Unrestricted 92,459, ,118,562 92,052,223 92,970,331 98,895,981 91,058,269 83,943,415 86,064,926 97,444, ,008,361 Total business-type activities net position $ 360,577,149 $ 469,399,966 $ 505,342,343 $ 525,136,916 $ 543,730,915 $ 550,372,210 $ 564,492,013 $ 579,723,680 $ 609,983,897 $ 619,445,534 Primary government Net investment in capital assets $ 498,410,619 $ 601,627,430 $ 657,069,731 $ 697,970,547 $ 722,873,614 $ 742,496,597 $ 758,335,601 $ 766,592,989 $ 775,039,821 $ 780,093,993 Restricted 34,944,048 13,067,315 13,185,158 11,281,859 11,548,585 10,906,397 9,159,597 9,205,558 20,530,143 11,840,980 Unrestricted 124,053, ,738, ,039, ,545, ,886, ,387, ,729, ,133, ,352, ,086,349 Total primary government net position $ 657,408,521 $ 786,433,069 $ 848,294,841 $ 899,797,435 $ 926,308,391 $ 931,790,207 $ 946,224,651 $ 958,931,579 $ 975,922,001 $ 981,021,322 Source: Current and prior year's financial statements. Note: GASB 65 implemented in 2013 requiring a restatement of Prior years not restated. 111

126 City of Thornton Schedule 2 Changes in Net Position (accrual basis of accounting) Fiscal Year Expenses restated 2013 Governmental activities: General government $ 20,865,858 $ 24,368,928 $ 19,430,649 $ 24,532,302 $ 17,919,618 $ 18,688,529 $ 17,616,971 $ 19,275,165 $ 31,840,827 $ 20,193,979 Police 17,770,086 18,368,441 21,001,214 21,207,033 23,444,248 24,401,274 25,286,720 25,877,812 26,295,237 28,044,137 Fire 6,935,165 7,002,975 8,451,251 8,443,303 8,650,645 10,946,487 11,353,650 11,960,138 12,188,210 12,758,169 City development 10,145,954 13,497,836 11,333,827 12,733,949 16,194,462 13,279,400 10,052,292 12,261,174 13,467,929 14,459,695 Streets, traffic & eng. 19,873,811 20,810,182 29,530,971 25,137,882 27,210,924 28,077,809 30,775,017 28,491,153 26,533,674 36,991,096 Community services 13,654,213 15,191,296 16,261,813 16,193,015 17,824,868 18,765,036 19,440,054 21,346,877 22,473,148 22,066,524 Interest of long-term debt 4,742,066 4,909,674 4,595,201 4,300,103 3,781,252 3,590,627 4,310,715 2,863,483 3,596,370 2,643,404 Total government activities expenses 93,987, ,149, ,604, ,547, ,026, ,749, ,835, ,075, ,395, ,157,004 Business-type activities Water 23,557,413 30,165,940 30,128,609 30,826,790 29,778,670 30,386,259 30,620,839 31,980,077 32,611,461 32,722,025 Sewer 9,151,152 10,128,266 9,613,186 10,652,174 11,762,778 11,039,822 11,177,035 11,960,169 12,132,240 12,254,003 Sanitation 3,469,921 3,625,966 3,963,962 3,962,888 4,233,909 4,554,390 4,692,145 4,685,426 6,067,844 4,454,606 Golf ,227,092 Ambulance 1,189,572 1,919,164 2,170,603 2,464,775 2,950, Total business-type activities expenses 37,368,058 45,839,336 45,876,360 47,906,627 48,725,938 45,980,471 46,490,019 48,625,672 50,811,545 50,657,726 Total primary government expenses $ 131,355,211 $ 149,988,668 $ 156,481,286 $ 160,454,214 $ 163,751,955 $ 163,729,633 $ 165,325,438 $ 170,701,474 $ 187,206,940 $ 187,814,730 Program Revenues Governmental activities: Charges for services: General government $ 4,995,231 $ 5,365,181 $ 4,594,416 $ 4,786,798 $ 4,884,922 $ 6,002,294 $ 6,009,873 $ 6,337,953 $ 6,143,674 $ 4,624,849 Police 1,582,929 2,160,028 2,067,638 2,592,966 2,315,213 2,581,214 2,922,506 3,021,716 3,014,682 2,699,807 Fire 59,366 11,134 6,236 7,629 10,125 2,297,046 2,108,174 2,127,107 1,753,060 1,617,997 City Development 3,941,027 4,372,452 3,460,037 2,678,851 1,899,072 1,499,013 1,608,848 1,769,755 2,172,200 2,607,403 Community Services 2,096,795 2,206,403 2,352,193 2,481,097 2,619,443 2,593,670 2,697,686 2,545,724 2,769,660 2,887,552 Operating grants/contrib. 1,284,870 1,276,278 1,183, , ,008 4,178,361 4,662,823 4,989,148 5,572,187 5,704,876 Capital grants/contrib. 20,155,888 24,154,532 32,600,240 33,431,560 22,245,220 12,784,216 12,721,678 10,080,966 7,899,630 12,577,779 Total government activities program revenues 34,116,106 39,546,008 46,263,834 46,907,175 34,782,003 31,935,814 32,731,588 30,872,369 29,325,093 32,720,263 Business-type activities: Charges for services: Water 24,181,449 27,628,862 29,189,016 29,162,009 30,380,457 28,647,511 30,901,291 30,315,557 33,188,946 28,765,602 Sewer 7,807,706 8,155,092 8,203,339 8,779,398 9,138,130 10,044,383 10,412,362 11,161,882 11,725,967 12,645,386 Sanitation 4,360,208 4,364,120 4,430,449 4,523,773 4,556,491 4,537,670 4,723,152 4,738,448 4,848,664 4,900,812 Golf ,130,711 1,282,893 Ambulance 503,711 2,474,754 2,401,990 2,060,649 2,395, Operating grants/contrib. - 17,374-28, Capital grants/contrib. 21,570,935 27,103,005 30,803,890 17,582,792 16,935,269 7,520,520 12,963,221 6,788,327 15,501,147 9,205,

