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CITY COUNCIL
REPORT
Meeting Date:
Charter Provision:
Objective:
ACTION
January 13, 2026
Submit the independent audit of the City's annual financial
statements to the Council
Commitment to economic sustainability and transparency
FY 2024/25 Annual Financial Audit. Accept the FY 2024/25 financial audit reports submitted by the
City's external auditors, Heinfeld, Meech & Co., P.C.
BACKGROUND
The City Charter requires the Council to designate the certified public accountants (CPAs) to perform an
independent audit of the City's annual financial statements and submit these reports to the Council.
Arizona Revised Statute requires that the CPA firm present the results of the annual financial statement
audit to the Council during a regular meeting and not on the consent agenda, within 90 days after
completion of the audit.
The City Auditor's Office contracted with Heinfeld, Meech & Co., P.C. to perform the FY 2024/25 financial
audit and report on the:
•
City's Annual Comprehensive Financial Report
•
Annual financial reports for the 4 Community Facility Districts (CFD) and the Municipal Property
Corporation (MPC)
•
City expenditures of federal awards (called a "Single Audit" report)
•
City's compliance with its Highway User Revenue Fund (HURF) uses
•
Housing and Urban Development (HUD) financial schedule for federally supported housing
programs
•
Annual Expenditure Limitation Report to the State
The Single Audit report, normally provided with the annual financial statement audit, is expected to be
available in February. The HUD and Annual Expenditure Limitation reports are typically completed in
February and March. These reports will be presented to the Audit Committee once completed. All other
reports are attached.
The Audit Committee reviewed the FY 2024/25 financial audit reports at its December 12, 2025,
meeting. After review and discussion with Heinfeld, Meech & Co., P.C., the Audit Committee voted
unanimously (2-0) to recommend that the City Council accept the reports.
ANALYSIS &ASSESSMENT
Citywide Reports
•
In its Independent Auditor's Report on the City's FY 2024/25 Annual Comprehensive Financial
Report, the CPA firm issued an clean opinion that the financial statements present fairly, in all
material respects, the financial position, changes in financial position and, where applicable,
Action Taken _______________ _
Item 18
Approved by a vote of 7 to 0
Audit Committee Regular Meeting – December 12, 2025
Item 5 – Discussion and possible direction to staff regarding Report No. 2601, the City’s
Financial and Compliance Audit for FY 2024/25, performed by Heinfeld Meech & Co., P.C.
Requested Action:
The Audit Committee recommend to the City Council acceptance of the City’s FY 2024/25
financial and compliance audit reports.
Citywide Reports
1.
FY 2024/25 Annual Comprehensive Financial Report (ACFR)
a.
Communication with Governance
b.
Highway User Revenue Fund (HURF) Compliance Report
2.
Single Audit Report
a.
Report on Internal Control over Financial Reporting and Compliance
Component Unit Reports
3.
DC Ranch Community Facilities District (CFD) Annual Financial Report
a.
Report on Internal Control over Financial Reporting and Compliance
4.
McDowell Mountain Ranch CFD Annual Financial Report
a.
Report on Internal Control over Financial Reporting and Compliance
5.
Municipal Property Corporation (MPC) Annual Financial Report
a.
Report on Internal Control over Financial Reporting and Compliance
6.
Via Linda Road CFD Annual Financial Report
a.
Report on Internal Control over Financial Reporting and Compliance
7.
Waterfront Commercial CFD Annual Financial Report
a.
Report on Internal Control over Financial Reporting and Compliance
8.
Communication with Governance
a.
DC Ranch, McDowell Mountain Ranch, Via Linda Road, Waterfront
Commercial CFD’s
b.
Municipal Property Corporation (MPC)
Attachment 1 - FY 2024/25
Annual Comprehensive
Financial Report (ACFR)
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
ANNUAL
COMPREHENSIVE
FINANCIAL
REPORT
Annual Comprehensive Financial Report
for the fiscal year ended June 30, 2025
Prepared by:
City Treasurer’s Office
Sonia Andrews, CPA
City Treasurer/Chief Financial Officer
City of Scottsdale, Arizona
Anna Marie Henthorn, CPA
Assistant City Treasurer/Assistant Chief Financial Officer
Sarah L. Delgado, CPA
Accounting Department Director
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City of Scottsdale, Arizona
Table of Contents
Introductory Section
Letter of Transmittal - City Treasurer....................................................................................................... 1
Certificate of Achievement - Government Finance Officers Association.......................................... 9
List of Elected and Appointed Officials................................................................................................11
Organizational Chart..................................................................................................................................13
Financial Section
Independent Auditor’s Report..................................................................................................................15
Management’s Discussion and Analysis..................................................................................................18
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position.................................................................................................................35
Statement of Activities.......................................................................................................................37
Fund Financial Statements:
Balance Sheet - Governmental Funds.............................................................................................38
Reconciliation of the Governmental Funds Balance Sheet to the Statement
of Net Position....................................................................................................................................40
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds..........................................................................................................................41
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances of Governmental Funds to the Statement of Activities............................... 43
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual - General Fund..................................................................................................44
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balance - Budget and Actual - General Fund.................................................................. 46
Statement of Fund Net Position - Proprietary Funds.................................................................. 47
Reconciliation of the Proprietary Funds Statement of Fund Net Position
to the Statement of Net Position.....................................................................................................49
City of Scottsdale, Arizona
Comprehensive Annual Financial Report
For the Fiscal Year ended June 30, 2025
ii
City of Scottsdale, Arizona
Statement of Revenues, Expenses, and Changes in Fund Net Position -
Proprietary Funds...............................................................................................................................50
Reconciliation of the Proprietary Funds Statement of Revenue, Expenses,
and Changes in Fund Net Position to the Statement of Activities............................................. 51
Statement of Cash Flows - Proprietary Funds...............................................................................52
Notes to Financial Statements:
I. Summary of Significant Accounting Policies.................................................................................54
II. Reconciliation of Government-wide and Fund Financial Statements....................................... 66
III. Stewardship, Compliance, and Accountability................................................................................77
IV. Detailed Notes on All Funds
A. Cash and Investments..................................................................................................................82
B. Endowments..................................................................................................................................88
C. Receivables.....................................................................................................................................88
D. Capital Assets................................................................................................................................91
E. Interfund Balances and Interfund Transfers ...........................................................................95
F. Leases..............................................................................................................................................96
G. Subscription-Based Information Technology Arrangements............................................... 97
H. Public-Public Partnerships and Public-Private Partnerships................................................. 98
I. Bonds, Loans, and Other Payables............................................................................................100
V. Other Information
A. Risk Management.......................................................................................................................111
B. Contingent Liabilities .................................................................................................................111
C. Subsequent Events......................................................................................................................112
D. Joint Ventures..............................................................................................................................112
E. Pollution Remediation................................................................................................................113
F. Related Organization...................................................................................................................114
G. Pension, Retirement, and Other Postemployment Benefit Plans.......................................114
H. Other Postemployment Benefits...............................................................................................137
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City of Scottsdale, Arizona
Required Supplementary Information
Proportionate Share of Collective Net Pension Liability for Cost-Sharing Pension Plan ...........138
Changes in the City’s Net Pension Liability (Asset) and Related Ratios of Agent
Pension Plans ............................................................................................................................................139
Schedule of City Contributions .............................................................................................................141
Changes in the City’s Total OPEB Liability and Related Ratios .......................................................144
Notes to Required Supplementary Information..................................................................................145
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds..........................................................149
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -
Nonmajor Governmental Funds...........................................................................................................150
Combining Balance Sheet - Nonmajor Special Revenue Governmental Funds.............................151
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -
Nonmajor Special Revenue Governmental Funds..............................................................................153
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual:
Transportation - Special Revenue Fund........................................................................................155
Community Development Block Grant - Special Revenue Fund.............................................156
HOME - Special Revenue Fund.....................................................................................................157
Grants - Special Revenue Fund.......................................................................................................158
Housing Choice Voucher Program - Special Revenue Fund.....................................................159
Preserve Privilege Tax - Special Revenue Fund............................................................................160
Streetlight Districts - Special Revenue Fund.................................................................................161
Special Programs - Special Revenue Fund....................................................................................162
Tourism Development - Special Revenue Fund...........................................................................163
Stadium Facility - Special Revenue Fund.......................................................................................164
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Nonmajor Debt Service Governmental Funds..................................165
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -
Nonmajor Debt Service Governmental Funds...................................................................................166
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City of Scottsdale, Arizona
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual:
General Obligation Bond Debt Service Fund..............................................................................167
Municipal Property Corporation Debt Service Fund.................................................................168
Combining and Individual Fund Statements:
Combining Balance Sheet - Nonmajor Capital Projects Governmental Funds.............................169
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -
Nonmajor Capital Projects Governmental Funds...............................................................................170
Combining Balance Sheet - Nonmajor Permanent Governmental Funds......................................171
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances -
Nonmajor Permanent Governmental Funds.......................................................................................172
Combining Statement of Fund Net Position - Internal Service Funds...........................................174
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position -
Internal Service Funds.............................................................................................................................175
Combining Statement of Cash Flows - Internal Service Funds.......................................................176
Other Supplementary Information:
Schedule of Changes in Long-Term Debt...........................................................................................178
Statistical Section
Financial Trends
Net Position by Component - Last Ten Fiscal Years (accrual basis of accounting)......................184
Changes in Net Position - Last Ten Fiscal Years (accrual basis of accounting).............................185
Fund Balances of Governmental Funds - Last Ten Fiscal Years
(modified accrual basis of accounting).................................................................................................188
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years
(modified accrual basis of accounting).................................................................................................189
Tax Revenues by Source - Last Ten Fiscal Years (modified accrual basis of accounting)............192
Revenue Capacity
Taxable Sales Subject to Privilege (Sales) Tax by Category - Last Ten Fiscal Years......................193
Direct and Overlapping Sales Tax Rates - Last Ten Fiscal Years......................................................194
Sales Tax Revenue Payers by Industry - Current Year and Nine Years Ago...................................195
Property Tax Rates - Direct and Overlapping Governments - Last Ten Fiscal Years...................196
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City of Scottsdale, Arizona
Principal Property Taxpayers - Current Year and Nine Years Ago..................................................197
Assessed Value of Taxable Property - Last Ten Fiscal Years............................................................198
Property Tax Levies and Collections - Last Ten Fiscal Years............................................................199
Debt Capacity
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years...........................................................200
Ratios of Net General Bonded Debt Outstanding - Last Ten Fiscal Years....................................201
Direct and Overlapping Governmental Activities Debt as of June 30, 2023.................................202
Legal Debt Margin Information - Last Ten Fiscal Years...................................................................203
Pledged-Revenue Coverage - Last Ten Fiscal Years............................................................................205
Demographic and Economic Information
Demographic and Economic Statistics - Last Ten Fiscal Years........................................................206
Principal Employers - Current Year and Nine Years Ago.................................................................207
Operating Information
Full-time Equivalent City Government Employees by Function - Last Ten Fiscal Years............208
Operating Indicators by Division - Last Ten Fiscal Years.................................................................209
Capital Asset Statistics by Function - Last Ten Fiscal Years..............................................................212
vi
City of Scottsdale, Arizona
1
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Letter of Transmittal
November 17, 2025
To the Honorable Mayor, Members of the City Council, and Citizens of the City of Scottsdale, Arizona:
The Annual Comprehensive Financial Report of the City of Scottsdale, Arizona, (the city) for the fiscal
year ended June 30, 2025, is submitted in accordance with City Charter and Arizona Revised Statutes. Both
require the city to issue an annual report on its financial position and activity, and to have the report audited
by certified public accountants independent of city government. This report was prepared by the city’s
accounting department in conformity with U.S. generally accepted accounting principles (GAAP) and audited
in accordance with U.S. generally accepted auditing standards by a firm of licensed certified public accountants.
This report consists of management’s representations concerning the finances of the city, including its blended
component units. Consequently, management assumes full responsibility for the completeness and reliability
of the information contained in this report. To provide a reasonable basis for making these representations,
management of the city has established a comprehensive internal control framework designed for this
purpose. Because the cost of internal control should not exceed anticipated benefits the objective is to provide
reasonable, rather than absolute assurance that the financial statements are free of any material misstatements.
To the best of management’s knowledge and belief, the enclosed data is accurate, in all material aspects, and is
reported in a manner that presents fairly the financial position and results of operations of the various funds
and component units of the city.
Heinfeld, Meech & Co., P.C., a firm of licensed certified public accountants, performed the annual independent
audit. The goal of the audit was to provide reasonable assurance that the basic financial statements of the
city are free of material misstatement. The independent auditor concluded that the city’s financial statements
for the fiscal year ended June 30, 2025, are fairly stated in conformity with GAAP. This is the most favorable
conclusion and is commonly known as an unmodified or “clean” opinion. The independent auditor’s report
is located on the first page of the Financial Section of this report.
The independent audit of the financial statements of the city was part of a broader, federally mandated Single
Audit designed to meet the special needs of federal grantor agencies. The standards governing Single Audit
engagements require the independent auditor to report not only on the fair representation of the financial
statements, but also on the audited government’s internal controls and compliance with legal requirements,
with special emphasis on internal controls and legal requirements involving the administration of federal
awards. These reports are available in the city’s separately issued Single Audit Report and may be obtained
from the city’s website.
This letter of transmittal provides a non-technical summary of the city’s profile, economic prospects, and
achievements. Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s
report and provides a narrative introduction, overview, and analysis of the city’s basic financial statements.
MD&A complements this letter of transmittal and should be read in conjunction with it.
2
City of Scottsdale, Arizona
CITY OF SCOTTSDALE PROFILE
History
Scottsdale was founded in 1888 when retired Army Chaplain Major Winfield Scott homesteaded what is now
the center of the city. The city incorporated in 1951 and the City Charter, under which it is presently governed,
was adopted in 1961. Portions of the city’s charter have been modified several times by vote of the citizens.
Current Profile
Scottsdale is centrally located in Maricopa County, Arizona, with its boundaries encompassing 184.5 square
miles, stretching 31 miles from north to south, and 11.4 miles at its widest point. The city is bordered on the
west by Phoenix, the state capital, by Tempe on the south, the Tonto National Forest to the north, and the
McDowell Mountains and the Salt River-Pima Maricopa Indian Community on the east. Scottsdale and its
neighboring cities form the Phoenix Metro area which is the economic, political, and population center of
the state. The city has experienced significant increases in population over the years, with the 1950 census
reporting 2,021 residents, the 2020 census reporting 241,361 residents, and a current estimate of 246,170
residents. The city is the seventh largest municipality by population in Arizona, and the 93rd largest city in the
United States.
Government and Organization
Scottsdale operates under a council-manager form of government as provided by its Charter. The Mayor
and six City Council members are elected at large on a non-partisan ballot and serve overlapping four-year
terms. The City Council directly appoints six officers (City Attorney, City Auditor, City Clerk, City Manager,
City Treasurer, and Presiding Judge) who have full responsibility for carrying out City Council policies and
administering day-to-day operations. The city provides a full range of municipal services including police and
fire protection, sanitation service, water and sewer services, construction and maintenance of streets, and
recreational activities including libraries and cultural events.
Budgetary Controls
The annual budget serves as the foundation for Scottsdale’s financial planning and control. The City Council
formally adopts the budget and legally allocates, or appropriates, available monies for the city’s various funds.
On or before the second regular Council meeting in May, the City Manager submits to the City Council
a proposed budget for the fiscal year commencing the following July 1. The budget includes proposed
expenditures and the means of financing them. Three public hearings are held prior to the final budget
adoption to obtain taxpayer comments. Each year in June, the budget is legally enacted through passage of
an ordinance. The ordinance sets the maximum legal expenditure limit for the ensuing fiscal year. Additional
expenditures may be authorized if directly necessitated by a natural or man-made disaster as prescribed in the
Arizona State Constitution, Article 9, Section 20. During fiscal year 2025, there were no such supplemental
budgetary appropriations authorized.
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City of Scottsdale, Arizona
The expenditure appropriations in the adopted budget are by division and fund level; however, divisional
appropriations may be amended during the year. On the recommendation of the City Manager and with the
approval of the City Council: 1) transfers may be made from the appropriations for contingencies to divisions;
and 2) unexpended appropriations may be transferred from one division to another. For example, if the
Public Safety Division is over budget and there are savings in the Community Services Division, City Council
can authorize a budget transfer between these divisions.
LOCAL ECONOMY
Business
Scottsdale is one of the state’s leading job centers with a robust economy anchored by biomedical science
companies, high-tech innovation, tourism, financial services, and corporate headquarters. Almost 34,000
companies do business in Scottsdale, creating more than 200,000 jobs. The high-tech innovation center
SkySong, located a few miles from downtown Scottsdale, is designed to help companies grow through a unique
partnership with Arizona State University. Scottsdale’s downtown, Old Town Scottsdale, is an emerging center
for high-tech businesses, and home to one of the most successful shopping centers in the southwest United
States, Scottsdale Fashion Square. To the north, Scottsdale Airpark is the city’s largest employment area, and
the Scottsdale Cure Corridor is a partnership of premier healthcare providers and biomedical companies.
Tourism
Tourism is one of Scottsdale’s largest and most vibrant industries and is a significant contributor to the
city’s economy. With great weather, breathtaking scenery, and a calendar full of special events, Scottsdale is
a popular tourist destination in Arizona that welcomes millions of visitors annually. The city boasts many
hotels, including several world-class resorts, along with spectacular spas, trend-setting dining, and one-of-a-
kind Sonoran Desert golf courses.
Transaction Privilege (Sales) Tax
Scottsdale’s largest revenue source is sales tax generated from a variety of business categories including
automotive, construction, food stores, hotels, department stores, retail stores, restaurants, utilities, amusement,
manufacturing, wholesale, and rentals. Sales tax is generated directly from the city’s own applied tax rate and
indirectly as the city receives its share of sales tax generated by the State of Arizona’s applied tax rate. Sales
tax is remitted to the city by the state on a weekly basis.
Sales tax revenue represented 42.1 percent of General Fund revenues for fiscal year 2025, totaling $196.7
million. The year-over-year slight increase of 2.1 percent in the General Fund sales tax revenue for fiscal
year 2025 was in line with the budget forecast and mostly attributed to inflation. Categories with the highest
reported tax revenues in fiscal year 2025 were major department stores, amusement, and automotive. The city
expects a slight decrease in General Fund sales tax revenues overall in fiscal year 2026, with anticipated slower
growth and the continued impact of the residential rental tax elimination that went into effect January 2025.
4
City of Scottsdale, Arizona
Property Values
Scottsdale is a safe, family-friendly community and benefits from a robust assessed valuation of the properties
contained within its boundaries. These strong assessed valuations contribute to Scottsdale residents experiencing
lower property tax rates and higher median housing values than many of the surrounding municipalities in the
Phoenix metropolitan area. Scottsdale property owners will see a decrease in the city’s combined property tax
rate in the coming year of $0.0067 over the prior year. The decrease is mostly attributed to the secondary tax
rate which pays for the city’s expected debt service payments.
LONG-TERM FINANCIAL PLANNING
Scottsdale’s five-year financial plan is based on sound financial reserves, low debt burden, and conservative
revenue growth forecasts. The city’s General fund anticipates a modest increase in overall revenues for the
five-year financial forecast with anticipated revenues representing a normal historical growth trend. The city
will continue to focus on efficient spending to maintain essential city services to the community such as police,
fire, transportation, and social services. Achieving and maintaining fiscal stability requires many elements all
working in concert with each other. The following identifies key elements of our financial plan.
Adopted Comprehensive Financial Policies
Financial policies establish guidance for Scottsdale’s overall fiscal planning and management. The city has
adopted 14 comprehensive financial policies governing revenue management, expenditure management, fiscal
planning and budgeting, capital assets maintenance and replacement, cash and investments, debt, grants, risk
management, reserves and fund balance, pension funding, tourism development, economic development,
enterprise funds, and accounting, auditing, and financial reporting. Regular review and refinement of these
policies is completed in conjunction with financial plan development and policies that are adopted annually
by the City Council.
The City Council has also adopted a Public Safety Personnel Retirement System (PSPRS) Pension Funding Policy as
required by state law. This policy outlines how the city will maintain stability of required contributions, how
and when the city’s funding requirements will be met and defines the city’s funded ratio target under the
PSPRS and when it will be met.
Financial Resources Planning
Scottsdale’s strategic financial planning begins with a determination of the city’s fiscal capacity based on long-
term financial forecasts of available revenues. Conservative financial forecasts, coupled with financial trend
analysis techniques and reserve analysis, help preserve the fiscal well-being of Scottsdale. Strategic financial
planning is a critical element to maintain long-term financial stability.
5
City of Scottsdale, Arizona
Multi-Year Operating Budget Planning
Multi-year budgeting encompasses long-range operating expenditure plans (including the operating impacts
of capital projects), which are linked to community expectations and broad goals of the City Council.
Scottsdale builds a five-year financial plan to help anticipate future impacts and ensure achievement of the
city’s long-term objectives. Additionally, the city adopts annual budgets for operating funds and five-year
Capital Improvement Plans budgets.
Strategic Capital Improvement Project Planning
Scottsdale Capital Improvement Projects are planned for five or more years and analyzed using city-specific
prioritization criteria. The operating cost impacts of projects are also planned and considered in developing
future operating budgets. Projects with significant operating impacts are carefully timed to avoid contingent
liabilities that future operating resources cannot meet. All capital funding sources are conservatively estimated
to avoid over-committing to capital construction using revenues that are not certain. To the extent debt
financing is used, capital project plans are sized to conform to existing debt management policies.
Debt Management
Scottsdale has a financial policy that prohibits the issuance of debt for operating expenses. With that as
a governing framework, all debt issuances are for the purpose of financing infrastructure or long-lived
assets. Each debt issuance is evaluated against policies addressing debt service as a percent of operating
expenditures; tax and revenue bases for the repayment of debt; overall debt burden on the community; and
statutory limitations and market factors affecting interest costs. In all cases, a long-term analysis is made
considering the debt capacity that fits the financial wherewithal (and willingness) of the community to pay
for the capital projects. Sizing of the city’s Capital Improvement Plan based on debt capacity in conjunction
with conservatively estimated revenues helps stabilize per capita debt and lower annual debt service costs to
the city over the long-term.
In recent years the city has issued two types of debt: voter-approved General Obligation bonds and non-voter-
approved Municipal Property Corporation bonds (see Section IV.I. of the Notes to the Financial Statements
for additional information).
The city retained credit ratings of “Aaa,” “AAA,” and “AAA” from the three major credit rating agencies
(Moody’s Investors Service, S&P Global, and Fitch Ratings, respectively) on the city’s outstanding General
Obligation bonds where debt service is supported by property taxes. Scottsdale is one of a select number
of cities in the nation to earn this distinction. Ratings for the city’s revenue bonds, where debt service is
supported by enterprise revenues or excise taxes, are also highly rated by the three major credit rating agencies.
A summary of the city’s bond ratings follows:
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City of Scottsdale, Arizona
City of Scottsdale Bonded Debt Ratings
As of June 30, 2025
Moody's Investors
Service
S&P Global
Fitch Ratings
General Obligation (GO)
Aaa
AAA
AAA
Municipal Property Corp (MPC)
Aaa
AAA
AA+
MAJOR INITIATIVES
The city’s adopted fiscal year 2026 budget reflects modest increase in revenue projections in the local economy
resulting from local sales tax, new ambulance transportation services, building permits fees and charges. These
increases are offset by anticipated reductions in the city’s interest earnings as a result of lower cash balances
and reductions from the city’s allocation of the state-shared income tax and vehicle license fees, primarily due
to the state’s switch to a flat income tax rate model. The General Fund adopted operating budget increased
by $89.5 million when compared to the fiscal year 2025, to provide core services and the priorities/policy
direction of the City Council which include:
• $50.0 million for a one-time PSPRS pension liability paydown
• $5.3 million for salary adjustments to align to the market
• $4.5 million for Phase II of ambulance transportation operations
• $3.3 million for capital project management staff movement to the operating budget
• $1.5 million to re-staff a fire truck for Station 608
Additionally, $2.24 billion is included in the adopted capital project budget for the proposed five-year Capital
Improvement Plan budget for fiscal year 2026. Many of the projects are part of the 2019 bond package
approved by voters, which address critical infrastructure needs. Projects also include City Council and citizen
priorities throughout the city. Significant projects include:
• $136.2 million Bond 2019 program projects which include expansion of Granite Reef Senior Center, lakes
and irrigation improvements at Vista Del Camino Park, and adding a dog park at Thompson Peak Park
• $43.0 million for the pavement overlay program
• $21.6 million Greenway Hayden Loop sewer improvements
• $14.6 million new parking structure in the north-east quadrant of Old Town Scottsdale
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City of Scottsdale, Arizona
AWARDS AND ACKNOWLEDGMENTS
Certificates of Achievement
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate
of Achievement for Excellence in Financial Reporting to the city for its Annual Comprehensive Financial
Report for the fiscal year ended June 30, 2024, marking the fifty-second consecutive year the city has achieved
this prestigious recognition. To be awarded a Certificate of Achievement, a government must publish an
easily readable and efficiently organized Annual Comprehensive Financial Report that satisfies both generally
accepted accounting principles and applicable legal requirements. A Certificate of Achievement is only valid
for a period of one year. We believe that our current Annual Comprehensive Financial Report continues
to meet the Certificate of Achievement Program’s requirements and will be submitted to the GFOA to
determine its eligibility for another certificate.
As well, the city received the Distinguished Budget Presentation Award for the fiscal year beginning July
1, 2024, from the GFOA for our conformity in budget presentation. We believe that our current budget
continues to conform to the program requirements, and we expect to receive this award again for the fiscal
year beginning July 1, 2025.
Acknowledgments
The preparation of this report would not have been possible without the skill, effort, and dedication of
the Accounting Department and the many members of other departments who responded so positively to
the requests for detailed information that accompanies each annual audit. I also wish to express my sincere
appreciation to the City Council and the City Manager for their support in maintaining the highest standards
of professionalism in planning and conducting the financial affairs of the City of Scottsdale.
Respectfully submitted,
Sonia Andrews, CPA
City Treasurer/Chief Financial Officer
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City of Scottsdale, Arizona
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City of Scottsdale, Arizona
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Scottsdale
Arizona
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2024
Executive Director/CEO
10
City of Scottsdale, Arizona
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For the Fiscal Year Ended June 30, 2025
11
City of Scottsdale, Arizona
Annual Comprehensive Financial Report
City of Scottsdale, Arizona
List of Elected and Appointed Officials
City Council
Lisa Borowsky, Mayor
Jan Dubauskas
Barry Graham
Adam Kwasman
Kathy Littlefield
Mary McAllen
Solange Whitehead
Charter Officers
Greg Caton, City Manager
Luis E. Santaella, Interim City Attorney
Lai Cluff, Acting City Auditor
Ben Lane, City Clerk
Sonia Andrews, City Treasurer/Chief Financial Officer
Marianne T. Bayardi, Presiding Judge
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City of Scottsdale, Arizona
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13
City of Scottsdale, Arizona
POLICE
Office of the Police Chief
Uniformed Services
Investigative Services
Operational Services
FIRE
Office of the Fire Chief
Emergency Services
Professional Services
Prevention Services
Civil
Prosecution
Risk Management
Victim Services
City Court
Accounting
Budget
Business Services
Finance
Purchasing
Mayor
& City
Council
Presiding
Judge
City
Attorney
City
Treasurer
City
Auditor
City
Manager
City
Clerk
Assistant
City
Manager
Police
Chief
Fire
Chief
Charter
Officers
Executive
Leadership
CITY MANAGER’S
OFFICE
ADMIN SERVICES
Communications
Government Relations
Information Technology
PUBLIC WORKS
Capital Project
Management
Facilities
Management
Fleet Management
Solid Waste
Management
Transportation
& Streets
COMMUNITY &
ECONOMIC
DEVELOPMENT
Aviation
Planning & Development
Services
Economic Development
Tourism & Events
WATER
Water Quality
Reclamation Services
Planning & Engineering
Technology &
Administration
Water Services
Pipeline & Treatment
Agreements
Citizen
Advisory
Groups
COMMISSIONS
Airport
Environmental
Historic Preservation
Human Relations
Human Services
McDowell Sonoran
Preserve
Neighborhood
Parks and Recreation
Planning
Tourism Development
Transportation
Veterans
BOARDS
Adjustment
Building Appeals
Development Review
Judicial Appointments
Library
Loss Trust Fund
Personnel
Public Safety Personnel
Retirement - Fire Local
Public Safety Personnel
Retirement - Police Local
Assistant
City
Manager
COMMUNITY
SERVICES
Human Services
Libraries
Parks & Recreation
Planning & Business
Operations
Preserve
WestWorld
People of Scottsdale
ADMIN SERVICES
Human Resources
14
City of Scottsdale, Arizona
15
City of Scottsdale, Arizona
Independent Auditor’s Report
Honorable Mayor and Members of the City Council
City of Scottsdale, Arizona
Report on Audit of Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Scottsdale, Arizona
(City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which
collectively comprise the City’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business-type activities, each major fund, and the
aggregate remaining fund information of the City of Scottsdale, Arizona, as of June 30, 2025, and the respective
changes in financial position and, where applicable, cash flows, and the respective budgetary comparison for
the General Fund, thereof for the year then ended in accordance with accounting principles generally accepted
in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States. Our responsibilities under those standards are further
described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We
are required to be independent of City of Scottsdale, Arizona, and to meet our other ethical responsibilities in
accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Change in Accounting Principle
As described in Note 1 to the financial statements, the City implemented the provisions of GASB Statement
No. 101, Compensated Absences, for the year ended June 30, 2025. Our opinion is not modified with respect
to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with accounting principles generally accepted in the United States of America, and for the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going
concern for one year beyond the financial statement date, including any currently known information that may
raise substantial doubt shortly thereafter.
16
City of Scottsdale, Arizona
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our
opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not
a guarantee that an audit conducted in accordance with generally accepted auditing standards and
Government Auditing Standards will always detect a material misstatement when it exists. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate,
they would influence the judgment made by a reasonable user based on the financial statements. In
performing an audit in accordance with generally accepted auditing standards and Government Auditing
Standards, we:
•
Exercise professional judgment and maintain professional skepticism throughout the audit.
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, and design and perform audit procedures responsive to those risks. Such procedures include
examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
•
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that
raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period
of time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control related matters
that we identified during the audit.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis, net pension liability information, and other postemployment benefit plan information,
as listed in the table of contents, be presented to supplement the basic financial statements. Such information
is the responsibility of management and, although not a part of the basic financial statements, is required by
the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting
for placing the basic financial statements in an appropriate operational, economic, or historical context. We
have applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for consistency
with management’s responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance.
17
City of Scottsdale, Arizona
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The Combining and Individual Fund Financial Statements and
Schedules of Changes in Long-Term Debt are presented for purposes of additional analysis and are not a
required part of the basic financial statements.
Such information is the responsibility of management and was derived from and relates directly to the
underlying accounting and other records used to prepare the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial
statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, the Combining and Individual Fund Financial
Statements and Schedules of Changes in Long-Term Debt information is fairly stated in all material respects in
relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information
comprises the Introductory Section and Statistical Section but does not include the basic financial statements
and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other
information and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and the basic
financial statements, or the other information otherwise appears to be materially misstated. If, based on other
work performed, we conclude that an uncorrected material misstatement of the other information exists, we
are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated November 17, 2025,
on our consideration of City of Scottsdale, Arizona’s internal control over financial reporting and on our tests
of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is solely to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of the City of Scottsdale, Arizona’s internal control over financial reporting or on compliance.
That report is an integral part of an audit performed in accordance with Government Auditing Standards in
considering City of Scottsdale, Arizona’s internal control over financial reporting and compliance.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
November 17, 2025
18
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
This section of the City of Scottsdale, Arizona’s (the city) Annual Comprehensive Financial Report presents
a narrative overview and comparative analysis of the financial activities of the city for the fiscal years ended
June 30, 2025, and 2024. Readers are encouraged to consider the information presented here in conjunction
with the basic financial statements that immediately follow, along with the letter of transmittal and other
portions of this Annual Comprehensive Financial Report.
FINANCIAL HIGHLIGHTS
• The city’s total assets and deferred outflows of resources exceeded its total liabilities and deferred inflows of
resources at the close of fiscal years 2025 and 2024 by $7.1 billion and $6.8 billion (net position), respectively.
Of these amounts, $733.0 million and $614.7 million, respectively, represent unrestricted net position which
may be used to meet the city’s ongoing obligations to citizens and creditors.
• The city’s total net position increased in fiscal year 2025 by $315.8 million compared to an increase in net
position of $379.1 million during fiscal year 2024. Revenues decreased by $57.7 million from the prior year
while expenses increased by $5.6 million from the prior year.
• As of June 30, 2025, and 2024, the city’s governmental funds reported combined ending fund balances of
$929.1 million and $731.1 million, respectively. Approximately 29.0 percent of the current year amount
($269.4 million) is available for spending at the city’s discretion (unassigned fund balance).
• At the end of the current fiscal year, unrestricted fund balance (the total of the committed, assigned, and unassigned
components of fund balance) for the General Fund was $285.9 million or approximately 74.7 percent of total
General Fund expenditures of $382.9 million.
• The city’s total long-term liabilities increased by $116.2 million to $1.35 billion during the current fiscal
year. This increase was primarily due to the issuance of General Obligation Bonds and Municipal Property
Corporation Bonds reduced by scheduled bond principal payments made.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the city’s basic financial statements,
which include three components:
(1) Government-wide Financial Statements
(2) Fund Financial Statements
(3) Notes to the Financial Statements
This report also includes supplementary information intended to furnish additional detail to support the basic
financial statements themselves.
19
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Relationship Between
Annual Comprehensive
Financial Report
and
Basic Financial Statements and
Required Supplementary Information (RSI)
Introductory
Section
Financial
Section
Statistical
Section
Basic
Financial
Statements
and
RSI
General Information on the government structure,
services, and environment
Management's Discussion and Analysis
Government-wide Financial Statements
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Notes to the Financial Statements
Required Supplementary Information
Information on individual funds and other
supplementary information not required
by GAAP
Trend data and nonfinancial data
+
+
Government-wide Financial Statements. The government-wide financial statements are designed to
provide readers with a broad overview of the city’s finances, in a manner similar to a private-sector business.
These statements provide information about the city as a whole, presenting both an aggregate current view
of the city’s finances and a longer-term view of those assets. Major fund financial statements provide the next
level of detail. For governmental funds, these statements reflect how services were financed in the short term
as well as what dollars remain for future spending. The major fund financial statements also display the city’s
most significant funds.
The statement of net position presents financial information on all the city’s assets, deferred outflows
of resources, liabilities, and deferred inflows of resources, with the difference 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 city’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 are expected to result in cash flows in future fiscal periods,
such as revenues pertaining to uncollected taxes and earned but unused vacation and medical leave.
20
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Both 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, public works, community and economic development, public
safety, community services, administrative services, and Scottsdale AZ CARES. The business-type activities of
the city include water and sewer utilities, solid waste management, and airport operations.
The government-wide financial statements include not only the city itself (known as the primary government),
but also the operations of the City of Scottsdale Municipal Property Corporation (MPC), and McDowell
Mountain Ranch, DC Ranch, Via Linda Road, and Waterfront Commercial Community Facilities Districts.
Although legally separate from the city, these component units are blended with the primary government
because of their governance or financial relationships to the city. Separate financial statements of the MPC,
and the McDowell Mountain Ranch, DC Ranch, Via Linda Road, and Waterfront Commercial Community
Facilities Districts may be obtained at the Scottsdale City Treasurer’s Office, 7447 East Indian School Road,
Suite 210, Scottsdale, Arizona 85251.
The government-wide financial statements can be found on pages 35-37 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. The funds of the city can be divided into two categories, governmental funds and proprietary
funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions reported
as governmental activities in the government-wide financial statements; however, unlike the government-wide
financial statements, governmental fund financial statements focus on near-term inflows and outflows of
spendable resources, and provide the balances of spendable resources available at the end of the fiscal year.
Such information reflects financial resources available in the near future to finance the city’s programs.
Because the focus of governmental funds is narrower than that of the government-wide financial statements,
it is useful to compare the information presented for governmental funds with similar information presented
for governmental activities in the government-wide financial statements. This comparison highlights the long-
term impact of the government’s near-term financing decisions. Both the governmental funds balance sheet
and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.
21
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
The city maintains several individual governmental funds organized according to their purpose (general,
special revenue, debt service, capital projects, and permanent). Information is presented separately in the
governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and
changes in fund balances for the General Fund, General Obligation Bond Debt Service Fund, General Capital
Improvement Plan (CIP) Construction Capital Projects Fund, Transportation Capital Projects Fund, and
the External Sources Capital Projects Fund which are considered major funds. Data from the remaining
governmental funds are combined into a single, aggregated presentation. Individual fund data for each of
the nonmajor governmental funds is provided in the form of combining statements in the combining and
individual funds statements and schedules section of this report.
The basic governmental fund financial statements can be found on pages 38-46 of this report.
Proprietary Funds. Proprietary funds are generally used to account for services for which the city charges
customers; either outside customers or internal units/divisions of the city. Proprietary funds provide the
same type of information as shown in the government-wide financial statements, only in more detail. The city
maintains the following two types of proprietary funds:
Enterprise funds are used to report the same functions presented as business-type activities in the
government-wide financial statements. The city uses enterprise funds to account for its water, sewer, solid
waste, and aviation services. All enterprise funds are considered major funds of the city.
Internal service funds are used to report activities that provide supplies and services for certain city
programs and activities. The city uses internal service funds to account for its fleet of vehicles, personal
computer replacement, and health and general liability insurance activities. Because these services
predominantly benefit internal units or divisions of the city rather than business-type functions, they
have been included within governmental activities in the government-wide financial statements. The
internal service funds are combined into a single, aggregated presentation in the proprietary fund financial
statements. Individual fund data for the internal service funds is provided in the form of combining
statements in a separate section of this report.
The basic proprietary fund financial statements can be found on pages 47-53 of this report.
Notes to the Financial Statements. The notes to the financial statements provide additional information
that is necessary to acquire 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 54-137 of this report.
Other Information. In addition to the basic financial statements and accompanying notes, this report also
presents required supplementary information concerning the city’s proportionate share of the cost-sharing
multiple-employer pension plan’s net pension liability, the changes in the city’s net pension liabilities regarding
the agent multiple-employer pension plans, schedules of contributions to the pension plans, and changes in
the city’s total other post-employment benefits (OPEB) liability. Required supplementary information can be
found on pages 138-145 of this report.
22
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Combining Statements. The combining statements referred to earlier in connection with nonmajor
governmental funds and internal service funds can be found on pages 146-176 of this report.