127 restated 2013 Total business-type activities program revenues 58,424,009 69,743,207 75,028,684 62,137,376 63,406,026 50,750,084 59,000,026 53,004,214 66,395,435 56,799,918 Total primary government program revenues $ 92,540,115 $ 109,289,215 $ 121,292,518 $ 109,044,551 $ 98,188,029 $ 82,685,898 $ 91,731,614 $ 83,876,583 $ 95,720,528 $ 89,520,181 Net (expense)/revenue Governmental activities $ (59,871,047) $ (64,603,324) $ (64,341,092) $ (65,640,412) $ (80,244,014) $ (85,813,348) $ (86,103,831) $ (91,203,433) $ (107,070,302) $ (104,436,741) Business-type activities 21,055,951 23,903,871 29,152,324 14,230,749 14,680,088 4,769,613 12,510,007 4,378,542 15,583,890 6,142,192 Total primary government net expense $ (38,815,096) $ (40,699,453) $ (35,188,768) $ (51,409,663) $ (65,563,926) $ (81,043,735) $ (73,593,824) $ (86,824,891) $ (91,486,412) $ (98,294,549) General Revenues and Other Changes in Assets Governmental activities Taxes Sales and use taxes $ 49,348,026 $ 56,898,236 $ 59,897,183 $ 63,024,197 $ 62,290,537 $ 62,119,298 $ 65,001,120 $ 67,476,006 $ 73,606,406 $ 78,188,772 Property taxes 13,938,881 14,841,034 16,524,030 18,845,065 11,566,814 12,060,852 11,853,225 11,778,013 11,719,559 11,858,574 Other taxes 5,146,804 6,440,848 6,773,531 6,996,945 7,385,961 7,085,194 7,224,095 7,247,598 7,505,706 8,157,151 Earnings on investments 1,607,339 2,339,275 4,495,777 5,907,726 4,715,727 1,690,251 1,074, , , ,456 Gain on sale of assets ,151-42,245 24,402 - Miscellaneous 1,550,707 1,677,766 2,569,966 2,574,500 1,702,893 1,688,123 1,265,257 1,229,878 1,871,200 1,663,472 Transfers (1,081,433) (210,000) , (1,890,206) - Total governmental activities 70,510,324 81,987,159 90,260,487 97,348,433 88,160,971 84,653,869 86,418,472 88,678,694 93,800, ,074,425 Business-type activities Investment earnings 1,785,896 2,977,126 4,932,054 5,108,857 4,027,346 1,686,174 1,447, ,446 1,198, ,078 Gain on sale of assets 13,773 3, ,507 35,215 5,192 2,062-7,307 28,964 16,259 Miscellaneous 238,997 2,763,662 1,543, , , , ,187 9,318,089 11,558,397 2,750,108 Transfers 1,081, , (499,039) ,890,206 - Total business-type activities 3,120,099 5,954,097 6,790,053 5,563,824 3,913,911 1,871,682 1,609,796 10,217,842 14,676,327 3,319,445 Total primary government $ 73,630,423 $ 87,941,256 $ 97,050,540 $ 102,912,257 $ 92,074,882 $ 86,525,551 $ 88,028,268 $ 98,896,536 $ 108,476,834 $ 103,393,870 Change in Net Position Governmental activities $ 10,639,277 $ 17,383,835 $ 25,919,395 $ 31,708,021 $ 7,916,957 $ (1,159,479) $ 314,641 $ (2,524,739) $ (13,269,795) $ (4,362,316) Business-type activities 24,176,050 29,857,968 35,942,377 19,794,573 18,593,999 6,641,295 14,119,803 14,596,384 30,260,217 9,461,637 Total primary government $ 34,815,327 $ 47,241,803 $ 61,861,772 $ 51,502,594 $ 26,510,956 $ 5,481,816 $ 14,434,444 $ 12,071,645 $ 16,990,422 $ 5,099,321 Source: Current and prior year's financial statements. Note: GASB 65 implemented in 2013 requiring a restatement of Prior years not restated. 113