Other Supplementary Information. The supplemental schedule of changes in long-term debt provides a
comprehensive overview of the city’s total debt and can be found on pages 177-181 of this report.
Statistical Information. The statistical section presents detailed information as a context for understanding
what the information in the financial statements, note disclosures, and required supplementary information
indicates about the city’s overall financial health. This section can be found on pages 183-212 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
While this document contains information about the funds used by the city to provide services to its citizens,
the statement of net position and the statement of activities serve to provide an answer to the question of
how the city, as a whole, performed financially throughout the year. These statements include all assets/
deferred outflows of resources and liabilities/deferred inflows of resources using the accrual basis of
accounting similar to the private sector. The basis for this accounting considers all the current year’s revenues
and expenses regardless of when the cash is received or paid.
These two statements report the city’s net position and change in net position. The change in net position
reflects whether the financial position of the city, as a whole, has improved or diminished; however, in
evaluating the overall financial position of the city, non-financial information such as changes in the city’s tax
base and the condition of the city’s capital assets should also be considered.
Analysis of Net Position. As noted earlier, net position over time may serve as a useful indicator of a
government’s financial position. For the city, total assets and deferred outflows of resources exceeded total
liabilities and deferred inflows of resources by $7.07 billion, and $6.75 billion at the close of the fiscal years
2025 and 2024, respectively.
23
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
The following table is a condensed summary of the city’s net position for governmental and business-type
activities:
Net Position
June 30, 2025 and 2024 (in thousands)
2025
2024
2025
2024
2025
2024
ASSETS AND DEFERRED OUTFLOWS OF
RESOURCES
Current and other assets
$ 1,275,681 $ 1,124,860
$ 597,694 $ 468,285
$ 1,873,375 $ 1,593,145
Capital assets
5,109,302 5,039,614
1,633,394 1,562,353
6,742,696 6,601,967
Total assets
6,384,983 6,164,474
2,231,088 2,030,638
8,616,071 8,195,112
Total deferred outflows of resources
114,625 126,051
15,301 14,906
129,926 140,957
Total assets and deferred outflows of resources
6,499,608 6,290,525
2,246,389 2,045,544
8,745,997 8,336,069
LIABILITIES AND DEFERRED INFLOWS OF
RESOURCES
Long-term liabilities outstanding
950,626 936,391
403,367 301,369
1,353,993 1,237,760
Other liabilities
143,459 182,342
45,881 60,118
189,340 242,460
Total liabilities
1,094,085 1,118,733
449,248 361,487
1,543,333 1,480,220
Total deferred inflows of resources
59,556 49,399
72,429 51,546
131,985 100,945
Total liabilities and deferred inflows of resources
1,153,641 1,168,132
521,677 413,033
1,675,318 1,581,165
NET POSITION
Net investment in capital assets
4,602,117 4,468,449
1,317,956 1,316,476
5,920,073 5,784,925
Restricted
412,106 350,415
5,500 4,907
417,606 355,322
Unrestricted
331,744 303,529
401,256 311,128
733,000 614,657
Total net position
$ 5,345,967 $ 5,122,393
$ 1,724,712 $ 1,632,511
$ 7,070,679 $ 6,754,904
Governmental Activities
Business-type Activities
Total
The largest portion, 83.7 percent, of the city’s net position reflects its net investment in capital assets (e.g.,
land, buildings, water and sewer system, and streets and storm drains) less any related outstanding debt used
to acquire those assets. These amounted to $5.92 billion and $5.78 billion as of June 30, 2025, and 2024,
respectively. Although the city’s investment in capital assets is reported net of related debt, the resources
needed to repay this debt must be provided from other sources because the city uses these assets to provide
services to citizens and therefore cannot liquidate them.
An additional portion, 5.9 percent, of the city’s net position, $417.6 million at June 30, 2025, and 5.3 percent
or $355.3 million at June 30, 2024, represents resources that are subject to external restrictions on how they
may be used. Unrestricted net position, 10.4 percent of the city’s total net position at June 30, 2025, and 9.1
percent at June 30, 2024, $733.0 million and $614.7 million, respectively, may be used to meet the government’s
ongoing obligations to its citizens and creditors.
Analysis of Changes in Net Position. Total revenues exceeded total expenses in the current year, resulting
in an increase in the city’s total net position of $315.8 million in fiscal year 2025 compared to an increase in
net position of $379.1 million during fiscal year 2024. The reasons for this overall increase are explained in the
governmental and business-type activities discussion herein and depicted in the table that follows.
24
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Changes in Net Position
For the fiscal years ended June 30, 2025 and 2024 (in thousands)
2025
2024
2025
2024
2025
2024
REVENUES
Program revenues
Charges for services
$ 70,132 $ 67,780
$ 270,562 $ 246,827
$ 340,694 $ 314,607
Operating grants and contributions
49,232 56,708
- -
49,232 56,708
Capital grants and contributions
48,752 116,728
31,074 43,641
79,826 160,369
General revenues
Property taxes
74,129 75,748
- -
74,129 75,748
Business taxes
360,154 356,050
262 233
360,416 356,283
Intergovernmental - taxes
89,499 101,099
- -
89,499 101,099
Intergovernmental - other
22,794 21,142
- -
22,794 21,142
Interest and investment income
51,042 40,323
14,862 13,148
65,904 53,471
Other
15,926 16,697
- -
15,926 16,697
Total revenues
781,660 852,275
316,760 303,849
1,098,420 1,156,124
EXPENSES
General Government
Mayor and City Council
1,065 1,027
- -
1,065 1,027
City Clerk
1,159 968
- -
1,159 968
City Attorney
8,636 8,059
- -
8,636 8,059
City Auditor
960 1,046
- -
960 1,046
City Court
7,823 7,357
- -
7,823 7,357
City Manager
3,033 2,035
- -
3,033 2,035
City Treasurer
12,338 11,683
- -
12,338 11,683
Other General Government
8 10,567
- -
8 10,567
Public Works
119,100 115,686
- -
119,100 115,686
Community and Economic Development
50,400 51,851
- -
50,400 51,851
Public Safety
221,440 206,102
- -
221,440 206,102
Community Services
95,668 87,734
- -
95,668 87,734
Administrative Services
32,174 34,605
- -
32,174 34,605
Scottsdale AZ CARES
- 117
- -
- 117
Streetlight and Services Districts
577 533
- -
577 533
Interest on Long-Term Debt
14,290 16,029
- -
14,290 16,029
Water Utility
- -
126,586 124,386
126,586 124,386
Sewer Utility
- -
46,530 58,401
46,530 58,401
Airport
- -
11,009 9,685
11,009 9,685
Solid Waste
- -
29,849 29,176
29,849 29,176
Total expenses
568,671 555,399
213,974 221,648
782,645 777,047
Increase in net position before transfers
212,989 296,876
102,786 82,201
315,775 379,077
Transfers
10,585 9,652
(10,585) (9,652)
- -
Change in net position
223,574 306,528
92,201 72,549
315,775 379,077
Net position - beginning
5,122,393 4,812,135
1,632,511 1,559,591
6,754,904 6,371,726
Net effect of prior period adjustment
- 3,730
- 371
- 4,101
Net position - beginning restated
5,122,393 4,815,865
1,632,511 1,559,962
6,754,904 6,375,827
Net position - ending
$ 5,345,967 $ 5,122,393
$ 1,724,712 $ 1,632,511
$ 7,070,679 $ 6,754,904
Governmental Activities
Business-type Activities
Total
Governmental Activities. Net position for governmental activities increased $223.6 million after transfers
during fiscal year 2025 compared to an increase of $306.5 million after transfers in fiscal year 2024. Total
revenues decreased $70.6 million or 8.3 percent from the prior fiscal year and expenses increased $13.2 million
or 2.4 percent. Overall, revenues exceeded expenses resulting in an increase in net position.
25
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
The city experienced a decrease in total revenues from governmental activities over the prior year due primarily
from decreases in capital grants and contributions of $68.0 million and decreases in intergovernmental taxes of
$11.6 million. The capital grants and contribution had significant decreases from developer contributions from
the completion of construction projects in fiscal year 2025, with 2.45 less miles of streets being contributed
than the prior fiscal year. The decrease in intergovernmental taxes was caused by the city receiving less state
shared revenues than the prior year due primarily from the State of Arizona’s revised flat income tax model
which generated less tax income.
General revenues such as property, franchise, and privilege taxes are not shown by program, but are used to
support program activities citywide. Total general revenues for governmental activities were $613.5 million in
fiscal year 2025 compared to $611.1 million in fiscal year 2024. Intergovernmental taxes decreased by $11.6
million or 11.5 percent from the previous year due to the reasons previously stated above. The decrease in
intergovernmental taxes was primarily offset by an increase in interest and investment income of $10.7 million
or 26.6 percent increase from the increase in market values of the investment portfolio.
For governmental activities overall, without regard to program, business taxes was the largest single source of
funds, followed by intergovernmental; property taxes; charges for services; interest and investment income;
capital grants and contributions; and operating grants and contributions. The other revenue category was the
least significant source of revenue.
.
Charges for Services
$70,132
9%
Operating Grants and
Contributions
$49,232
6%
Capital Grants and
Contributions
$48,752
6%
Property Taxes
$74,129
10%
Other Revenue
$15,926
2%
Business Taxes
$360,154
46%
Intergovernmental
$112,293
14%
Interest and Investment
Income
$51,042
7%
Governmental Activities
Revenues by Source
Fiscal Year 2024/25
(in thousands)
26
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Another component of the change in net position is expenses. The Public Safety Division, which is comprised
of the Police and Fire Departments, has the largest expense function (38.9 percent), followed by the Public
Works Division (20.9 percent), and the Community Services Division (16.8 percent).
The Public Safety Division provides police and fire/emergency services throughout the city. Expenses
increased by $15.3 million, or 7.4 percent, during fiscal year 2025 due primarily from increases in personnel
related costs from two percent market adjustment and for the pay for performance plan of up to five percent.
The city also hired new personnel for the municipal ambulance service program.
The Public Works Division consists of five departments: Capital Project Management, Facilities Management,
Fleet Management, Solid Waste Management, and Transportation and Streets. Expenses were $3.4 million, or
3.0 percent higher primarily from increased personnel cost from the two percent market adjustment and for
the pay for performance plan of up to three percent.
The city’s Community Services Division is responsible for improving and maintaining facilities, and sponsors
services that provide opportunities for family interaction, cultural enrichment, development of lifetime skills,
and promoting healthy lifestyles. The division consists of: Human Services, Libraries, Parks and Recreation,
Planning and Business Operations, Preserve, and WestWorld. Expenses were $7.9 million, or 9.0 percent
higher than the prior fiscal year due primarily from increases in personnel-related expenditures from a two
percent market adjustment and for the pay for performance plan of up to three percent.
Business-type Activities. Net position for business-type activities increased by $92.2 million after transfers
during fiscal year 2025 compared to $72.5 million after transfers in fiscal year 2024. Total revenues increased
by $12.9 million, or 4.3 percent, due largely from the charges for services category. The charges for services
revenue category increased over the prior year due primarily from customer water usage. The city supplied 4.5
percent more water than the prior year on average. Overall, total revenues exceeded expenses resulting in an
increase in net position for the fiscal year.
As shown in the Business-type Activities Revenues by Source chart, charges for services provided the largest share
of revenues, followed by capital grants and contributions. The interest and investment income and business
taxes were the least significant sources of revenue.
27
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
As shown below in the Business-type Activities Program Revenues and Expenses chart, the largest of the city’s
business-type activities, water utility and sewer utility, had expenses of $126.6 million and $46.5 million,
respectively, in fiscal year 2025, followed by solid waste with $29.9 million and airport with $11.0 million.
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
Water Utility
Sewer Utility
Solid Waste
Airport
Business-type Activities
Program Revenues and Expenses
Fiscal Year 2024/25
(in thousands)
Program Revenues
Program Expenses
The city’s Water Resources Department manages and operates a safe, reliable water supply and wastewater
reclamation system, and in fiscal year 2025 they provided 94,087 water connections to Scottsdale citizens.
The water and sewer utility’s combined expenses decreased by 5.2 percent or $9.7 million in fiscal year 2025
compared to fiscal year 2024. The decrease in expenditure was primarily from the sewer utilities activities in
reduced joint venture costs when compared to the prior fiscal year.
Business Taxes
$262
0%
Charges for Services
$270,562
85%
Interest and
Investment Income
$14,862
5%
Capital Grants and
Contributions
$31,074
10%
Business-type Activities
Revenues by Source
Fiscal Year 2024/25
(in thousands)
28
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
The Aviation Department operates the city’s general aviation reliever facility and is home to many local
corporate aircraft. More than 164,443 take-offs and landings occurred in fiscal year 2025 at Scottsdale Airport,
a decrease of 4.1 percent from the prior year. Total program expenses increased by 13.7 percent or $1.3
million in fiscal year 2025 compared to fiscal year 2024 due primarily to increases in personnel related costs
from the city’s pay for performance plan for up to three percent and market adjustment of two percent.
The Solid Waste Department provided delivery of safe, efficient, and environmentally sound refuse collection
services to 85,186 residential customers in fiscal year 2025. Total program expenses increased 2.3 percent or
$0.7 million in fiscal year 2025 compared to fiscal year 2024 due primarily from increases in personnel costs
from the city’s pay for performance plan for up to three percent and market adjustment of two percent.
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
As noted earlier, the city uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements.
Funds are created and segregated for the purpose of carrying out specific activities or attaining certain
objectives in accordance with special regulations, restrictions, or limitations. Activity not required to be
reported in a separate fund is included in the General Fund. Governmental funds are used to account for tax-
supported activities.
Governmental Funds. The focus of the city’s governmental funds is to provide information on near-term
inflows, outflows, and balances of spendable and non-spendable resources. Such information may be useful
in assessing the city’s financing requirements. In particular, unassigned fund balance may serve as a useful
measure of a government’s net resources available for discretionary use, as it represents the portion of fund
balance which has not yet been limited to use for a particular purpose by either an external party, the City
Council, or the City Treasurer who has been delegated authority to assign resources for a particular purpose
by the City Council. Types of governmental funds reported by the city include the General Fund, Special
Revenue Funds, Debt Service Funds, Capital Project Funds, and Permanent Funds.
As of the end of the current fiscal year, the city’s governmental funds reported a combined ending fund balance
of $929.1 million, an increase of $198.0 million from the prior year total of $731.1 million. Approximately 29.0
percent, or $269.4 million, of the current year amount constitutes unassigned fund balance. The remainder
of fund balance is either nonspendable, restricted, or committed to indicate that it is not available for new
spending.
Revenues for governmental functions totaled $781.4 million in fiscal year 2025, an increase of 5.5 percent, or
$40.7 million, from the previous year total of $740.7 million. In fiscal year 2025, expenditures for governmental
functions totaled $704.5 million, a decrease of 4.1 percent, or $30.2 million, from the fiscal year 2024 total
of $734.7 million. For the current fiscal year, revenues exceeded expenditures for governmental functions by
$76.9 million. The increase in revenues was largely attributed to a $20.8 million or 66.7 percent increase in
miscellaneous grants primarily from the State Arterial Life Cycle Program for roadways, $7.4 million or 49.6
percent increase in the fair value of investments, a $6.0 million or 2.0 percent increase in transaction privilege
tax, a $4.9 million or 12.0 percent increase in charges for services, a $4.3 million or 28.4 percent increase in
federal grants, and a $3.3 million or 13.1 percent increase in interest earnings, offset by a $10.6 million or 8.0
percent decrease in intergovernmental tax revenues (state shared sales tax, state revenue sharing, auto lieu and
highway user fuel tax revenues).
29
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
The General Fund is the chief operating fund of the city. At the end of fiscal year 2025, the unassigned
fund balance of the General Fund was $285.9 million, while the total fund balance was $304.3 million; the
unassigned and total fund balances for the General Fund at the end of fiscal year 2024 were $246.4 million
and $247.0 million, respectively. 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 74.7 percent of the total General Fund expenditures of $382.9 million in fiscal year 2025 and
represented 65.5 percent of the total General Fund expenditures of $376.4 million in fiscal year 2024. Total
fund balance represented 79.5 percent and 65.6 percent of total fund expenditures for fiscal years 2025 and
2024, respectively.
Overall, the General Fund’s performance resulted in revenue and other financing sources exceeding
expenditures and other financing uses in the fiscal year ended June 30, 2025, by $57.3 million. Total revenues
increased $11.0 million, or 2.4 percent compared to the prior year while expenditures increased $6.5 million
or 1.7 percent. Significant reasons for the increase in revenues were the increases in transaction privilege tax
revenue, charges for services, interest earnings, and the change in fair market value of investments, offset
by a decrease in state shared revenues. Significant reasons for increases in expenditures were attributed to
personnel-related costs, offset by a decrease in capital-related expenditures.
Key changes in General Fund revenues over the prior year included $7.6 million for the increase in the fair
market value of investments, $5.3 million increase in charges for services, $4.0 million increase in transaction
privilege tax, and $2.3 million for interest earnings, offset by a decrease in state revenue sharing revenues of
$12.4 million. The increase in the fair value of investments is due to market fluctuations and interest earnings
have increased due to higher interest rates on city investments and from higher invested balances. Charges for
services increased due to building permit activity, Westworld fees, and fire service fees. Transaction privilege
tax increased due to a combination of inflation, tourism, and increased consumer activity. State revenue
sharing decreased due to the enactment of the state income flat tax rate, resulting in lower state income tax
receipts.
The Public Safety Division experienced the largest increase in General Fund expenditures, 4.3 percent, or
$8.7 million, primarily due from increases in personnel expenditures resulting from the two percent market
adjustment the city provided effective this fiscal year, and up to five percent pay for performance program, and
the associated retirement costs. Community Services increased 11.1 percent, or $5.3 million and Administrative
Services department increased 10.5 percent or $2.4 million due to increases in personnel-related cost from the
pay for performance program.
The General Obligation Bond Debt Service Fund is used to account for the accumulation of resources for,
and the payment of, general obligation debt principal, interest, and related costs. At the end of the current
fiscal year, the fund balance of the General Obligation Bond Debt Service Fund was $7.5 million, an increase
of $7.4 million from the $0.1 million balance from the prior year. The increase in fund balance was due
to a decrease in debt services payments compared to the prior year of $7.1 million and recognition of an
expenditure in the prior fiscal year of a $5.1 million that did not occur in the current fiscal year related to
the Maricopa County Qasimyar Settlement. The General Obligation Bond Debt Service is serviced partially
through secondary property taxes and through transfers from various funds.
30
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
The General CIP Construction Capital Projects Fund is used to account for the resources used to acquire,
construct, and improve major capital facilities from amounts transferred from the city’s General Fund. This
fund also represents other City Council approved capital programs including transfers for tourism-related
capital projects, in-lieu parking, and in-lieu stormwater. At the end of the current fiscal year, the fund balance
of the General CIP Construction Capital Projects fund was $152.2 million, a decrease of $25.8 million from
the $178.0 million from the prior fiscal year, primarily from the use of funds for various capital projects offset
by cash transfers in of $44.1 million. The transfers to this fund are primarily from the General Fund resulting
from construction sales tax and interest income as required by the city’s comprehensive financial policies.
The Transportation Capital Projects Fund is used to account for the portion of the transportation privilege
(sales) tax dedicated to transportation capital improvements. At the end of the current fiscal year, the fund
balance was $133.3 million, an increase of $19.7 million from the $113.6 million balance from the prior year.
The increase in fund balance was primarily due to increased cash transfers in from the transportation tax in
accordance with the city’s comprehensive financial policies.
The External Sources Capital Projects Fund is used to account for funds received from a variety of external
sources including federal and state grants, as well as contributions restricted or committed for capital projects.
At the end of the current fiscal year, the fund balance was a deficit of $11.0 million, an increase of $21.4
million from the deficit balance of $32.4 million from the prior year. The increase in fund balance was due
to timing differences for grant and intergovernmental reimbursements that were received in the current fiscal
year for costs incurred in the prior year.
Proprietary Funds. The city’s proprietary funds provide the same type of information found in the
government-wide financial statements, but in more detail.
At the end of the fiscal years 2025 and 2024, the unrestricted net position for the Water and Sewer Utility
Fund was $360.0 million and $291.0 million, respectively; the Airport Fund was $20.0 million and $5.2 million,
respectively; and the Solid Waste Fund was $12.0 million and $6.7 million, respectively. The Internal Service
Funds, which are used to account for certain governmental activities, had an unrestricted net position of $53.8
million and $52.0 million, respectively.
The total growth in net position for the enterprise funds was $91.2 million and $70.4 million for fiscal years
2025 and 2024, respectively. Factors concerning the finances of these funds have been addressed previously
in the discussion of the city’s business-type activities.
GENERAL FUND BUDGETARY HIGHLIGHTS
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 and can be found on page
44 of this report.
31
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
General Fund revenues on a budgetary basis were $14.9 million more than projected for fiscal year 2025.
The variance in revenues was primarily due to the city receiving more in transaction privilege tax, interest
earnings, and light and power franchise fees than budgeted, offset by less property tax revenues than budgeted.
The privilege tax was the most significant increase, consisting of $13.7 million more revenues received than
projected as the city continued to see increases in consumer spending. Property taxes were less than budget
largely due to the $4.9 million in Maricopa County Qasimyar Settlement property tax adjustment not included
in budgetary basis revenues. Expenditures of $378.1 million were $7.1 million less than budgeted expenditures
of $385.2 million. All divisional expenditures came in lower than budget mostly attributed to vacancy savings.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. The city’s total capital assets for its governmental and business-type activities as of June
30, 2025 and 2024 were $6.74 billion and $6.60 billion, respectively (net of accumulated depreciation/
amortization). This investment in capital assets includes land, buildings and improvements, streets and
storm drains, water and sewer systems, water rights, vehicles, machinery and equipment, subscription-based
information technology arrangements, furniture and fixtures, public-public partnerships, and construction in
progress. The total increase in the city’s capital assets (net of accumulated depreciation/amortization) between
fiscal years 2025 and 2024 was $140.7 million or 2.1 percent.
Capital Assets, Net of Depreciation/Amortization
June 30, 2025 and 2024 (in thousands)
2025
2024
2025
2024
2025
2024
Land
$ 3,513,288 $ 3,498,381
$ 52,993 $ 52,781
$ 3,566,281 $ 3,551,162
Buildings and Land Improvements
511,612 445,827
116,046 97,202
627,658 543,029
Streets and Storm Drains
674,393 680,043
- -
674,393 680,043
Machinery and Equipment
57,907 50,093
6,784 4,947
64,691 55,040
Water Rights
- -
87,171 87,171
87,171 87,171
Water System
- -
802,606 815,178
802,606 815,178
Sewer System
- -
407,675 404,067
407,675 404,067
Motor Vehicles
48,070 44,860
- -
48,070 44,860
Furniture, Fixtures, and Office Equipment
- -
641 523
641 523
Construction in Progress
220,001 229,048
159,038 100,385
379,039 329,433
Subscription-Based I.T. Arrangements
10,290 12,866
440 99
10,730 12,965
Public-Public Partnership Assets
73,741 78,496
- -
73,741 78,496
Total
$ 5,109,302 $ 5,039,614
$ 1,633,394 $ 1,562,353
$ 6,742,696 $ 6,601,967
Governmental Activities
Business-type Activities
Total
Significant capital asset events during fiscal year 2025 included the following:
• Land:
• $14.0 million from land donated by developers that coincides with public street improvements for
finalized permits
• Buildings and Land Improvements:
• $45.6 million police and fire training facilities
• $23.9 million airport operator improvement
32
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
• $14.4 million McCormick Railroad Park improvement
• $11.9 million Scottsdale Stadium improvement
• $10.0 million Ashler Hills Park improvement
• Streets:
• $20.2 million Hayden and Miller-Pinnacle Peak to Happy Valley
• $12.8 million for payment overlay program
• $8.2 million public street improvements donated by developers
• Water System:
• $13.0 million developer contributions of waterline infrastructure assets
• $3.0 million water distribution system improvements
• Sewer System:
• $10.5 million developer contributions of sewerline infrastructure assets
• $6.8 million wastewater system improvements
As of June 30, 2025, the city has construction commitments of $183.9 million for current projects. Additional
information on the city’s capital assets can be found in Note IV.D. on page 91-94 of this report.
Long-term Debt. At the end of the fiscal years 2025 and 2024, the city had total long-term liabilities of $1.35
billion and $1.24 billion, respectively. Of these amounts, $405.8 million and $359.1 million, for fiscal years
2025 and 2024, respectively, are general obligation bonds backed by the full faith and credit of the city. The
remainder includes Municipal Property Corporation bonds, net pension liabilities, and other obligations of
$948.2 million and $878.7 million for fiscal years 2025 and 2024, respectively.
The State Constitution imposes debt limitations on the city equal to 6 percent and 20 percent of the assessed
valuation of properties within the city. The city’s available debt margin at June 30, 2025 and 2024 was
$829.4 million and $675.1 million, respectively, in the 6 percent capacity and $2.42 billion and $1.92 billion,
respectively, in the 20 percent capacity. Additional information on the debt limitations and capacities may be
found in Section IV.I. of the Notes to the Financial Statements and in Tables XVIa and XVIb in the Statistical
Section of this report.
33
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
During fiscal year 2025, the city’s total long-term liabilities increased overall by $116.2 million due to the
issuance of general obligation bonds in the governmental activities and municipal property corporation bonds
in the business-type activities, net of principal due on outstanding bonds.
In accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions, the city’s proportionate
share of the unfunded pension liabilities for pension plans in which it participates is included in the outstanding
long-term liabilities. The city’s net pension liabilities at the end of fiscal years 2025 and 2024 were $335.9
million and $352.2 million, respectively. The decrease was due to actuarial gains from investments income.
Additional information on the city’s pensions can be found starting on page 114.
Additional information on the city’s long-term liabilities can be found in Section IV.I. of the Notes to the
Financial Statements on pages 100-110 of this report.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
The strength of the city’s economy continued to show resiliency in the current fiscal year, which was driven
by consumer spending and tourism-related activity. The overall budget forecast for next fiscal year includes
modest increases in forecasted revenue primarily due to the expansion of ambulance services, and minor
increases in projected in sales tax, with reductions anticipated of state shared revenues from changes in
the state’s income tax rate model and interest earnings. In June 2025, the City Council approved a $2,203.7
million budget, which is a $91.1 million decrease from the prior year budget of $2,294.8 million. The adopted
fiscal year 2026 budget includes $885.2 million for operations, $370.8 million for contingencies/reserves, and
$947.7 million for capital improvements.
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 directed to the Scottsdale City Treasurer’s Office, 7447
East Indian School Road, Suite 210, Scottsdale, AZ 85251, or visit our website at: https://www.scottsdaleaz.
gov/finance.
Long-term Liabilities
June 30, 2025 and 2024 (in thousands)
2025
2024
2025
2024
2025
2024
General Obligation Bonds
$ 405,765 $ 359,110
$ - $ -
$ 405,765 $ 359,110
Municipal Property Corporation Bonds
134,225 153,515
299,465 204,540
433,690 358,055
Community Facilities Districts
General Obligation Bonds - Direct Placements
3,918 5,273
- -
3,918 5,273
Issuance Premiums
26,123 24,563
19,820 13,765
45,943 38,328
Total Bonds Payable
570,031 542,461
319,285 218,305
889,316 760,766
Contracts Payable - Direct Borrowings
1,373 1,786
- -
1,373 1,786
Leases
4,596 3,997
83 116
4,679 4,113
Public-Public Partnerships
4,084 4,368
- -
4,084 4,368
Subscriptions
7,930 9,811
175 84
8,105 9,895
Risk Management Claims
23,472 20,958
- -
23,472 20,958
Compensated Absences
35,819 33,266
4,072 4,399
39,891 37,665
Total Other Postemployment Benefit Liability
893 863
- -
893 863
Net Pension Liabilities
302,426 318,881
33,476 33,279
335,902 352,160
Pollution Remediation Obligation
- -
46,276 45,186
46,276 45,186
Total Long-term Liabilities
$ 950,624 $ 936,391
$ 403,367 $ 301,369
$ 1,353,991 $ 1,237,760
Governmental Activities
Business-type Activities
Total
34
City of Scottsdale, Arizona
Basic Financial Statements
35
City of Scottsdale, Arizona
Statement of Net Position
June 30, 2025 (in thousands)
Governmental
Activities
Business-type
Activities
Total
ASSETS
Cash and Investments
$ 1,004,195
$ 331,883
$ 1,336,078
Receivables (net of allowance for uncollectibles)
Property and Other Local Taxes
37,508
33
37,541
Charges for Services
-
27,345
27,345
Fines
10,517
-
10,517
Intergovernmental and Grants
47,530
1,946
49,476
Interest
5,897
2,695
8,592
Leases
34,187
14,459
48,646
Public-Private Partnerships
-
8,428
8,428
Other
10,415
2,915
13,330
Internal Balances
8,544
(8,544)
-
Supplies Inventory
2,180
-
2,180
Prepaid Items
219
2,874
3,093
Prepayments
26,214
-
26,214
Pollution Remediation Recoveries
-
46,276
46,276
Restricted Assets
Cash with Fiscal Agent
76,378
77,535
153,913
Customer Advances and Deposits
-
2,115
2,115
Joint Venture Construction Deposits
-
5,500
5,500
Advanced Construction Payments
-
2,080
2,080
Advanced Lease Payments
-
667
667
Net Pension OPEB Asset
9,408
1,281
10,689
Equity in Joint Ventures
2,489
78,206
80,695
Capital Assets Not Being Depreciated/Amortized
Land, Water Rights, and Construction in Progress
3,733,289
299,202
4,032,491
Capital Assets, Net of Accumulated Depreciation/Amortization
Facilities, Infrastructure, and Equipment
1,376,013
1,334,192
2,710,205
Total Assets
6,384,983
2,231,088
8,616,071
DEFERRED OUTFLOWS OF RESOURCES
Deferred Amounts on Refundings
11,493
9,141
20,634
Pension-Related Amounts
102,157
6,086
108,243
Pension OPEB-Related Amounts
500
74
574
City OPEB-Related Amounts
475
-
475
Total Deferred Outflows of Resources
$ 114,625
$ 15,301
$ 129,926
(continued)
36
City of Scottsdale, Arizona
Statement of Net Position
June 30, 2025 (in thousands)
Governmental
Activities
Business-type
Activities
Total
LIABILITIES
Accounts Payable
$ 28,268
$ 18,160
$ 46,428
Accrued Payroll and Benefits
14,173
1,776
15,949
Accrued Compensated Absences
56
12
68
Interest Payable
7,151
3,621
10,772
Matured Bonds, Loans, and Other Payables
69,115
17,450
86,565
Due to Other Governments
4,549
-
4,549
Unearned Revenue
11,576
-
11,576
Liabilities Payable from Restricted Assets
Advanced Construction Payments
-
2,080
2,080
Advanced Lease Payments
-
667
667
Customer Advances & Deposits
5,639
2,115
7,754
Other Liabilities
2,932
-
2,932
Noncurrent Liabilities
Due Within One Year
Accrued Compensated Absences
18,329
2,204
20,533
Bonds, Loans, and Other Payables
81,246
22,755
104,001
City Other Postemployement Benefit Liability
127
-
127
Due in More Than One Year
Accrued Compensated Absences
17,490
1,868
19,358
City Other Postemployment Benefit Liability
766
-
766
Net Pension Liabilities
302,426
33,476
335,902
Bonds, Loans, and Other Payables
530,242
296,788
827,030
Pollution Remediation Obligation
-
46,276
46,276
Total Noncurrent Liabilities
950,626
403,367
1,353,993
Total Liabilities
1,094,085
449,248
1,543,333
DEFERRED INFLOWS OF RESOURCES
Leases
31,580
13,211
44,791
Pension-Related Amounts
20,637
2,544
23,181
Pension-Related OPEB Amounts
3,379
430
3,809
Public-Private Partnerships
2,329
56,244
58,573
City OPEB-Related Amounts
1,631
-
1,631
Total Deferred Inflows of Resources
59,556
72,429
131,985
NET POSITION
Net Investment in Capital Assets
4,602,117
1,317,956
5,920,073
Restricted
Debt Service
10,615
-
10,615
Transportation and Preserve Privilege Tax Activities
199,527
-
199,527
Capital Projects
163,698
-
163,698
Grants
3,113
-
3,113
Special Programs
19,976
-
19,976
Community Facilities Districts
144
-
144
Stadium Facility
6,269
-
6,269
Tourism Development
8,062
-
8,062
Endowments
Expendable
27
-
27
Nonexpendable
675
-
675
Joint Venture Construction Deposits
-
5,500
5,500
Unrestricted
331,744
401,256
733,000
Total Net Position
$ 5,345,967
$ 1,724,712
$ 7,070,679
The notes to the financial statements are an integral part of this statement.
37
City of Scottsdale, Arizona
Statement of Activities
For the Fiscal Year Ended June 30, 2025 (in thousands)
Expenses
Charges for
Services
Operating Grants
and Contributions
Capital Grants and
Contributions
Governmental
Activities
Business-type
Activities
Total
FUNCTIONS/PROGRAMS
Governmental Activities
General Government
Mayor and City Council
$ 1,065
$ 88
$ 13
$ -
$ (964)
$ -
$ (964)
City Clerk
1,159
74
-
-
(1,085)
-
(1,085)
City Attorney
8,636
1,563
-
-
(7,073)
-
(7,073)
City Auditor
960
145
77
-
(738)
-
(738)
City Court
7,823
-
3
-
(7,820)
-
(7,820)
City Manager
3,033
1,478
152
-
(1,403)
-
(1,403)
City Treasurer
12,338
7,728
-
-
(4,610)
-
(4,610)
Other General Government
8
-
-
-
(8)
-
(8)
Public Works
119,100
14
20,006
47,149
(51,931)
-
(51,931)
Community and Economic Development
50,400
23,531
2,936
-
(23,933)
-
(23,933)
Public Safety
221,440
16,421
10,622
909
(193,488)
-
(193,488)
Community Services
95,668
18,285
14,601
694
(62,088)
-
(62,088)
Administrative Services
32,174
203
822
-
(31,149)
-
(31,149)
Streetlight and Services Districts
577
602
-
-
25
-
25
Interest on Long-Term Debt
14,290
-
-
-
(14,290)
-
(14,290)
Total Governmental Activities
568,671
70,132
49,232
48,752
(400,555)
-
(400,555)
Business-type Activities
Water Utility
126,586
164,928
-
17,166
-
55,508
55,508
Sewer Utility
46,530
57,329
-
12,300
-
23,099
23,099
Airport
11,009
11,649
-
1,608
-
2,248
2,248
Solid Waste
29,849
36,656
-
-
-
6,807
6,807
Total Business-type Activities
213,974
270,562
-
31,074
-
87,662
87,662
Total Government
$ 782,645
$ 340,694
$ 49,232
$ 79,826
(400,555)
87,662
(312,893)
General Revenues
Taxes
Property Taxes
74,129
-
74,129
Sales and Use Taxes
345,731
262
345,993
Franchise Taxes
14,423
-
14,423
Intergovernmental - Unrestricted
State Shared Sales
37,509
-
37,509
State Revenue Sharing
51,990
-
51,990
Other
22,794
-
22,794
Interest and Investment Income
51,042
14,862
65,904
Other Revenue
15,926
-
15,926
Transfers
10,585
(10,585)
-
Total General Revenues and Transfers
624,129
4,539
628,668
Change in Net Position
223,574
92,201
315,775
Net Position - Beginning
5,122,393
1,632,511
6,754,904
Net Position - Ending
$ 5,345,967
$ 1,724,712
$ 7,070,679
The notes to the financial statements are an integral part of this statement.
Program Revenues
38
City of Scottsdale, Arizona
General
General
Obligation Bond
Debt Service
General CIP
Construction
Capital Projects
Transportation
Capital Projects
External Sources
Capital Projects
Total Nonmajor
Governmental
Funds
Total
Governmental
Funds
ASSETS
Cash and Investments
270,405
$
6,913
$
161,254
$
137,436
$
-
$
345,869
$
921,877
$
Cash with Fiscal Agent
-
60,604
-
-
-
15,774
76,378
Receivable (net of allowance for uncollectibles)
Interest
3,649
-
-
358
1
1,889
5,897
Privilege Tax
17,337
-
-
1,536
-
8,374
27,247
Transient Occupancy Tax
-
-
-
-
-
1,950
1,950
Property Tax
1,300
1,160
-
-
-
65
2,525
State Shared Sales Tax
1,860
-
-
-
-
-
1,860
Franchise Fee
3,320
-
-
-
-
70
3,390
Court
10,249
-
-
-
-
268
10,517
Highway User Tax
-
-
-
-
-
1,878
1,878
Auto Lieu Tax
536
-
-
-
-
-
536
Intergovernmental
-
-
4,724
15,814
8,977
11,421
40,936
Grants
-
-
-
-
2,583
2,133
4,716
Ambulance
1,233
-
-
-
-
-
1,233
Leases
34,130
-
-
-
-
57
34,187
Miscellaneous
5,429
-
112
-
-
3,193
8,734
Due from Other Funds
12,302
-
-
-
-
-
12,302
Advances to Other Funds
17,800
-
-
-
-
-
17,800
Supplies Inventory
556
-
-
-
-
-
556
Total Assets
380,106
$
68,677
$
166,090
$
155,144
$
11,561
$
392,941
$
1,174,519
$
(continued)
June 30, 2025 (in thousands)
Governmental Funds
Balance Sheet
39
City of Scottsdale, Arizona
General
General
Obligation Bond
Debt Service
General CIP
Construction
Capital Projects
Transportation
Capital Projects
External Sources
Capital Projects
Total Nonmajor
Governmental
Funds
Total
Governmental
Funds
June 30, 2025 (in thousands)
Governmental Funds
Balance Sheet
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
(DEFICITS)
Liabilities
Accounts Payable
5,864
$
-
$
9,020
$
5,612
$
1,094
$
4,005
$
25,595
$
Accrued Payroll and Benefits
13,138
-
7
-
-
752
13,897
Due to Other Funds
-
-
-
-
10,740
1,562
12,302
Matured Bond Interest Payable
-
5,006
-
-
-
2,145
7,151
Matured Bonds Payable
-
55,595
-
-
-
13,520
69,115
Unearned Revenue
Intergovernmental
-
-
-
-
-
9,116
9,116
Other
2,051
-
3
-
-
385
2,439
Due to Other Governments
4,499
-
-
-
-
50
4,549
Guaranty and Other Deposits
5,634
-
-
-
-
5
5,639
Other
2,779
-
-
-
-
153
2,932
Total Liabilities
33,965
60,601
9,030
5,612
11,834
31,693
152,735
Deferred Inflows of Resources
Unavailable Revenues
12,481
553
4,835
16,231
10,724
16,231
61,055
Leases
29,377
-
-
-
-
2,203
31,580
Total Deferred Inflows of Resources
41,858
553
4,835
16,231
10,724
18,434
92,635
Total Liabilities and Deferred Inflows of
Resources
75,823
61,154
13,865
21,843
22,558
50,127
245,370
Fund Balances (Deficits)
Nonspendable
18,356
-
-
-
-
675
19,031
Restricted
-
7,523
-
133,301
3,443
315,979
460,246
Committed
-
-
152,225
-
70
28,158
180,453
Unassigned
285,927
-
-
-
(14,510)
(1,998)
269,419
Total Fund Balances (Deficits)
304,283
7,523
152,225
133,301
(10,997)
342,814
929,149
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances (Deficits)
380,106
$
68,677
$
166,090
$
155,144
$
11,561
$
392,941
$
1,174,519
$
The notes to the financial statements are an integral part of this statement.