128 City of Thornton Schedule 3 Fund Balances of Governmental Funds (modified accrual basis accounting) Fiscal Year General Fund Nonspendable $ 578,051 $ 576,024 $ 54,076 $ 153,589 $ 139,486 $ 69,884 $ 74,270 $ 161,867 $ 219,622 $ 276,656 Restricted 5,128,617 4,638,501 4,820,179 3,474,583 3,636,053 3,433,640 3,598,873 3,779,906 3,866,729 4,241,641 Committed , , ,692 15,566,436 15,939,956 16,760,292 Assigned 382, ,941 5,162 3, ,628 57, , Unassigned 9,220,014 10,163,110 11,449,178 15,782,660 18,131,570 22,383,855 24,767,643 7,935,397 7,467,599 11,628,514 Total general fund $ 15,309,060 $ 16,024,576 $ 16,328,595 $ 19,414,042 $ 22,954,429 $ 26,310,264 $ 29,097,958 $ 27,443,606 $ 27,493,906 $ 32,907,103 All other governmental funds Nonspendable $ 8,695,797 $ 9,298,581 $ 10,056,015 $ 2,770,247 $ 10,635,873 $ 10,635,873 $ 12,137,961 $ 22,711,120 $ 23,667,937 $ 15,951,159 Restricted 16,114,758 9,437,144 11,626,526 10,470,423 9,986,656 8,673,028 5,942,335 4,723,410 3,356,873 1,742,501 Committed ,417,785 1,255,801 1,137,543 Assigned 51,921,424 54,829,946 65,451,638 78,861,929 65,136,598 55,396,455 56,522,946 48,856,038 52,110,630 68,087,596 Unassigned (16,702,735) (25,188,697) Total all other governmental funds $ 76,731,979 $ 73,565,671 $ 87,134,179 $ 92,102,599 $ 85,759,127 $ 74,705,356 $ 74,603,242 $ 78,708,353 $ 63,688,506 $ 61,730,102 Source: Current and prior year's financial statements. 114

129 City of Thornton Schedule 4 Changes in Fund Balances of Governmental Funds (modified accrual basis of accounting) Fiscal Year Revenues Taxes $ 68,433,711 $ 78,180,118 $ 83,194,744 $ 88,866,207 $ 81,243,312 $ 81,265,344 $ 84,078,440 $ 86,501,617 $ 92,831,671 $ 98,204,497 Licenses and permits 3,890,285 4,318,402 3,404,072 2,546,233 1,779,845 1,437,400 1,518,201 1,703,236 2,139,568 2,602,394 Intergovernmental 13,200,884 12,865,207 10,800,787 11,796,323 12,538,500 10,047,887 10,877,954 10,986,448 11,079,512 12,931,228 Governmental Grants 1,732,841 1,802,967 2,371,883 2,309,409 3,038,387 5,007,808 5,337,732 3,826,164 2,285,517 5,348,856 Charges for services 6,940,748 7,419,593 6,758,396 7,081,436 7,299,787 10,665,173 10,592,215 10,867,399 10,504,227 8,952,084 Fines and forfeitures 1,470,105 2,021,586 1,934,531 2,525,313 2,153,324 2,509,218 2,878,298 2,921,491 2,915,446 2,597,693 Lease 222, , , , ,831 99,049 98,914 99,004 98, ,581 Interest 1,607,339 2,339,275 4,495,777 5,907,726 4,715,727 1,690,251 1,074, , , ,456 Miscellaneous 1,610,654 1,290,158 2,987,675 2,292,572 1,515,165 2,380,588 1,032,564 1,031,616 1,279,366 1,077,349 Total revenues 99,109, ,460, ,171, ,513, ,491, ,102, ,489, ,841, ,097, ,128,138 Expenditures General government 17,115,408 18,280,263 15,084,604 14,963,678 15,728,156 15,812,704 15,866,341 15,975,991 29,176,040 13,280,383 Police 16,091,589 16,623,259 19,759,996 20,019,953 21,275,665 22,926,111 23,351,480 24,040,493 24,537,205 26,345,134 Fire and Ambulance 6,541,134 6,628,000 7,522,389 7,846,944 8,212,836 10,350,459 10,779,604 11,363,156 11,572,631 12,195,742 City development 5,361,364 5,657,558 6,999,655 6,867,840 6,603,991 6,710,701 6,695,016 6,712,679 6,652,180 7,010,772 Streets, traffic and engineering 7,837,148 8,376,353 10,476,869 10,439,811 9,856,343 10,490,438 10,280,489 10,156,803 10,838,187 11,105,807 Community services 10,008,197 11,023,089 13,437,977 12,967,765 13,737,436 14,068,607 14,501,194 14,916,314 15,649,418 16,521,970 Capital outlay 52,202,642 33,460,358 16,382,133 21,888,359 33,781,788 33,569,119 24,319,275 24,658,593 30,931,273 30,090,513 Debt service Principal retirement 7,234,467 7,513,443 7,995,000 8,835,000 4,990,000 5,445,000 5,675,000 5,810,000 6,200,000 4,985,000 Interest 4,297,828 5,128,502 4,631,322 3,986,558 3,600,362 3,414,367 3,652,206 2,746,415 2,527,873 2,681,595 Bond fees 8,676 10,766 9,204 7,800 7,425 7,225 4,900 5,292 4,544 1,700 Bond issuance costs 660, , ,801 5, Miscellaneous , Total Expenditures 127,359, ,701, ,299, ,382, ,794, ,800, ,291, ,391, ,089, ,218,616 Excess (deficiency) of revenues over (under) expenditures (28,249,778) (2,240,792) 13,872,527 15,130,654 (3,302,124) (7,697,936) 2,197,787 2,450,759 (13,991,817) 7,909,522 Other financing sources Transfers in 2,765,020 2,463,240 2,479,516 2,989,823 4,016,799 4,771,225 4,995,191 8,966,617 3,647,024 3,532,854 Transfers out (3,846,453) (2,673,240) (2,479,516) (2,989,823) (3,517,760) (4,771,225) (4,995,191) (8,966,617) (4,624,754) (3,532,854) Bonds issued 21,195, ,820, ,220, Premium on bonds issued 86, Payments to underwriter on bonds iss' (211,950) - - (31,992,994) - - (13,365,636) Discount on certificates of participation (256,047) Sales of capital assets , Loss on Land held for resale (7,647,746) (4,454,729) Total other financing sources (uses) 19,988,209 (210,000) - (7,076,787) 499, ,793 - (977,730) (4,454,729) Net change in fund balances $ (8,261,569) $ (2,450,792) $ 13,872,527 $ 8,053,867 $ (2,803,085) $ (7,697,936) $ 2,665,580 $ 2,450,759 $ (14,969,547) $ 3,454,793 Debt service as a percentage of noncapital expenditures 9.9% 12.7% 13.8% 13.2% 8.5% 8.2% 9.2% 8.5% 7.1% 7.7% Source: Current and prior year's financial statements. 115

130 City of Thornton Schedule 5 General Government Tax and Assessment Revenues by Source¹ Last ten fiscal years Specific Fiscal Sales Motel Use Property ownership Franchise Cigarette Year tax tax tax tax tax tax tax Total 2004 $ 36,142,372 $ 420,347 $ 12,922,183 $ 6,639,330 $ 796,584 $ 3,560,921 $ 266,291 $ 60,748, ,290, ,907 13,338,473 6,970, ,425 3,983, ,572 68,049, ,036, ,197 13,430,950 7,507, ,057 4,173, ,905 69,753, ,565, ,442 12,554,321 7,889, ,119 4,271, ,326 69,987, ,831, ,768 10,097,584 9,197, ,486 4,727, ,466 70,468, ,386, ,317 10,407,990 9,257, ,531 4,602, ,396 68,996, ,180, ,764 10,687,720 9,042, ,315 4,903, ,225 72,021, ,529, ,503 10,910,856 9,139, ,036 4,893, ,615 73,732, ,074, ,007 12,897,094 8,986, ,241 4,818, ,567 79,273, ,221, ,638 13,311,291 9,045, ,464 5,258, ,756 82,590,191 ¹ General tax and assessment revenues from the General, Special Revenue, Debt Service and Capital Project Funds, excluding Thornton Development Authority. Source: City of Thornton Finance Department 116

131 This Page Left Intentionally Blank 117

132 City of Thornton Schedule 6 Sales Tax Revenue by Type of Industry Professional Fiscal General Bars & & Personal Year Merchandise Grocery Restaurants Automotive Services Construction 2004 $ 14,928,344 $ 7,103,721 $ 3,922,877 $ 2,835,222 $ 506,374 $ 62, ,471,047 6,886,779 4,236,619 2,844, ,702 52, ,354,808 6,950,039 4,369,921 2,874, ,930 74, ,643,640 7,436,819 4,632,056 2,590, , , ,735,051 8,271,863 4,928,995 2,399, , , ,544,820 9,191,634 5,011,846 2,688, , , ,336,378 8,430,141 5,284,623 2,881, , , ,643,576 8,638,413 5,396,944 3,066, , , ,327,673 9,056,261 5,902,883 3,358, , , ,256,380 9,617,781 6,325,706 3,848, , ,604 Source: City of Thornton Sales and Use Tax Reports 118