40
City of Scottsdale, Arizona
June 30, 2025 (in thousands)
Fund Balances - Total Governmental Funds
929,149
$
Amounts reported for governmental activities in the statement of net position are different because
(see Note II. A. for the detailed reconciliation):
Capital assets used in governmental activities are not financial resources; therefore, are not
reported in the funds.
4,948,161
Equity in joint venture is not a financial resource; therefore, is not reported in the funds.
2,485
Prepayments, public-public partnerships, leases, and subscription-based information technology
arrangements are not financial resources; therefore, are not reported in the funds.
114,477
Deferred outflows relating to deferred amounts on refundings, pensions, and other
postemployment benefits are not financial resources; therefore, are not reported in the funds.
113,644
Long-term liabilities, including bonds payable, are not due and payable in the current period;
therefore, are not reported in the funds.
(912,090)
Deferred inflows relating to pensions, other postemployment benefits, and public-private
partnerships represent a future acquisition of net position that is not reported in the funds. Also,
because the focus of governmental funds is on short-term financing, some assets will not be
available to pay for current period expenditures. Those assets are offset by unavailable revenue in
the funds.
33,550
Internal Service Funds are used by management to charge the costs of certain activities, such as
insurance, computer equipment, and vehicles to individual funds. The assets and liabilities of the
Internal Service Funds are included in governmental activities in the statement of net position.
116,591
Net Position of Governmental Activities
5,345,967
$
The notes to the financial statements are an integral part of this statement.
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position
41
City of Scottsdale, Arizona
General
General
Obligation Bond
Debt Service
General CIP
Construction
Capital Projects
Transportation
Capital Projects
External Sources
Capital Projects
Total Nonmajor
Governmental
Funds
Total
Governmental
Funds
REVENUES
Taxes - Local
Property
37,133
$
34,176
$
-
$
-
$
-
$
1,951
$
73,260
$
Transaction Privilege
196,727
-
-
17,611
-
95,724
310,062
Transient Occupancy
-
-
-
-
-
34,735
34,735
Light and Power Franchise
11,045
-
-
-
-
214
11,259
Cable TV Franchise
3,164
-
-
-
-
-
3,164
Salt River Project In-Lieu
197
-
-
-
-
-
197
Other Taxes
971
-
-
-
-
7,824
8,795
Taxes - Intergovernmental
State Shared Sales
37,509
-
-
-
-
-
37,509
State Revenue Sharing
51,990
-
-
-
-
-
51,990
Auto Lieu Tax
13,170
-
-
-
-
-
13,170
Highway User Tax
-
-
-
-
-
19,136
19,136
Local Transportation Assistance Fund
-
-
-
-
-
610
610
Business and Liquor Licenses
2,672
-
-
-
-
49
2,721
Charges for Current Services
Building and Related Permits
23,205
-
35
-
-
147
23,387
Recreation Fees
5,947
-
-
-
-
3,617
9,564
WestWorld Equestrian Facility Fees
7,035
-
-
-
-
1,410
8,445
Fire Fees
4,728
-
-
-
-
-
4,728
Fines, Fees, and Forfeitures
Court
4,672
-
-
-
-
125
4,797
Parking
215
-
-
-
-
-
215
Photo Radar
2,719
-
-
-
-
-
2,719
Court Enhancement
-
-
-
-
-
2,272
2,272
Library
50
-
-
-
-
94
144
Police
-
-
-
-
-
105
105
Opioid Settlements
-
-
-
-
-
992
992
Property Rental
6,497
-
-
-
-
5,975
12,472
Interest Earnings
17,967
2
138
1,801
3
8,884
28,795
Net Increase in the Fair Value of Investments
22,077
-
-
-
-
170
22,247
Intergovernmental
Federal Grants
-
-
-
-
6,159
13,504
19,663
State Grants
-
-
-
-
-
2,102
2,102
Miscellaneous
5,628
-
-
-
40,589
5,874
52,091
Developer Contributions
-
-
-
-
710
2,929
3,639
Streetlight and Services Districts
-
-
-
-
-
602
602
Contributions and Donations
-
-
-
-
300
2,841
3,141
Reimbursements from Outside Sources
1,204
-
-
-
-
772
1,976
Indirect Costs
9,345
-
-
-
-
-
9,345
Other
1,270
-
1
-
-
103
1,374
Total Revenues
467,137
$
34,178
$
174
$
19,412
$
47,761
$
212,761
$
781,423
$
(continued)
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2025 (in thousands)
42
City of Scottsdale, Arizona
General
General
Obligation Bond
Debt Service
General CIP
Construction
Capital Projects
Transportation
Capital Projects
External Sources
Capital Projects
Total Nonmajor
Governmental
Funds
Total
Governmental
Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2025 (in thousands)
EXPENDITURES
Current
General Government
Mayor and City Council
1,082
$
-
$
-
$
-
$
-
$
13
$
1,095
$
City Clerk
1,180
-
-
-
-
-
1,180
City Attorney
9,106
-
-
-
-
-
9,106
City Auditor
981
-
-
-
-
-
981
City Court
5,959
-
-
-
-
1,980
7,939
City Manager
3,026
-
-
-
-
-
3,026
City Treasurer
12,989
-
752
70
-
160
13,971
Other General Government
-
-
-
-
-
8
8
Public Works
27,508
-
856
2,528
-
26,030
56,922
Community and Economic Development
24,938
-
298
-
-
22,805
48,041
Public Safety
211,693
-
531
-
-
4,875
217,099
Community Services
53,270
-
75
-
-
20,783
74,128
Administrative Services
25,469
-
2,095
324
-
838
28,726
Streetlight and Services Districts
-
-
-
-
-
577
577
Debt Service
Principal
3,490
55,595
-
-
-
21,723
80,808
Interest and Fiscal Charges
889
10,018
-
-
-
4,589
15,496
Bond Issuance Costs
-
522
-
-
-
-
522
Capital Outlay
1,277
-
65,313
32,484
26,361
19,456
144,891
Total Expenditures
382,857
66,135
69,920
35,406
26,361
123,837
704,516
Excess (Deficiency) of Revenues over (under) Expenditures
84,280
(31,957)
(69,746)
(15,994)
21,400
88,924
76,907
OTHER FINANCING SOURCES (USES)
Transfers In
17,210
38,850
44,074
35,738
20
24,912
160,804
Transfers Out
(46,852)
-
(71)
(1)
-
(103,277)
(150,201)
Financing of Leases
1,587
-
-
-
-
353
1,940
Financing of Subscription-Based I.T. Arrangements
779
-
-
-
-
-
779
Sale of General Capital Assets
277
-
-
-
-
-
277
Issuance of Long-Term Capital-Related Debt
-
141
-
-
-
102,109
102,250
Premium on Long-Term Debt Issued
-
384
-
-
-
4,891
5,275
Total Other Financing Sources (Uses)
(26,999)
39,375
44,003
35,737
20
28,988
121,124
Net Change in Fund Balances
57,281
7,418
(25,743)
19,743
21,420
117,912
198,031
Fund Balances (Deficits) - Beginning
247,002
105
177,968
113,558
(32,417)
224,902
731,118
Fund Balances (Deficits) - Ending
304,283
$
7,523
$
152,225
$
133,301
$
(10,997)
$
342,814
$
929,149
$
The notes to the financial statements are an integral part of this statement.
43
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025 (in thousands)
Net Change in Fund Balances - Total Governmental Funds
198,031
$
Amounts reported for governmental activities in the statement of activities are different because
(see Note II. B. for the detailed reconciliation):
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 capital outlay exceeded depreciation in the
current period.
54,699
Donations of capital assets are not capitalized on the governmental fund statements, but are
shown in the statement of activities.
22,407
Amortization of deferred inflows of resources related to capital assets acquired by the city as a
result of public-private partnerships are not shown in the governmental fund statements. On
the statement of activities it is recorded as revenue.
87
Some expenses reported in the statement of activities do not require the use of current financial
resources; therefore, are not reported as expenditures in governmental funds.
(50,232)
Current-year pension and other postemployment benefit contributions are reclassified from
expenditures in the governmental funds to deferred outflows of resources in the government-
wide statements.
44,522
Current-year joint venture contributions are are reclassified from expenditures in the
governmental funds to an increase in the investment in the joint venture in the government-
wide statements.
177
When leases (in which the city is the lessee), public-public partnerships (PPPs) (in which the city
is the operator), and subscription-based information technology arrangements (SBITAs) are to
be used in governmental activities, an expenditure is recorded in the governmental funds in the
amount of the Present Value of the Future Lease Payments (PVFLP)/Present Value of the
Future Installment Payments (PVFIP)/Present Value of the Future Subscription Payments
(PVFSP), respectively; however, in the statement of activities, the PVFLP, PVFIP, and PVFSP
are recognized as intangible assets and amortized over the lease/PPP/subscription term.
17
The State Treasurer distributes funding directly to the Public Safety Personnel Retirement
System that is used to offset the contribution required to be made by the city. The fund financial
statements recognize the current year contribution; however, the government-wide statements
recognize the prior year contribution.
(1,134)
Revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds.
(23,173)
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; however, neither transaction has any effect on net position. This is the
amount by which principal retirement exceeded debt proceeds in the current period.
(29,106)
Additional interest accretion calculated on bonds and notes payable and amortization of bond
premium and deferred amounts on refundings.
1,206
When lease assets and subscription-based information technology arrangement assets (SBITAs)
are retired, a loss is recognized on the statement of activities.
(18)
The change in net position of the Internal Service Funds is attributed to governmental activities.
6,091
Change in Net Position of Governmental Activities
223,574
$
The notes to the financial statements are an integral part of this statement.
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities
44
City of Scottsdale, Arizona
Original
Final
Actual Amounts
Budgetary Basis
Budget to GAAP
Differences
Actual Amounts
GAAP Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
REVENUES
Taxes - Local
Property
38,384
$
38,384
32,272
$
4,861
$
37,133
$
(6,112)
$
Transaction Privilege
183,003
183,003
196,727
-
196,727
13,724
Light and Power Franchise
10,282
10,282
11,045
-
11,045
763
Cable TV Franchise
3,328
3,328
3,164
-
3,164
(164)
Salt River Project In-Lieu
200
200
197
-
197
(3)
Other Taxes
965
965
971
-
971
6
Taxes - Intergovernmental
State Shared Sales
37,126
37,126
37,509
-
37,509
383
State Revenue Sharing
51,842
51,842
51,990
-
51,990
148
Auto Lieu Tax
12,284
12,284
13,170
-
13,170
886
Business and Liquor Licenses
2,667
2,667
2,672
-
2,672
5
Charges for Current Services
Building and Related Permits
21,770
21,770
23,205
-
23,205
1,435
Recreation Fees
5,607
5,607
5,947
-
5,947
340
WestWorld Equestrian Facility Fees
5,577
5,577
7,035
-
7,035
1,458
Fire Fees
7,206
7,206
4,728
-
4,728
(2,478)
Fines, Fees, and Forfeitures
Court
4,241
4,241
4,672
-
4,672
431
Parking
261
261
215
-
215
(46)
Photo Radar
2,645
2,645
2,719
-
2,719
74
Library
43
43
50
-
50
7
Property Rental
6,241
6,241
6,847
(350)
6,497
606
Interest Earnings
15,596
15,596
16,620
1,347
17,967
1,024
Net Increase in the Fair Value of Investments
-
-
-
22,077
22,077
-
Intergovernmental
Miscellaneous
4,354
4,354.00
5,628
-
5,628
1,274
Reimbursements from Outside Sources
415
415
1,204
-
1,204
789
Indirect Costs
9,227
9,227
9,345
-
9,345
118
Other
469
469
750
520
1,270
281
Total Revenues
423,733
$
423,733
$
438,682
$
28,455
$
467,137
$
14,949
$
(continued)
Budgeted Amounts
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual
For the Fiscal Year Ended June 30, 2025 (in thousands)
45
City of Scottsdale, Arizona
Original
Final
Actual Amounts
Budgetary Basis
Budget to GAAP
Differences
Actual Amounts
GAAP Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
Budgeted Amounts
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual
For the Fiscal Year Ended June 30, 2025 (in thousands)
EXPENDITURES
Current
General Government
Mayor and City Council
1,228
$
1,230
$
1,085
$
(3)
$
1,082
$
145
$
City Clerk
1,458
1,449
1,178
2
1,180
271
City Attorney
9,017
9,227
9,025
81
9,106
202
City Auditor
1,420
1,374
974
7
981
400
City Court
6,096
6,161
5,941
18
5,959
220
City Manager
2,944
3,357
3,017
9
3,026
340
City Treasurer
13,642
13,565
12,893
96
12,989
672
Public Works
30,020
28,937
27,450
58
27,508
1,487
Community and Economic Development
26,117
26,415
25,019
(81)
24,938
1,396
Public Safety
209,816
210,330
209,789
1,840
211,693
541
Community Services
52,772
54,405
53,605
(335)
53,270
800
Administrative Services
21,427
28,309
27,714
(2,245)
25,469
595
Debt Service
Principal
153
153
284
3,206
3,490
(131)
Interest and Fiscal Charges
304
304
175
714
889
129
Capital Outlay
-
-
-
1,277
1,277
-
Total Expenditures
376,414
$
385,216
$
378,149
4,644
382,857
7,067
Excess (Deficiency) of Revenues over (under)
Expenditures
47,319
38,517
60,533
23,811
84,280
22,016
OTHER FINANCING SOURCES (USES)
Transfers In
15,815
15,815
17,210
-
17,210
1,395
Transfers Out
(59,584)
(62,675)
(64,652)
17,800
(46,852)
(1,977)
Financing of Leases
-
-
-
1,587
1,587
-
Financing of SBITAs
-
-
-
779
779
-
Sale of General Capital Assets
190
190
213
64
277
23
Total Other Financing Sources (Uses)
(43,579)
(46,670)
(47,229)
20,230
(26,999)
(559)
Net Change in Fund Balances
$ 3,740
$ (8,153)
$ 13,304
$ 44,041
$ 57,281
$ 21,457
The notes to the financial statements are an integral part of this statement.
46
City of Scottsdale, Arizona
General Fund
For the Fiscal Year Ended June 30, 2025 (in thousands)
Explanation of Differences:
Items recorded as revenues/other financing sources for GAAP purposes that are not recorded for
budget purposes:
Amortized Lease Revenue
(350)
$
Lease Interest Revenue
1,347
Net Increase in the Fair Value of Investments
22,077
Maricopa County Qasimyar Settlement Property Tax Adjustment
4,861
In-Kind Revenue
520
Financing of Leases
1,587
Financing of SBITAs
779
Gain on Lease Termination
64
Total Revenue/Other Financing Source Adjustments
30,885
The City budgets for certain expenditures on the cash basis, rather than on the modified accrual
basis:
Payroll Accrual and Compensated Absences
1,606
Non-Cash Operating Expenditures
622
Non-Cash Debt Service Expenditures
50
Non-Cash Capital Expenditures
2,366
Transfer from Solid Waste Loan
(17,800)
Total Expenditure Adjustments
(13,156)
Net Increase in Fund Balance - Budget to GAAP
44,041
$
Differences in Presentation between Budget and GAAP Basis:
The notes to the financial statements are an integral part of this statement.
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balance – Budget and Actual
The city records principal and interest payments related to the subscription-based information technology arrangements,
contracts payable, and lease activity on a GAAP basis; however, for budget purposes, they are included in the associated
division's expenditures. Additionally, the city records capitalized expenditures as capital outlay on the GAAP basis; however,
for budget purposes, they are included in the associated division's expenditures. These differences have no bearing on the
fund balance since the overall total expenditures are the same.
47
City of Scottsdale, Arizona
Statement of Fund Net Position
Proprietary Funds
June 30, 2025 (in thousands)
Water and
Sewer Utility
Airport
Solid Waste
Total
Governmental
Activities - Internal
Service Funds
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Assets
Current Assets
Cash and Investments
277,822
$
19,023
$
35,038
$
331,883
$
82,318
$
Receivables (net of allowance for uncollectibles)
Privilege Tax
-
33
-
33
-
Charges for Services
23,166
399
3,780
27,345
-
Intergovernmental
61
320
-
381
-
Leases
-
1,409
-
1,409
-
Public-Private Partnerships
-
217
-
217
-
Interest
2,538
75
82
2,695
-
Miscellaneous
2,914
-
1
2,915
448
Supplies Inventory
-
-
-
-
1,624
Restricted Cash, Cash Equivalents, and Investments
Cash with Fiscal Agent
76,154
1,381
-
77,535
-
Customer Advances and Deposits
1,694
421
-
2,115
-
Prepaid Items
2,730
42
102
2,874
219
Other Restricted Items
Joint Venture Construction Deposits
5,500
-
-
5,500
-
Total Current Assets
392,579
23,320
39,003
454,902
84,609
Noncurrent Assets
Lease Receivables
15
13,035
-
13,050
-
Intergovernmental Receivables
1,565
-
-
1,565
Public-Private Partnership Receivables
-
8,211
-
8,211
Net Pension OPEB Asset
899
55
327
1,281
203
Equity in Joint Ventures
78,102
8
96
78,206
4
Pollution Remediation Recoveries
46,276
-
-
46,276
-
Restricted Cash, Cash Equivalents, and Investments
Advanced Construction Payments
2,080
-
-
2,080
-
Advanced Lease Payments
-
667
-
667
-
Capital Assets
Land
42,318
9,564
1,111
52,993
-
Water Rights
87,171
-
-
87,171
-
Water System
1,564,960
-
-
1,564,960
-
Sewer System
774,962
-
-
774,962
-
Buildings and Improvements
-
161,341
7,943
169,284
19,003
Motor Vehicles
-
628
-
628
119,295
Machinery and Equipment
9,087
773
1,502
11,362
6,911
Furniture and Fixtures
1,659
217
148
2,024
-
Construction in Progress
156,944
223
1,871
159,038
8,903
Leases
138
16
9
163
27
Subscription-Based Information Technology Arrangements
652
1
8
661
514
Less Accumulated Depreciation/Amortization
(1,134,519)
(50,139)
(5,194)
(1,189,852)
(81,775)
Total Capital Assets (net)
1,503,372
122,624
7,398
1,633,394
72,878
Total Noncurrent Assets
1,632,309
144,600
7,821
1,784,730
73,085
Total Assets
2,024,888
167,920
46,824
2,239,632
157,694
Deferred Outflows of Resources
Deferred Amounts on Refundings
9,141
-
-
9,141
-
Pension OPEB-Related Amounts
52
3
19
74
12
Pension-Related Amounts
4,232
250
1,604
6,086
969
Total Deferred Outflows of Resources
13,425
$
253
$
1,623
$
15,301
$
981
$
(continued)
48
City of Scottsdale, Arizona
Statement of Fund Net Position
Proprietary Funds
June 30, 2025 (in thousands)
Water and
Sewer Utility
Airport
Solid Waste
Total
Governmental
Activities - Internal
Service Funds
LIABILITIES AND DEFERRED INFLOWS OF RESOURCES
Liabilities
Current Liabilities
Accounts Payable
17,434
$
101
$
625
$
18,160
$
2,673
$
Accrued Payroll and Benefits
1,183
71
522
1,776
332
Accrued Compensated Absences - Current
12
-
-
12
-
Accrued Compensated Absences - Due within one year
1,553
112
539
2,204
357
Unearned Revenue
-
-
-
-
21
Customer Advances and Deposits
1,694
421
-
2,115
-
Interest Payable
3,280
341
-
3,621
-
Matured Bonds and Other Payables
16,410
1,040
-
17,450
-
Bonds Payable and Other Payables - Due within one year
21,525
1,090
-
22,615
-
Leases - Due within one year
30
3
2
35
6
Subscription - Due within one year
104
-
1
105
-
Advance from Other Funds - Due within one year
-
-
1,553
1,553
-
Other Liabilities
-
-
-
-
9,839
Total Current Liabilities
63,225
3,179
3,242
69,646
13,228
Noncurrent Liabilities
Accrued Compensated Absences - Due in more than one year
1,287
134
447
1,868
``
175
Advanced Construction Payments
2,080
-
-
2,080
-
Advanced Lease Payments
-
667
-
667
-
Net Pension Liabilities
23,502
1,433
8,541
33,476
5,309
Bonds, Loans, and Other Payables - Due in more than one year
280,196
16,474
-
296,670
13,633
Pollution Remediation Obligation
46,276
-
-
46,276
-
Leases - Due in more than one year
41
5
2
48
12
Subscription - Due in more than one year
70
-
-
70
-
Advance from Other Funds - Due in more than one year
-
-
16,247
16,247
-
Total Noncurrent Liabilities
353,452
18,713
25,237
397,402
19,129
Total Liabilities
416,677
21,892
28,479
467,048
32,357
Deferred Inflows of Resources
Pension OPEB-Related Amounts
302
18
110
430
68
Pension-Related Amounts
1,786
109
649
2,544
403
Leases
9
13,202
-
13,211
-
Public-Private Partnerships
-
56,244
-
56,244
-
Total Deferred Inflows of Resources
2,097
69,573
759
72,429
471
NET POSITION
Net Investment in Capital Assets
1,254,072
56,714
7,170
1,317,956
72,040
Restricted for Joint Venture Construction Deposits
5,500
-
-
5,500
-
Unrestricted
359,967
19,994
12,039
392,000
53,807
Total Net Position
1,619,539
$
76,708
$
19,209
$
1,715,456
$
125,847
$
The notes to the financial statements are an integral part of this statement.
49
City of Scottsdale, Arizona
Total Enterprise Fund Net Position
1,715,456
$
Amounts reported for business-type activities in the government-wide statement of
net position are different because:
Internal Service Funds are used by management to charge the costs of certain
activities, such as insurance, computer equipment, and motor vehicles to
individual funds. A look-back adjustment applies to business-type activities and
creates an internal balance.
9,256
Net Position of Business-type Activities
1,724,712
$
The notes to the financial statements are an integral part of this statement.
Reconciliation of the Proprietary Funds Statement of Fund Net Position to the Statement of
Net Position
June 30, 2025 (in thousands)
50
City of Scottsdale, Arizona
Statement of Revenues, Expenses, and Changes in Fund Net Position
Proprietary Funds
For the Fiscal Year Ended June 30, 2025 (in thousands)
Water and
Sewer Utility
Airport
Solid Waste
Total
Governmental
Activities -
Internal Service
Funds
OPERATING REVENUES
Charges for Sales and Services
Water Service Fees
141,024
$
-
$
-
$
141,024
$
-
$
Sewer Service Fees
55,767
-
-
55,767
-
Proprietary - Non-potable water fees
17,673
-
-
17,673
-
Solid Waste Fees
-
-
36,656
36,656
-
Airport Fees
-
11,649
-
11,649
-
Other Services
-
-
-
-
90,253
Other
7,793
-
-
7,793
1,927
Total Operating Revenues
222,257
11,649
36,656
270,562
92,180
OPERATING EXPENSES
Costs for Sales and Services
Water Operations
77,376
-
-
77,376
-
Sewer Operations
22,760
-
-
22,760
-
Solid Waste Operations
-
-
28,069
28,069
-
Airport Operations
-
3,446
-
3,446
-
Other Services
-
-
-
-
76,577
Indirect Costs
6,577
730
2,038
9,345
-
Depreciation/Amortization
60,820
6,243
384
67,447
12,159
Total Operating Expenses
167,533
10,419
30,491
208,443
88,736
Operating Income
54,724
1,230
6,165
62,119
3,444
NON-OPERATING REVENUES (EXPENSES)
Transaction Privilege Tax
-
262
-
262
-
Property Tax
-
-
-
-
1,259
Investment Income
13,185
949
728
14,862
-
Interest Expense
(5,696)
(599)
-
(6,295)
-
Gain (Loss) on Sale of Capital Assets
(135)
-
(146)
(281)
272
Net Non-Operating Revenue (Expenses)
7,354
612
582
8,548
1,531
Income Before Contributions and Transfers
62,078
1,842
6,747
70,667
4,975
Capital Contributions
29,466
1,608
-
31,074
2,179
Transfers In
-
-
-
-
128
Transfers Out
(10,585)
-
-
(10,585)
(146)
Change in Net Position
80,959
3,450
6,747
91,156
7,136
Total Net Position - Beginning
1,538,580
73,258
12,462
1,624,300
118,711
Total Net Position - Ending
1,619,539
$
76,708
$
19,209
$
1,715,456
$
125,847
$
The notes to the financial statements are an integral part of this statement.
51
City of Scottsdale, Arizona
Net Change in Total Enterprise Fund Net Position
91,156
$
Amounts reported for business-type activities in the government-wide statement of
net position are different because:
Internal Service Funds are used by management to charge the costs of certain
activities, such as insurance, computer equipment, and motor vehicles to
individual funds. A look-back adjustment applies to business-type activities and
creates an internal balance, which reduced the expenses.
1,045
Change in Net Position of Business-type Activities
92,201
$
The notes to the financial statements are an integral part of this statement.
Reconciliation of the Proprietary Funds Statement of Revenues, Expenses, and Changes
in Fund Net Position to the Statement of Activities
For the Fiscal Year Ended June 30, 2025 (in thousands)
52
City of Scottsdale, Arizona
Water and
Sewer Utility
Airport
Solid Waste
Total
Governmental
Activities -
Internal Service
Funds
Cash Flows from Operating Activities
Cash Received from Customers
214,007
$
11,312
$
36,567
$
261,886
$
90,371
$
Cash Payments to Suppliers for Goods/Services
(83,010)
(2,775)
(19,365)
(105,150)
(69,704)
Cash Payments to Employees for Services
(29,471)
(1,649)
(11,719)
(42,839)
(7,299)
Other Cash Receipts
7,793
-
-
7,793
1,927
Net Cash Provided by (Used for) Operating Activities
109,319
6,888
5,483
121,690
15,295
Cash Flows from NonCapital Financing Activities
Property Tax
-
-
-
-
1,259
Transaction Privilege Tax
-
266
-
266
-
Transfers In
-
-
-
-
128
Transfers Out
(10,585)
-
-
(10,585)
(146)
Net Cash Provided by (Used for) NonCapital Financing Activities
(10,585)
266
-
(10,319)
1,241
Cash Flows from Capital and Related Financing Activities
Bond Proceeds
118,002
-
-
118,002
-
Capital Contributions from:
Water and Sewer Development Fees
4,864
-
-
4,864
-
Water and Sewer Development Fee Credit Agreements
(276)
-
-
(276)
-
Capital Grants
370
1,300
-
1,670
-
Acquisition and Construction of Property and Equipment
(95,046)
(2,611)
(1,595)
(99,252)
(19,524)
Principal Payments on Capital Debt and Other Payables
(18,943)
(994)
(5)
(19,942)
-
Interest Paid on Capital Debt
(6,474)
(706)
-
(7,180)
-
Investment in Joint Venture
(12,730)
(1)
(14)
(12,745)
-
Advances From Other Funds
-
-
17,800
17,800
-
Sale of Capital Assets
-
-
-
-
4,311
Net Cash Provided by (Used for) Capital and Related Financing Activities
(10,233)
(3,012)
16,186
2,941
(15,213)
Cash Flows from Investing Activities
Income from Investments
12,843
939
722
14,504
-
Net Cash Provided by (Used for) Investing Activities
12,843
939
722
14,504
-
Net Increase (Decrease) in Cash and Cash Equivalents
101,344
5,081
22,391
128,816
1,323
Cash and Cash Equivalents at Beginning of Year
256,406
16,411
12,647
285,464
80,995
Cash and Cash Equivalents at End of Year
357,750
$
21,492
$
35,038
$
414,280
$
82,318
$
(continued)
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2025 (in thousands)
53
City of Scottsdale, Arizona
Water and
Sewer Utility
Airport
Solid Waste
Total
Governmental
Activities -
Internal Service
Funds
Cash and Cash Equivalents at End of Year includes:
Cash and Investments
277,822
$
19,023
$
35,038
$
331,883
$
82,318
$
Cash with Fiscal Agent
76,154
1,381
-
77,535
-
Restricted Cash and Investments
3,774
1,088
-
4,862
-
Total Cash and Cash Equivalents
357,750
$
21,492
$
35,038
$
414,280
$
82,318
$
Reconciliation of Operating Income to Net Cash Provided by (Used for) Operating Activities
Cash Flows from Operating Activities
Operating Income
54,724
$
1,230
$
6,165
$
62,119
$
3,444
$
Adjustments to Reconcile Operating Income to Net Cash Provided by (Used for)
Operating Activities:
Depreciation/Amortization
60,820
6,243
384
67,447
12,159
Current Year Pension/OPEB Contributions
(2,470)
(151)
(898)
(3,519)
(579)
Change in Equity in Joint Ventures
(2,641)
2
16
(2,623)
1
Change in Accounts Receivable
(1,026)
46
(89)
(1,069)
112
Change in Lease/PPP Receivable
-
2,291
-
2,291
-
Change in Miscellaneous Receivable
302
-
-
302
-
Change in Inventories
-
-
-
-
(213)
Change in Prepaid Expense
(555)
(16)
(39)
(610)
-
Change in Customer Deposits
268
2
-
270
-
Change in Accounts Payable
(1,470)
9
(305)
(1,766)
(2,472)
Change in Unearned Revenue
-
-
-
-
8
Change in Accrued Payroll and Compensated Absences
(205)
(57)
66
(196)
137
Change in Claims Payable
-
-
-
-
2,513
Change in Advanced Payments
-
(100)
-
(100)
-
Change in Net Pension/OPEB Liability
(446)
(162)
(476)
(1,084)
(272)
Change in Deferred Inflows of Resources Leases/PPPs
(1)
(2,576)
-
(2,577)
-
Change in Deferred Outflows of Resources Related to Pensions
1,385
97
448
1,930
325
Change in Deferred Inflows of Resources Related to Pensions
634
30
211
875
132
Total Adjustments
54,595
5,658
(682)
59,571
11,851
Net Cash Provided by (Used for) Operating Activities
109,319
$
6,888
$
5,483
$
121,690
$
15,295
$
Supplemental Disclosure of Non-Cash Investing, Capital, and Financing Activities
Initiation of SBITA
(501)
$
(1)
$
(2)
$
(504)
$
-
$
Contributions of Capital Assets from Developers
24,508
-
-
24,508
-
Contributions of Capital Assets from Other Funds
-
-
-
-
2,179
Amortization of Bond Premium
2,065
84
-
2,149
-
Deferred Amount on Refundings
(1,194)
-
-
(1,194)
-
Retirement of Assets
135
-
-
135
(361)
Total Non-Cash Investing, Capital, and Financing Activities
25,013
$
84
$
-
$
25,094
$
1,818
$
The notes to the financial statements are an integral part of this statement.
For the Fiscal Year Ended June 30, 2025 (in thousands)
Statement of Cash Flows
Proprietary Funds
54
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
I.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A.
Financial Reporting Entity
The City of Scottsdale, Arizona (the city) was incorporated in 1951. The current City Charter was
adopted in 1961, which established the Council/Manager form of government. The city provides basic
government services to its citizens including roads, water, sewer, solid waste management, public transit,
parks and recreation facilities, and public safety.
The accounting policies of the city conform to accounting principles generally accepted in the United
States of America (GAAP) as applicable to governmental units.
The financial reporting entity presented in these financial statements consists of the City of Scottsdale,
Arizona (the primary government) and its component units. The component units discussed below
are included in the city’s reporting entity because of the significance of their operational or financial
relationships with the city. The city has operational responsibility for the component units:
55
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Component Unit
Description and Criteria for Inclusion
Reporting
Method
For Separate Financial
Statements
City of Scottsdale
Municipal Property
Corporation (MPC)
Non-profit corporation created in 1967
Sole purpose is to construct, acquire, and equip buildings,
structures, or land improvements for the city
Governed by Board of Directors approved by City Council
For financial reporting purposes, transactions are included as a
governmental and proprietary fund type as if part of the city’s
operation
Blended
City of Scottsdale
City Treasurer’s Office
7447 E. Indian School Rd.
Ste. 210
Scottsdale, AZ 85251
McDowell
Mountain Ranch
Community
Facilities District
(CFD)
Formed in 1994 by petition to City Council
Created to acquire and improve public infrastructure in specified
land area
Able to levy taxes and issue bonds independent of the city
Property owners within the designated area are assessed for
District taxes and costs of operation
City Council serves as the Board of Directors
The city has no liability for District debt
For financial reporting purposes, transactions are included as a
governmental fund type as if part of the city’s operation
Blended
City of Scottsdale
City Treasurer’s Office
7447 E. Indian School Rd.
Ste. 210
Scottsdale, AZ 85251
DC Ranch
Community
Facilities District
(CFD)
Formed in 1997 by petition to City Council
Created to acquire and improve public infrastructure in specified
land area
Able to levy taxes and issue bonds independent of the city
Property owners within the designated area are assessed for
District taxes and costs of operation
City Council serves as the Board of Directors
The city has no liability for District debt
For financial reporting purposes, transactions are included as a
governmental fund type as if part of the city’s operation
Blended
City of Scottsdale
City Treasurer’s Office
7447 E. Indian School Rd.
Ste. 210
Scottsdale, AZ 85251
Via Linda Road
Community
Facilities District
(CFD)
Formed in 1998 by petition to City Council
Created to acquire and improve public infrastructure in specified
land area
Able to levy taxes and issue bonds independent of the city
Property owners within the designated area are assessed for
District taxes and costs of operation
City Council serves as the Board of Directors
The city has no liability for District debt
For financial reporting purposes, transactions are included as a
governmental fund type as if part of the city’s operation
Blended
City of Scottsdale
City Treasurer’s Office
7447 E. Indian School Rd.
Ste. 210
Scottsdale, AZ 85251
Waterfront
Commercial
Community
Facilities District
(CFD)
Formed in 2005 by petition to City Council
Created to acquire and improve public infrastructure in specified
land area
Able to levy taxes and issue bonds independent of the city
Property owners within the designated area are assessed for
District taxes and costs of operation
City Council serves as the Board of Directors
The city has no liability for District debt
For financial reporting purposes, transactions are included as a
governmental fund type as if part of the city’s operation
Blended
City of Scottsdale
City Treasurer’s Office
7447 E. Indian School Rd. Ste.
210
Scottsdale, AZ 85251
56
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
B.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities)
report information on all the nonfiduciary activities of the primary government and its component units. For
the most part, the effect of interfund activity has been removed from these statements.
Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported
separately from business-type activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses for a given function or
segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific
function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or
directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a function or segment.
Taxes and other items not included among program revenues are reported instead as general revenues.
Indirect costs incurred by governmental activities and reimbursed by business-type activities are included in
the program expense reported by the individual business-type functions.
Separate financial statements are provided for governmental funds and proprietary funds. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund
financial statements.
C.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned
and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property
taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized
as revenue as soon as all eligibility requirements have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Revenues are recognized as soon as they are earned and available. Revenues
are considered to be available when they are collectible within the current period or soon enough thereafter to
pay liabilities of the current period. The city considers revenues to be available if they are collected within 31
days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred,
as under accrual accounting; however, debt service expenditures, as well as expenditures related to vacation,
sick leave, claims, and judgments, are recorded only when payment is due. Capital asset acquisitions are
reported as expenditures in the governmental funds. Issuance of long-term debt and acquisitions under leases,
subscription-based information technology arrangements, public-public partnerships, and contracts payables
are reported as other financing sources.
Because different measurement focuses and bases of accounting are used in the government-wide statement
of net position and in governmental fund balance sheets, amounts reported as restricted fund balances in
governmental funds may be different from amounts reported as restricted net position in the statement of net
position.
57
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Property taxes, other local taxes, and licenses available within the current fiscal period are all considered to be
susceptible to accrual and have been recognized as revenues in the current fiscal period. Interest is accrued in
the same fiscal period in which the revenue is earned. All other revenue items are considered to be measurable
and available only when the city receives cash.
The government reports the following major governmental funds:
The General Fund is the government’s primary operating fund and is used to account for and report all
financial resources not accounted for and reported in another fund.
The General Obligation Bond Debt Service Fund is used to account for and report the accumulation of financial
resources that are restricted to expenditures for the payment of long-term general obligation debt principal,
interest, and related costs.
The General CIP Construction Capital Projects Fund is used to account for and report financial resources that
are committed or restricted to expenditures for capital outlays including the acquisition, construction, and
improvements to major capital facilities or capital equipment from amounts transferred from the city’s
General Fund in accordance with the city’s comprehensive financial policies adopted by the City Council
annually. This fund also represents other City Council approved capital programs including committing
funds for tourism-related capital projects as well as activity for the capital in-lieu parking and in-lieu
stormwater.
The Transportation Capital Projects Fund is used to account for the portion of Transportation Privilege (Sales)
Tax dedicated to transportation capital improvements. Resources are provided by the 0.2 percent 1989
voter-approved privilege tax and 0.1 percent 2018 voter-approved privilege tax dedicated to the Arterial
Life Cycle Program. The Arizona Highway User Revenue tax also contributes to this fund.
The External Sources Capital Projects Fund is used to account for the activity related to monies received
from a variety of external sources including federal and state grants and contributions. The revenues are
restricted or committed for specific types of capital improvements.
The government reports the following major proprietary funds:
The Water and Sewer Utility, Airport, and Solid Waste Funds account for the operating revenues and expenses
of the city’s water and sewer utility systems, airport, and sanitation services (solid waste, brush removal,
container maintenance, etc.), respectively.
Additionally, the government reports the following fund types:
The Internal Service Funds account for fleet management, self-insurance services, and computer replacements
provided to other departments or units of the city on a cost-reimbursement basis.
The Permanent Funds account for resources that are legally restricted to the extent that only earnings, not
principal, support the city’s programs.
58
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
In general, the effect of interfund activity has been eliminated from the government-wide financial statements.