133 Total Direct Manufacturing Total Tax & Wholesale Accomodations Education Entertainment Utilities Sales Tax Rate $ 995,037 $ 70,390 $ 37,192 $ 724,082 $ 4,957,014 $ 36,142, ,501 60,144 43, ,314 5,351,904 42,290, ,524 54,331 31, ,311 5,735,049 43,036, ,243,172 59,892 40,737 1,021,572 6,022,655 43,565, ,272,196 69,222 38,848 1,113,720 6,324,127 44,831, ,891 57,111 54,910 1,234,067 6,048,016 43,386, ,755 46,559 45,052 1,471,506 7,441,379 46,180, ,323 58,147 27,272 1,391,060 6,926,227 47,529, ,480,297 66,694 25,753 1,790,926 6,941,722 51,074, ,725 97,529 20,307 1,694,929 7,583,610 53,221,

134 City of Thornton Schedule 7 Direct and Overlapping Sales Tax Rates Overlapping Rates Rapid Total Total Direct Transit Cultural Football Overlapping Fiscal City of Sales Tax State of Adams District Facilities Stadium Sales Tax Year Thornton Rate Colorado County RTD District District Rate % 3.75% 2.90% 0.70% 0.60% 0.10% 0.10% 8.15% % 3.75% 2.90% 0.70% 1.00% 0.10% 0.10% 8.55% % 3.75% 2.90% 0.75% 1.00% 0.10% 0.10% 8.60% % 3.75% 2.90% 0.75% 1.00% 0.10% 0.10% 8.60% % 3.75% 2.90% 0.75% 1.00% 0.10% 0.10% 8.60% % 3.75% 2.90% 0.75% 1.00% 0.10% 0.10% 8.60% % 3.75% 2.90% 0.75% 1.00% 0.10% 0.10% 8.60% % 3.75% 2.90% 0.75% 1.00% 0.10% 0.10% 8.60% % 3.75% 2.90% 0.75% 1.00% 0.10% 0.00% 8.50% % 3.75% 2.90% 0.75% 1.00% 0.10% 0.00% 8.50% Source: City of Thornton Sales and Use Tax Reports 120

135 City of Thornton Schedule 8 Principal Sales Tax Payers Fiscal Year Aggregate top ten filers 1, 2 $ 19,018,816 $ 21,195,836 $ 21,195,442 $ 19,850,777 $ 20,273,782 $ 19,333,867 $ 19,823,390 $ 22,693,871 $ 23,418,920 $ 24,561,715 Aggregate all other filers 2 16,549,142 20,509,017 21,154,041 22,669,031 23,243,067 22,640,094 24,749,897 23,738,081 25,234,128 26,676,200 Total sales tax 2 $ 35,567,958 $ 41,704,853 $ 42,349,483 $ 42,519,808 $ 43,516,849 $ 41,973,961 $ 44,573,287 $ 46,431,952 $ 48,653,048 $ 51,237,915 Top ten filers as a percentage of total sales tax 53.47% 50.82% 50.05% 46.69% 46.59% 46.06% 44.47% 48.88% 48.13% 47.94% 1 Colorado State Statues and City of Thornton Ordinances prohibit disclosure of individual sales tax returns. 2 Excludes use tax, audit revenue, penalties and interest. Source: City of Thornton Sales and Use Tax Reports 121

136 City of Thornton Schedule 9 Ratios of Outstanding Debt by Type Governmental Activities Business-Type Activities Sales and Tax Certificates General Fiscal Use Tax Increment of Capital Obligation Revenue Year Bonds Bonds Participation Leases Bonds Bonds 2004 $ 34,940,000 $ 26,575,000 $ 45,840,000 $ 208,430 $ 86,080,000 $ 42,615, ,000,000 24,965,000 43,945, ,987 78,975,000 42,530, ,890,000 23,035,000 41,990,000-71,605,000 42,310, ,590,000 20,505,000 42,480, ,280 63,880,000 42,085, ,300,000 19,895,000 40,390,000 89,822 56,025,000 41,850, ,905,000 19,270,000 37,965,000 69,696 48,140,000 41,610, ,835,000 18,620,000 35,445,000 47,752 40,220,000 41,360, ,315,000 17,950,000 32,825,000 23,826 32,260,000 41,110, ,520,000 17,260,000 30,110,000-24,250,000 40,850, ,065,000 16,545,000 27,295,000-16,175,000 39,955,000 1 See Schedule 14 for personal income and population data. Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Source: Current and prior year's financial statements. 122