Exceptions to this rule are indirect costs, in-lieu franchise fees, and other charges between the city’s governmental
activities and the Water and Sewer Utility Fund, Airport Fund, and Solid Waste Fund, because elimination
of these charges would distort the direct costs and program revenues reported in the statement of activities.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues
and expenses generally result from providing services in connection with the funds’ principal ongoing
operations. The principal operating revenues of the city’s enterprise and internal service funds are charges
for customer services including water, sewer, airport, solid waste, vehicle purchase/maintenance, computer
replacement, and self-insurance charges. Operating expenses for enterprise funds and internal service funds
include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as non-operating revenues and expenses.
When both restricted and unrestricted resources are available for specified expenditures, restricted resources
are considered spent before unrestricted resources. Within unrestricted resources, committed would be
considered spent first (if available), followed by assigned (if available), and then unassigned amounts.
D.
Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund
Balance
1.
Deposits and Investments
The city considers all highly liquid investments (including restricted assets) in money market mutual
funds, demand deposits, certificates of deposit, repurchase agreements, commercial paper, and
U.S. Treasury bills with an original maturity of three months or less to be cash equivalents. For
the purposes of the statements of cash flows, all pooled cash and investments are considered cash
equivalents. Maturities in excess of three months when purchased may be deposited or withdrawn by
the proprietary funds at any time without prior notice or penalty, therefore having the characteristics
of demand deposits.
GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment
Pools provides that governmental entities may report all investments at fair value, or they may elect to
report certain money market investments and participating interest-earning investment contracts at
amortized cost. The city has elected to report all investments at fair value. The city’s policy permits it
to invest in certificates of deposit; repurchase agreements; highly rated commercial paper issued by
corporations organized and doing business in the United States; money market mutual funds; highly
rated corporate bonds/notes/asset-backed securities denominated in U.S. dollars; obligations issued
or guaranteed by the United States government, or any of the senior debt of its agencies, sponsored
agencies, corporations, sponsored corporations or instrumentalities; bonds, notes, or other evidences
of indebtedness of this state or any of its counties, incorporated cities or towns, school districts, or
special taxing districts; and the pooled investment funds established by the Office of the Arizona State
Treasurer.
59
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
2.
Receivables and Payables
Activity between funds that is representative of lending/borrowing arrangements outstanding at the
end of the fiscal year is classified as “due to/from other funds” (i.e., the current portion of interfund
loans) or advances to other funds for long-term interfund loans. Any residual balances outstanding
between the governmental activities and business-type activities are reported in the government-wide
financial statements as “internal balances.”
All accounts receivables are shown net of an allowance for uncollectible amounts.
The city’s property tax is levied each year on or before the third Monday in August based on the
previous January 1 full cash value as determined by the Maricopa County Assessor. Levies are due
and payable in two installments, on October 1 and March 1, and become delinquent after November
1 and after May 1, respectively. A lien attaches to the property on the first day of January preceding
the assessment and levy of taxes. Delinquent amounts bear interest at the rate of 16 percent. Public
auctions of properties which have delinquent real estate taxes are held in February. Maricopa County,
at no charge to the taxing entities, bills and collects all property taxes.
Property taxes levied for current operation and maintenance expenses on residential property are
limited to one percent of the limited property value of such property. In addition, taxes levied for
current operation and maintenance expenses on all types of property are limited to a maximum
increase of two percent over the prior-year’s levy, adjusted for new construction and annexations.
Property taxes levied to pay principal and interest on bonded indebtedness are not limited.
3.
Inventories, Prepayments, and Prepaid Items
Inventories of the governmental funds are recorded under the consumption method. Inventories are
recorded as expenditures when consumed rather than when purchased. Inventories are valued at year
end based on cost, with cost determined using an average cost method.
Prepayments of the governmental funds, which are prepared using the modified accrual basis of
accounting, are recorded under the purchase method, and are therefore recorded as expenditures when
purchased. Within the government-wide statements, which are prepared using the accrual basis of
accounting, prepayments are recorded as assets and amortized over the life of the related agreement.
Prepaid items contain payments made to vendors applicable to future accounting periods in both the
government-wide and proprietary fund financial statements. The cost of a prepaid item is recorded as
an expense when consumed rather than purchased.
4.
Restricted Assets
Certain proceeds of the city’s bonds, as well as certain resources set aside for their repayment, are
classified as restricted assets on the statement of net position because they are maintained in separate
bank accounts or their use is restricted by outside parties.
60
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The joint venture construction deposits with the City of Phoenix are used for capital expansion,
rehabilitation, and expansion of the jointly used facilities.
Assets are also restricted in enterprise funds for deposits received from water, sewer, and airport
customers, as well as unearned revenues related to cash received in advance of services provided.
5.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, sidewalks,
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 $10,000, except for private-public and public-public partnerships,
leases, and subscription-based technology arrangements must be $50,000 or greater; and an estimated
useful life in excess of two years. All land and land rights regardless of value are capitalized. The city
may capitalize items under the individual threshold if in the aggregate the items exceed the threshold.
Assets contributed (donated) are recorded by reference to historical costs of the donor if recently
purchased or constructed, or if such records are not available, at acquisition value. The costs of
normal maintenance and repairs that do not add to the value of the asset or materially extend assets’
lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects
are constructed. The city has elected to exclude the values of the art collections held in perpetuity
from capitalization as the worth of the collections may change over time and because these collections
are maintained in perpetuity to be used for purposes other than financial gain.
Depreciation and amortization of all assets are recorded and calculated using the straight-line method
over the following estimated useful lives:
Water System...........................................................................................10 to 75 Years
Sewer System...........................................................................................25 to 50 Years
Buildings and Improvements................................................................25 to 50 Years
Streets and Storm Drains.................................................................................30 Years
Land Improvements.........................................................................................25 Years
Machinery and Equipment......................................................................5 to 20 Years
Motor Vehicles..........................................................................................3 to 15 Years
Furniture, Fixtures, and Office Equipment..........................................5 to 10 Years
Lease, public-public partnership, and subscription-based information technology arrangements assets
are amortized over the life of the associated contract. The excess purchase price over fair value of
assets acquired in the Water and Sewer Utility Enterprise Fund is amortized on the straight-line method
over 20 to 60 years.
When capital assets are disposed of, the cost and accumulated depreciation or amortization is removed
from the accounts, and any resulting gain or loss is recognized in the government-wide and proprietary
fund financial statements.
61
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
6.
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred
inflows of resources related to pensions, and pension expense, information about the pension plans’
fiduciary net position, and additions to/deductions from the plans’ fiduciary net position, have been
determined on the same basis as they are reported by the plans. For this purpose, benefit payments
(including refunds of employee contributions) are recognized when due and payable in accordance
with the benefit terms. Investments are reported within the fair value hierarchy established by generally
accepted accounting principles.
7.
Compensated Absences
Compensated absences consist of vacation leave and a calculated amount of medical leave earned by
employees based on services already rendered. Employees may accumulate up to a maximum number
of hours of vacation depending on years of service, but any vacation hours in excess of the maximum
amount unused at the calendar year end are forfeited. The city’s policy is to pay employees for unused
accumulated vacation hours at termination or retirement. The city’s medical leave policy, however, is
that only those employees hired full-time before July 1, 1982, receive cash for a portion of unused
medical leave at death or retirement. For employees hired after July 1, 1982, the city funds the value
of medical leave balances converted to a retiree health savings account for the participant immediately
upon retirement. To be eligible for the medical leave conversion, the employee must retire and have
accumulated 300 or more hours of medical leave (420 or more hours for shift fire employees) and will
be funded at 100 percent for any medical leave hours accrued prior to July 1, 2011. If an employee has
not accrued 1,200 hours before July 1, 2011, the employee will be funded the unused medical leave
accrued after July 1, 2011, at 50 percent of the employee’s hourly base rate at the time of retirement,
up to and including 1,200 hours accrued both before and after July 1, 2011. Shift fire employees will
have the same rules apply, except their cap is 1,680 medical leave hours.
Vacation pay is calculated based on vacation used, and the medical leave conversion is based on an
actuarial valuation dated January 1, 2025. The medical leave conversion and vacation pay amounts
are accrued in the government-wide and proprietary fund financial statements. A liability for the
current amount of compensated absences is recorded as a current liability as of June 30, 2025, in
the governmental and proprietary funds. The current liability represents compensated absences that
have matured but were not paid as of June 30, 2025, which resulted from employee resignations and
retirements. The current compensated absences amount in the governmental funds is combined with
accrued payroll and other payroll-related amounts in the accrued payroll and benefits line item. No
long-term liability for compensated absences is recorded in the governmental funds.
8.
Long-term Obligations
Long-term debt and other long-term obligations are reported as liabilities in the governmental activities
or business-type activities section, as appropriate, in the statement of net position of the government-
wide financial statements, or in the proprietary fund statement of net position in the proprietary fund
financial statements. Bond premiums and discounts are amortized over the life of the bonds using the
straight-line method. Bonds payable are reported net of the applicable bond premium or discount and
bond issuance costs are expensed when incurred.
62
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. The face amount of debt issued is reported as
other financing sources. Premiums received on debt issuances are reported as other financing sources
while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt service expenditures.
9.
Deferred Outflows/Inflows of Resources
In addition to assets, the government-wide financial statements and the proprietary fund financial
statements include a section for deferred outflows of resources. This represents a consumption of net
assets that applies to a future period(s) and will not be recognized as an outflow of resources (expense/
expenditure) until then. The city has three items that qualify for this category: deferred amounts on
refundings, pension-related amounts, and other postemployment benefits (OPEB)-related amounts.
Deferred amounts on refundings result from the difference between the carrying value of refunded
debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of
the refunded or refunding debt.
The pension and OPEB-related amounts include differences between expected and actual experience,
changes of assumptions or other inputs, and contributions made to the pension/OPEB plan by the
employer subsequent to the measurement date of the net pension liability/total OPEB liability and
before the end of the reporting period. Additionally, the pension-related amounts include the difference
between projected and actual investment earnings and changes in proportion and differences between
employer contributions and proportionate share of contributions. With the exception of the difference
between projected and actual investment earnings and contributions made to the pension/OPEB
plan by the employer subsequent to the measurement date of the net pension liability/total OPEB
liability and before the end of the reporting period, the pension-and OPEB-related deferred outflows
of resources should be recognized in pension/OPEB expense, respectively, beginning in the current
reporting period, using a systematic and rational method over a closed period equal to the average of
the expected remaining service lives of all employees that are provided with pensions/OPEB through
the pension/OPEB plans (active employees and inactive employees) determined as of the beginning
of the measurement period. The deferred outflows of resources relating to the difference between
projected and actual investment earnings should be recognized in pension expense using a systematic
and rational method over a closed five-year period, beginning in the current reporting period. The
deferred outflows of resources relating to contributions made to the pension/OPEB plan by the
employer subsequent to the measurement date of the net pension liability/total OPEB liability and
before the end of the reporting period will reduce the beginning net pension liability/total OPEB
liability in the following fiscal year.
In addition to liabilities, the government-wide and fund financial statements include a section for
deferred inflows of resources. This represents an acquisition of fund balance or net assets that applies
to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time.
The city has the following items that qualify for this category: unavailable revenue, pension-related
amounts, OPEB-related amounts, lease-related amounts, and public-private partnership amounts.
63
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Unavailable revenue, which arises only under the modified accrual basis of accounting, is recognized
as an inflow of resources in the period that the related amounts become available.
The pension-and OPEB-related amounts include differences between expected and actual experience
and changes of assumptions or other inputs. Additionally, the pension-related amounts include the
difference between projected and actual investment earnings and changes in proportion and differences
between employer contributions and proportionate share of contributions. With the exception of the
difference between projected and actual investment earnings, the pension-and OPEB-related deferred
inflows of resources should be recognized in pension/OPEB expense, respectively, beginning in the
current reporting period, using a systematic and rational method over a closed period equal to the
average of the expected remaining service lives of all employees that are provided with pensions/
OPEB through the pension/OPEB plans (active employees and inactive employees) determined as of
the beginning of the measurement period. The deferred inflows of resources relating to the difference
between projected and actual investment earnings should be recognized in pension expense using
a systematic and rational method over a closed five-year period, beginning in the current reporting
period.
Lease-related amounts are recognized at the inception of leases in which the city is the lessor. The
deferred inflow of resources is recorded in an amount equal to the corresponding lease receivable plus
certain additional amounts received from the lessee at or before the commencement of the lease term
that relate to future periods, less any lease incentives paid to, or on behalf of, the lessee at or before the
commencement of the lease term. The inflow of resources is recognized in a systematic and rational
manner over the term of the lease.
Public-private partnership (PPP) amounts are recognized at the inception of PPPs in which the city
is the transferor and upon the contribution of improvements to the underlying PPP asset made by
the operator in the PPP to the city. The deferred inflow of resources is recorded in an amount equal
to the corresponding PPP receivable plus the value of the contributed improvements at the time of
the contribution. The inflow of resources is recognized in a systematic and rational manner over the
term of the PPP.
10.
Development Impact Fee Revenue
The city has entered into several agreements whereby it will provide a development fee credit to
developers for construction of certain public infrastructure improvements. The funding source for
the reimbursements will come from water and sewer development fees, which are paid when units
of the development are connected to the utility system. The city does not become liable under the
agreements until the city has accepted the cost, a development fee has been paid, and a water meter
has been set.
11.
Fund Balance Policies
In the fund financial statements, governmental funds report the fund balance into classifications that
comprise a hierarchy based on the extent to which the city is bound to honor constraints on the specific
purpose for which those funds can be spent. The classifications of fund balance are Nonspendable,
Restricted, Committed, Assigned, and Unassigned.
64
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Nonspendable fund balances include amounts that cannot be spent because they are not in a spendable
form, such as inventory or prepaid items, or because resources legally or contractually must remain
intact.
Restricted fund balances are the portion of a fund balance that have externally enforceable limitations
on their usage through legislation or limitations imposed by creditors, grantors, laws and regulations
of other governments, or enabling legislation.
Committed fund balances are self-imposed limitations by the highest level of decision-making
authority, namely City Council, prior to the end of the reporting period. City Council approval is
required to commit resources or to rescind the commitment through a City Council resolution.
Assigned fund balances are limitations imposed internally by management based on the intended use
of the funds. In June 2011, through City Council Resolution No. 8751, the City Council authorized
the City Treasurer to assign fund balances for specific purposes.
Unassigned fund balances represent the residual net resources in excess of the other classifications.
The General Fund is the only fund that can report a positive unassigned fund balance, whereas any
governmental fund can report a negative unassigned fund balance.
When both restricted and unrestricted resources are available for specified expenditures, restricted
resources are considered spent before unrestricted resources. Within unrestricted resources, committed
would be considered spent first (if available), followed by assigned (if available), and then unassigned
amounts.
12.
Net Position
The government-wide and proprietary fund financial statements utilize a net position presentation.
Net position is categorized as net investment in capital assets, restricted, and unrestricted.
Net Investment in Capital Assets – This category groups all capital assets, including infrastructure
and capital-related deferred outflows of resources, into one component of net position. Accumulated
depreciation/amortization, the outstanding balances of debt that are attributable to the acquisition,
construction, or improvement of these assets, and the capital-related deferred inflows of resources
reduce the balance in this category.
Restricted Net Position – This category represents net position that has external restrictions imposed
by creditors, grantors, contributors, laws or regulations of other governments, and restrictions imposed
by law through constitutional provisions or enabling legislation.
Unrestricted Net Position – This category represents net position of the city not restricted for a
specific purpose.
65
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
13.
Use of Estimates
The preparation of basic 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 amount of assets, deferred outflows of resources, liabilities, deferred inflows
of resources, revenue and expenses/expenditures, and the disclosure of contingent assets and liabilities
at the date of the basic financial statements. Actual results could differ from those estimates.
E.
Implementation of New Accounting Principles
1.
Governmental Accounting Standards No. 101, Compensated Absences
The city adopted the provisions of GASB Statement No 101, Compensated Absences, that was effective
for periods beginning after December 15, 2023. The objective of the statement is to better meet
the information needs of financial statement users by updating the recognition and measurement
guidance for compensated absences. The statement requires that liabilities be recognized for leave that
has not been used, is attributable to services already rendered, accumulates and the leave is more likely
than not to be paid in cash or settled through non-cash means.
2.
Governmental Accounting Standards No. 102, Certain Risk Disclosures
The city adopted the provisions of GASB Statement No 102, Certain Risk Disclosures, that was effective
for periods beginning after June 15, 2024. The objective of this statement is to provide users of a
government’s financial statements with essential information about risks related to a government’s
vulnerabilities due to certain concentrations or constraints. The disclosures will provide users with
better information to understand and anticipate certain risks to a government’s financial condition.
66
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
II.
RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS
A.
Explanation of certain differences between the governmental funds balance sheet and the
government-wide statement of net position
The city’s total governmental fund balances, $929,149,000 differ from the net position of governmental
activities, $5,345,967,000 reported in the statement of net position. The difference primarily results from the
long-term economic focus in the statement of net position versus the current financial resources focus in the
governmental funds balance sheet.
67
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Reconciliation of Governmental Funds Balance Sheet to the Government-wide Statement of Net Position
(in thousands)
Total
Governmental
Funds
Long-Term
Assets and
Deferred
Outflows/
Liabilities
and Deferred
Inflows(1)
Internal
Service
Funds(2)
Reclassifications and Eliminations(3)
Statement of
Net Position
Total
Assets
Cash and Investments
$ 921,877
$ -
$ 82,318
$ -
$ 1,004,195
Cash with Fiscal Agent
76,378
-
-
-
76,378
Receivables (net of allowance for uncollectibles)
Interest
5,897
-
-
-
5,897
Privilege Tax
27,247
-
-
-
27,247
Transient Occupancy Tax
1,950
-
-
-
1,950
Property Tax
2,525
-
-
-
2,525
State Shared Sales Tax
1,860
-
-
-
1,860
Franchise Fee
3,390
-
-
-
3,390
Court
10,517
-
-
-
10,517
Highway User Tax
1,878
-
-
-
1,878
Auto Lieu Tax
536
-
-
-
536
Intergovernmental
40,936
-
-
-
40,936
Grants
4,716
-
-
-
4,716
Ambulance
1,233
1,233
Leases
34,187
-
-
-
34,187
Miscellaneous
8,734
-
448
-
9,182
Due from Other Funds
12,302
-
-
(12,302)
-
Advances to Other Funds
17,800
-
-
17,800
Supplies Inventory
556
-
1,624
-
2,180
Prepaid Items
-
-
219
-
219
Capital Assets (net of accumulated depreciation)
-
4,948,161
72,860
-
5,021,021
Net Pension OPEB Asset
-
9,205
203
-
9,408
Equity in Joint Venture
-
2,485
4
-
2,489
Lease Assets (net of accumulated amortization)
-
4,234
16
-
4,250
Subscription-Based I.T. Arrangements (net of accumulated amortization)
-
10,288
2
-
10,290
Prepayments
-
26,214
-
-
26,214
Public-Public Partnerships (net of accumulated amortization)
-
73,741
-
-
73,741
Total Assets
1,174,519
5,074,328
157,694 (12,302)
6,394,239
Deferred Outflows of Resources
Deferred Amounts on Refundings
-
11,493
-
-
11,493
Pension-Related Amounts
-
101,188
969
-
102,157
Pension OPEB-Related Amounts
-
488
12
-
500
City OPEB-Related Amounts
-
475
-
-
475
Total Deferred Outflows of Resources
-
113,644
981
-
114,625
Total Assets and Deferred Outflows of Resources
$ 1,174,519
$ 5,187,972
$ 158,675
$ (12,302)
$ 6,508,864
(continued)
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
68
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Reconciliation of Governmental Funds Balance Sheet to the Government-wide Statement of Net Position
(in thousands)
Total
Governmental
Funds
Long-Term
Assets and
Deferred
Outflows/
Liabilities
and Deferred
Inflows(1)
Internal
Service
Funds(2)
Reclassifications and Eliminations(3)
Statement of
Net Position
Total
Liabilities
Accounts Payable
$ 25,595
$ -
$ 2,673
$ -
$ 28,268
Accrued Payroll and Benefits
13,897
(56)
332
-
14,173
Due to Other Funds
12,302
-
9,256
(12,302)
9,256
Accrued Compensated Absences - Current
-
56
-
-
56
Accrued Compensated Absences - Due within one year
-
17,972
357
-
18,329
Accrued Compensated Absences - Due in more than one year
-
17,315
175
-
17,490
OPEB - Due within one year
-
127
-
-
127
Leases - Due within one year
-
1,598
6
-
1,604
Subscriptions - Due within one year
-
2,722
-
-
2,722
Matured Bond Interest Payable
7,151
-
-
-
7,151
Matured Bonds Payable
69,115
-
-
-
69,115
Unearned Revenue
Intergovernmental
9,116
-
-
-
9,116
Other
2,439
-
21
-
2,460
Due to Other Governments
4,549
-
-
-
4,549
Guaranty and Other Deposits
5,639
-
-
-
5,639
Other
2,932
-
-
-
2,932
Bonds, Loans, Capital Leases, and Other Payables
-
881,561
28,793
-
910,354
Total Liabilities
152,735
921,295
41,613
(12,302)
1,103,341
Deferred Inflows of Resources
Unavailable Revenue
61,055
(61,055)
-
-
-
Leases
31,580
-
-
-
31,580
Pension-Related Amounts
-
20,234
403
-
20,637
Pension-Related OPEB Amounts
-
3,311
68
-
3,379
Public-Private Partnerships
-
2,329
-
-
2,329
City OPEB-Related Amounts
-
1,631
-
-
1,631
Total Deferred Inflows of Resources
92,635
(33,550)
471
-
59,556
Total Liabilities and Deferred Inflows of Resources
245,370
887,745
42,084
(12,302)
1,162,897
Fund Balances/Net Position
Total Fund Balances/Net Position
929,149
4,300,227
116,591
-
5,345,967
$ 1,174,519
$ 5,187,972
$ 158,675
$ (12,302)
$ 6,508,864
(continued)
LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND
BALANCE/NET POSITION
Total Liabilities, Deferred Inflows of Resources, and Fund Balances/Net Position
69
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Reconciliation of Governmental Funds Balance Sheet to the Government-wide Statement of Net Position
(in thousands)
(1)
Cost of capital assets
$ 6,947,582
Accumulated depreciation
(1,999,421)
$ 4,948,161
$ 2,485
Prepayments at 7/1/24
$ 23,596
Prepayments for fiscal year 2025
3,943
Prepayments reclassified to SBITA asset
(358)
Amortization of prepayments
(967)
$ 26,214
PPPs at 7/1/24
$ 78,496
Retirement of PPPs
Land improvements net additions for PPPs
4,794
Amortization of PPPs
(9,549)
$ 73,741
Leases at 7/1/24
$ 3,756
Leases for fiscal year 2025
1,940
Loss on retirement
(18)
Amortization of leases
(1,444)
$ 4,234
SBITAs at 7/1/24
$ 12,752
SBITAs for fiscal year 2025
1,430
Prepayments reclassified to SBITA asset
358
Amortization of SBITAs
(4,252)
$ 10,288
Deferred amounts on refundings
$ 11,493
Pension-related amounts
101,188
Total City OPEB amounts
475
Pension OPEB-related amounts
488
(continued)
$ 113,644
Deferred outflows of resources consist of items that will consume net assets in a future reporting period(s) and do not meet the definition of an asset. Deferred amounts on refundings result
from the difference between the carrying value of refunded debt and its reacquisition price. The pension and OPEB-related amounts result from differences between expected and actual
experience, changes of assumptions or other inputs, the difference between projected and actual investment earnings, changes in the proportion and differences between city contributions and
proportionate share of contributions, and contributions made to the pension/OPEB plan by the employer subsequent to the measurement date of the net pension liability/total OPEB liability
and before the end of the reporting period.
Equity in joint ventures that are to be used in governmental activities are reported in the governmental funds as expenditures. These assets are included in the statement of net position for the
city as a whole.
When capital assets (land, buildings, equipment, etc.) that are to be used in governmental activities are purchased or constructed, the costs of those assets are reported as expenditures in
governmental funds; however, the statement of net position includes those capital assets among the assets of the city as a whole.
Certain items that are recognized as assets on the statement of net position are expended in governmental funds when paid, such as long-term prepayments, while others arise from the
incurrence of long-term liabilities or the receipt of capital assets from elsewhere within the city, such as public-public partnerships (PPPs), leases, and subscription-based information technology
arrangements (SBITAs). These assets are capitalized and amortized over the life of the corresponding agreement.
70
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Reconciliation of Governmental Funds Balance Sheet to the Government-wide Statement of Net Position
(in thousands)
Leases
$ (4,578)
Bonds
(543,908)
Public-public partnerships
(4,084)
Subscription-based information technology arrangements
(7,930)
Contracts Payable
(1,373)
Issuance premium
(26,125)
Accrued vacation and sick leave pay
(35,287)
Total City OPEB liability
(893)
Pension-Related OPEB (Asset)
9,205
Net pension liabilities
(297,117)
$ (912,090)
Unavailable court revenue
$ 3,908
Unavailable property tax revenue
1,190
Unavailable privilege tax revenue
7,578
Unavailable transient occupancy tax revenue
456
Unavailable intergovernmental revenue
41,961
Unavailable other revenue
5,962
$ 61,055
Pension-related amounts
$ (20,234)
Pension-related OPEB amounts
(3,311)
City OPEB-related amounts
(1,631)
Public-private partnerships
(2,329)
$ (27,505)
(2)
$ 116,591
(3)
Reduction of amount due from other governmental fund
$ (12,302)
Reduction of amount due to other governmental fund
$ 12,302
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 in the governmental funds. All
liabilities, both current and long-term, are reported in the statement of net position. Balances at June 30, 2025, were:
Because the focus of governmental funds is on a short-term basis, some assets will not be available to pay for current-period expenditures. Those assets (for example, receivables) are offset by
unavailable revenues in the governmental funds and thus are not included in fund balance. Certain tax and other revenues that are considered unavailable under modified accrual accounting for
governmental fund statements are recognized as revenue under accrual accounting for the government-wide statements.
When governmental funds have cash timing differences, due to and from balances are established at the fund level. This adjustment eliminates the governmental interfund activity.
Deferred inflows of resources represent an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. Deferred
inflows of resources related to pensions and OPEB may result from differences between expected and actual experience, changes of assumptions or other inputs, the difference between projected
and actual investment earnings, and changes in proportion and differences between employer contributions and proportionate share of contributions. Deferred inflows of resources related to
public-private partnerships are recorded in an amount equal to the value of the contributed operator improvements at the time of the contribution.
Internal service funds are used by management to charge the costs of certain activities, such as fleet management, computer equipment, and self-insurance, to individual funds. The assets and
liabilities of the internal service funds are included in governmental activities in the statement of net position.
71
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
B.
Explanation of certain differences between the governmental funds statement of
revenues, expenditures, and changes in fund balances and the government-wide
statement of activities
The net change in fund balances for governmental funds, $198,031,000 differs from the change in net position
for the governmental activities, $223,574,000 reported in the statement of activities. The differences arise
primarily from the long-term economic focus in the statement of activities versus the current financial
resources focus in the governmental funds. The effect of the differences is illustrated in the following table:
72
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
(in thousands)
Total
Governmental
Funds
Long-Term
Revenue/
Expenses(4)
Capital
Related
Items(5)
Internal
Service
Funds(6)
Reclassifications
and
Eliminations(7)
Long-Term Debt
Transactions(8)
Statement of
Activities
Taxes - Local
Property
$ 73,260
$ (390)
$ -
$ 1,259
$ -
$ -
$ 74,129
Transaction Privilege
310,062
715
-
-
-
-
310,777
Transient Occupancy
34,735
219
-
-
-
-
34,954
Light and Power Franchise
11,259
-
-
-
-
-
11,259
Cable TV Franchise
3,164
-
-
-
-
-
3,164
Salt River Project In-Lieu
197
-
-
-
-
-
197
Other Taxes
8,795
22
-
-
-
-
8,817
Taxes - Intergovernmental
State Shared Sales
37,509
-
-
-
-
-
37,509
State Revenue Sharing
51,990
-
-
-
-
-
51,990
Auto Lieu Tax
13,170
-
-
-
-
-
13,170
Highway User Tax
19,136
-
-
-
-
-
19,136
Local Transportation Assistance Fund
610
-
-
-
-
-
610
Business and Liquor Licenses
2,721
2
-
-
-
-
2,723
Charges for Current Services
Building and Related Permits
23,387
172
-
-
(28)
-
23,531
Recreation Fees
9,564
(16)
-
-
-
-
9,548
WestWorld Equestrian Facility Fees
8,445 (822)
-
-
-
-
7,623
Fire Fees
4,728
583
-
-
-
-
5,311
Fines, Fees, and Forfeitures
Court
4,797
154
-
-
-
-
4,951
Parking
215
11
-
-
-
-
226
Photo Radar
2,719
7
-
-
-
-
2,726
Court Enhancement
2,272
-
-
-
-
-
2,272
Library
144
1
-
-
-
-
145
Police
105
-
-
-
-
105
Opioid Settlements
992 (404)
-
-
-
-
588
Property Rental
12,472
210
-
-
-
-
12,682
Interest Earnings
28,795
-
-
-
-
-
28,795
Net Increase in Fair Value of Investments
22,247
-
-
-
-
-
22,247
Public-Private Partnerships
-
-
87
-
-
-
87
Intergovernmental
Federal Grants
19,663
415
-
-
-
-
20,078
State Grants
2,102
144
-
-
-
-
2,246
Miscellaneous
52,091
(24,324)
-
-
-
-
27,767
Developer Contributions
3,639
-
-
-
-
-
3,639
Streetlight and Services Districts
602
-
-
-
-
-
602
Contributions and Donations
3,141 (825)
-
-
-
-
2,316
Reimbursements from Outside Sources
1,976 (175)
-
-
-
-
1,801
Indirect Costs
9,345
-
-
-
-
-
9,345
Other
1,374
2
-
-
(20)
-
1,356
Total Revenues
$ 781,423
$ (24,299)
$ 87
$ 1,259
$ (48)
$ - $ 758,422
(continued)
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Government-wide Statement of Activities
REVENUES
73
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
(in thousands)
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Government-wide Statement of Activities
Total
Governmental
Funds
Long-Term
Revenue/
Expenses(4)
Capital
Related
Items(5)
Internal
Service
Funds(6)
Reclassifications
and
Eliminations(7)
Long-Term Debt
Transactions(8)
Statement of
Activities
Current
General Government
Mayor and City Council
$ 1,095
$ (26)
$ -
$ (4)
$ -
$ -
$ 1,065
City Clerk
1,180
(18)
-
(3)
-
-
1,159
City Attorney
9,106
(456)
15
(29)
-
-
8,636
City Auditor
981
(18)
-
(3)
-
-
960
City Court
7,939
(142)
45
(19)
-
-
7,823
City Manager
3,026
5
4
(2)
-
-
3,033
City Treasurer
13,971
(1,600)
29
(42)
(20)
-
12,338
Other General Government
8
-
-
-
-
-
8
Public Works
56,922
(694)
63,976
(382)
(862)
140
119,100
Community and Economic Development
48,041
(389)
3,077
(71)
(258)
-
50,400
Public Safety
217,099
(146)
6,425
(1,542)
(583)
187
221,440
Community Services
74,128
8,524
13,226
(251)
(103)
144
95,668
Administrative Services
28,726
511
2,943
(51)
(6)
51
32,174
Streetlight and Services Districts
577
-
-
-
-
-
577
Debt Service
Principal
80,808
-
-
-
-
(80,808)
-
Interest and Fiscal Charges
15,496
-
-
-
-
(1,206)
14,290
Bond Issuance Costs
522
-
-
-
-
(522)
-
Capital Outlay
144,891
-
(144,891)
-
-
-
-
Total Expenditures/Expenses
$ 704,516
$ 5,551
$ (55,151)
$ (2,399)
$ (1,832)
$ (82,014)
$ 568,671
Net Transfers from Other Funds
$ 10,603
$ -
$ -
$ (18)
$ -
$ -
$ 10,585
Capital Contributions
-
-
22,407
2,179
(1,784)
-
22,802
Financing of Leases
1,940
-
-
-
-
(1,940)
-
Financing of Subscription-Based I.T. Arrangements
779
-
-
-
-
(779)
-
Sale of General Capital Assets
277
(8)
(452)
272
-
-
89
Issuance of Long-Term Capital-Related Debt
102,250
-
-
-
-
(102,250)
-
Premium on Long-Term Debt Issued
5,275
-
-
-
-
(5,275)
-
Gain on In-Substance Defeasance of Debt
-
-
-
-
-
330
330
Gain on Retirement of Lease Liability
-
-
-
-
-
17
17
Total
121,124
(8)
21,955
2,433
(1,784)
(109,897)
33,823
Net Change for the Year
$ 198,031
$ (29,858)
$ 77,193
$ 6,091
$ -
$ (27,883)
$ 223,574
(continued)
EXPENDITURES/EXPENSES
OTHER FINANCING SOURCES (USES) / CHANGES IN NET
POSITION
74
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
(in thousands)
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Government-wide Statement of Activities
(4)
Taxes-Local
$ 566
Charges for Services/Licenses
(81)
Fines, Fees, and Forfeitures
(231)
Intergovernmental
(22,631)
Other
(796)
$ (23,173)
Accrual for long-term compensated absences
(2,470)
$
City OPEB expense
133
Pension expense
(44,176)
Reclassified expenses from lease and capital
6,812
Pension OPEB Expense
6,206
Change in equity interest for joint venture
(525)
Amortization of long-term prepaid leases
(967)
Amortization of public-public partnerships
(9,549)
Amortization of leased assets
(1,444)
Amortization of subscription-based I.T. arrangements
(4,252)
$ (50,232)
Current-year pension contributions
$ 44,251
Current-year Pension OPEB contributions
177
Current-year City OPEB contributions
94
$ 44,522
$ 177
(continued)
Some expenses reported in the statement of activities do not require the use of current financial resources, and are therefore not reported as expenditures in governmental funds.
Current-year pension and OPEB contributions are reclassified to deferred outflows of resources and prepayments on the statement of net position, and are therefore not a reduction of net position.
Current-year joint venture contributions are reclassified to an increase in the joint venture asset on the statement of net position, and are therefore not a reduction of net position.
Because some property taxes will not be collected for several months after the city's fiscal year-end, they are not considered as "available" revenues in the governmental funds. Similarly, other revenues
are not currently available at year-end and are not reported as revenue in the governmental funds.
75
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
(in thousands)
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Government-wide Statement of Activities
When lease assets are retired, a gain or loss is recognized on the statement of activities.
Lease retirements
$ (18)
$ (1,134)
(5)
Capital expenditures
144,891
$
Depreciation expense
(89,740)
Sale of capital assets
(452)
54,699
$
Capital contributions
22,407
$
87
$
(continued)
Donations of capital assets are not capitalized on the governmental fund statements, but are included in the assets of the city. On the statement of activities the donations are shown as capital
contributions.
When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds; however, in
the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. As a result, fund balance decreases by the amount of financial
resources expended, whereas net position decreases by the amount of depreciation expense charged for the year and the sale of capital assets.
The State Treasurer distributes funding directly to the Public Safety Personnel Retirement System (PSPRS) that is used to offset the contributions required to be made by the city to the PSPRS. This
amount is recognized as revenue by the city although no cash is received directly from the State Treasurer.
Amortization of deferred inflows of resources related to capital assets acquired by the city as a result of public-private partnerships are not shown in the governmental fund statements. On the statement
of activities it is recorded as revenue.
76
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
(in thousands)
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the
Government-wide Statement of Activities
(6)
Change in net position
7,136
$
Internal payable to Enterprise Fund
(1,045)
6,091
$
(7)
Reduction in revenues/capital contributions - Governmental Funds
(1,832)
$
Reduction in expenditures/expenses - Governmental Funds
(1,832)
$
(8)
Transferred to the paying agent
Principal payments made
80,808
$
Amortization of deferred charges on refundings
$ (1,917)
Amortization of bond premiums and discounts
3,123
1,206
$
Lease acquisitions
$ (1,940)
Subscription-based information technology arrangements
(779)
Long-Term capital-related debt
(102,250)
Premium on bonds
(5,275)
(110,244)
$
When lease, subscription-based information technology arrangement (SBITA), and contract payable liabilities are retired, a gain or loss is recognized on the statement of activities.
Retirement of lease liabilities
17
$
$ 330
Any difference between the reacquisition price and the net carrying amount of debt defeased in-substance by existing resources, together with any deferred outflows of resources or deferred inflows of
resources from prior refundings, should be recognized as a separately identified gain or loss in the period of the in-substance defeasance.
Bond proceeds and the financing of leases, subscription-based information technology arrangements, and contracts payable are reported as financing sources in governmental funds and thus contribute
to the change in fund balance. In the government-wide statements, however, issuing debt increases long-term liabilities in the statement of net position and does not affect the statement of activities.
Proceeds were received from:
Interest expense in the statement of activities differs from the amount reported in governmental funds because additional interest was calculated for the amortization of deferred amounts on refundings,
and reductions of interest expense were recognized due to the amortization of bond premiums.
Repayment of principal and defeasance of bond principal via refunding bonds are reported as an expenditure or other financing use, respectively, in governmental funds. These payments have the effect
of reducing fund balance because current financial resources have been used. For the government-wide statements; however, these payments reduce the liabilities in the statement of net position and do
not result in an expense in the statement of activities.
Interfund transactions between governmental activities are eliminated in the consolidation of these activities for the statement of activities. The elimination is reflected as a reduction of revenues and
expenditures to eliminate the doubling up effect of these transactions within the governmental activities.
Internal service funds are used by management to charge the costs of certain activities, such as insurance, computer equipment, and fleet management to the individual funds. The adjustments for
internal service funds adjust those funds by charging/crediting additional amounts to participating governmental activities and recording an amount due to/from the enterprise funds.
77
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
III.
STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A.
Budget and Budgetary Accounting
The city prepared an annual budget that covered fiscal year 2025. The fiscal year 2025 budget appropriation is
established and reflected in the financial statements as follows:
The city prepares its budget on a basis generally consistent with GAAP, with such exceptions as eliminating
the adjustments for fair value of investments, payroll accruals, in-kind revenue and expenditure recognition
activity, interest associated with leases, amortized lease revenue, accrued compensated absences, and GAAP
entries associated with the financing or termination of leases, subscription-based information technology
arrangements, public-private partnerships, long-term contracts payable, and timing differences for interfund
loan arrangements.
A budgetary comparison statement for the General Fund is presented in the basic financial statements. This
statement displays original budget, amended budget, and actual results. Budgetary comparison schedules are
also included as supplementary schedules for certain other governmental funds.
The City Council formally adopts the budget and legally allocates, or appropriates, available monies for the
General Fund, certain special revenue funds (Transportation, Community Development Block Grant, HOME,
Grants, Housing Choice Voucher Program, Preserve Privilege Tax, Streetlight Districts, Special Programs,
Tourism Development, and Stadium Facility) and debt service funds (except for the Community Facilities
Districts and the Debt Service Stabilization Funds); therefore, these funds have appropriated budgets, and
budget to actual information is presented.
Community facilities districts funds, capital projects funds, enterprise funds, internal service funds, and
permanent funds have non-appropriated budgets. Accordingly, no comparison of budget to actual is presented
in the financial statements for these funds. Budgets for the Community Development Block Grant, HOME,
Grants, and Housing Choice Voucher Program Funds are established pursuant to the terms of the related
grant awards. Budgets for the community facilities districts are established in accordance with Arizona Revised
Statutes, which do not require their inclusion in the city budget or adoption by the City Council. Budgets for
capital projects funds are established for individual projects and unexpended funds are re-appropriated each
year until the project is completed and capitalized. Budgets for enterprise funds and internal service funds
are established to help departments control operational costs. Budgets for permanent funds are established in
accordance with endowment requirements.
On or before the second regular council meeting in May, the City Manager submits to the City Council
a proposed budget for the fiscal year commencing the following July 1. The budget includes proposed
expenditures and the means of financing them. Three public hearings are held prior to the final budget
adoption to obtain taxpayer comments.
In June, the budget is legally enacted through the passage of an ordinance. The ordinance sets the limit
for expenditures during the fiscal year. Additional expenditures may be authorized beyond the limit for
expenditures directly necessitated by a natural or man-made disaster as prescribed in the State Constitution,
Article 9, Section 20. No supplemental budgetary appropriations were made to the original budget during
fiscal year 2025.
78
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The expenditure appropriations in the adopted budget are allocated by division. The maximum legal
expenditure permitted for the fiscal year is the total budget as adopted. Divisional appropriations may be
amended during the fiscal year.
Upon the recommendation of the City Manager and with the approval of the City Council: 1) transfers may
be made from the appropriations for contingencies to divisions and 2) unexpended appropriations may be
transferred from one division to another. Management control of budgets is further maintained at a line-
item level within the division.
B.
Excess of Expenditures over Appropriations
The Housing Choice Voucher Program Special Revenue Fund, the Streetlight Districts Special Revenue
Fund, and the Tourism Development Special Revenue Fund exceeded their expenditure appropriation by
$659,000, $5,000, and $734,000 respectively. The additional expenditures incurred were funded by available
fund balances within the respective funds.
C.
Deficit Fund Equity
The Community Development Block Grant Special Revenue Fund, HOME Special Revenue Fund, Grants
Special Revenue Fund, and the External Sources Capital Project Fund had deficit ending fund balances of
$1,000, $56,000, $1,650,000, and $10,997,000 respectively. These deficits were caused by timing differences
from pending grant reimbursements and reimbursements from intergovernmental agreements. Revenue
accruals are not recognized in the current fiscal year due to the unavailability of the funds. These pending
reimbursements will be recognized as revenue when received or available.
The Streetlight Districts Special Revenue Fund had a deficit fund balance of $54,000 due to timing differences
in collections from the streetlight levy.
D.
Fund Balance Classifications
The following table details the fund balance categories and classifications for Governmental Funds:
79
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
(in thousands)
General
General
Obligation
Bond Debt
Service
General CIP
Construction
Capital
Projects
Transportation
Capital
Projects
External
Sources
Capital
Projects
Total Nonmajor
Governmental
Funds
Total
Governmental
Funds
FUND BALANCES
Nonspendable
Inventory
$ 556
$ -
$ -
$ -
$ -
$ -
$ 556
Interfund Loan to Solid Waste
17,800
-
-
-
-
- 17,800
Endowment Funds
-
-
-
-
-
675
675
Total Nonspendable
18,356
-
-
-
-
675
19,031
Restricted
Property Tax for Debt Service
-
7,523
-
-
-
-
7,523
Transaction Privilege and Highway User Tax for Transportation Capital Improvements
-
-
-
133,301
-
-
133,301
External Contributions for Capital Improvements
-
-
-
-
3,443
-
3,443
GO Bond Proceeds for Capital Improvements
-
-
-
-
-
90,148
90,148
Transaction Privilege and Highway User Tax for Transportation Improvements
-
-
-
-
-
32,087
32,087
Federal Grants for the Community Development Block Grant Program
-
-
-
-
-
206
206
Federal Grants for Housing Choice Voucher Program
-
-
-
-
-
810
810
Transaction Privilege Tax for Preserve Land Purchase and Improvements
-
-
-
-
-
165,144
165,144
Property Tax for Community Facility Districts
-
-
-
-
-
281
281
Contributions for City Manager Special Events and Programs
-
-
-
-
-
4
4
Contributions for Mayor/City Council Special Events and Programs
-
-
-
-
-
10
10
Court Fees for City Court Improvements to Facilities and Operations
-
-
-
-
-
2,060
2,060
Contributions for City Court Jury Program Refreshments
-
-
-
-
-
14
14
APS Improvement District Fees for Underground Utility Upgrades
-
-
-
-
-
24
24
Contribution for the Stormwater Drainage System
-
-
-
-
-
253
253
Contributions for Community and Economic Development
-
-
-
-
-
1
1
Disbursements from AZ State Crime Laboratory Assessment Fund for Crime Lab Services
-
-
-
-
-
174
174
Annual Payment from IGA with the SRP-MIC for Forensic Lab Services
-
-
-
-
-
306
306
Contributions for the Fire Department
-
-
-
-
-
11
11
Contributions for the Police Department
-
-
-
-
-
126
126
Fees for Police Department 30-Day Tow Program
-
-
-
-
-
382
382
Fees for Police Officer Safety Equipment
-
-
-
-
-
262
262
Contributions for the School Resource Officers Crisis Canine Program
-
-
-
-
-
44
44
Disbursements from the State of Arizona for Peace Officer Safety Equipment
-
-
-
-
-
27
27
Contributions for Paiute and Vista Neighborhood Centers
-
-
-
-
-
8
8
Contributions for the Scottsdale Cares Program
-
-
-
-
-
290
290
Contributions for Human Services
-
-
-
-
-
20
20
Facility/Recreation Fees for Senior Center Special Programs
-
-
-
-
-
18
18
Golf Course Surcharge for TPC Turf Removal Projects
-
-
-
-
-
521
521
Contributions for Parks and Recreation
-
-
-
-
-
46
46
Contributions for the Libraries
-
-
-
-
-
144
144
Disbursements from Endowments for the Libraries
-
-
-
-
-
13
13
Disbursements from AZ Supreme Court for Smart and Safe Expungements
-
-
-
-
-
2
2
Disbursements from the Smart and Safe AZ Fund for the Fire Department
-
-
-
-
-
1,335
1,335
Disbursements from the Smart and Safe AZ Fund for the Police Department
-
-
-
-
-
1,748
1,748
Disbursements from the Opioid Settlement Funds for Human Services
-
-
-
-
-
2,976
2,976
Transient Occupancy Tax for Destination Marketing
-
-
-
-
-
7,834
7,834
Contributions for Stadium Operations
-
-
-
-
-
6,247
6,247
MPC Funds for Debt Service
-
-
-
-
-
4
4
Stadium Surcharge for Debt Service
-
-
-
-
-
2,372
2,372
Endowment Funds
-
-
-
-
-
27
27
Total Restricted
$ - $ 7,523
$ - $ 133,301
$ 3,443
$ 315,979
$ 460,246
(continued)
80
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
(in thousands)
General
General
Obligation
Bond Debt
Service
General CIP
Construction
Capital
Projects
Transportation
Capital
Projects
External
Sources
Capital
Projects
Total Nonmajor
Governmental
Funds
Total
Governmental
Funds
FUND BALANCES
Committed
General Fund Contribution for Capital Improvements
$ -
$ -
$ 126,887
$ -
$ -
$ -
$ 126,887
McCormick Railroad Park Improvements
-
-
362
-
-
-
362
In-Lieu Parking Fees for Parking Projects
-
-
530
-
-
-
530
In-Lieu Stormwater Fees for Drainage Improvements
-
-
231
-
-
-
231
Tourism Development Capital Projects
-
-
1,262
-
-
-
1,262
Court Capital Improvement Enhancement Projects
-
-
2,349
-
-
-
2,349
Forensic Science Intergovernmental Agreement Contribution
-
-
-
-
70
-
70
Risk Management Capital Improvement Contribution
-
-
8
-
-
-
8
Stormwater Utility Fee for Capital Improvements
-
-
14,535
-
-
-
14,535
Downtown Fees for Capital Improvements
-
-
1,072
-
-
-
1,072
Downtown Special Capital Improvements
-
-
3,044
-
-
-
3,044
Greater Airpark Special Capital Improvements
-
-
1,742
-
-
-
1,742
Special Event Parking for Capital Improvements
-
-
203
-
-
-
203
Court Enhancement Fees for Upgrades to Court Operations
-
-
-
-
-
4,745
4,745
Rent Fees for Loloma School Maintenance and Capital Improvements
-
-
-
-
-
163
163
In-Lieu Stormwater Fees for Area Drainage Master Studies
-
-
-
-
-
20
20
Downtown Cultural Program for Public Works of Art
-
-
-
-
-
2,198
2,198
Developer Contributions to the Airpark Cultural Trust for Public Works of Art
-
-
-
-
-
11
11
In-Lieu Fees for Public Improvement at Airpark
-
-
-
-
-
5,665
5,665
Rent Fees for the Community Arts Trust to Support the Loloma School
-
-
-
-
-
103
103
Historic Preservation Program for Rehabilitation of Buildings
-
-
-
-
-
362
362
License Fees for the Regulation of the Public Safety Pawn Shop Ordinance
-
-
-
-
-
262
262
Cadet Competition Fees for the Scottsdale Police Department Cadet Program
-
-
-
-
-
21
21
Sponsorship Fees for Events at the Senior Centers
-
-
-
-
-
84
84
Sponsorship Fees for Parks and Recreation Programming
-
-
-
-
-
2
2
Golf Course Surcharge for Silverado Golf Course Improvements
-
-
-
-
-
1,333
1,333
Retail Sale Revenue for McCormick Stillman Railroad Park Operations
-
-
-
-
-
26
26
Contribution for Habitat Improvements in the Preserve
-
-
-
-
-
219
219
Allocation of Youth Sports Fee for Maintenance/Improvements of Athletic Fields
-
-
-
-
-
804
804
Allocation of Aquatic Fee for Maintenance/Improvements of Aquatic Facilities
-
-
-
-
-
57
57
Retail Sale Revenue for Library Collection Materials
-
-
-
-
-
52
52
Attendee Fees for Westworld User Area Improvements
-
-
-
-
-
4,137
4,137
Transient Occupancy Tax for Tourism Development
-
-
-
-
-
5,211
5,211
Excise Tax for Debt Reserve
-
-
-
-
-
2,683
2,683
Total Committed
-
-
152,225
-
70
28,158
180,453
Unassigned
285,927
-
-
-
(14,510)
(1,998)
269,419
Total Fund Balances
$ 304,283
$ 7,523
$ 152,225
$ 133,301
$ (10,997)
$ 342,814
$ 929,149
81
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The City Council has adopted a financial policy to maintain an operating reserve for the following
funds:
• General Fund equal to 20 percent of operating uses, excluding transfers out, to provide stability and
flexibility to respond to unexpected events.
• Transportation, Non-major Special Revenue Fund equal to 10 percent of operating uses, excluding
transfers out, to provide funding to address fluctuations in economic cycles and unexpected one-
time operating requirements.
• Water and Sewer Utility Enterprise Fund equal to 25 percent of operating uses, excluding transfers
out and debt service for emergencies, unexpected decline in revenues, and other unanticipated
events.
• Airport Enterprise Fund equal to 25 percent of operating uses, excluding transfers out and debt
service for emergencies, unexpected decline in revenues, and other unanticipated events.
• Solid Waste Enterprise Fund equal to 15 percent of operating uses, excluding transfers out and debt
service for emergencies, unexpected decline in revenues, and other unanticipated events.
The City Council has adopted a financial policy to maintain the following additional reserves:
• General Fund Emergency Reserve of 5 percent of operating uses, excluding transfers out. The
reserve is intended for unexpected emergencies and events where immediate action must be taken
in the best interest of the city’s residents and business owners.
• Water and Sewer Utility Enterprise Fund Asset Replacement Reserve equal to 2 percent
of undepreciated book value of tangible fixed assets for repair and maintenance of critical
infrastructure.
• General Obligation Bond Debt Service Fund Reserve of no more than 10 percent of the amount
of annual principal and interest needed to service the outstanding debtt.
• Debt Service Reserve for governmental debt supported by excise taxes, dedicated taxes, or revenues,
at a minimum of 25 percent of the next fiscal year’s debt service.
• Self-Insurance Reserve at a level that will adequately fund the city’s financial obligations for the
payment of property, workers’ compensation, liability and health benefit losses equal to the actuary’s
75 percent confidence level of projected total outstanding claims liability.
E.
Net Position Restrictions
Only restrictions imposed by external sources are shown as restricted net position on the government-wide
financial statements. The following restrictions apply to the Business-type Activities as of June 30, 2025:
Net Position Restrictions (in thousands)
Water and Sewer
Restricted for Joint Venture Construction Deposits
$ 5,500
82
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
IV.
DETAILED NOTES ON ALL FUNDS
A.
Cash and Investments
The city maintains a cash and investment pool for use by most funds. The city holds unexpended General
Obligation Bond construction proceeds received at issuance in separate investment accounts. Certain activities
of the city’s grant funds are also held in separate bank accounts, as well as the Community Facilities Districts
and Municipal Property Corporation. The city’s endowment funds have investments held separately by a
trustee.
The city’s investment policy, which is authorized by City Charter, ordinance, and trust agreements permits the
city to invest in certain instruments. These instruments include certificates of deposit; repurchase agreements;
highly rated commercial paper issued by corporations organized and doing business in the United States;
money market mutual funds; highly rated corporate bonds/notes/asset-backed securities denominated in
U.S. dollars; obligations issued or guaranteed by the United States government or any of the senior debt of
its agencies, sponsored agencies, corporations, sponsored corporations, or instrumentalities; bonds, notes
or other evidences of indebtedness of this state or any of its counties, incorporated cities or towns, school
districts, or special taxing districts; and the pooled investment funds established by the Office of the Arizona
State Treasurer.
Deposits
As of June 30, 2025, the carrying amount of the city’s deposits was $185,836,633 and the bank balance
was $193,754,304. The $7,917,671 difference represents outstanding checks, deposits in transit, and
other reconciling items.
Custodial Credit Risk
Custodial credit risk is the risk that, in the event of the failure of a depository financial institution,
the city will not be able to recover deposits or will not be able to recover collateral securities that
are in the possession of an outside party. All deposits are required to be fully collateralized per the
city’s investment policy. As of June 30, 2025, $73,198,968 of the city’s deposits were exposed to
custodial credit risk and was uninsured and collateralized by securities held by the pledging bank’s trust
department not in the city’s name.
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty
(e.g., broker-dealer) to a transaction, the city will not be able to recover the value of its investment
or collateral securities that are in the possession of another party. The city’s investment policy limits
its exposure to custodial credit risk by requiring all security transactions entered into by the city be
conducted on a delivery-versus-payment basis. Securities are to be held by a third-party custodian.
83
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of
an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its
fair value to changes in market interest rates. As a means of limiting its exposure to fair value losses
arising from rising interest rates, the city’s investment policy limits the city’s investment portfolio to
maturities of five years or less from the date of purchase and the weighted average maturity of the
overall investment portfolio to three years or less.
The following table summarizes the city’s interest rate risk, based on maturity dates of various
investments (in thousands):
Investment Type
Fair Value
Less than 1
1 - 2
2 - 3
3 - 4
4 - 5
U.S. Government Securities
$ 837,258
$ 270,671
$ 79,090
$ 155,494
$ 156,156
$ 175,847
U.S. Government Agencies
234,192
41,635
29,567
73,945
33,326
55,719
Corporate Notes
101,013
49,448
51,565
-
-
-
Total Investments
$ 1,172,463
$ 361,754
$ 160,222
$ 229,439
$ 189,482
$ 231,566
Investment Maturities (in Years)
Credit Risk
Generally, credit risk is the risk that the issuer or other counterparty to an investment will not fulfill its
obligations to the holder of the investment. Credit risk is measured by the assignment of a rating by
Nationally Recognized Statistical Rating Organizations (NRSROs). The city’s investment policy limits
its investments in:
• Obligations issued or guaranteed by the United States government or any of the senior debt of
its agencies, sponsored agencies, corporations, sponsored corporations, or instrumentalities with a
maximum maturity of five years
• Bonds, notes, or other evidence of indebtedness of this state or any of its counties, incorporated
cities or towns, school districts or special taxing districts, which carry a minimum “AA-” or “Aa3”
or equivalent rating by at least one NRSRO at the time of purchase with a maximum maturity of
five years
• Fully insured or collateralized certificates of deposit and other evidence of deposit at banks and
savings institutions placed in accordance with the procedures prescribed in Arizona Revised Statutes
§ 35-323.01 with a maximum maturity of 18 months from the time of purchase
• Negotiable or brokered certificates of deposit within the top two ratings by at least two NRSROs,
at the time of purchase, and a maximum maturity of three years
• Commercial paper within the top two ratings of a NRSRO at the time of purchase, issued by
corporations organized and doing business in the United States, and a maximum maturity of nine
months
• Bonds, debentures, notes, or other evidence of indebtedness with a minimum “A” or better rating,
at the time of purchase, from at least two NRSROs, and a maximum maturity of five years
84
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
• Repurchase agreements with a maximum maturity of 180 days
• Money market funds whose underlying investments are securities, which are allowed by state law
and registered under the Investment Company Act of 1940
The city’s investments in the investment types referenced above as of June 30, 2025, meet the
aforementioned criteria. Presented below are the ratings, as determined by S&P (unless otherwise
noted), as of June 30, 2025, for each investment type (in thousands):
Investment Type
Total
A
A+
AA-
AA
AA+
AAAm
AAA
Exempt
from
Disclosure
U.S. Government Securities
$ 837,258 $ - $ - $ - $ -
$ - $ - $ -
$ 837,258
U.S. Government Agencies
234,192
-
-
- -
234,192 -
- -
Corporate Notes
101,013
15,050
11,489
32,040 11,111
8,886
- 22,437 -
Money Market Mutual Funds
135,833
-
-
- -
- 135,833
- -
Total Investments
$ 1,308,296 $ 15,050 $ 11,489 $ 32,040
$ 11,111 $ 243,078
$ 135,833 $ 22,437
$ 837,258
Concentration of Credit Risk
The city’s investment guidelines place the following limits on the amount that the city may invest in
various security types:
Security Type
Maximum Percent
of Portfolio
U.S. Treasury Obligations
80%
Federal Agency Obligations
80%
With One Agency
40%
Instrumentalities (Supranational Debt)
15%
With One Issuer
5%
Certificates of Deposit
20%
With One Financial Institution
5%
Negotiable Certificates of Deposit
20%
With One Issuer
5%
Commercial Paper
35%
With One Issuer
5%
Corporate Indebtedness
35%
With One Issuer
5%
Repurchase Agreements
75%
With One Counterparty
20%
Money Market Funds
35%
Arizona Investment Pool
35%
Municipal Obligations of State of AZ or Political Subdivisions
25%
With One Issuer
5%
85
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The following is a listing by issuer of the city’s investments as of June 30, 2025:
(dollars in thousands)
Issuer
Investment Type
Fair Value
Percent of
Holdings
United States Treasury
U.S. Govt. Securities
$ 837,258
71.41%
Federal Home Loan Bank (FHLB)
U.S. Govt. Agencies
115,756
9.87%
Federal National Mortgage Association (FNMA)
U.S. Govt. Agencies
60,595
5.17%
Federal Farm Credit Bank (FFCB)
U.S. Govt. Agencies
43,709
3.72%
Microsoft Corp.
Corporate Notes
17,323
1.48%
Chevron Corp.
Corporate Notes
15,622
1.33%
Federal Home Loan Mortgage Corporation (FHLMC)
U.S. Govt. Agencies
14,132
1.21%
Novartis AG
Corporate Notes
11,898
1.01%
Wal-Mart Inc.
Corporate Notes
11,111
0.95%
Apple Inc.
Corporate Notes
8,886
0.76%
Pepsico Inc.
Corporate Notes
6,370
0.54%
Bank of America Corp.
Corporate Notes
5,119
0.44%
Johnson & Johnson
Corporate Notes
5,114
0.44%
Bank Of New York Mellon Corp.
Corporate Notes
5,028
0.43%
Bristol-Myers Squibb Co.
Corporate Notes
4,684
0.39%
Exxon Mobil Corp.
Corporate Notes
4,520
0.39%
JP Morgan Chase & Co.
Corporate Notes
4,428
0.38%
Target Corp.
Corporate Notes
910
0.08%
Total Investments
$ 1,172,463
100.00%
86
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Investments
Total city cash and investments at fair value are as follows (in thousands):
Cash on Hand
$ 18
Carrying Amount of City Deposits
185,837
Investments
1,308,296
Endowments
702
Total Cash and Investments
$ 1,494,853
The city categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The city has the following recurring fair value measurements as of
June 30, 2025:
Investments Measured at Fair Value
(in thousands)
Quoted Prices in Active
Markets for Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
U.S. Government Securities
-
$
837,258
$
-
$
U.S. Government Agencies
-
234,192
-
Corporate Notes
-
101,013
-
-
$
1,172,463
$
-
$
Fair Value Measurements Using
87
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The following pricing methodologies are utilized to value the city’s investments:
U.S. Government Securities
Evaluators gather information from market sources and integrate relative credit information,
observed market movements, and sector news into the evaluated pricing applications and
models.
U.S. Government Agencies
A bullet (non-call) spread scale is created for each issuer for maturities going out to forty
years; an Option Adjusted Spread (OAS) model is incorporated to adjust spreads of issues
that have early redemption features; and final spreads are added to a U.S Treasury curve. A
special cash discounting yield/price routine calculates prices from final yields to
accommodate odd coupon payment dates typical of medium-term notes.
Corporate Notes
Evaluators gather information from market sources and integrate relative credit information,
observed market movements, and sector news into the evaluated pricing applications and
models.
Total city cash and investments as of June 30, 2025 are reported as follows (in thousands):
Primary Government
Cash and Investments
$ 1,336,078
Cash with Fiscal Agent
153,913
Other Restricted Cash
4,862
Total Cash and Investments
$ 1,494,853
Investment income is comprised of the following for the fiscal year ended June 30, 2025 (in thousands):
Net Interest
$ 36,987
Net Increase in the Fair Value of Investments
28,917
Total Net Investment Income
$ 65,904
The net increase in the fair value of investments for the fiscal year was $28,917,000. This amount takes
into account all changes in fair value (realized and unrealized) that occurred during the fiscal year.
88
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
B.
Endowments
The city is the sole beneficiary of four permanent endowment funds, held and managed by the Arizona
Community Foundation (Foundation). The endowment funds are managed in accordance with Arizona
Revised Statute §10-11803, which governs the appropriation for expenditure or accumulation of endowment
funds. The spending policy of the Foundation is communicated to the city annually. Distribution pursuant
to the spending policy shall be based upon recommendation of the city, made by and through the City
Council. As of June 30, 2025, the amount of donor-restricted endowment funds available for authorization
and expenditure is $27,400.
C.
Receivables
Receivables as of June 30, 2025, for the government’s individual major governmental funds, nonmajor
governmental funds, and internal service funds in the aggregate, including the applicable allowances for
uncollectible accounts, are as follows (in thousands):
Governmental Activities and Internal Service Funds
General
General Obligation
Bond Debt Service
General CIP
Construction
Capital Projects
Transportation
Capital Projects
External Sources
Capital Projects
Nonmajor and
Other Funds
Total
Governmental and
Internal Service
Funds
Receivables
Property Taxes and Penalties
Property
$ 1,300
$ 1,160
$ -
$ -
$ -
$ 65
$ 2,525
Court
69,753
-
-
-
-
1,820
71,573
Subtotal Property Taxes and Penalties
71,053
1,160
-
-
-
1,885
74,098
Other Local Taxes
Privilege
17,337
-
-
1,536
-
8,374
27,247
Transient Occupancy
-
-
-
-
-
1,950
1,950
State Shared Sales
1,860
-
-
-
-
-
1,860
Franchise Fee
3,320
-
-
-
-
70
3,390
Auto Lieu
536
-
-
.
-
-
536
Highway User
-
-
-
-
-
1,878
1,878
Subtotal Other Local Taxes
23,053
-
-
1,536
-
12,272
36,861
Intergovernmental/Grants
-
-
4,724
15,814
11,560
13,554
45,652
Interest and Other
Interest
3,649
-
-
358
1
1,889
5,897
Ambulance
1,979
-
-
-
-
-
1,979
Leases
34,130
-
-
-
-
57
34,187
Miscellaneous
5,496
-
112
-
-
3,642
9,250
Subtotal Interest and Other
45,254
-
112
358
1
5,588
51,313
Gross Receivables
139,360
1,160
4,836
17,708
11,561
33,299
207,924
Less: Allowances for Uncollectibles
(60,317)
-
-
-
-
(1,553)
(61,870)
Net Total Receivables
$ 79,043
$ 1,160
$ 4,836
$ 17,708
$ 11,561
$ 31,746
$ 146,054
89
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The following agreements include governmental fund receivables that are not expected to be collected within
the next year:
•
The city has an improvement district for underground utilities with expected reimbursements from impacted
property owners to pay $196,598 with interest through November 2032.
•
Through the use of Community Development Block Grant (CDBG) funds, the city issues Green Housing
Rehabilitation Program loans to qualified Scottsdale homeowners. As of June 30, 2025, the loan balances
totaled $2,096,930, of which the majority is not expected to be collected within the next year.
•
The city has an intergovernmental agreement with the Arizona State Land Department to reimburse the city
for capital expenditures for street and drainage improvements of $20,537,852 after the land on which the
improvements were made is sold. This receivable is not expected to be collected within the next year.
•
The city is a participant in the One Arizona Distribution of Opioid Settlement Funds agreement which is part
of the nationwide Opioid Settlement. The city received $2,815,937 through June 30, 2025, and anticipates
receiving additional estimated payments of $8,772,309 through 2038.
•
The city has various long-term lease agreements and therefore the lease receivables are not expected to be
collected within the next year.
Business-type Activities and Enterprise Funds
(in thousands)
Water and Sewer
Utility
Airport
Solid Waste
Total Enterprise
Fund
Receivables
Privilege Tax
$ -
$ 33
$ -
$ 33
Charges for Services
23,264
399
3,800
27,463
Intergovernmental
61
320
-
381
Interest
2,538
75
82
2,695
Lease
-
1,409
-
1,409
Public-Private Partnership
-
217
-
217
Miscellaneous
2,914
-
1
2,915
Gross Receivables
28,777
2,453
3,883
35,113
Less: Allowances for Uncollectibles
(98)
-
(20)
(118)
Net Total Receivables
$ 28,679
$ 2,453
$ 3,863
$ 34,995
90
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The following agreements include enterprise fund receivables that are not expected to be collected within the next
year:
•
The city has an intergovernmental agreement with the Arizona State Land Department to reimburse the
city for capital expenditures for water and sewer improvements of $1,565,043 after the land on which the
improvements were made is sold. This receivable is not expected to be collected within the next year.
•
The city is a participant in the nationwide settlement agreements related to aqueous file forming foam and/
or other products containing perfluoroalkyl substances. The city received $2,201,795 through June 30, 2025,
and anticipates receiving additional payments in the future. Due to the potential of additional litigation and
settlements, the city cannot reasonably estimate the total amount of payments that will be received.
•
Within the business-type activity the city has various long-term lease agreements and public-private partnerships
and therefore these receivables are not expected to be collected within the next year.
Governmental funds report deferred inflows in connection with receivables for revenues that are not considered to
be available to liquidate liabilities of the current period. Additionally, governmental funds record unearned revenue
when resources have been received, but not yet earned. At the end of the fiscal year, the various components of
deferred inflows and unearned revenue reported in the governmental funds were as follows (in thousands):
Unavailable
Unearned
Property Tax
$ 1,190
$ -
Transient Occupancy Tax
456
-
Court
3,908
-
Privilege Occupancy Tax
7,578
-
Intergovernmental
41,961
9,116
Other
5,962
2,439
Total
$ 61,055
$ 11,555
91
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
D.
Capital Assets
Governmental Activities
Beginning Balance
Increases
Decreases
Ending Balance
Capital Assets, not being depreciated/amortized
Land
$ 3,498,381
$ 14,907
$ -
$ 3,513,288
Construction in Progress
229,048
157,026
(166,073)
220,001
Total Capital Assets, not being depreciated/amortized
3,727,429
171,933
(166,073)
3,733,289
Capital Assets, being depreciated/amortized
Buildings and Land Improvements
911,407
91,996
(191)
1,003,212
Streets and Storm Drains
2,083,536
50,146
(29)
2,133,653
Motor Vehicles
103,792
13,160
(5,236)
111,716
Machinery and Equipment
108,223
17,974
(6,375)
119,822
Lease Buildings and Land Improvements
2,733
837
-
3,570
Lease Motor Vehicles
1,537
701
(261)
1,977
Lease Machinery and Equipment
1,945
403
-
2,348
Public-Public Partnership Buildings and Land Improvements
90,391
4,794
-
95,185
Subscription-Based I.T. Arrangements
18,346
1,791
(165)
19,972
Total Capital Assets, being depreciated/amortized
3,321,910
181,802
(12,257)
3,491,455
Less Accumulated depreciation/amortization:
Buildings and Land Improvements
466,971
26,480
(99)
493,352
Streets and Storm Drains
1,403,493
55,785
(18)
1,459,260
Motor Vehicles
59,847
9,842
(4,923)
64,766
Machinery and Equipment
59,601
9,671
(5,979)
63,293
Lease Buildings and Land Improvements
1,342
476
-
1,818
Lease Motor Vehicles
622
477
(242)
857
Lease Machinery and Equipment
474
496
-
970
Public-Public Partnership Buildings and Land Improvements
11,895
9,549
-
21,444
Subscription-Based I.T. Arrangements
5,480
4,367
(165)
9,682
Total Accumulated depreciation/amortization
2,009,725
117,143
(11,426)
2,115,442
Total Capital Assets, being depreciated/amortized, net
1,312,185
64,659
(831)
1,376,013
Governmental Activities Capital Assets, net
$ 5,039,614
$ 236,592
$ (166,904)
$ 5,109,302
Capital asset activity for the fiscal year ended June 30, 2025, was as follows (in thousands):
92
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Business-type Activities
Beginning Balance
Increases
Decreases
Ending Balance
Capital Assets, not being depreciated/amortized
Land
$ 52,781
$ 212
$ -
$ 52,993
Water Rights
87,171
-
-
87,171
Construction in Progress
100,385
106,002
(47,349)
159,038
Total Capital Assets, not being depreciated/amortized
240,337
106,214
(47,349)
299,202
Capital Assets, being depreciated/amortized
Water System
1,537,909
27,137
(86)
1,564,960
Sewer System
751,173
23,836
(47)
774,962
Buildings and Land Improvements
144,096
25,374
(186)
169,284
Machinery and Equipment
9,460
2,704
(802)
11,362
Motor Vehicles
628
-
-
628
Furniture, Fixtures, and Office Equipment
1,835
346
(157)
2,024
Lease Machinery and Equipment
163
-
-
163
Subscription-Based I.T. Arrangements
157
504
-
661
Total Capital Assets, being depreciated/amortized
2,445,421
79,901
(1,278)
2,524,044
Less Accumulated depreciation/amortization:
Water System
722,731
39,627
(4)
762,354
Sewer System
347,106
20,182
(1)
367,287
Buildings and Land Improvements
46,894
6,406
(62)
53,238
Machinery and Equipment
4,629
830
(800)
4,659
Motor Vehicles
628
-
-
628
Furniture, Fixtures, and Office Equipment
1,312
204
(133)
1,383
Lease Machinery and Equipment
47
35
-
82
Subscription-Based I.T. Arrangements
58
163
-
221
Total Accumulated depreciation/amortization
1,123,405
67,447
(1,000)
1,189,852
Total Capital Assets, being depreciated/amortized, net
1,322,016
12,454
(278)
1,334,192
Business-type Activities Capital Assets, net
$ 1,562,353
$ 118,668
$ (47,627)
$ 1,633,394
(in thousands):
93
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Depreciation/amortization expense was charged to functions/programs of the primary government as
follows (in thousands):
City Clerk
$ 2
Mayor and City Council
1
City Auditor
2
City Attorney
56
City Court
52
City Manager
12
Public Works
64,047
Community and Economic Development
3,092
Public Safety
8,704
City Treasurer
253
Community Services
22,879
Administrative Services
5,884
Capital Assets Held by the Government's Internal Service Funds
are Charged to the Various Functions Based on their Usage of the Assets
12,159
Total Depreciation/Amortization Expense - Governmental Activities
$ 117,143
Governmental Activities
Water and Sewer System
$ 60,820
Airport
6,243
Solid Waste
384
Total Depreciation/Amortization Expense - Business-type Activities
$ 67,447
Business-type Activities
94
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Construction Commitments
The city has active construction projects as of June 30, 2025. At year end the government’s commitments with
contractors for specific projects are as follows (in thousands):
Capital Project Program Classification
Spent to Date
Remaining
Commitment
Aviation
$ 1,410
$ 1,097
Drainage and Flood Control
1,334
2,683
Fire Protection
21,653
4,847
Municipal Facilities
10,370
7,641
Neighborhood and Community
4,116
2,326
Parks
23,045
31,472
Police
8,895
4,148
Preservation
168
154
Streets
73,842
34,346
Technology
5,314
5,275
Traffic
1,044
145
Transit
398
338
Wastewater
34,911
25,795
Water
77,396
63,614
Total Construction Commitments
$ 263,896
$ 183,881
Governmental Activities
General CIP Construction Capital Projects Fund
$ 37,157
$ 38,308
Transportation Capital Projects Fund
66,070
11,584
External Sources Capital Projects Fund
6,781
23,290
Nonmajor Governmental Funds
33,577
17,735
Internal Service Funds
4,892
812
Total Governmental Activities
148,477
91,729
Business-type Activities
Water and Sewer Utility
112,368
89,442
Airport
1,410
1,097
Solid Waste
1,641
1,613
Total Business-type Activities
115,419
92,152
Total Construction Commitments
$ 263,896
$ 183,881
95
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
E.
Interfund Balances and Interfund Transfers
Due To and Due From Other Funds
“Due to” and “Due from” balances have been recorded to address temporary cash flow needs. The composition
of interfund balances as of June 30, 2025, is as follows (in thousands):
Receivable Fund
Amount
Payable Fund
Amount
General Fund
$ 10,740
External Sources Capital Projects Fund
$ 10,740
General Fund
1,562
Nonmajor Governmental Funds
1,562
General Fund
$ 12,302
$ 12,302
The External Sources Capital Project Fund, HOME Special Revenue Fund, Grants Special Revenue Fund
and Streetlight District Special Revenue Fund had deficit cash balances of $10,740,000, $198,0000, $1,298,000,
and $66,000 respectively, due to pending reimbursements from intergovernmental agreements, grants, and
timing difference of property tax revenues respectively.
Interfund Transfers
Transfers are used to fund capital projects and debt service, to administer other operations, and for indirect
administrative cost allocations (including in-lieu franchise fees) charged to Enterprise Funds.
Net Transfers (in thousands)
Transfers Out
Transfers In
Governmental Funds
General
$ 46,852
$ 17,210
Debt Service - General Obligation Bond
-
38,850
Capital Projects - General CIP Construction
71
44,074
Capital Projects - Transportation
1
35,738
Capital Projects - External Sources
-
20
Nonmajor Governmental Funds
103,277
24,912
Total Governmental Funds
150,201
160,804
Enterprise Funds
Water and Sewer Utility
10,585
-
Total Enterprise Funds
10,585
-
Internal Service Funds
Self-Insurance
146
128
Total Internal Service Funds
146
128
Total Transfers
$ 160,932
$ 160,932
96
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Advances to and Advances From Other Funds
In fiscal year 2025, the General Fund provided an interfund loan for $17,800,000 to the Solid Waste Enterprise
fund for the construction of a solid waste transfer station, The General Fund will be paid back with annual
principal and interest payments of $2,086,000, incorporating a three percent interest rate, through fiscal year
2036.
(in thousands):
F.
Leases
City as Lessee
The city, as a lessee, has entered into lease agreements involving a baseball facility, printing and imaging
equipment, a street sweeper and accompanying transport trailer, motor vehicles, a distributed antenna
system, water quality monitoring and treatment equipment, park equipment, a data center facility
space, situational awareness cameras, a document inserter, a warehouse for equipment storage and
a temporary fire station. The city subleases the baseball facility to a professional baseball team. The
payments related to the park equipment are based on a percentage of revenue earned by the city and
are therefore not included in the measurement of the lease liability. This amount totaled $368,436
for the fiscal year ended June 30, 2025. The city also made $30,046 of payments on a month-to-
month basis after the conclusion of motor vehicle leases; these payments were excluded from the
measurement of the lease liability.
The total of the city’s lease assets are recorded at a cost of $8,058,000 less accumulated amortization
of $3,727,000.
The future lease payments under lease agreements are as follows (in thousands):
Principal
Interest
Total
2026
1,639
$
249
$
1,888
$
2027
1,253
148
1,401
2028
653
78
731
2029
122
45
167
2030
20
41
61
2031-2035
118
192
310
2036-2040
162
163
325
2041-2045
218
127
345
2046-2050
292
78
370
2051-2055
202
17
219
Total
4,679
$
1,138
$
5,817
$
Leases
Receivable Fund
Amount
Payable Fund
Amount
General Fund
$ 17,800
Solid Waste - Enterprise Fund
$ 17,800
97
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
City as Lessor
The city, as a lessor, has entered into lease agreements involving land, golf course, baseball facilities,
airport facilities, and building space. The baseball facility is leased from the City of Phoenix and
subleased to a professional baseball team. The total amount of inflows of resources, including
lease revenue, interest revenue, and other lease-related inflows, recognized during the fiscal year was
$9,628,708. This total includes $5,524,836 of variable and other payments not previously included in
the measurement of the lease receivable.
G.
Subscription-Based Information Technology Arrangements
The city has obtained the right to use various desktop and server software, cloud backup services, payroll
and human resources software, and other intangible right-to-use software under the provisions of various
subscription-based information technology arrangements (SBITAs).
The total of the city’s subscription assets are recorded at a cost of $20,633,000, less accumulated amortization
of $9,903,000.