137 Business-Type Activities (Cont'd) Notes and Total Percentage Loan Capital Primary of Personal Per Payable Leases Government Income 1 Capita 1 $ 778,030 $ 389, $ 237,426, % $ 2, , , ,303, % 1,945 1,069, , ,099, % 1, , , ,642, % 1, , ,264, % 1, , ,493, % 1, , ,858, % 1, , ,629, % 1, , ,103, % 1,007 79, ,114, %

138 City of Thornton Schedule 10 Ratios of General Bonded Debt Outstanding Percentage of Estimated General Less: Amounts Actual Taxable Fiscal Obligation Available in Debt Value of Per Year Bonds Service Fund Total Property Capita $ 86,080,000 $ - $ 86,080, % $ ,975,000-78,975, % ,605,000-71,605, % ,880,000-63,880, % ,025,000-56,025, % ,140,000-48,140, % ,220,000-40,220, % ,260,000-32,260, % ,250,000-24,250, % ,175,000-16,175, % See Schedule 14 for population data. Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Source: Current and prior year's financial statements. 124

139 City of Thornton Schedule 11 Direct and Overlapping Governmental Activities Debt As of December 31, Percentage Assessed Debt Applicable Estimated Share Entity (1) Valuation (2) Outstanding (3) to the City (4) of Overlapping Debt City of Thornton direct debt $ 51,905,000 Overlapping Debt Adams 12 Five Star School District $ 1,462,608,660 $ 286,987, ,385,211 Adams County School District 1 458,786,800 37,551, ,702,902 Adams County School District ,550,160 80,658, ,992,265 Amber Creek Metropolitan District 4, , ,642 Brighton School District 27J 780,933, ,665, ,940,611 Fallbrook Metropolitan District 11,169,520 6,849, ,849,646 Fire District 3 North Washington 467,473,890 4,070, Heritage Todd Creek Metropolitan District 12,940,960 27,587, ,587,000 Highpointe Park Metropolitan District 4,151,700 1,470, ,470,000 Hyland Hills Metro Park & Rec. District 829,649,190 10,390, ,517 Lakeview Estates Water District 1,072, , ,385 Lambertson Lakes Metro District 11,218,460 6,220, ,220,000 Larkridge Metropolitan District No. 1 1,556,410 10,950, ,950,000 Larkridge Metropolitan District No ,150 2,944, ,944,661 Marshall Lake Metropolitan District 8,578,150 2,705, ,705,000 North Metro Fire Rescue FKA Fire Dist ,561,690 21,875, ,938 Northern Metropolitan Bond 49,264,420 1,200, ,200,000 PLA Metropolitan District 2,715,670 1,230, ,230,000 Talon Pointe Metropolitan District 585,770 8,000, ,000,000 Thornton 136th Avenue General Improvement District (5) 348,290 2,420, ,420,000 Subtotal, overlapping debt $ 239,670,185 Total direct and overlapping debt $ 291,575,185 (1) The following entities also overlap the City but have no reported general obligation debt outstanding: Adams County North Metro Fire Pen (FKA FD1P) Big Dry Creek Metropolitan District North Washington Water and Sanitation District Bramming Farm Metro Districts Parterre Metropolitan Districts Brittany Place Metropolitan District Rangeview Library District Central Colorado Water Conservancy Regional Transportation District Cherrylane Metro District South Adams Water and Sanitation District Creekside Village Metropolitan District South Thornton Urban Renewal Area Creekside Village Subdistrict A Thornton Dev North Cundall Farms Metropolitan District Timberleaf Metropolitan District East 144th Ave Urban Renewal Area Todd Creek Village Park and Recreation District Fire District 4 South Adams County Urban Drainage and Flood Control District Fire District 6 Greater Brighton Urban Drainage and Flood Control District - S. Platte Fire District 6 IGA Village at Dry Creek Metro Districts Lewis Pointe Metropolitan District Village at North Creek Metropolitan District Mayfield Metropolitan District Village at Thorncreek Metropolitan District North End Metropolitan Districts Villas at Eastlake Reservoir Metropolitan District North Holly Metro District Welby Metropolitan District North Metro Fire Bond (FKA FD1B) Wright Farms Metropolitan District (2) Assessed values certified in 2013 are for collection of ad valorem property taxes in (3) Does not include self-supporting general obligation debt. (4) The percentage of each entity's outstanding debt chargeable to the City is calculated by comparing the assessed valuation of the portion overlapping the City to the total assessed valuation of the overlapping entity. To the extent the City's assessed valuation changes disproportionately with the assessed valuation of overlapping entities, the percentage of debt for which property owners within the City are responsible will also change. (5) The City of Thornton 136th Avenue General Improvement District (the "GID") and the City entered into an intergovernmental agreement pursuant to which the City loaned the GID $2,420,000. Sources: Adams County Assessor's office and individual taxing entities. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. 125