The future subscription payments under SBITA agreements are as follows (in thousands):
Principal
Interest
Total
2026
2,827
$
479
$
3,306
$
2027
1,975
317
2,292
2028
1,910
198
2,108
2029
1,393
84
1,477
Total
8,105
$
1,078
$
9,183
$
Subscriptions
In addition to the amounts presented above, the city also had outflows of resources during the fiscal year
totaling $1,379,306 that were not included in the measurement of the subscription liability. This total consists
of a $39,900 variable amount that is based on the number of licenses used by the city related to the remote
location court appearance software. Additionally, $1,339,406 for payments related to arrangements that either
have interminable subscriptions terms or that are prepaid and otherwise meet SBITA recognition criteria but
have a subscription term of less than two years.
The city has committed to SBITAs involving web content management system software, an enterprise resource
planning system, a permitting/code enforcement system, and a lobby management system. These SBITAs are
currently being implemented, and the city has paid a total of $6,624,298 related to these agreements. These
outflows were recorded as prepayments as of June 30, 2025.
98
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
H.
Public-Public Partnerships and Public-Private Partnerships
City as Operator
The city, as the operator, has entered into the following public-public partnerships (PPPs) with the United
States Bureau of Reclamation (BOR):
Land use agreement at Westworld. Under the agreement, the city operates and develops the land where
the city’s WestWorld operation is located for a period of 50 years (through July 28, 2032) (with a mutual option
to renew for an additional 25 years). The city entered into this agreement to develop the WestWorld facility
for public recreation use and to enhance its revenue stream from rentals, concession sales, and parking fees.
The city pays the BOR annually and has recognized an intangible right-to-use asset with a net book value of
$60,251,820 at fiscal year-end, which includes land improvements paid for by the city, and a related liability in
the amount of $1,667,322. A discount rate of four percent was used to calculate the liability.
Recreational land use agreement at Tournament Players Club. Under the agreement, the city operates
and develops the land where the city’s Tournament Players Club (TPC) operation is located for a period of
50 years (through June 17, 2035) (with a mutual option to renew for an additional 25 years). The city entered
into this agreement to develop the TPC complex for public recreation use and to enhance its revenue stream
from facility usage fees and rentals. The city pays the BOR annually and has recognized an intangible right-
to-use asset with a net book value of $13,488,891 at fiscal year-end, which includes land improvements paid
for by the city, and a related liability in the amount of $2,416,796. A discount rate of four percent was used
to calculate the liability.
The future payments under PPP agreements are as follows (in thousands):
City as Transferor
The city, as the transferor, has entered into public-private partnerships (PPPs) with the following operators:
Two fixed-base operators (FBOs) at Scottsdale Airport. Under the agreements, the FBOs have the right
to operate the Airport facilities and provide aeronautical services such as flight instruction, aircraft charter
service, and aircraft storage for periods of 30 years (through November 4, 2031) (with an option for the
operator to extend for an additional 10 years) for one operator and 40 years, (through January 31, 2059) for
the other.
Principal
Interest
Total
2026
318
$
163
$
481
$
2027
355
151
506
2028
394
137
531
2029
437
121
558
2030
482
103
585
2031-2035
2,098
228
2,326
Total
4,084
$
903
$
4,987
$
PPPs
99
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The FBOs pay the city monthly, and the city has recognized a PPP receivable and a related deferred inflow
of resources involving these agreements. Additionally, the operators have made improvements totaling
$68,806,123 that are recognized as an asset by the city. The carrying value of these improvements at fiscal
year-end is $46,296,253 and the city reports a deferred inflow of resources at year-end pursuant to the public-
private partnership agreement. As of June 30, 2025, the combined PPP receivable and deferred inflow of
resources were reported in the amounts of $8,428,000 and $56,244,464, respectively. A discount rate of four
percent was used to calculate the PPP receivable.
Food services operator at Westworld. Under the agreement, the Westworld operator has the right to use
city facilities, such as kitchens and certain related areas, for the preparation of food and alcohol for immediate
consumption at Westworld for a period of one year. This agreement was originally scheduled to expire on
June 30, 2024; however, it was extended on a month-to-month basis upon the cessation of the original term.
The Westworld operator pays a percentage fee based on its sales; this fee totaled $897,963 for the fiscal year
ended June 30, 2025.
Concession services operator at Scottsdale Stadium. Under the agreement, the Scottsdale Stadium
(Stadium) operator has the right to provide concession services, alcoholic beverage services, and catering
services on an exclusive basis during certain Stadium events for a period of five years (through December 31,
2025) (with a mutual option to renew for up to two additional five-year periods). The Stadium operator pays a
percentage fee based on its sales; this fee totaled $178,753 for the fiscal year ended June 30, 2025.
Facility operator at the Silverado Golf Course. Under the agreement, the Silverado Golf Course (Silverado)
operator has the right to use Silverado to operate the golf course and provide related ancillary services,
such as the operation of a pro-shop and clubhouse; the provision of golfing and golf course management
instruction; and the operation of conference, banquet, restaurant, and meeting facilities within the clubhouse
for a period of 35 years (through April 14, 2032) (with an option for the operator to extend for up to two
additional 10-year periods). Additionally, the operator has made improvements totaling $2,725,775 that are
recognized as an asset by the city. The carrying value of these improvements at year-end is $1,335,630 and
the city reports a deferred inflow of resources in the amount of $2,328,727 at year-end pursuant to the public-
private partnership agreement. The Silverado operator pays a percentage fee based on its sales; this fee totaled
$335,417 for the fiscal year ended June 30, 2025.
Facility operator at The Scottsdale Center for the Performing Arts, Scottsdale Civic Center, and
The Scottsdale Museum of Contemporary Art. Under the agreement, the Scottsdale Center for the
Performing Arts, Scottsdale Civic Center, and Scottsdale Museum of Contemporary Art (city-owned facilities)
operator has the right to manage, operate, and program each of the city-owned facilities; related tasks include
scheduling, booking, promoting, administering, and creating and presenting exhibitions, events, and programs
at the city-owned facilities for a period of five years (through June 30, 2025) (with a mutual option to renew
for one additional five-year period). The city-owned facilities operator pays a percentage fee based on its sales;
this fee totaled $32,494 for the fiscal year ended June 30, 2025.
In total, the city had inflows of $1,445,915 from variable payments not included in the measurement of the
city’s receivable for installment payments.
100
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
I.
Bonds, Loans, and Other Payables
The following are brief descriptions of bonds outstanding as of June 30, 2025. The totals shown are the
principal amount outstanding, net of the amount due July 1, 2025.
General Obligation Bonds
Geeneral Obligation (GO) bonds are issued, after approval by City of Scottsdale voters at an authorized
bond election, to finance the construction of water and sewer systems, artificial lighting, parks and
open spaces, recreational facilities, public safety, and general-purpose improvements. In May 2004,
voters authorized $500,000,000 of additional Preservation GO bonds, as well as an additional 0.15
percent sales tax increase to be used to finance Preserve land acquisitions. As of June 30, 2025, the city
has $256,544,516 of unissued Preservation GO bonds from the May 2004 authorization. Preservation
GO bonds are backed by the full faith and credit of the city and are repaid through the Preserve sales
tax approved by voters in May 1995 and May 2004 to be used specifically to finance land acquisitions
for the McDowell Sonoran Preserve. As of June 30, 2025, the city has $78,950,900 of unissued
various purpose GO bonds that were authorized in November 2019.
Municipal Property Corporation Bonds
The City of Scottsdale Municipal Property Corporation (MPC) is a non-profit corporation created
by the city in 1967 to finance the construction or acquisition of certain capital improvement projects.
The MPC issues its own bonds, which are repaid through the city’s excise tax collections and other
unrestricted revenues. The use of property taxes to repay these bonds is specifically prohibited by
law. These bonds are recorded as both governmental and business-type activities long-term debt. A
portion of the 2006 MPC Excise Tax Revenue Refunding Bonds, a portion of the 2015A MPC Excise
Tax Revenue Bonds, the 2015 MPC Excise Tax Revenue Refunding Bonds, the 2017 MPC Excise
Tax Revenue Refunding Bonds, the 2017A MPC Excise Tax Revenue Bonds, the 2021A MPC Excise
Tax Revenue Refunding Bonds, a portion of the 2021B MPC Taxable Excise Tax Revenue Refunding
Bonds, and the 2025 Municipal Property Corporation Excise Tax Revenue Bonds are recorded in
and paid by the Water and Sewer Enterprise Fund. The 2017B MPC Excise Tax Revenue Bonds are
recorded in and paid by the Airport Enterprise Fund.
The city has pledged to repay $647,324,252 in MPC Excise Tax Revenue Bonds issued from 2006
through June 30, 2025, payable through 2045. Bonds issued prior to July 1, 2010, were pledged by
revenues that included transient occupancy tax while bonds issued after this date exclude transient
occupancy tax. The coverage ratio (revenues to debt service) for 2025 for MPC bonds is 6.59 (excluding
the transient occupancy tax). The total principal and interest remaining to be paid on all MPC bonds is
$545,833,134. Principal and interest paid for the current year and total excise tax collections (excluding
transient occupancy taxes) were $48,129,646 and $317,103,021, respectively.
101
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The MPC bond issuances, for both governmental and business-type activities, contain the following
provisions that would constitute an event of default by the city:
• Non-punctual payment of principal or interest
• Default in the performance or observance of any covenant, agreement, or condition in the indenture
or in the bonds not cured within 30 days of notice of default. The city is also considered to be in
default if the issue is not curable within 30 days and corrective action is not diligently pursued to
the satisfaction of the trustee within 30 days
• Bankruptcy, insolvency, and/or receivership
• Default on any bonds which are on a parity basis with the bonds in question
If any of the events of default transpire, the MPC bond trustee may file a suit or suits in equity
or at law and appoint a receiver to collect and properly disburse pledged MPC revenues for debt
service payments. Any amounts recovered through such proceedings shall be paid first to the costs
and expenses incurred by the trustee, its agents, attorneys and counsel, and of all proper expenses,
liabilities and advances incurred or made by the trustee or any registered owner(s) of the bonds in
question. If a residual amount were to remain, it would be applied to the then-owed or unpaid amount
related to the bonds. If insufficient funds were to exist, the residual amount would be allocated on a
pro-rata basis to the then-owed or unpaid amount related to the bonds.
Community Facilities Districts General Obligation Bonds
Community Facilities District (CFD) General Obligation Bonds are issued by CFDs to fund public
infrastructure benefiting properties within the district. Bonds are repaid through ad valorem taxes
levied by the CFD and collected by the county. Property owners within the CFD bear all related costs;
the city holds no liability for the CFD bonds.
CFDs are formed by property owner petition to the City Council. As the Board of Directors for the
CFDs, the Council has adopted a formal policy to require a minimum property value-to-debt ratio of
3:1 before bond issuance and 5:1 after improvements. These ratios are verified through an appraisal
paid by the CFD and administered by the city. Please see “Summary of Significant Accounting Policies”
for additional information on the CFDs.
102
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Failure to pay the principal and interest when due and payable would constitute an event of default
by the city in relation to any of the CFD bond issuances. If such an event of default transpires, the
CFD bond trustee may pursue all remedies in law and equity. The following provisions apply only to
the 2019 Waterfront Commercial CFD Refunding Bonds:
• Default in the performance or observance of any covenant, agreement, or obligation not cured
within 30 days of notice of default. No event of default will be deemed to have occurred so long as
a course of action has been commenced within 30 days and is diligently prosecuted to completion
• Any representation or warranty by the District that proves to have been materially incorrect when
made or confirmed
• Bankruptcy, insolvency, and/or receivership
• Default and/or acceleration of payment of any other District indebtedness
• Actual or asserted invalidity or impairment of the District Documents or the Series 2019 Bonds
If any non-punctual payment of principal or interest occurs, the Waterfront CFD bond trustee
may recover the costs and expenses of administration and collection related to the unpaid amounts.
Additionally, the Waterfront CFD bond trustee shall be entitled to a writ of mandamus compelling
performance.
103
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Bonds payable as of June 30, 2025, consisted of the following:
Classified in Governmental Activities on the Government-wide Financial Statements:
General Obligation Bonds
Bonds
Outstanding
(in thousands)
2014 Preservation Bonds (issued May 7, 2014) due in annual installments of $465,000 to
$945,000 through July 1, 2034; interest at 1.75 percent to 4 percent. On December 30, 2020,
$6,690,000 due 2027 through 2034 was defeased. Original issue amount $14,000,000.
$ 725
2015 Refunding Bonds (issued April 2, 2015) due in annual installments of $500,000 to
$30,565,000 through July 1, 2034; interest at 3 percent to 4 percent. On December 30, 2020,
$3,290,000 due 2029 through 2034 was refunded. Original issue amount $160,415,000.
29,675
2017A Preservation Bonds (issued March 8, 2017) due in annual installments of $1,825,000 to
$2,545,000 through July 1, 2034; interest at 4 percent to 5 percent. Original issue amount
$17,410,000.
17,410
2017 Refunding Bonds (issued May 17, 2017) due in annual installments of $1,055,000 to
$5,525,000 through July 1, 2034; interest at 3 percent to 5 percent. Original issue amount
$39,985,000.
25,870
2017C Various Purpose Bonds (issued December 6, 2017) due in annual installments of
$1,690,000 to $6,800,000 through July 1, 2027; interest at 5 percent. Original issue amount
$25,500,000.
4,605
2020 Taxable Refunding Bonds (issued December 30, 2020) due in annual installments of
$2,155,000 to $33,150,000 through July 1, 2034; interest at 0.15 percent to 1.64 percent. Original
issue amount $168,220,000.
118,325
2021 Various Purpose Bonds (issued February 10, 2021) due in annual installments of
$1,135,000 to $1,965,000 through July 1, 2040; interest at 2 percent to 4 percent. Original issue
amount $31,390,000.
25,175
2021 Various Purpose Taxable Bonds (issued February 10, 2021) due in annual installments of
$325,000 to $1,195,000 through July 1, 2040; interest at 1.35 percent to 3 percent. Original issue
amount $19,770,000.
15,945
2023 Various Purpose Bonds (issued February 1, 2023) due in annual installments of $1,475,000
to $1,975,000 through July 1, 2042; interest at 4 percent to 5 percent. Original issue amount
$34,175,000.
30,300
2023 Various Purpose Taxable Bonds (issued February 1, 2023) due in annual installments of
$1,975,000 to $2,525,000 through July 1, 2042; interest at 4.30 percent to 5 percent. Original
issue amount $39,530,000.
35,485
2025 Various Purpose Bonds (issued June 11, 2025) due in annual installments of $3,350,000 to
$10,000,000 through July 1, 2045; interest at 4 percent to 5 percent. Original issue amount
$102,250,000.
102,250
Total General Obligation Bonds Outstanding
$ 405,765
Some of the above General Obligation Bonds are paid from the 0.2 percent and 0.15 percent
Preservation Sales Taxes.
104
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Municipal Property Corporation Bonds
Bonds
Outstanding
(in thousands)
2006 Municipal Property Corporation Excise Tax Revenue Refunding Bonds (issued November
29, 2006) due in annual installments of $1,200,000 to $4,975,000 through July 1, 2034; interest at
5 percent. Original issue amount $55,450,000.
$ 31,390
2015A Municipal Property Corporation Excise Tax Revenue Bonds (issued January 6, 2015) due
in annual installments of $205,000 to $865,000 through July 1, 2034; interest at 3 percent to 5
percent. On February 17, 2021, $685,000 due in 2027 was refunded. Original issue amount
$12,200,000.
6,175
2015A Municipal Property Corporation Taxable Excise Tax Revenue Bonds (issued January 6,
2015) due in annual installments of $275,000 to $1,025,000 through July 1, 2034; interest at 2
percent to 4 percent. Original issue amount $14,615,000.
7,955
2019A Municipal Property Corporation Excise Tax Revenue Bonds (issued October 23, 2019)
due in annual installments of $205,000 to $645,000 through July 1, 2039; interest at 3 percent to
5 percent. Original issue amount $9,275,000.
7,355
2019B Municipal Property Corporation Taxable Excise Tax Revenue Bonds (issued October 23,
2019) due in annual installments of $940,000 to $2,125,000 through July 1, 2039; interest at 1.85
percent to 2.9 percent. Original issue amount $33,275,000.
25,150
2021B Municipal Property Corporation Taxable Excise Tax Revenue Refunding Bonds (issued
February 17, 2021) due in annual installments of $330,000 to $9,410,000 through July 1, 2035;
interest at 0.14 percent to 1.91 percent. Original issue amount $71,325,000.
56,200
Total Municipal Property Corporation Bonds Outstanding
$ 134,225
Community Facilities Districts General Obligation Bonds - Direct Placements
Bonds
Outstanding
(in thousands)
2012 DC Ranch Community Facilities District General Obligation Refunding Bonds (issued
September 18, 2012) due in annual installments of $555,000 to $1,245,000 through July 15, 2027;
interest at 3.41 percent. Original issue amount $14,670,000.
$ 2,450
2019 Waterfront Commercial Community Facilities District General Obligation Refunding
Bonds (issued November 14, 2019) due in annual installments of $172,000 to $225,000 through
July 15, 2032; interest at 2.47. Original issue amount $2,563,000.
1,468
Total Community Facilities Districts General Obligation Bonds - Direct Placements
$ 3,918
Total Bonds Payable Recorded in Governmental Activities
$ 543,908
105
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Classified in Business-type Activities on the Government-wide Financial Statements:
Municipal Property Corporation Bonds
Bonds
Outstanding
(in thousands)
2006 Municipal Property Corporation Excise Tax Revenue Refunding Bonds (issued November
29, 2006) due in annual installments of $3,600,000 to $10,140,000 through July 1, 2030; interest at
5 percent. Original issue amount $110,510,000.
$ 28,080
2015A Municipal Property Corporation Excise Tax Revenue Bonds (issued January 6, 2015) due
in annual installments of $310,000 to $1,305,000 through July 1, 2034; interest at 3 percent to 5
percent. On February 17, 2021, $1,040,000 due in 2027 was refunded. Original issue amount
$18,485,000.
9,355
2015 Municipal Property Corporation Excise Tax Revenue Refunding Bonds (issued March 26,
2015) due in annual installments of $3,788,459 to $5,822,479 through July 1, 2028; interest at 5
percent. On February 17, 2021, $11,257,479 due 2027 through 2028 was refunded. Original issue
amount $46,811,731.
5,200
2017 Municipal Property Corporation Excise Tax Revenue Refunding Bonds (issued March 1,
2017) due in annual installments of $2,015,000 to $12,630,000 through July 1, 2036; interest at 3
percent to 5 percent. On February 17, 2021, $38,350,000 due 2031 through 2033 and 2035
through 2036 was defeased. Original issue amount $79,970,000.
34,795
2017A Municipal Property Corporation Excise Tax Revenue Bonds (issued May 24, 2017) due in
annual installments of $1,080,000 to $2,730,000 through July 1, 2037; interest at 3 percent to 5
percent. Original issue amount $39,065,000.
27,415
2017B Municipal Property Corporation Excise Tax Revenue Bonds (issued May 24, 2017) due in
annual installments of $645,000 to $1,655,000 through July 1, 2037; interest at 3 percent to 5
percent. Original issue amount $23,520,000.
16,560
2021A Municipal Property Corporation Excise Tax Revenue Refunding Bonds (issued February
17, 2021) due in a single installment of $7,920,000 on July 1, 2030; interest at 5 percent. Original
issue amount $7,920,000.
7,920
2021B Municipal Property Corporation Taxable Excise Tax Revenue Refunding Bonds (issued
February 17, 2021) due in annual installments of $145,000 to $12,750,000 through July 1, 2036;
interest at 0.14 percent to 1.96 percent. Original issue amount $63,860,000.
57,765
2025 Municipal Property Corporation Excise Tax Revenue Bonds (issued June 11, 2025) due in
annual installments of $1,600,000 to $10,000,000 through July 1, 2045; interest at 4 percent to 5
percent. Original issue amount $112,375,000.
112,375
Total Municipal Property Corporation Bonds Outstanding
$ 299,465
Total Bonds Payable Recorded in Business-type Activities
$ 299,465
Total Long-Term Bonds Payable
$ 843,373
106
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Statutory Debt Limitation
Under the provisions of Article 9, Section 8 of the Arizona Constitution, outstanding General
Obligation (GO) bonded debt (including outstanding “excess premium,” as defined in Arizona
Revised Statutes Title 35, Chapter 3, Articles 3 and 4) issued for water, sewers, artificial light, parks,
playgrounds and recreational facilities, open space preserves, public safety facilities, and streets and
transportation facilities may not exceed 20 percent of a city’s assessed valuation. Outstanding GO
bonded debt for all other purposes may not exceed 6 percent of a city’s assessed valuation. GO
bonds of community facilities districts are not subject to or included in this calculation. The following
summarizes the city’s legal GO bonded debt borrowing capacity as of June 30, 2025:
20% Constitutional Limit
$ 2,826,612,550
6% Constitutional Limit
$ 847,983,765
Less General Obligation
20% Bonds Outstanding
(388,518,000)
Less General Obligation
6% Bonds Outstanding
(17,247,000)
Excess Premium
(15,287,622)
Excess Premium
(1,306,634)
Available 20% Limitation
Borrowing Capacity
$ 2,422,806,928
Available 6% Limitation
Borrowing Capacity
$ 829,430,131
General Obligation Bonds Issued to Provide
Water, Sewers, Artificial Light, Parks, Playgrounds and
Recreational Facilities, Open Space Preserves, Public Safety
Facilities, and Streets and Transportation Facilities
General Obligation Bonds Issued for
All Other Purposes
Arbitrage
Arbitrage is the ability to obtain tax-exempt bond proceeds and invest the funds in higher yielding
taxable securities, resulting in a profit. The city monitors compliance with federal arbitrage regulations
and uses an independent consultant. It was determined that there is no arbitrage liability as of June
30, 2025.
Advance Refundings and Defeasances
In prior years, the city refinanced other bond issues through the issuance of refunding bonds. The
proceeds from the refunding bonds have been deposited in irrevocable trusts at commercial banks
and invested in U.S. Government securities which, together with interest earned thereon, will provide
amounts sufficient for future redemption or payment of principal and interest of the issues refunded.
As a result, the refunded bonds are considered defeased and the liability has been removed from the
governmental and business-type activities columns of the financial statements.
107
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The following table reflects refunded debt outstanding as of June 30, 2025, net of any amounts to be
paid or retired by the trustee on July 1, 2025 (in thousands):
2017 MPC Excise Tax Revenue Refunding Bonds
$ 38,350
Refunded Debt Outstanding
Contracts Payable
The city has entered into contracts related to the financing of an underground utility facilities
improvement district, field maintenance equipment, and I.T. hardware equipment. The following is a
summary of debt service to maturity for the long-term contracts as of June 30, 2025:
Classified in Governmental Activities on the Government-wide Financial Statements:
Contracts Payable -
Direct Borrowings
(in thousands)
Contract payable to PNC Bank for the financing of an underground utility facilities improvement
district; due in annual installments through 2033; interest at 5.72 percent.
$ 197
Contract payable to John Deere Financial for the financing of field maintenance equipment; due
in annual installments through 2027; interest at 2.99 percent.
53
Contract payable to Axon Enterprise, Inc. for the financing of I.T. hardware equipment; due in
annual installments through 2027 interest at 6.00 percent.
1,123
$ 1,373
108
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Changes in Long-Term Liabilities
The following is a summary of changes in long-term liabilities reported in the government-wide
financial statements for the fiscal year ended June 30, 2025 (in thousands):
Governmental Activities
Beginning
Balance
Additional
Obligations
and Net
Increases
Current
Maturities,
Retirements,
and Net
Decreases
Ending
Balance
Amounts Due
Within One
Year
Bonds Payable
General Obligation Bonds
$ 359,110
$ 102,250
$ (55,595)
$ 405,765
$ 52,300
Municipal Property Corporation Bonds
153,515
-
(19,290)
134,225
12,640
Community Facilities Districts General Obligation Bonds - Direct Placements
5,273
-
(1,355)
3,918
1,400
Add Issuance Premiums
24,563
5,274
(3,712)
26,125
-
Total Bonds Payable
542,461
107,524
(79,952)
570,033
66,340
Contracts Payable - Direct Borrowings
1,786
-
(413)
1,373
423
Leases
3,997
1,940
(1,341)
4,596
1,604
Public-Public Partnerships
4,368
-
(284)
4,084
318
Subscriptions
9,811
779
(2,660)
7,930
2,722
Risk Management Claims
20,958
47,425
(44,911)
23,472
9,839
Compensated Absences
33,266
2,553
-
35,819
18,329
City Total Other Postemployment Benefit Liability
863
30
-
893
127
Net Pension Related Liabilities
318,881
-
(16,455)
302,426
-
Governmental Activities Long-Term Liabilities
$ 936,391
$ 160,251
$ (146,016)
$ 950,626
$ 99,702
Internal service funds serve primarily the governmental funds, the long-term liabilities of which are
included as part of the governmental activities. For the fiscal year ended June 30, 2025, $532,000
of accrued compensated absences is included in the above amount for internal service funds.
The compensated absences presented in this note are net of the current liability of $56,000 in the
governmental funds.
Business-type Activities
Beginning
Balance
Additional
Obligations
and Net
Increases
Current
Maturities,
Retirements,
and Net
Decreases
Ending
Balance
Amounts Due
Within One
Year
Bonds Payable
Municipal Property Corporation Bonds
$ 204,540
$ 112,375
$ (17,450)
$ 299,465
$ 22,615
Add Issuance Premiums
13,765
8,203
(2,148)
19,820
-
Total Bonds Payable
218,305
120,578
(19,598)
319,285
22,615
Leases
116
-
(33)
83
35
Subscriptions
84
199
(108)
175
105
Compensated Absences
4,399
-
(327)
4,072
2,204
Net Pension Liabilities
33,279
197
-
33,476
-
Pollution Remediation Obligation
45,186
1,090
-
46,276
-
Business-type Activities Long-Term Liabilities
$ 301,369
$ 122,064
$ (20,066)
$ 403,367
$ 24,959
109
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Debt Service Requirements to Maturity
The following is a summary of debt service requirements to maturity for long-term liabilities as of
June 30, 2025:
Fiscal Year
Principal
Interest
Total
Principal
Interest
Total
Principal
Interest
Total
2026
$ 50,901 $ 13,243 $ 64,144
$ 1,399 $ 770 $ 2,169
$ 52,300 $ 14,013 $ 66,313
2027
40,138 11,406 51,544
772 676 1,448
40,910 12,082 52,992
2028
38,951 10,044 48,995
789 640 1,429
39,740 10,684 50,424
2029
29,418 8,773 38,191
772 602 1,374
30,190 9,375 39,565
2030
25,306 7,886 33,192
794 565 1,359
26,100 8,451 34,551
2031-2035
112,172 28,229 140,401
4,343 2,263 6,606
116,515 30,492 147,007
2036-2040
55,626 14,309 69,935
4,859 1,305 6,164
60,485 15,614 76,099
2041-2045
36,006 4,418 40,424
3,519 451 3,970
39,525 4,869 44,394
2046-2050
- - -
- - -
- - -
2051-2055
- - -
- - -
- - -
Total
$ 388,518 $ 98,308 $ 486,826
$ 17,247 $ 7,272 $ 24,519
$ 405,765 $ 105,580 $ 511,345
Fiscal Year
Principal
Interest
Total
Principal
Interest
Total
Principal
Interest
Total
2026
$ 12,640 $ 3,801 $ 16,441
1,604
$
243
$
$ 1,847
$ 1,400 $ 120 $ 1,520
2027
13,215 3,452 16,667
1,226
144
1,370
1,445 74 1,519
2028
16,450 3,092 19,542
639
77
716
204 27 231
2029
17,805 2,654 20,459
115
45
160
209 21 230
2030
10,655 2,170 12,825
20
41
61
215 16 231
2031-2035
52,835 5,453 58,288
118
192
310
445 17 462
2036-2040
10,625 788 11,413
162
163
325
- - -
2041-2045
- - -
218
127
345
- - -
2046-2050
- - -
292
78
370
- - -
2051-2055
- - -
202
17
219
- - -
Total
$ 134,225 $ 21,410 $ 155,635
$ 4,596 $ 1,127 $ 5,723
$ 3,918 $ 275 $ 4,193
Fiscal Year
Principal
Interest
Total
Principal
Interest
Total
Principal
Interest
Total
2026
318
$
163
$
$ 481
2,722
$
469
$
$ 3,191
$ 423 $ 79 $ 502
2027
355
151
506
1,905
313
2,218
434 54 488
2028
394
137
531
1,910
198
2,108
435 30 465
2029
437
121
558
1,393
84
1,477
38 4 42
2030
482
103
585
-
-
-
43 2 45
2031-2035
2,098
228
2,326
- -
- - - -
2036-2040
-
-
-
- -
- - - -
2041-2045
- - -
- -
- - - -
2046-2050
- - -
- -
- - - -
2051-2055
- - -
- -
- - - -
Total
$ 4,084 $ 903 $ 4,987
$ 7,930 $ 1,064 $ 8,994
$ 1,373 $ 169 $ 1,542
(continued)
Governmental Activities
(in thousands)
Municipal Property
Corporation Bonds
Leases
Community Facilities Districts
General Obligation Bonds - Direct
Placements
Public-Public Partnerships
General Obligation Bonds Issued
to Provide Water, Sewers, Artificial
Light, Parks, Playgrounds and
Recreational Facilities, Open Space
Preserves, Public Safety Facilities,
and Streets and Transportation
Facilities
20% Limitation
General Obligation Bonds Issued For
All Other Purposes
6% Limitation
Total General Obligation Bonds
Subscriptions
Contracts Payable - Direct
Borrowings
110
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Fiscal Year
Principal
Interest
Total
Principal
Interest
Total
Principal
Interest
Total
2026
$ 22,615 $ 12,102 $ 34,717
$ 105 $ 10 $ 115
$ 35 $ 6 $ 41
2027
23,465 10,728 34,193
70 4 74
27 4 31
2028
22,045 9,862 31,907
- - -
14 1 15
2029
22,830 9,062 31,892
- - -
7 - 7
2030
26,145 7,997 34,142
- - -
- - -
2031-2035
105,400 26,933 132,333
- - -
- - -
2036-2040
53,815 11,211 65,026
- - -
- - -
2041-2045
23,150 2,838 25,988
- - -
- - -
Total
$ 299,465 $ 90,733 $ 390,198
$ 175 $ 14 $ 189
$ 83 $ 11 $ 94
Fiscal Year
Principal
Interest
Total
2026
$ 22,755 $ 12,118 $ 34,873
2027
23,562 10,736 34,298
2028
22,059 9,863 31,922
2029
22,837 9,062 31,899
2030
26,145 7,997 34,142
2031-2035
105,400 26,933 132,333
2036-2040
53,815 11,211 65,026
2041-2045
23,150 2,838 25,988
Total
$ 299,723 $ 90,758 $ 390,481
Total Business-type Activities
Municipal Property
Corporation Bonds
Subscriptions
Leases
Business-type Activities
(in thousands)
Fiscal Year
Principal
Interest
Total
2026
$ 71,407 $ 18,888 $ 90,295
2027
59,490 16,270 75,760
2028
59,772 14,245 74,017
2029
50,187 12,304 62,491
2030
37,515 10,783 48,298
2031-2035
172,011 36,382 208,393
2036-2040
71,272 16,565 87,837
2041-2045
39,743 4,996 44,739
2046-2050
292 78 370
2051-2055
202 17 219
Total
$ 561,891 $ 130,528 $ 692,419
Total Governmental Activities
Governmental Activities
(in thousands)
111
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
V.
OTHER INFORMATION
A.
Risk Management
The city is exposed to various risks of loss related to public and aviation liability, self-insured benefits, workers’
compensation, and property and casualty claims. Public liability includes public officials’ errors and omissions,
law enforcement liability, premises liability, and automobile and general liability. The city is self-insured for the
first $2,000,000 of public liability, the first $100,000 of property coverage, the first $350,000 of health benefits
claims for an individual in a fiscal year, and the first $1,000,000 of workers’ compensation claims. Coverage in
excess of these respective amounts is provided through the purchase of commercial insurance. As for claim
expenditures, settlements for each of the past three fiscal years have not exceeded the city’s excess insurance
coverage amounts for any claims.
The city reports its self-insurance activity in the Self-Insurance Internal Service Fund. Claims liabilities are
reported when it is probable that a loss has occurred, and the amount of the loss can be reasonably estimated.
The liability claims amount recorded in the accompanying financial statements is based on reported pending
claims and an actuarial analysis and projection of the accrued liability amounts necessary to fund the claims. As
of June 30, 2025, the city’s general, worker’s compensation, auto and property liabilities claims payable totaled
$20,311,000 and the self-insured benefits claims payable totaled $3,161,000.
2025
2024
Claims Payable, July 1
$ 20,958
$ 21,145
Current Year Claims Incurred
47,425
40,552
Current Year Claim Payments
(44,911)
(40,739)
Claims Payable, June 30
$ 23,472
$ 20,958
Fiscal Year Ended June 30
(in thousands)
B.
Contingent Liabilities
The city is subject to a number of lawsuits, investigations, and other claims that are incidental to its normal
operations. Although the outcome of these lawsuits is not presently determinable, in the opinion of city
management, based on advice of the City Attorney, the resolution of these matters will not have a material
adverse effect on the financial condition of the city. The city is self-insured for the first $2,000,000 of public
liability, coverage in excess of this amount is provided through the purchase of commercial insurance. For more
information on the city’s self-insurance, refer to Note V.A. above.
The city has entered into several agreements whereby it will reimburse developers a portion of development
costs, interest, or sales tax generated on their site for a period of time and up to a maximum dollar amount.
Depending on the terms of the agreement, the city does not become liable for payment until certain milestones
are met. The city’s estimated contingent liability related to these agreements as of June 30, 2025, is $34.2 million.
112
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
C.
Subsequent Events
In August 2025, the city redeemed in advance of maturity the remaining $725,000 of the General
Obligation Bonds, Series 2014 and partially redeemed in advance $2,670,000 of the General Obligation
Refunding Bonds, Series 2015.
D.
Joint Ventures
Sub-Regional Operating Group (SROG)
The city participates in the multi-city Subregional Operating Group (SROG). SROG was formed
pursuant to the Joint Exercise of Powers Agreement (JEPA) to govern the construction, operation,
and maintenance of jointly used sewage treatment and transportation facilities. The facilities include
the 91st Avenue Wastewater Treatment Plant, the Salt River Outfall Sewer, the Southern Avenue
Interceptor, and related transportation facilities. The City of Phoenix acts as lead agency and is
responsible for the planning, budgeting, construction, operation, and maintenance of the facilities.
In addition, the City of Phoenix provides all management, personnel, financing arrangements, and
accepts federal grants on behalf of the participants. The JEPA requires each city to pay for its share
of the actual cash costs of operating and maintaining the facilities based on relative sewage flows and
strengths.
The city records its share of SROG’s cash deposits, and its equity in the joint venture in the city’s
Water and Sewer Fund. For the fiscal year ended June 30, 2024, the latest audited information available
from SROG, the city’s equity in SROG was $77,942,000 or 12.90 percent of the equity balance and the
total cash deposit was $5,500,438.
The Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2024, for SROG (the
latest SROG Annual Comprehensive Financial Report available) may be obtained from the AMWUA
office at 3003 N. Central Avenue, Suite 1550, Phoenix, Arizona, 85012.
Regional Wireless Cooperative (RWC)
The city participates in the Regional Wireless Cooperative (RWC), an association of municipalities
formed in 2008 to oversee the administration, operation, management, and maintenance of an
expanding regional communications network. The RWC was formed through an intergovernmental
governance structure founded on the principles of cooperation for the mutual benefit of all members
and has expanded to serve a still-growing list of cities, towns, and fire districts, along with many other
area entities who serve public safety needs. A regional radio communications network was built to
seamlessly serve the interoperable communication needs of first responders and other municipal radio
users in and around the Greater Phoenix Metropolitan Region. Financial responsibilities are shared by
all members based on their relative size as measured by the number of subscriber units (radios) on the
network. The City of Phoenix is responsible for the day-to-day operations and maintenance of the
network, as well as the management of the RWC’s organization and finances.
113
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The city records its share of contributions to the RWC, third party contributions paid to the RWC for
the benefit of the city, and equity in the joint venture in the city’s proprietary funds and government-
wide financial statements. The equity balance as of June 30, 2024, the latest audited information
available from RWC, was $3,074,560 or 6.27 percent of the RWC’s total net position. The city
contributed $211,483 for the fiscal year ended June 30, 2025, and shared in estimated depreciation
expenses of $532,789, resulting in an estimated equity balance as of June 30, 2025, of $2,753,254. The
RWC Annual Comprehensive Financial Statement is available from the Regional Wireless Cooperative,
200 West Washington Street, 14th Floor, Phoenix, Arizona, 85003-1611.
E.
Pollution Remediation
In the proprietary funds financial statements, a long-term pollution remediation obligation is recognized
for the remaining remediation period. In 1981, groundwater contamination was discovered when elevated
levels of trichloroethylene (TCE) and other volatile organic chemicals were detected in two active city wells
and three future wells. The city immediately shut down the affected wells. Following an investigation by the
Environmental Protection Agency (EPA), the North Indian Bend Wash (NIBW) site which includes the five
wells above was placed on the federal Superfund list in 1983.
The Superfund law was enacted to provide funding and regulatory authority for the study and cleanup of
contaminated sites. The EPA, in conjunction with the State of Arizona, directs the cleanup of the NIBW site
that encompasses a groundwater contamination plume in Scottsdale.
Following its investigation, the EPA identified three companies, Motorola Solutions Inc. (MSI), SMI Holdings,
LLC, formerly Siemens Corporation, and GlaxoSmithKline Corporation, as the primary parties potentially
responsible for causing the contamination and directed the companies to pay the costs associated with the
cleanup. In 1991, the city, EPA, State of Arizona, Salt River Project (SRP), and the above-referenced participating
companies entered a Consent Decree to begin the containment and remediation of the contaminated
groundwater plume and provide Scottsdale citizens with a potable water source. The companies agreed to pay
for the construction and operation of the Central Groundwater Treatment Facility (CGTF), an air stripping
plant that removes contaminants from the affected wells. As the CGTF operator and drinking water provider,
the city ensures the water produced by the plant meets all federal and state water quality standards before
water is delivered into the city’s distribution system. An Amended Consent Decree was signed by all parties
in 2003 to capture additional voluntary and required work at the NIBW Site. No additional obligations were
identified for the city.