140 City of Thornton Schedule 12 Legal Debt Margin Information Fiscal Year Debt Limit 1 $ 69,217,190 $ 75,335,362 $ 78,224,255 $ 91,022,856 $ 91,846,877 $ 89,744,142 $ 90,447,542 $ 89,466,614 $ 89,773,098 $ 90,471,515 Total net debt applicable to limit Legal debt margin $ 69,217,190 $ 75,335,362 $ 78,224,255 $ 91,022,856 $ 91,846,877 $ 89,744,142 $ 90,447,542 $ 89,466,614 $ 89,773,098 $ 90,471,515 Total net debt applicable as a percentage of debt limit Legal Debt Margin Calculation for Fiscal Year 2013 Assessed Value $ 904,715,150 Debt limit (10% of total assessed value) 1 90,471,515 Debt applicable to limit General obligation bonds Less: Amount set aside for repayment of general obligation debt - Total net debt applicable to limit - Legal debt margin $ 90,471,515 1 Per the City of Thornton Charter, the City's general obligation debt should not exceed 10 percent of the total assessed property value. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying genera obligation bonds. Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements Source: Current and prior year's financial statements and the Adams County Assessor's Office. 126

141 City of Thornton Schedule 13 Pledged-Revenue Coverage Water Revenue Refunding Bonds Water Less: Net Fiscal Charges Operating Available Year and Other Expenses Revenue Principal Interest Coverage 2004 $ 42,431,571 $ 11,936,411 $ 30,495,160 $ - $ 752, ,198,768 13,765,252 39,433,516-1,992, ,795,110 14,825,931 36,969,179-1,992, ,709,657 15,545,743 33,163,914-1,992, ,037,364 16,066,692 30,970,672-1,992, ,482,700 17,368,712 19,113,988-1,992, ,626,770 18,053,279 25,573,491-1,992, ,324,785 18,260,090 27,064,695-1,992, ,832,946 19,286,086 40,546,860 1,992, ,083,359 20,131,086 18,952,273 1,665, Sewer Revenue Bonds Sewer Less: Net Fiscal Charges Operating Available Year and Other Expenses Revenue Principal Interest Coverage 2004 $ 9,027,665 $ 6,710,406 $ 2,317,259 $ 170,000 $ 153, ,049,076 7,640,427 2,408, , , ,284,828 7,050,538 3,234, ,000 77, ,430,853 7,968,132 2,462, ,000 70, ,714,702 8,028,546 2,686, ,000 63, ,757,630 8,597,631 2,159, ,000 55, ,106,207 8,882,780 2,223, ,000 47, ,748,793 9,199,268 2,549, ,000 39, ,658,996 9,247,656 3,411, ,000 32, ,468,428 10,124,758 3,343, ,000 22, Tax Increment Bonds Sales and Fiscal Property Year Taxes Principal Interest Coverage 2004 $ 7,299,551 $ 1,545,000 $ 342, ,282,037 1,610,000 1,382, ,365,517 1,930,000 1,119, ,055,355 2,530,000 1,011, ,434, , , ,652, , , ,748, , , ,190, , , ,521, , , ,162, , , Sales and Use Tax Bonds Fiscal Sales Year Taxes Principal Interest Coverage 2004 $ 52,720,280 $ 3,770,000 $ 1,768, ,436,985 3,940,000 1,607, ,114,548 4,110,000 1,436, ,163,873 4,300,000 1,256, ,784,531 2,290,000 1,080, ,618,056 2,395, , ,314,748 2,505, , ,733,571 2,520, , ,296,929 2,795, , ,811,466 1,455, , Notes: Water revenue refunding bonds were issued in Water and Sewer charges and other includes investment earnings and tap fees. Operating expenses do not include depreciation or amortization expenses. 127

142 City of Thornton Schedule 14 Demographic and Economic Statistics Personal Per Income Capita Fiscal (thousands of Personal Unemployment Year Population of dollars) Income Rate ,433 $ 2,371,107 $ 21, % ,278 2,453,663 21, % ,213 2,516,680 21, % ,873 2,530,851 21, % ,688 2,569,821 21, % ,843 2,594,620 21, % ,772 3,099,949 26, % ,147 3,135,837 26, % ,211 3,241,909 26, % ,643 3,258,134 26, % Note: Unemploymnet rate is the City's average for the year then ended and is based on preliminary data then updated in subsequent year. Sources: US Census Bureau (personal income) City of Thornton Planning Division (population) United States Department of Labor (unemployment) 128