To facilitate groundwater sustainability and plume management, in 2012 the city voluntarily entered into
an agreement with MSI to operate an additional groundwater treatment facility that would be designed and
constructed to deliver treated water to the Chaparral Water Treatment Plant (CWTP). The North Indian Bend
Wash Granular Activated Carbon Treatment Facility (NGTF) was completed in late 2013 and began delivery
of water to the CWTP in August 2014. The facility is a granular activated carbon plant that is owned by MSI
but operated and maintained by the city to treat a well owned by SRP. The type of treatment chosen was due
to the lower concentration of contaminants in the well. All costs are reimbursed to the city by MSI.
114
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The measurement of the city’s pollution remediation obligation liability includes all remediation work that the
city expects to perform, including work expected to be performed for the participating companies. To estimate
the CGTF liability, 18 projected cash flows, based on the prior 18 years of historical costs and weighted
equally, were used to calculate an average annual cost. To estimate the NGTF liability, twelve projected cash
flows, based on the prior twelve years of historical costs and weighted equally, were used to calculate an
average annual cost. These average costs were then projected over the remaining remediation period of 49
years for the CGTF and the NGTF. The EPA estimated in its September 2011 review that future remediation
will be required for approximately 50-70 years at each site. The most recent five-year EPA review, released in
November 2022, did not quantify the remedial time needed to achieve aquifer restoration.
Improvements in technology and changes in laws or regulations did not impact the average annual cost.
The liability is revalued annually. The fiscal year 2025 reimbursable outlays for operating and monitoring the
CGTF were $665,192 and for the NGTF were $279,214. The city has a reimbursement agreement with the
responsible parties and the total liability is expected to be fully recovered by the participating companies and
therefore a corresponding pollution remediation recoveries receivable has been accrued.
In September 2023, under the Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA), 42 U.S.C. §§ 9601-9675, the United States Environmental Protection Agency (EPA) identified
the City of Scottsdale and another party as potentially responsible parties for soil vapor contamination
(chlorinated solvents) at the North Indian Bend Wash Superfund Site, Area 7. Upon completion of a Remedial
Investigation and Feasibility Study, the EPA will choose a remedy for the site. The potential remedies vary
greatly in scope and cannot be reasonably estimated until the completion of the study.
F.
Related Organization
The Industrial Development Authority (IDA) is a non-profit corporation established by the city and granted
incorporation by the Arizona Corporation Commission in 1984. The primary function of the IDA is to
promote the retention, expansion, and attraction of businesses and commercial enterprises in Scottsdale. The
City Council appoints the Board of Directors of the IDA and is also involved in granting and denying IDA
bond applications.
G.
Pension, Retirement, and Other Postemployment Benefit Plans
All eligible employees of the City, including the Mayor and the City Council, are covered by one of four
pension plans. All full-time City employees, except public safety personnel (police officers and firefighters)
and the Mayor and City Council, participate in the Arizona State Retirement System, a cost-sharing multiple-
employer defined benefit pension plan. All public safety personnel participate in the Public Safety Personnel
Retirement System, which consists of both an agent multiple-employer defined benefit pension plan and a
defined contribution plan. The Mayor and City Council participate in either the Elected Officials’ Retirement
Plan (a cost-sharing multiple-employer defined benefit pension plan) or the Elected Officials’ Defined
Contribution Retirement System (a defined contribution plan). The city contributes to the Elected Officials’
Retirement Plan; however, the plan is not described below because of its relative insignificance to the financial
statements. All plans are component units of the State of Arizona.
115
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
In addition to pension benefits, the city provides other postemployment benefits (OPEB) to Public Safety
Personnel Retirement System accidental disability retirees through the city’s self-insured health plan. The
benefit terms are the same as those afforded to active employees; however, retirees participating in the Plan
are required to pay 100 percent of the blended actuarial rate.
A summary of pension and other postemployment benefit related items as of and for the year-ended June
30, 2025 is presented below (in thousands). The ASRS and PSPRS OPEB plans are not included in the notes
as the liability (asset) and related deferred inflows of resources, deferred outflows of resources, and OPEB
expense are not material to the financial statements:
Plan Description
Governmental
Activities
Business-Type
Activities
Total
Deferred Outflows of Resources
PSPRS - Police
$ 43,823
$ -
$ 43,823
PSPRS - Fire
34,500
-
34,500
ASRS
23,834
6,086
29,920
OPEB - City
475
-
475
OPEB - ASRS
289
74
363
OPEB - PSPRS Police
65
-
65
OPEB - PSPRS Fire
146
-
146
Total
$ 103,132
$ 6,160
$ 109,292
Liabilities/(Assets)
PSPRS - Police
$ 138,842
$ -
$ 138,842
PSPRS - Fire
33,273
-
33,273
ASRS
130,311
33,476
163,787
OPEB - City
893
-
893
OPEB - ASRS
(4,982)
(1,281)
(6,263)
OPEB - PSPRS Police
(3,698)
(3,698)
OPEB - PSPRS Fire
(728)
-
(728)
Total
$ 293,911
$ 32,195
$ 326,106
Deferred Inflows of Resources
PSPRS - Police
$ 6,048
$ -
$ 6,048
PSPRS - Fire
4,688
-
4,688
ASRS
9,901
2,544
12,445
OPEB - City
1,631
-
1,631
OPEB - ASRS
1,675
430
2,105
OPEB - PSPRS Police
944
-
944
OPEB - PSPRS Fire
760
-
760
Total
$ 25,647
$ 2,974
$ 28,621
Pension/OPEB Expense
PSPRS - Police
$ 22,814
$ -
$ 22,814
PSPRS - Fire
9,312
-
9,312
EODCRS - Elected
15
-
15
ASRS
12,382
2,743
15,125
OPEB - City
(133)
-
(133)
OPEB - ASRS
(792)
(203)
(995)
OPEB - PSPRS Police
(612)
-
(612)
OPEB - PSPRS Fire
(144)
-
(144)
Total
$ 42,842
$ 2,540
$ 45,382
116
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Arizona State Retirement System
General Information about the Pension Plan
Plan Description
All eligible city employees, except public safety personnel and the Mayor and City Council, participate
in the Arizona State Retirement System (ASRS). ASRS administers a cost-sharing multiple-employer
defined benefit pension plan. ASRS was established by the State of Arizona to provide pension
benefits for employees of the State and participating political subdivisions and school districts. ASRS
is administered in accordance with Title 38, Chapter 5, Articles 2 and 2.1 of the Arizona Revised
Statutes (ARS). ASRS issues a publicly available financial report that includes financial statements
and required supplementary information. That report may be obtained by writing to ASRS Financial
Services Division, 3300 North Central Avenue, Phoenix, AZ 85012, or by visiting https://www.
azasrs.gov/content/annual-reports. The ASRS other postemployment benefit plans are not further
disclosed due to their relative insignificance to the financial statements.
Benefits Provided
ASRS provides retirement and survivor benefits. State statute establishes benefits terms. A member
may retire upon meeting the following age and service requirements:
Age
Years of Service
Age
Years of Service
65
N/A
65
N/A
62
10
62
10
60
25
55
30
Initial Membership Date
Pre-July 1, 2011
July 1, 2011 and after
Age plus years of service total 80
117
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The retirement benefit is based on a percentage of average monthly compensation (benefit multiplier)
multiplied by the years of credited service. The compensation generally does not include lump sum
payments on termination of employment for accumulated vacation leave, sick leave, compensation time
pay, termination incentive pay, or any other form of termination pay (see discussion of pre-January
1, 1984, members below). The benefit multiplier percentage and average monthly compensation are
defined in the following schedules:
Years of Service
Multiplier
0.00-19.99 years
2.10%
20.00-24.99 years
2.15%
25.00-29.99 years
2.20%
30.00 or more years
2.30%
Membership Date
Average Monthly Compensation
Pre-July 1, 2011
36 consecutive months of highest
compensation within final 120 months
of service
July 1, 2011 and after
60 consecutive months of highest
compensation within final 120 months
of service
Members who began participation in the Plan prior to January 1, 1984, may choose to have average
monthly compensation determined based upon the period of 60 consecutive months during which
the member receives the highest compensation within the last 120 months of service, including lump
sum payments as described above. Members who attain age 50 with at least five years of total credited
service may take an early retirement; however, the amount of their retirement benefit is actuarially
reduced.
Survivor benefits are applicable if death occurs prior to retirement, and are payable, at the option of
the beneficiary, by either of the following methods:
1.
A lump sum equal to the sum of (a) and (b):
a.
the sum of the member’s combined (member and employer) accumulated contribution
balance with compound interest at a rate determined by the board through the day of
the payment of the benefit, and
b.
the amount of the member’s combined (member and employer) accumulated account,
along with any supplemental credits transferred from the System (closed portion of
ASRS) to the Plan with compound interest at a rate determined by the board through
the day of the payment of the benefit.
2.
The beneficiary may elect to receive a monthly income, in the single life form, which is actuarially
equivalent to the lump sum above.
Retirees who have been retired one year are eligible for a permanent benefit increase (PBI) up to a
maximum of 4 percent. The PBI is paid from a reserve of “Excess Investment Earnings.” If there are
no “Excess Investment Earnings” in reserve, then no PBI is paid. Further, PBI enhancements (EPBI)
provide retired members with at least ten years of service who have been retired five or more years
an additional benefit. For each complete 5-year period the member has been retired, an incremental
benefit is paid if monies to pay the benefit are available. This benefit is funded by an interest credit of
8 percent of the reserve for future PBIs. Due to legislation enacted in the 2013 legislative session, PBIs
and EPBIs will not be awarded to members hired on or after September 13, 2013.
118
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Contributions
The ARS provide statutory authority for determining the employees’ and employers’ contribution
amounts as a percentage of the city’s covered payroll. Although the statutes prescribe the basis for
making the actuarial calculation, the Arizona legislature is authorized to approve a contribution rate
other than the actuarially determined rate. Employees were required to contribute 12.12 percent of
their annual pay for the fiscal year ended June 30, 2025, and the city’s required contribution rate was
12.05 percent during the same period. In addition, the city was required by statute to contribute at the
actuarially determined rate of 10.14 percent of annual covered payroll of retired members who worked
for the city in positions that would typically be filled by an employee who contributes to the ASRS. The
required contribution rate for the fiscal year ended June 30, 2025, was actuarially determined to yield
contribution amounts sufficient to finance costs earned by employees during the year and to amortize
the Plan’s unfunded actuarially accrued liability over the period specified in the statutes. Contributions
to the pension plan by the city amounted to $17,843,000 for the fiscal year ended June 30, 2025.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
As of June 30, 2025, the city reported a liability of $163,786,607 for its proportionate share of the collective net
pension liability of the ASRS. The collective net pension liability was measured as of June 30, 2024, and the total
pension liability used to calculate the collective net pension liability was determined by an actuarial valuation as
of June 30, 2023. Update procedures were used to roll forward the total pension liability to the measurement
date. The city’s proportion of the collective net pension liability was based on the city’s proportionate share of
accrued contributions to the pension plan relative to the contributions of all participating entities for the fiscal
year ended June 30, 2024. As of June 30, 2024, the city’s proportion was 1.02357 percent, which was an increase
of 0.02749 percent over its proportion measured as of June 30, 2023.
For the fiscal year ended June 30, 2025, the city recognized a collective pension expense of $15,125,081. As of
June 30, 2025, the city reported a collective deferred outflow of resources and a collective deferred inflow of
resources related to pensions from the following sources (in thousands):
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Differences between expected and actual
experience
$ 9,142
$ -
Net difference between projected and actual
earnings on pension plan investments
-
10,460
Changes in proportion and differences between city
contributions and proportionate share of
contributions
2,935
1,985
City contributions subsequent to the measurement
date
17,843
-
Total
$ 29,920
$ 12,445
119
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The $17,843,000 reported as a collective deferred outflow of resources related to pensions resulting from city
contributions subsequent to the measurement date will be recognized as a reduction of the collective net pension
liability in the fiscal year ending June 30, 2026. Other amounts reported as a collective deferred outflow of
resources and a collective deferred inflow of resources related to pensions will be recognized in pension expense
as follows (in thousands):
2026
(5,202)
$
2027
9,402
2028
(2,648)
2029
(1,920)
2030
-
Thereafter
-
Fiscal year ending June 30:
Actuarial Assumptions
The total pension liability in the June 30, 2024, actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement:
Actuarial valuation date
June 30, 2023
Actuarial roll forward date
June 30, 2024
Actuarial cost method
Entry age normal
Amortization method
Plan amendments
Immediate
Investment gain/loss
Five years
Assumption gain/loss
Average remaining service lives
Experience gain/loss
Average remaining service lives
Proportion/proportionate share gain/loss
Average remaining service lives
Asset valuation
Fair value
Discount rate
7.0%
Projected salary increases
2.9-8.4%
Inflation
2.3%
Permanent benefit increase
Included
Mortality rates
2017 SRA Scale U-MP
The actuarial assumptions used in the June 30, 2023, valuation were based on the results of an actuarial
experience study for the five-year period ended June 30, 2020. The ASRS Board adopted the experience
study recommended changes which were first applied to the June 30, 2020, actuarial valuation.
The expected long-term rate of return on ASRS pension plan investments was determined to be 4.60
percent (excluding investment expense and inflation) using a building-block method in which best-
estimate ranges of expected future real rates of return (expected returns, net of investment expense and
inflation) are developed for each major asset class. These ranges are combined to produce the expected
long-term rate of return by weighting the expected future real rates of return by the target asset allocation
percentage. The target allocation and best estimates of long-term expected geometric real rates of return
for each major asset class are summarized in the following table:
120
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Asset Class
Target Asset
Allocation
Public Equity
44%
4.48%
Credit
23%
4.40%
Real Estate
17%
6.05%
Private Equity
10%
6.11%
Interest Rate Sensitive
6%
-0.45%
Total
100%
Real Return
Geometric Basis
Discount Rate
The discount rate used to measure the total pension liability was 7.0 percent. The projection of cash
flows used to determine the discount rate assumed that contributions from participating employers
will be made on the actuarially determined rates. Based on those assumptions, the pension plan’s
fiduciary net position was projected to be available to make all the projected future benefit payments
of current members. Therefore, the long-term expected rate of return on pension plan investments
was applied to all periods of projected benefit payments to determine the total pension liability.
Sensitivity of the City’s Proportionate Share of the Collective Net Pension Liability to Changes in the Discount Rate
The following presents the city’s proportionate share of the collective net pension liability calculated
using the discount rate of 7.0 percent, as well as what the city’s proportionate share of the collective
net pension liability would be if it were calculated using a discount rate that is 1-percentage-point
lower (6.0 percent) or 1-percentage-point higher (8.0 percent) than the current rate (in thousands):
1% Decrease
(6.0%)
Discount Rate
(7.0%)
1% Increase
(8.0%)
City's proportionate share of
the collective net pension
liability
250,791
$
163,787
$
91,276
$
Pension Plan Fiduciary Net Position
The pension plan’s fiduciary net position has been determined on the same basis used by the pension
plan. The financial statements of ASRS are prepared using the accrual basis of accounting in
accordance with accounting principles generally accepted in the United States of America that apply
to government accounting of fiduciary funds issued by the Governmental Accounting Standards
Board. Benefits and refunds are recognized when due and payable. Expenses are recorded when the
corresponding liabilities are incurred, regardless of when payment is made.
Fair value measurements are categorized within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the
fair value of the asset and gives the highest priority to unadjusted quoted prices in active markets for
identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs
(Level 3 measurements).
121
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
In instances where inputs used to measure fair value fall into different levels in the fair value hierarchy,
fair value measurements in their entirety are categorized based on the lowest level input that is
significant to the valuation. Investments that are measured at fair value using the net asset value per
share (or its equivalent) as a practical expedient are not classified in the fair value hierarchy. Cash
and short-term investments generally include cash, foreign currencies, short-term investment funds,
and U.S. Treasury bills that mature within one year. These investments are reported at cost. Detailed
information about the pension plan’s fiduciary net position is available in the separately issued ASRS
financial report.
Public Safety Personnel Retirement System
General Information about the Pension Plan
Plan Description
All the city’s sworn public safety personnel participate in the Public Safety Personnel Retirement
System (PSPRS). PSPRS administers both an agent multiple-employer defined benefit pension plan
and a defined contribution plan. The defined contribution plan is only available to police department
members who became a member on or after July 1, 2017, and fire department members who became
a member on or after January 1, 2012. The defined benefit and defined contribution pension plans
are administered in accordance with Title 38, Chapter 5, Articles 4 and 4.1, respectively, of the
Arizona Revised Statutes (ARS). PSPRS acts as a common investment and administrative agent that
is jointly administered by a nine-member board known as the Board of Trustees (the Board) and
234 local boards. PSPRS issues a publicly available financial report that includes financial statements
and required supplementary information. The report may be obtained by writing to Public Safety
Personnel Retirement System, 3010 East Camelback Road, Suite 200, Phoenix, AZ 85016, calling
(602) 255-5575, or by visiting: https://www.psprs.com/investments--financials/annual-reports. The
PSPRS other postemployment benefit plan is not further disclosed due to its relative insignificance to
the financial statements.
Benefits Provided
PSPRS provides retirement, disability, and survivor benefits. State statute establishes benefit terms.
Retirement benefits for employees who became a member on or before December 31, 2011 (Tier
1 members) commence the first day of the month following termination of employment and are
calculated based upon the following age and service requirements:
1.
Age 62 with 15 years of service, or 20 years of service with less than 20 years of credited service:
50 percent of the average monthly benefit compensation for the first 20 years of credited service.
The pension is reduced by 4 percent per year for each year of credited service under 20 years.
2.
20 to 24.99 years of credited service: 50 percent of the average monthly benefit compensation for
the first 20 years of credited service plus 2 percent of the average monthly benefit compensation
for each year of credited service between 20 and 24.99.
122
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
3.
25 or more years of credited service: 50 percent of the average monthly benefit compensation
for the first 20 years of credited service plus 2.5 percent of the average monthly benefit
compensation for each year of credited service above 20 years - up to a maximum of 80 percent
of the average monthly benefit compensation.
Retirement benefits for employees who became a member on or after January 1, 2012, and on or
before June 30, 2017, (Tier 2 members) commence the first day of the month following termination
of employment and are calculated based upon the following age and service requirements:
1.
Age 52.5 with 15 years of credited service but less than 25 years: average monthly benefit
compensation multiplied by a multiplier that varies by years of service, from 1.5 percent to 2.5
percent per year of service, multiplied by the number of years of service.
2.
Age 52.5 with 25 years of service: 62.5 percent of the average monthly benefit compensation.
Benefits will be reduced by 4 percent for each year of credited service under 25 years.
3.
25 or more years of service: 62.5 percent of the average monthly benefit compensation for the
first 25 years of credited service plus 2.5 percent of the average monthly benefit compensation
for each year over 25 years of credited service - up to a maximum of 80 percent of the average
monthly benefit compensation. The pension is reduced by 4 percent per year for each year of
credited service under 25 years with a pro-rata reduction for any fractional years.
Retirement benefits for employees who became a member on or after July 1, 2017, (Tier 3 members)
are contingent upon which retirement plan is chosen by a member. This group of members has
an irrevocable choice of enrolling in either the defined benefit plan (police employees) or a hybrid
plan, which has elements of both a defined benefit and defined contribution plan (fire employees),
or a defined contribution plan in lieu of the respective choices listed above (both police and fire
employees). If enrolling in the defined benefit plan or hybrid plan, benefits (defined benefit portion
only for the hybrid plan) commence the first day of the month following termination of employment
and are based upon the following age and service requirements:
1.
Age 55 with 15 or more years of credited service: average monthly benefit compensation times
a multiplier that varies by years of service, from 1.5 percent to 2.5 percent per year of service,
times the number of years of service - up to a maximum of 80 percent of the average monthly
benefit compensation.
2.
An individual who became a member on or after July 1, 2017, and reaches age 52.5 with at least
15 years of credited service may take an early retirement; however, the amount of his or her
retirement benefit is actuarially reduced.
The phrase “average monthly benefit compensation,” as it is used in the above discussion, is defined
in the following schedule:
123
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Membership Tier
Average Monthly Compensation
Tier 1
36 consecutive months of highest covered payroll
within the last 20 years of service
Tier 2
60 consecutive months of highest covered payroll
within the last 20 years of service
Tier 3
60 consecutive months of highest compensation
within the last 15 years of service
Disability benefits are calculated as follows:
Accidental Disability Retirement:
50% of average monthly compensation, or the monthly
Normal Retirement pension that the member is entitled to
receive if he or she retired immediately, whichever is greater.
Catastrophic Disability Retirement:
90% of Average Monthly Benefit Compensation for the first
60 months. Thereafter, the benefit is the greater of 62.5% of
Average Monthly Benefit Compensation and the member’s
accrued normal pension.
Ordinary Disability Retirement:
Normal Retirement pension that the member is entitled to
receive, prorated based on Credited Service earned over the
required Credited Service for Normal Retirement (maximum
ratio of 1).
Survivor benefits are paid on behalf of an active member in the amount of 80 percent of the pension
based on the calculation for an accidental disability retirement. If the member was killed in the line
of duty, the benefit is 100 percent of the member’s Average Monthly Benefit Compensation. The
benefit amount is allocated to the surviving spouse and, if applicable, eligible children. If there is
no surviving spouse, and there is at least one eligible child, the guardian of the eligible child(ren)
and the eligible child(ren) are the recipients of the benefit. If there is no surviving spouse or eligible
child(ren), the member’s named refund beneficiary on file will receive the member’s accumulated
contributions. Benefits are paid on behalf of an inactive, non-retired member to the member’s named
refund beneficiary in the amount of the member’s accumulated contributions. Death benefits are paid
on behalf of a retired member in a manner similar to that of an active member. The surviving spouse
will receive 80 percent of the member’s pension benefit for life.
124
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
A retired member, or survivor of a retired member, may be eligible for a cost-of-living adjustment
(COLA) from the System if monies are available. COLA eligibility and calculation is contingent upon
the member’s hire date.
Members, or survivors of retired members, who were hired before July 1, 2017, are eligible to receive
a compounding COLA on the base benefit of up to 2 percent per year. The COLA will be based
on the average annual percentage change in the Metropolitan Phoenix-Mesa Consumer Price Index
published by the United States Department of Labor, Bureau of Statistics.
Members, or survivors of retired members, who were hired on or after July 1, 2017, are eligible to
receive a compounding COLA on the base benefit, beginning at the earlier of the first calendar year after
the seventh anniversary of the retired member’s retirement or when the retired member reaches sixty
years of age. The COLA will be based on the average annual percentage change in the Metropolitan
Phoenix-Mesa Consumer Price Index published by the United States Department of Labor, Bureau
of Statistics. COLA adjustments will be received for this cohort if the following conditions are met:
Ratio of Actuarial
Value of Assets to
Liabilities
Maximum
increase
70-80%
1.0%
80-90%
1.5%
>90%
2.0%
Employees Covered by Benefit Terms
As of June 30, 2025, the following employees were covered by the benefit terms:
Inactive plan members or beneficiaries currently receiving benefits
412
Inactive plan members entitled to but not yet receiving benefits
181
Active plan members
566
Total
1,159
Contributions
ARS Title 38, Chapter 5, Article 4, Section 38-843 provides the authority for determining the city
and active employee contribution requirements to the PSPRS pension plan. The contribution rates
for employers are based on an actuarially determined rate recommended by an independent actuary
contracted by the Board. The contribution rates for employees are prescribed by the ARS Section
referenced above. For Tier 1 and Tier 2 employees, the actuarially determined rate is the estimated
amount necessary to finance the costs of benefits earned during the year by these employees, with an
additional amount to finance any unfunded accrued liability. The unfunded accrued liability portion of
the rate is paid by the city as a percentage of the pay of all the city’s active PSPRS members, regardless
of start date. For Tier 3 employees, each employer shall make contributions sufficient to pay fifty
percent of both the normal cost plus the actuarially determined amount required to amortize the total
unfunded accrued liability attributable only to those members hired on or after July 1, 2017. As noted
above, the city will also pay an amount to finance any unfunded accrued liability relating to employees
hired before July 1, 2017.
125
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The city’s pension-related contribution rates for fiscal year ended June 30, 2025 were:
Police
Tier 2
Membership date
7/19/2011
or earlier
On or after
7/20/2011
1/1/2012
or later
Plan type
Defined
benefit
Defined
benefit
Defined
benefit
Defined
benefit
Defined
contribution
Employee contribution rate
7.65%
7.65%
7.65%
8.42%
9.00%
Employer contribution rate
56.73%
56.73%
56.73%
51.23%
51.81%
Fire
Membership date
7/19/2011
or earlier
On or after
7/20/2011
Plan type
Defined
benefit
Defined
benefit
Defined
benefit
(hybrid)
Defined
contribution
(hybrid)
Defined
benefit
(hybrid)
Defined
contribution
(hybrid)
Defined
contribution
Employee contribution rate
7.65%
7.65%
7.65%
3.00%
9.67%
3.00%
9.00%
Employer contribution rate
27.74%
27.74%
27.74%
4.00%
22.27%
3.00%
21.61%
Tier 2
1/1/2012 or later
Tier 3
7/1/2017 or later
Tier 1
Tier 3
7/1/2017 or later
Tier 1
Participants’ defined contributions and the earnings on those contributions are immediately vested.
A participant is fully vested in employer contributions after ten years of service; the vesting occurs
at a rate of ten percent per year. If a participant dies or is determined to be eligible for an accidental
or catastrophic disability pension before completing ten years of service, the employer contributions
are immediately fully vested. In addition, the city was required by statute to contribute an actuarially
determined rate (42.81 percent for police employees and 12.61 percent for fire employees) of annual
covered payroll of retired members who worked for the city in positions that would typically be filled
by an employee who contributes to PSPRS. The city’s contributions to the pension plan for the fiscal
year ended June 30, 2025, were $26,715,103.
126
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
ARS Title 9, Chapter 8, Article 3, Section 9-952 requires the state treasurer to distribute a fire insurance
premium tax to the respective incorporated cities and towns and legally organized fire districts in
proportion to the full cash value of the real property and improvements in each incorporated city
and town and legally organized fire district that procures the services of a private fire company and in
each area served by a fire department or legally organized fire district. The annual tax provided by law
is based on a portion of the premiums received on policies and contracts of fire insurance covering
property within the state. The warrant issued by the state treasurer is deposited on the city’s behalf
into the pension plan. PSPRS received $3,888,314 of fire insurance premium tax for the city’s fire
pension plan for the fiscal year ended June 30, 2025. PSPRS accounts for the fire insurance premium
tax collected for the city as employer contributions.
Net Pension Liability
The city’s net pension liability of $172,115,171 was measured as of June 30, 2024, and the total pension
liability used to calculate the net pension liability was determined by an actuarial valuation as of that date.
Actuarial Assumptions
The total pension liability in the June 30, 2024, measurement was determined using the following
actuarial assumptions:
Actuarial Cost Method
Entry Age Normal
Inflation
2.50%
Salary Increases
1.25%-12.50%
Tier 1/2 Investment Rate of Return
7.20%
Tier 3 Investment Rate of Return
7.00%
Mortality rates
Active Lives: PubS-2010 Employee mortality, adjusted by a factor of 1.03 for
male members and 1.08 for female members, with generational improvements
using 85% of the most recent projection scale (currently Scale MP-2021). 100%
of active deaths are assumed to be in the line of duty.
Inactive Lives: PubS-2010 Healthy Retiree mortality, adjusted by a factor of
1.03 for male retirees and 1.11 for female retirees, with generational
improvements using 85% of the most recent projection scale (currently Scale
MP-2021).
Beneficiaries: PubS-2010 Survivor mortality, adjusted by a factor of 0.98 for
male beneficiaries and adjusted by a factor of 1.06 for female beneficiaries, with
generational improvements using 85% of the most recent projection scale
(currently Scale MP-2021).
Disabled Lives: PubS-2010 Disabled mortality, adjusted by a factor of 1.08 for
male disabled members and 1.01 for female disabled members, with generational
improvements using 85% of the most recent projection scale (currently Scale
MP-2021).
127
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
The actuarial assumptions used in the June 30, 2024, valuation were based on the results of an actuarial
experience study for the five-year period ended June 30, 2021. The purpose of the experience study
was to review actual experience in relation to the actuarial assumptions in effect. The PSPRS Board
adopted the experience study recommended changes which were applied to the June 30, 2022, actuarial
evaluation.
The long-term expected rate of return on pension plan investments can be determined using a
building-block method in which best-estimate ranges of expected future real rates of return (expected
returns, net of pension plan investment expenses and inflation) are developed for each major asset
class.
These ranges are combined to produce the long-term expected rate of return by weighting the expected
future real rates of return by the target asset allocation percentage and by adding expected inflation.
Best estimates of geometric real rates of return for each major asset class included in the pension
plan’s target asset allocation adopted as of June 30, 2024, as provided by PSPRS, are summarized in
the following table:
Asset Class
Cash - Mellon
2%
0.89%
Diversifying Strategies
5%
3.15%
Core Bonds
6%
2.44%
International Public Equity
16%
4.47%
Private Credit
20%
6.24%
U.S. Public Equity
24%
3.62%
Global Private Equity
27%
7.05%
100%
Long-Term Expected
Real Rate of Return
Target
Allocation
Discount Rate
The discount rate used to measure the total pension liability was 7.20 percent for Tier 1/2 members
and 7.00 percent for Tier 3 members. The projection of cash flows used to determine the discount
rates assumed that plan member contributions will be made at the current contribution rate and that
employer contributions will be made at rates equal to the difference between actuarially determined
contribution rates and the member rate. Based on those assumptions, the PSPRS plan’s fiduciary net
position was projected to be available to make all projected future benefit payments of current plan
members. Therefore, the long-term expected rate of return on pension plan investments was applied
to all periods of projected benefit payments to determine the total pension liability.
128
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Changes in the Net Pension Liability
Total Pension
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net Pension
Liability
(a)-(b)
Balances at 6/30/24
472,820
$
316,310
$
156,510
$
Changes for the year:
Service cost
7,538
-
7,538
Interest
33,740
-
33,740
Changes of benefit terms
-
-
-
Differences between expected and actual experience
10,134
-
10,134
Changes of assumptions
-
-
-
Contributions-employer
-
33,608
(33,608)
Contributions-employee
-
3,135
(3,135)
Net investment income
-
32,505
(32,505)
Benefit payments, including refunds of employee contributions
(23,492)
(23,492)
-
Administrative expense
-
(168)
168
Tiers 1 & 2 adjustment
-
-
-
Other changes
-
-
-
Net changes
27,920
45,588
(17,668)
Balances at 6/30/25
500,740
$
361,898
$
138,842
$
Increase (Decrease)
Public Safety Personnel Retirement System (Police)
Changes in the Net Pension Liability
(in thousands)
129
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Total Pension
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net Pension
Liability
(a)-(b)
Balances at 6/30/24
200,350
$
165,880
$
34,470
$
Changes for the year:
Service cost
6,073
-
6,073
Interest
14,665
-
14,665
Changes of benefit terms
-
-
-
Differences between expected and actual experience
5,017
-
5,017
Changes of assumptions
-
-
-
Contributions-employer
-
7,436
(7,436)
Contributions-employee
-
2,369
(2,369)
Net investment income
-
17,230
(17,230)
Benefit payments, including refunds of employee contributions
(5,487)
(5,487)
-
Administrative expense
-
(83)
83
Other changes
-
-
-
Net changes
20,268
21,465
(1,197)
Balances at 6/30/25
220,618
$
187,345
$
33,273
$
Increase (Decrease)
Public Safety Personnel Retirement System (Fire)
Changes in the Net Pension Liability
(in thousands)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the city’s proportionate share of the net pension liability calculated using
the discount rate of 7.20 percent for Tier 1/2 members and 7.00 percent for Tier 3 members, as
well as what the city’s net pension liability would be if it were calculated using a discount rate that is
1-percentage-point lower (6.20/6.00 percent) or 1-percentage-point higher (8.20/8.00 percent) than
the current rate (in thousands):
1% Decrease
(6.20%/6.00%)
Discount Rate
(7.20%/7.00%)
1% Increase
(8.20%/8.00%)
Police net pension liability
207,178
$
138,842
$
83,165
$
Fire net pension liability
66,101
33,273
6,496
130
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Pension Plan Fiduciary Net Position
The pension plan’s fiduciary net position has been determined on the same basis used by the pension
plan. PSPRS financial statements are prepared using the economic resources measurement focus
and the accrual basis of accounting. Benefits are recognized when due and payable in accordance
with the terms of PSPRS. Refunds are due and payable by state law within 20 days of receipt of a
written application for a refund. Refunds are recorded when paid. Expenses are recorded when the
corresponding liabilities are incurred, regardless of when payment is made.
PSPRS investments are reported at fair value. Short-term investments are reported at cost plus accrued
interest. Derivative instruments’ fair values are determined by the custodial agent. The fair value of
limited partnership investments is based on estimated current value and accepted industry practice.
Fair value measurements are categorized within the hierarchy established by generally accepted
accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs
used to measure an asset’s fair value. Investments that are measured at fair value using the net asset
value (NAV) per share (or its equivalent) as a practical expedient are not classified in the fair value
hierarchy. Fair values are determined as follows:
• Level 1 - Unadjusted quoted prices for identical instruments in active markets
• Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar
instruments in markets that are not active; and model-derived valuations in which all significant
inputs are observable
• Level 3 - Valuations derived from valuation techniques in which significant inputs are unobservable
The fair value of alternative investments is based on the investments’ NAV per share. These are
investments for which exchange quotations are not readily available and are valued at estimated fair
value, as determined in good faith by the General Partner of each fund or by the investment manager
responsible for that sector.
Detailed information about the pension plan’s fiduciary net position is available in the separately
issued PSPRS financial report.
131
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to Pensions
For the fiscal year ended June 30, 2025, the city recognized pension expense of $31,587,319 related to the
defined benefit plan and the defined benefit portion of the hybrid plan and $539,339 related to the defined
contribution plan and the defined contribution portion of the hybrid plan. As of June 30, 2025, the city
reported deferred outflows of resources and deferred inflows of resources related to pensions from the
following sources (in thousands):
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Differences between expected and actual
experience
$ 47,372
$ 3,732
Changes of assumptions
4,236
-
Net difference between projected and actual
earnings on pension plan investments
-
7,004
City contributions subsequent to the measurement
date
26,715
-
Total
$ 78,323
$ 10,736
City contributions subsequent to the measurement date of $26,715,103 were reported as deferred outflows
of resources and will be recognized as a reduction of the net pension liability in the fiscal year ending June 30,
2026. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to
pensions will be recognized in pension expense as follows (in thousands):
2026
5,388
$
2027
15,753
2028
5,109
2029
2,922
2030
3,949
Thereafter
7,751
Fiscal year ending June 30:
Elected Officials’ Defined Contribution Retirement System
The city contributes to the Elected Officials’ Defined Contribution Retirement System (EODCRS), which
includes a defined contribution pension plan for elected officials and judges of certain state, county, and local
governments. Participants in this plan include only those elected officials who began service subsequent to
December 31, 2013, and had no relationship to ASRS or EORP at the inception of service. The Board of
Trustees of the PSPRS is also the administrator for the EODCRS.
132
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Benefit terms, including contribution requirements, for EODCRS are established by Title 38, Chapter 5,
Article 3.1 of the Arizona Revised Statutes (ARS) and may be amended by the State of Arizona. For each
member of EODCRS, the city is required to contribute 6 percent of gross compensation to an individual
member retirement account. Members are required to contribute 8 percent of gross compensation to their
retirement account. Members are immediately vested in both their and the city’s contributions and earnings on
those contributions. For the fiscal year ended June 30, 2025, the city recognized pension expense of $14,801.
Postemployment Benefits Other Than Pensions (OPEB)
The cost of postemployment healthcare benefits, from an accrual accounting perspective, should be
associated with the periods in which the future costs are earned rather than in the future years when they
will be paid (similar to the cost of pension benefits). GASB Statement No. 75, Accounting and Financial
Reporting for Postemployment Benefits Other Than Pensions requires the city to recognize the entire OPEB
liability and a comprehensive measure of OPEB expense. The comprehensive measure of OPEB expense
includes immediate recognition in OPEB expense of the effects of changes of benefit terms, as well as
the incorporation of the amortization of deferred inflows of resources and deferred outflows of resources
related to OPEB over a defined, closed period.
Plan Description
The city’s defined benefit OPEB plan (“the Plan”) provides OPEB for eligible retired employees
through a single employer defined benefit medical plan administered by the city. The City Council, by
way of resolution, grants itself the authority, on an annual basis, to reestablish and amend the benefit
terms and financing requirements of the Plan. No assets are accumulated in a trust that meets the
criteria in paragraph 4 of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment
Benefits Other Than Pensions.
Benefits Provided
The Plan offers medical benefits to its eligible retirees and their dependents through the city’s self-
insured health plan. An eligible retiree is a Public Safety Personnel Retirement System accidental
disability retired employee. Eligible retirees can enroll in a city plan up to 60 days after they retire; after
that their eligibility for this benefit ceases. The benefit terms are the same as those afforded to active
employees; however, retirees participating in the Plan are required to pay 100 percent of the blended
actuarial rate, while employees pay less than the full amount. Upon a retiree reaching 65 years of age,
the retiree and related dependents are no longer eligible for city coverage.
133
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Employees Covered by Benefit Terms
The following employees were covered by the benefit terms:
As of June 30, 2025, Membership Consisted of:
Inactive Employees or Beneficiaries Currently Receiving Benefits
10
Inactive Employees Entitled to but Not Yet Receiving Benefits
-
Active Employees
675
Total
685
Total OPEB Liability
The city’s total OPEB liability of $893,000 was measured as of July 1, 2024, as determined by an actuarial
valuation as of that date.
Actuarial Assumptions and Other Inputs
The total OPEB liability in the July 1, 2024, actuarial valuation was determined using the following
actuarial assumptions and other inputs, applied to all periods included in the measurement, unless
otherwise specified:
Inflation
2.5%
Salary Increases
3.25% wage inflation plus merit and longevity increases ranging from 0.0% to 11.75%
Discount Rate
4.21%
Healthcare Cost Trend Rates*
8.60% for 2025, 8.00% for 2026, and then decreasing 0.5% per year to an ultimate rate of
4.50% for 2033 and later years
Retirees' Share of Benefit-Related Costs
100%
*The initial trend rate reflects the city’s actual projected cost increases from fiscal year 2025 to 2026.
The discount rate was based on the S&P Municipal Bond 20-Year High Grade Rate Index.