143 City of Thornton Schedule 15 Principal Employers 2012 Percentage of Total City Employer Type Employees Rank Employment Educational Services (21 Units) 5, % Retail Trade (175 units) 3, % Health Care and Social Assistance (165 Units) 2, % Accommodation and Food Services (141 Units) 2, % Administrative and support (112 Units) 1, % Construction (200 Units) % Professional Services (235 Units) % Other Services (122 Units) % Information (23 Units) % Wholesale trade (119 Units) % Total 18,577 93% Total number of persons employed by Thornton establishments: 19, Percentage of Total City Employer Type Employees Rank Employment Retail Trade (192 units) 5, % Educational Services (16 Units) 5, % Accommodation and Food Services (147 Units) 3, % Health Care and Social Assistance (163 Units) 3, % Administrative and support (79 Units) 2, % Construction (181 Units) 1, % Information (21 Units) % Other Services (115 Units) % Professional Services (165 Units) % Real Estate (81 Units) % Total 23,629 92% Total number of persons employed by Thornton establishments: 25,759 Note: The number of employees per business is confidential therefore the City is providing employee totals by sector. The City did not request or collect this information prior to Schedule is updated as soon as data is available. Source: State of Colorado's Department of Labor and Employment's Quarterly Census of Employment and Wages (QCEW) 2nd Quarter of 2008 and 2012 data set. 129

144 City of Thornton Schedule 16 Full-time Equivalent City Government Employees by Function Function General government Police Officers Civilians Fire Firefighters and officers Ambulance Civilians City development Streets, traffic, & engineering Engineering Maintenance Community services Water & Sewer Sanitation Total Source: City of Thornton budget office. 130

145 City of Thornton Schedule 17 Operating Indicators by Function Function Police (priority 1-2-3) Patrol calls for service 43,489 44,535 44,683 42,283 41,133 57, , , ,969 98,634 Physical arrests 6,218 6,718 4,218 5,669 3,874 3,554 3,280 3,248 2,692 2,365 Traffic violations 11,520 16,296 14,539 17,461 15,639 19,057 20,229 22,771 20,796 17,993 Fire Calls for service 7,208 7,672 7,643 7,826 7,803 7,689 7,826 8,107 8,180 8,106 Fire incidents EMS and other incidents 6,931 7,328 7,303 7,546 7,505 7,453 7,586 7,889 7,935 7,916 Inspections 1,210 1,747 1,619 1,641 1,348 2,327 1,684 1,700 1,798 1,586 City development Single-family permits issued 1,109 1,256 1, Commercial permits issued Building inspections 71,336 72,449 57,719 36,004 34,671 24,450 25,677 25,083 26,212 28,473 Code violations & inspections 11,805 14,658 10,427 13,038 14,716 14,088 14,031 14,028 16,161 16,370 Graffiti incidents removed ,039 1,102 1,016 1,798 1,526 Streets, traffic, & engineering Lane miles of streets maintained 1,179 1,220 1,258 1,300 1,318 1,302 1,310 1,313 1,222 1,227 Community services Recreation center admissions 291, , , , , , , , , ,200 Water New connections 1,209 1,117 1, Average daily Sanitation consumption (in gallons) (excludes Westminster) 13,809,340 15,539,150 16,993,184 16,396,893 17,058,504 15,429,112 16,347,926 16,590,032 17,919,403 14,971,237 Solid waste customers 23,612 23,965 24,340 24,831 25,006 25,185 25,678 25,919 26,623 26,919 Tons of refuse collected 35,612 36,015 34,686 35,432 33,284 33,106 33,173 32,359 32,729 34,029 Tons of recyclables collected 1,829 1,869 1,791 2,934 4,292 4,777 5,114 5,120 5,089 5,180 Ambulance Number of transports 1,412 4,059 3,906 4,186 4,286 4,643 4,466 4,481 4,517 4,193 Note: Indicators are not available for the general government function. Sources: Various city departments. 131

146 City of Thornton Schedule 18 Capital Asset Statistics by Function Function Police Fire Stations Patrol Units Fire Stations Ambulances Streets, traffic, & engineering Streets (miles) Streetlights 6,629 7,216 8,038 8,102 8,276 8,357 8,473 8,483 8,514 8,565 Community services Parks acreage Parks Swimming Pools Tennis Courts Community Centers Golf Course 1 1 Water Water mains (miles) Fire Hydrants 3,668 3,798 3,990 4,132 4,233 4,244 4,262 4,663 4,686 4,699 Maximum daily capacity (thousands of gallons) 50,000 68,000 68,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 Sewer Storm sewers (miles) Sanitary sewer (miles) Sanitation Collection Trucks Note: No capital asset indicators are available for the general government function. Sources: Various city departments. 132

147