Mortality rates were based on the following:
Healthy Police and Fire retirees:
SOA Pub-2010 Public Safety Headcount Weighted Mortality
Table fully generational using Scale MP-2021
Disabled Police and Fire retirees:
SOA Pub-2010 Public Safety Disabled Headcount Weighted
Mortality Table fully generational using Scale MP-2021
Surviving Spouses:
SOA Pub-2010 Contingent Survivor Headcount Weighted
Mortality Table fully generational using Scale MP-2021
134
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Changes in the Total OPEB Liability
(in thousands)
Total OPEB
Liability
Balance at 6/30/24
863
$
Changes for the year:
Service cost
44
Interest
35
Differences between expected and actual experience
30
Changes of assumptions/other inputs
48
Benefit payments
(127)
Net changes
30
Balance at 6/30/25
893
$
Changes in assumptions reflect the following:
1.
Change in the discount rate from 4.13 percent as of the beginning of the year to 4.21 percent as of
the end of the year.
2.
The termination rates for public safety employees have been updated based on the Maricopa County
rates from the Police and Fire Public Safety Personnel Retirement System actuarial valuation as of
June 30, 2024.
3.
The retirement rates for public safety employees have been updated based on the Maricopa County
rates from the Police and Fire Public Safety Personnel Retirement System actuarial valuation as of
June 30, 2024.
4.
The salary scale for public safety employees has been updated based on the Maricopa County rates from
the Police and Fire Public Safety Personnel Retirement System actuarial valuation as of June 30, 2024.
5.
Healthcare trend rates have been updated to reflect actual premium increases from fiscal year 2025 to
fiscal year 2026, followed by an annual trend of 7.5 percent decreasing by 0.5 percent annually to an
ultimate rate of 4.5 percent.
135
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability of the city, as well as what the city’s total OPEB
liability would be if it were calculated using a discount rate that is 1-percentage-point lower (3.21
percent) or 1-percentage-point higher (5.21 percent) than the current discount rate (in thousands):
1%
Decrease
(3.21%)
Discount
Rate
(4.21%)
1%
Increase
(5.21%)
Total OPEB Liability
934
$
893
$
854
$
Sensitivity of the Total OPEB liability to Changes in the Healthcare Cost Trend Rates
The following presents the total OPEB liability of the city, as well as what the city’s total OPEB
liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point
lower (6.5 percent decreasing to 3.50 percent) or 1-percentage-point higher (8.5 percent decreasing to
5.50 percent) than the current healthcare cost trend rates (in thousands):
1%
Decrease
(6.50%
decreasing
to 3.50%)
Healthcare
Cost Trend
Rates
(7.50%
decreasing
to 4.50%)
1%
Increase
(8.50%
decreasing
to 5.50%)
Total OPEB Liability
835
$
893
$
958
$
136
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related
to OPEB
For the year ended June 30, 2025, the city recognized OPEB expense of $(133,358). As of June 30, 2025, the
city reported deferred outflows of resources and deferred inflows of resources related to OPEB from the
following sources (in thousands):
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Differences between expected and actual
experience
$ 205
$ 813
Change of assumptions or other inputs
176
818
City benefits paid subsequent to the measurement
date
94
-
Total
$ 475
$ 1,631
The $93,906 reported as a deferred outflow of resources related to OPEB resulting from city benefits
paid subsequent to the measurement date will be recognized as a reduction of the total OPEB liability in
the fiscal year ending June 30, 2026. Amounts reported as deferred outflows of resources and deferred
inflows of resources related to OPEB will be recognized in OPEB expense as follows (in thousands):
2025
(213)
$
2026
(213)
2027
(202)
2028
(202)
2029
(173)
Thereafter
(247)
Fiscal year ending June 30:
137
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Financial Statements
H.
Other Postemployment Benefits
In addition to pension benefits, the city provides an option for post-retirement healthcare benefits, in accordance
with Chapter 14 of the City Code. Employees hired before July 1, 1982, receive cash equal to 50 percent of
the first 520 hours of unused medical leave plus 25 percent of all hours in excess of 520. The conversion
rate is the employee’s average hourly base pay rate for the five years immediately preceding retirement. The
medical leave not paid out in cash is applied to a retirement health savings account at the employee’s hourly
rate of pay at the time of retirement. For shift fire employees with 420 or more hours and all other retirees
with 300 or more hours of accumulated medical leave hired on or after July 1, 1982, the city will apply the
value of the medical leave to a retirement health savings account. Medical leave balances accumulated through
June 30, 2011, will be paid at 100 percent of the employee’s hourly rate at the time of retirement. Medical
leave balances accumulated July 1, 2011, or after will be paid out at 50 percent of the employee’s hourly rate
at retirement. Additionally, the payout is limited to the value of 1,200 combined hours for all retirees, except
shift fire employees, who are limited to 1,680 hours earned both before and after July 1, 2011, unless more
than 1,200 or 1,680 hours, respectively, were accrued prior to July 1, 2011. Total hours accrued before July 1,
2011, will be paid without limitation.
The projected liability for active employees, as of June 30, 2025, was $17,559,767. The projected liability was
considered payable within one year or greater, and therefore considered noncurrent and included in both the
proprietary fund and government-wide financial statements. Significant actuarial assumptions of the January
1, 2025, actuarial valuation include: a) mortality rates based on the SOA Pub-2010 General (for non-PSPRS-
eligible personnel)/Public Safety (for PSPRS-eligible personnel) Headcount Weighted Mortality Table fully
generational using Scale MP-2021; b) interest compounded 2.5 percent annually; c) salary increases at a rate
of 4 percent based on payroll experience and future expectations; and d) Traditional Unit Credit cost method
based on participant data as of December 31, 2024.
138
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Required Supplementary Information
Proportionate Share of Collective Net Pension Liability for Cost–Sharing Pension Plan
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
City's proportion of the
collective net pension liability
1.023570%
0.996080%
1.040000%
1.009390%
1.050150%
1.049160%
1.055510%
1.056820%
1.086990%
1.099760%
City's proportionate share of the
collective net pension liability
$163,787
$161,180
$169,751
$132,630
$181,954
$152,665
$147,206
$164,632
$175,451
$171,304
City's covered payroll
$143,550
$130,436
$124,179
$110,303
$114,944
$110,748
$105,097
$107,259
$101,917
$101,962
City's proportionate share of the
collective net pension liability as
a percentage of its covered
payroll
114.10%
123.57%
136.70%
120.24%
158.30%
137.85%
140.07%
153.49%
172.15%
168.01%
Plan fiduciary net position as a
percentage of the total pension
liability
76.93%
75.47%
74.26%
78.58%
69.33%
73.24%
73.40%
69.92%
67.06%
68.35%
Schedule of the City's Proportionate Share of the Collective Net Pension Liability
Last Ten Fiscal Years (dollars in thousands)
Arizona State Retirement System
Note: The Arizona State Retirement System report may be obtained by writing to ASRS Financial Services Division, 3300 North Central Avenue, Phoenix, AZ 85012, or by visiting
https://www.azasrs.gov/content/annual-reports.
139
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Required Supplementary Information
Changes in the City’s Net Pension Liability (Asset) and Related Ratios for Agent Pension Plans
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
Total pension liability
Service cost
7,538
$
7,212
$
7,411
$
7,480
$
7,402
$
8,154
$
7,103
$
7,841
$
6,603
$
6,537
$
Interest
33,740
31,619
30,359
29,613
27,559
25,834
24,013
22,479
20,570
19,640
Changes of benefit terms
-
-
-
-
-
-
-
2,584
17,206
-
Differences between expected and actual experience
10,134
13,210
3,688
(4,736)
12,629
3,089
4,880
(921)
(3,203)
87
Changes of assumptions or other inputs
-
-
4,494
-
-
9,123
-
9,028
11,023
-
Benefit payments, including refunds of employee contributions
(23,492)
(22,333)
(22,603)
(21,540)
(17,538)
(16,512)
(15,475)
(16,239)
(14,059)
(14,835)
Net change in total pension liability
27,920
29,708
23,349
10,817
30,052
29,688
20,521
24,772
38,140
11,429
Total pension liability-beginning
472,820
443,112
419,763
408,946
378,894
349,206
328,685
303,913
265,773
254,344
Total pension liability-ending (a)
500,740
$
472,820
$
443,112
$
419,763
$
408,946
$
378,894
$
349,206
$
328,685
$
303,913
$
265,773
$
Plan fiduciary net position
Contributions-employer
33,608
$
33,258
$
56,142
$
19,326
$
18,854
$
17,387
$
15,491
$
11,888
$
11,710
$
8,970
$
Contributions-employee
3,135
3,315
3,216
3,063
3,649
3,343
3,438
3,983
4,230
3,944
Net investment income
32,505
22,790
(11,123)
55,286
2,471
9,714
11,537
17,104
842
5,113
Benefit payments, including refunds of employee contributions
(23,492)
(22,333)
(22,603)
(21,540)
(17,538)
(16,512)
(15,475)
(16,239)
(14,059)
(14,835)
Administrative expense
(168)
(133)
(200)
(260)
(202)
(171)
(176)
(152)
(122)
(125)
Other changes
-
9
11
21
35
9
(34)
(134)
(36)
(243)
Net change in plan fiduciary net position
45,588
36,906
25,443
55,896
7,269
13,770
14,781
16,450
2,565
2,824
Plan fiduciary net position-beginning
316,310
279,404
253,961
198,065
190,914
177,208
162,427
145,977
143,412
140,588
Adjustment to Beginning of Year
-
-
-
-
(118)
(64)
-
-
-
-
Plan fiduciary net position-ending (b)
361,898
$
316,310
$
279,404
$
253,961
$
198,065
$
190,914
$
177,208
$
162,427
$
145,977
$
143,412
$
City's net pension liability-ending ((a) - (b))
138,842
$
156,510
$
163,708
$
165,802
$
210,881
$
187,980
$
171,998
$
166,258
$
157,936
$
122,361
$
Plan fiduciary net position as a percentage of the total pension
liability
72.27%
66.90%
63.05%
60.50%
48.43%
50.39%
50.75%
49.42%
48.03%
53.96%
Covered payroll
38,996
$
35,260
$
34,540
$
33,349
$
35,069
$
31,628
$
34,869
$
33,896
$
33,073
$
33,075
$
City's net pension liability as a percentage of covered payroll
356.04%
443.87%
473.97%
497.17%
601.33%
594.35%
493.27%
490.49%
477.54%
369.95%
Public Safety Personnel Retirement System (Police)
Schedule of Changes in the City's Net Pension Liability and Related Ratios
Last Ten Fiscal Years (dollars in thousands)
Note: The Public Safety Personnel Retirement System report may be obtained by writing to Public Safety Personnel Retirement System, 3010 East Camelback Road, Suite 200, Phoenix, AZ 85016, calling (602) 255-
5575, or by visiting: http://www.psprs.com/investments--financials/annual-reports.
140
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Required Supplementary Information
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
Total pension liability
Service cost
6,073
$
6,197
$
5,760
$
5,565
$
5,457
$
6,378
$
5,098
$
5,009
$
4,077
$
3,720
$
Interest
14,665
13,099
11,338
10,094
8,387
7,654
6,729
5,797
4,655
4,037
Changes of benefit terms
-
-
-
-
-
-
-
639
7,546
-
Differences between expected and actual experience
5,017
7,071
12,155
4,095
11,517
(2,821)
(2,004)
1,264
(877)
994
Changes of assumptions or other inputs
-
-
347
-
-
2,644
-
1,881
3,303
-
Benefit payments, including refunds of employee contributions
(5,487)
(3,501)
(3,348)
(2,458)
(1,705)
(1,259)
(1,047)
(932)
(1,430)
(691)
Net change in total pension liability
20,268
22,866
26,252
17,296
23,656
12,596
8,776
13,658
17,274
8,060
Total pension liability-beginning
200,350
177,484
151,232
133,936
110,280
97,684
88,908
75,250
57,976
49,916
Total pension liability-ending (a)
220,618
$
200,350
$
177,484
$
151,232
$
133,936
$
110,280
$
97,684
$
88,908
$
75,250
$
57,976
$
Plan fiduciary net position
Contributions-employer
7,436
$
6,540
$
10,807
$
4,704
$
4,219
$
2,830
$
6,061
$
2,737
$
2,974
$
2,247
$
Contributions-employee
2,369
3,378
6,882
2,502
2,653
2,946
1,981
2,551
2,693
2,337
Net investment income
17,230
11,892
(5,847)
30,222
1,307
4,863
5,520
7,822
358
2,046
Benefit payments, including refunds of employee contributions
(5,487)
(3,501)
(3,348)
(2,458)
(1,705)
(1,259)
(1,047)
(932)
(1,430)
(691)
Administrative expense
(83)
(63)
(105)
(140)
(106)
(85)
(85)
(70)
(52)
(50)
Tiers 1 & 2 adjustment
-
(783)
-
-
-
-
-
-
-
-
Other changes
-
(1)
11
-
-
-
16
1
(53)
12
Net change in plan fiduciary net position
21,465
17,462
8,400
34,830
6,368
9,295
12,446
12,109
4,490
5,901
Plan fiduciary net position-beginning
165,880
148,418
140,018
105,188
98,906
89,627
77,181
65,072
60,582
54,681
Adjustment to Beginning of Year
-
-
-
-
(86)
(16)
-
-
-
-
Plan fiduciary net position-ending (b)
187,345
$
165,880
$
148,418
$
140,018
$
105,188
$
98,906
$
89,627
$
77,181
$
65,072
$
60,582
$
City's net pension liability (asset)-ending ((a) - (b))
33,273
$
34,470
$
29,066
$
11,214
$
28,748
$
11,374
$
8,057
$
11,727
$
10,178
$
(2,606)
$
Plan fiduciary net position as a percentage of the total pension
liability (asset)
84.92%
82.80%
83.62%
92.58%
78.54%
89.69%
91.75%
86.81%
86.47%
104.49%
Covered payroll
27,619
$
28,153
$
27,018
$
25,764
$
25,187
$
24,376
$
23,192
$
23,500
$
21,498
$
20,420
$
City's net pension liability as a percentage of covered payroll
120.47%
122.44%
107.58%
43.53%
114.14%
46.66%
34.74%
49.90%
47.34%
0.00%
Public Safety Personnel Retirement System (Fire)
Schedule of Changes in the City's Net Pension Liability (Asset) and Related Ratios
Last Ten Fiscal Years (dollars in thousands)
Note: The Public Safety Personnel Retirement System report may be obtained by writing to Public Safety Personnel Retirement System, 3010 East Camelback Road, Suite 200, Phoenix, AZ 85016, calling (602) 255-
5575, or by visiting: http://www.psprs.com/investments--financials/annual-reports.
141
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Required Supplementary Information
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
Statutorily required contribution
17,843
$
17,223
$
15,538
$
14,892
$
13,242
$
13,151
$
12,384
$
11,437
$
11,540
$
11,049
$
Employer contributions in relation to
the statutorily required contribution
(17,843)
(17,223)
(15,538)
(14,892)
(13,242)
(13,151)
(12,384)
(11,437)
(11,540)
(11,049)
Contribution deficiency (excess)
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
Covered payroll
150,120
$
143,550
$
130,436
$
124,179
$
110,303
$
114,944
$
110,748
$
105,097
$
107,259
$
101,917
$
Contributions as a percentage of
covered payroll
11.89%
12.00%
11.91%
11.99%
12.01%
11.44%
11.18%
10.88%
10.76%
10.84%
Schedule of City Contributions
Arizona State Retirement System
Last Ten Fiscal Years (dollars in thousands)
142
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Required Supplementary Information
2025
2024(1)
2023(1)
2022(1)
2021
2020
2019
2018
2017
2016
Actuarially determined contribution
22,412
$
22,161
$
22,196
$
20,225
$
19,171
$
18,850
$
17,296
$
15,341
$
12,328
$
11,635
$
Employer contributions in relation to
the actuarially determined contribution
(22,412)
(33,621)
(33,501)
(56,145)
(19,171)
(18,850)
(17,296)
(15,341)
(12,328)
(11,635)
Contribution deficiency (excess)
-
$
(11,460)
$
(11,305)
$
(35,920)
$
-
$
-
$
-
$
-
$
-
$
-
$
Covered payroll
40,035
$
38,996
$
35,260
$
34,540
$
33,349
$
35,069
$
31,628
$
34,869
$
33,896
$
33,073
$
Contributions as a percentage of
covered payroll
55.98%
86.22%
95.01%
162.55%
57.49%
53.75%
54.69%
44.00%
36.37%
35.18%
(1) City made additional contributions during fiscal years 2022 through 2024 to pay down total pension liability.
Schedule of City Contributions
Public Safety Personnel Retirement System (Police)
Last Ten Fiscal Years (dollars in thousands)
143
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Required Supplementary Information
2025
2024
2023
2022(1)
2021
2020
2019
2018
2017
2016
Actuarially determined contribution
8,191
$
7,018
$
6,155
$
5,533
$
4,731
$
4,167
$
4,577
$
3,924
$
2,840
$
2,626
$
Employer contributions in relation to
the actuarially determined contribution
(8,191)
(7,018)
(6,155)
(10,533)
(4,731)
(4,167)
(4,577)
(3,924)
(2,840)
(2,626)
Contribution deficiency (excess)
-
$
-
$
-
$
(5,000)
$
-
$
-
$
-
$
-
$
-
$
-
$
Covered payroll
31,657
$
27,619
$
28,153
$
27,018
$
25,764
$
25,187
$
24,376
$
23,192
$
23,500
$
21,498
$
Contributions as a percentage of
covered payroll
25.87%
25.41%
21.86%
38.99%
18.36%
16.54%
18.78%
16.92%
12.09%
12.22%
(1) City made additional contributions during fiscal year 2022 to pay down total pension liability.
Schedule of City Contributions
Public Safety Personnel Retirement System (Fire)
Last Ten Fiscal Years (dollars in thousands)
144
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Required Supplementary Information
Changes in the City’s Total OPEB Liability and Related Ratios
2025
2024
2023
2022
2021
2020
2019
2018
Total OPEB liability
Service cost
44
$
79
$
101
$
323
$
274
$
236
$
241
$
260
$
Interest
35
31
19
58
83
89
85
67
Differences between expected and actual experience
30
197
(106)
(236)
(587)
(261)
(278)
(230)
Changes of assumptions/other inputs
48
(72)
(62)
(1,100)
121
126
(38)
125
Benefit payments
(127)
(71)
(84)
(137)
(145)
(116)
(101)
(111)
Net change in total OPEB liability
30
164
(132)
(1,092)
(254)
74
(91)
111
Total OPEB liability-beginning
863
699
831
1,923
2,177
2,103
2,194
2,083
Total OPEB liability-ending
893
$
863
$
699
$
831
$
1,923
$
2,177
$
2,103
$
2,194
$
Covered-employee payroll
60,114
$
55,666
$
53,352
$
50,459
$
53,874
$
55,023
$
52,970
$
51,137
$
Total OPEB liability as a percentage of covered-employee payroll
1.49%
1.55%
1.31%
1.65%
3.57%
3.96%
3.97%
4.29%
The city implemented GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions for the fiscal year ended June 30, 2018. Information for the
prior years is not available.
Note: No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions .
Total OPEB Liability and Related Ratios
Last Eight Fiscal Years (dollars in thousands)
145
City of Scottsdale, Arizona
For the Fiscal Year Ended June 30, 2025
Notes to Required Supplementary Information
I.
ACTUARIALLY DETERMINED CONTRIBUTION RATES
The actuarially determined contribution rates for PSPRS are calculated as of June 30 two years prior to the
end of the fiscal year in which contributions are made. The actuarial assumptions used are disclosed in the
notes to the financial statements.
II.
FACTORS THAT AFFECT TRENDS
Arizona State Retirement System (ASRS)
The actuarial assumptions related to funding used in the June 30, 2023, valuation for ASRS were based on the
results of an actuarial experience study for the five-year period ended June 30, 2020. The major changes in
assumptions involved the investment return, the inflation rate, general wage inflation, and future permanent
benefit increases. The ASRS Board adopted the recommended changes from the experience study, which were
first applied to the June 30, 2020, actuarial valuation.
Public Safety Personnel Retirement System (PSPRS)
The actuarial assumptions used in the June 30, 2024, valuation for PSPRS were based on the results of
an actuarial experience study for the five-year period ended June 30, 2021. The purpose of the experience
study was to review actual experience in relation to the actuarial assumptions in effect. The PSPRS Board
adopted the experience study recommended changes, which were applied beginning with the June 30, 2022,
actuarial valuation. The total liabilities as of measurement date June 30, 2024 , reflected changes in actuarial
assumptions based on the results of the actuarial experience study, including decreasing the discount rate from
7.3 percent to 7.2 percent, changing the wage inflation rate from 3.5 percent to a range of 3.25-15.0 percent,
and increasing the cost-of-living adjustment rate from 1.75 percent to 1.85 percent.
Arizona courts have ruled those provisions of a 2011 law that changed the mechanism for funding permanent
pension benefit increases and increased employee pension contribution rates were unconstitutional or a breach
of contract because those provisions apply to individuals who were members as of the law’s effective date.
As a result, the PSPRS changed benefit terms to reflect the prior mechanism for funding permanent benefit
increases for those members and revised actuarial assumptions to explicitly value future permanent benefit
increases. PSPRS also reduced those members’ employee contribution rates. These changes are reflected in the
plans’ pension liabilities for fiscal year 2015 (measurement date 2014) for members who were retired as of the
law’s effective date and fiscal year 2018 (measurement date 2017) for members who retired or will retire after
the law’s effective date. These changes also increased the PSPRS-required pension contributions beginning
in fiscal year 2016 for members who were retired as of the law’s effective date. These changes increased the
PSPRS-required contributions beginning in fiscal year 2019 for members who retired or will retire after the
law’s effective date.
Other Postemployment Benefit Plan
No assets are accumulated in a trust that meets the criteria in paragraph four of GASB Statement No. 75.
146
City of Scottsdale, Arizona
Special Revenue Funds
Special Revenue Funds have either legal restrictions stipulated by an external party or are committed through
formal action by the City Council to be used for a specified purpose.
Transportation Fund. This fund receives and expends the city’s allocation of the Arizona Highway User
Revenue tax, 0.2 percent of privilege tax for transportation improvements, and 0.1 percent of privilege tax
dedicated to the Arterial Life Cycle Program. The amount of Arizona Highway User Revenue available to
each city is allocated on a population basis, which is determined by the latest federal census and must be
used for street construction, reconstruction, maintenance, or transit.
Community Development Block Grant Fund. This fund receives and expends the city’s Community
Development Block Grant revenues. The amount of the grant is awarded annually by the U.S. Department
of Housing and Urban Development (HUD). Community Development Block Grant revenues may be
used only for those projects approved in the grant budget and are subject to agency expenditure guidelines.
HOME Fund. This fund receives and expends monies from the Maricopa County Home Consortium.
Expenditures are made to provide affordable housing, expand the capacity of non-profit housing providers,
strengthen the ability of local governments to provide housing, and leverage private-sector participation
in housing.
Grants Fund. This fund receives and expends the city’s grant revenues not accounted for in other funds.
The amount of grants received is generally based on applications to granting agencies by the city and on
availability of funding by the grantors. Grant revenues may be used only for the stated purpose in the
approved grant agreement and are subject to grantor expenditure guidelines.
Housing Choice Voucher Program Fund. This fund receives and expends the city’s Housing Choice
Voucher Program revenues. Funding is awarded by the U.S. Department of Housing and Urban
Development (HUD) to provide rental housing assistance. Budgets are approved annually by HUD.
Housing Choice Voucher Program revenues may be used only for assistance approved by HUD and are
subject to agency expenditure guidelines.
Preserve Privilege Tax Fund. This fund receives voter-approved Preservation Privilege (Sales) Tax of
0.35 percent (0.2 percent 1995 and 0.15 percent 2004). Revenues are transferred to the Preserve Privilege
Tax Capital Projects Fund for land purchases and improvements in the McDowell Sonoran Preserve or
are transferred to the General Obligation Bond Debt Service Fund to be used for related debt service
payments for prior preserve land acquisitions.
NONMAJOR GOVERNMENTAL FUNDS
147
City of Scottsdale, Arizona
Community Facilities Districts (CFD) Funds
These funds account for the non-debt or non-capital related expenditures incurred by community facilities
districts.
McDowell Mountain Ranch CFD
DC Ranch CFD
Via Linda Road CFD
Waterfront Commercial CFD
Streetlight Districts Fund. This fund accounts for the property tax revenues received by the streetlight
districts generated through the annual streetlight district levy. These funds are restricted for electricity
expenditures of each streetlight district.
Special Programs Fund. This fund receives monies from a variety of sources. The monies are either
restricted by an outside source or committed by City Council and are required to be expended for specific
purposes related to the intention of the source of the revenue.
Tourism Development Fund. This fund receives revenues generated through transient occupancy taxes
and certain lease agreements. The use of these funds has been restricted or committed by the City Council
for tourism-related purposes.
Stadium Facility Fund. This fund accounts for certain revenue received for Scottsdale Stadium and
contributions from the San Francisco Giants and the Scottsdale Charros. The contributions are restricted
by an outside agreement to be used to support the operations, maintenance, and capital improvements for
Scottsdale Stadium.
Debt Service Funds
Debt Service Funds record the accumulation of resources for, and the payment of, long-term debt
principal and interest not serviced by the proprietary funds.
Municipal Property Corporation Fund. This fund accounts for the principal and interest requirements
of the city’s Municipal Property Corporation bonds. Financing is provided primarily by transaction
privilege tax.
Debt Service Stabilization Fund. This fund consists of amounts committed by the City Council to be
used for the repayment of debt, as well as stadium surcharge amounts restricted for the payment of debt
service.
Community Facilities Districts (CFD) Funds. These funds account for the principal and interest of
general obligation bonds issued by community facilities districts. Although these bonds are not obligations
of the city, generally accepted accounting principles require that the bonds be disclosed herein.
DC Ranch CFD
Waterfront Commercial CFD
NONMAJOR GOVERNMENTAL FUNDS (Continued)
148
City of Scottsdale, Arizona
Capital Projects Funds
Capital Projects Funds account for the resources used to acquire, construct, and improve major capital assets
other than those financed by proprietary funds. Capital Projects Funds allow the city to compile project cost data,
comply with the City’s capitalization policy, and demonstrate that legal or contractual requirements of funding
sources are fully satisfied.
General Obligation Bonds Fund. This fund accounts for the proceeds and interest of the sale of voter-
approved general obligation bonds that are used for authorized capital improvements.
Preserve Privilege Tax Fund. This fund accounts for the resources used to acquire and improve land
within the McDowell Sonoran Preserve. Resources are provided by the 0.2 percent 1995 and 0.15 percent
2004 voter-approved Preserve Privilege Tax.
Permanent Funds
Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, not
principal, may be used to support city programs.
Rassner Memorial Scottsdale Library Endowment. This fund requires the interest to be used
exclusively to support library and literacy programs benefiting the citizens of Scottsdale.
Scottsdale Community Endowment. This fund requires the interest to be used exclusively for
community projects and programs for the public good within the city.
Scottsdale Employee Endowment. This fund requires the interest to be used exclusively to support
501(c)(3) tax-exempt organizations serving the Scottsdale area and city programs.
Herbert R. Drinkwater Youth Services Endowment. This fund requires the interest to be used
exclusively to support city youth programs.
NONMAJOR GOVERNMENTAL FUNDS (Continued)
149
City of Scottsdale, Arizona
Special Revenue
Funds
Debt Service
Funds
Capital Projects
Funds
Permanent
Funds
Total Nonmajor
Governmental
Funds
ASSETS
Cash and Investments
$ 247,847
$ 5,055
$ 92,265
$ 702
$ 345,869
Cash with Fiscal Agent
6
15,768
-
-
15,774
Receivables (net of allowance for uncollectibles)
Interest
1,885
4
-
-
1,889
Privilege Tax
8,374
-
-
-
8,374
Transient Occupancy Tax
1,950
-
-
-
1,950
Property Tax
5
60
-
-
65
Franchise Fee
70
-
-
-
70
Court
268
-
-
-
268
Highway User Tax
1,878
-
-
-
1,878
Intergovernmental
11,421
-
-
-
11,421
Grants
2,133
-
-
-
2,133
Leases
57
-
-
-
57
Miscellaneous
3,193
-
-
-
3,193
Total Assets
$ 279,087
$ 20,887
$ 92,265
$ 702
$ 392,941
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
(DEFICITS)
Liabilities
Accounts Payable
$ 1,857
$ -
$ 2,148
$ -
$ 4,005
Accrued Payroll and Benefits
752
-
-
-
752
Due to Other Funds
1,562
-
-
-
1,562
Matured Bond Interest Payable
-
2,145
-
-
2,145
Matured Bonds Payable
-
13,520
-
-
13,520
Unearned Revenue
Intergovernmental
9,116
-
-
-
9,116
Other
385
-
-
-
385
Due to Other Governments
50
-
-
-
50
Guaranty and Other Deposits
5
-
-
-
5
Other
153
-
-
-
153
Total Liabilities
13,880
15,665
2,148
-
31,693
Deferred Inflows of Resources
Unavailable Revenues
16,205
26
-
-
16,231
Leases
2,203
-
-
-
2,203
Total Deferred Inflows of Resources
18,408
26
-
-
18,434
Total Liabilities and Deferred Inflows of
Resources
32,288
15,691
2,148
-
50,127
Fund Balances (Deficits)
Nonspendable
-
-
-
675
675
Restricted
223,291
2,513
90,148
27
315,979
Committed
25,475
2,683
-
-
28,158
Unassigned
(1,967)
-
(31)
-
(1,998)
Total Fund Balances (Deficits)
246,799
5,196
90,117
702
342,814
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances (Deficits)
$ 279,087
$ 20,887
$ 92,265
$ 702
$ 392,941
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2025 (in thousands)
150
City of Scottsdale, Arizona
Special Revenue
Funds
Debt Service
Funds
Capital Projects
Funds
Permanent
Funds
Total Nonmajor
Governmental
Funds
REVENUES
Taxes - Local
Property
$ 151
$ 1,800
$ -
$ -
$ 1,951
Transaction Privilege
95,724
-
-
-
95,724
Transient Occupancy
34,735
-
-
-
34,735
Light and Power Franchise
214
-
-
-
214
Other Taxes
7,824
-
-
-
7,824
Taxes - Intergovernmental
Highway User Tax
19,136
-
-
-
19,136
Local Transportation Assistance Fund
610
-
-
-
610
Business and Liquor Licenses
49
-
-
-
49
Charges for Current Services
Building and Related Permits
147
-
-
-
147
Recreation Fees
3,617
-
-
-
3,617
WestWorld Equestrian Facility Fees
1,410
-
-
-
1,410
Fines, Fees, and Forfeitures
Court
125
-
-
-
125
Court Enhancement
2,272
-
-
-
2,272
Library
94
-
-
-
94
Police
105
-
-
-
105
Opioid Settlements
992
-
-
-
992
Property Rental
5,975
-
-
-
5,975
Interest Earnings
8,485
12
387
-
8,884
Net Increase in the Fair Value of Investments
-
-
102
68
170
Intergovernmental
Federal Grants
13,504
-
-
-
13,504
State Grants
2,102
-
-
-
2,102
Miscellaneous
5,874
-
-
-
5,874
Developer Contributions
2,929
-
-
-
2,929
Streetlight and Services Districts
602
-
-
-
602
Contributions and Donations
2,841
-
-
-
2,841
Reimbursements from Outside Sources
772
-
-
-
772
Other
103
-
-
-
103
Total Revenues
210,392
1,812
489
68
212,761
EXPENDITURES
Current
General Government
Mayor and City Council
13
-
-
-
13
City Court
1,980
-
-
-
1,980
City Treasurer
160
-
-
-
160
Other General Government
8
-
-
-
8
Public Works
26,030
-
-
-
26,030
Community and Economic Development
22,805
-
-
-
22,805
Public Safety
4,745
-
130
-
4,875
Community Services
20,714
-
31
38
20,783
Administrative Services
836
-
2
-
838
Streetlight and Services Districts
577
-
-
-
577
Debt Service
Principal
1,078
20,645
-
-
21,723
Interest and Fiscal Charges
268
4,321
-
-
4,589
Capital Outlay
2,268
-
17,188
-
19,456
Total Expenditures
81,482
24,966
17,351
38
123,837
Excess (Deficiency) of Revenues over (under) Expenditures
128,910 # (23,154)
(16,862)
30
88,924
OTHER FINANCING SOURCES (USES)
Transfers In
1,318
23,437
157
-
24,912
Transfers Out
(103,277)
-
-
-
(103,277)
Financing of Leases
353
-
-
-
353
Issuance of Long-Term Capital-Related Debt
-
-
102,109
-
102,109
Premium on Long-Term Debt Issued
-
-
4,891
-
4,891
Total Other Financing Sources (Uses)
(101,606)
23,437
107,157
-
28,988
Net Change in Fund Balances (Deficits)
27,304
283
90,295
30
117,912
Fund Balances (Deficits) - Beginning
219,495
4,913
(178)
672
224,902
Fund Balances (Deficits)- Ending
$ 246,799
$ 5,196
$ 90,117
$ 702
$ 342,814
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2025 (in thousands)
151
City of Scottsdale, Arizona
June 30, 2025 (in thousands)
Transportation
Community
Development
Block Grant
HOME
Grants
Housing Choice
Voucher Program
Preserve Privilege
Tax
McDowell
Mountain Ranch
CFD
DC Ranch CFD
ASSETS
Cash and Investments
$ 28,868
$ 303
$ -
$ -
$ 1,023
$ 160,361
$ 57
$ 24
Cash with Fiscal Agent
-
-
-
-
-
-
-
-
Receivables (net of allowance for uncollectibles)
Interest
715
-
-
-
-
918
-
-
Privilege Tax
2,986
-
-
-
-
5,388
-
-
Transient Occupancy Tax
-
-
-
-
-
-
-
-
Property Tax
-
-
-
-
-
-
-
5
Franchise Fee
-
-
-
-
-
-
-
-
Court
-
-
-
-
-
-
-
-
Highway User Tax
1,878
-
-
-
-
-
-
-
Intergovernmental
-
-
-
2,649
-
-
-
-
Grants
-
207
201
1,725
-
-
-
-
Leases
-
57
-
-
-
-
-
-
Miscellaneous
49
2,097
-
-
6
-
-
-
Total Assets
$ 34,496
$ 2,664
$ 201
$ 4,374
$ 1,029
$ 166,667
$ 57
$ 29
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES (DEFICITS)
Liabilities
Accounts Payable
$ 1,177
$ 143
$ -
$ 77
$ 1
$ 53
$ -
$ -
Accrued Payroll and Benefits
406
17
3
47
22
-
-
-
Due to Other Funds
-
-
198
1,298
-
-
-
-
Unearned Revenue
Intergovernmental
-
124
-
2,649
-
-
-
-
Other
-
5
-
303
-
-
-
-
Due to Other Governments
-
10
-
-
39
-
-
-
Guaranty and Other Deposits
-
5
-
-
-
-
-
-
Other
-
-
-
-
151
-
-
-
Total Liabilities
1,583
304
201
4,374
213
53
-
-
Deferred Inflows of Resources
Unavailable Revenues
826
2,304
56
1,650
6
1,470
-
-
Leases
-
57
-
-
-
-
-
-
Total Deferred Inflows of Resources
826
2,361
56
1,650
6
1,470
-
-
Total Liabilities and Deferred Inflows of Resources
2,409
2,665
257
6,024
219
1,523
-
-
Fund Balances (Deficits)
Restricted
32,087
206
-
-
810
165,144
57
29
Committed
-
-
-
-
-
-
-
-
Unassigned
-
(207)
(56)
(1,650)
-
-
-
-
Total Fund Balances (Deficits)
32,087
(1)
(56)
(1,650)
810
165,144
57
29
Total Liabilities, Deferred Inflows of Resources,
and Fund Balances (Deficits)
$ 34,496
$ 2,664
$ 201
$ 4,374
$ 1,029
$ 166,667
$ 57
$ 29
(continued)
Combining Balance Sheet
Nonmajor Special Revenue Governmental Funds
152
City of Scottsdale, Arizona
Via Linda Road
CFD
Waterfront
Commercial CFD
Streetlight
Districts
Special Programs
Tourism
Development
Stadium Facility
Total
ASSETS
Cash and Investments
$ 52
$ -
$ -
$ 37,484
$ 13,541
$ 6,134
$ 247,847
Cash with Fiscal Agent
-
6
-
-
-
-
6
Receivables (net of allowance for uncollectibles)
Interest
-
-
-
68
142
42
1,885
Privilege Tax
-
-
-
-
-
-
8,374
Transient Occupancy Tax
-
-
-
-
1,950
-
1,950
Property Tax
-
-
-
-
-
-
5
Franchise Fee
-
-
-
70
-
-
70
Court
-
-
-
268
-
-
268
Highway User Tax
-
-
-
-
-
-
1,878
Intergovernmental
-
-
-
8,772
-
-
11,421
Grants
-
-
-
-
-
-
2,133
Leases
-
-
-
-
-
-
57
Miscellaneous
-
-
12
717
189
123
3,193
Total Assets
$ 52
$ 6
$ 12
$ 47,379
$ 15,822
$ 6,299
$ 279,087
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES (DEFICITS)
Liabilities
Accounts Payable
$ -
$ -
$ -
$ 259
$ 145
$ 2
$ 1,857
Accrued Payroll and Benefits
-
-
-
212
30
15
752
Due to Other Funds
-
-
66
-
-
-
1,562
Unearned Revenue
Intergovernmental
-
-
-
6,343
-
-
9,116
Other
-
-
-
64
-
13
385
Due to Other Governments
-
-
-
1
-
-
50
Guaranty and Other Deposits
-
-
-
-
-
-
5
Other
-
-
-
2
-
-
153
Total Liabilities
-
-
66
6,881
175
30
13,880
Deferred Inflows of Resources
Unavailable Revenues
-
-
-
9,415
456
22
16,205
Leases
-
-
-
-
2,146
-
2,203
Total Deferred Inflows of Resources
-
-
-
9,415
2,602
22
18,408
Total Liabilities and Deferred Inflows of Resources
-
-
66
16,296
2,777
52
32,288
Fund Balances (Deficits)
Restricted
52
6
-
10,819
7,834
6,247
223,291
Committed
-
-
-
20,264
5,211
-
25,475
Unassigned
-
-
(54)
-
-
-
(1,967)
Total Fund Balances (Deficits)
52
6
(54)
31,083
13,045
6,247
246,799
Total Liabilities, Deferred Inflows of Resources,
and Fund Balances (Deficits)
$ 52
$ 6
$ 12
$ 47,379
$ 15,822
$ 6,299
$ 279,087
Combining Balance Sheet
Nonmajor Special Revenue Governmental Funds
June 30, 2025 (in thousands)
153
City of Scottsdale, Arizona
Transportation
Community
Development
Block Grant
HOME
Grants
Housing Choice
Voucher Program
Preserve Privilege
Tax
McDowell
Mountain Ranch
CFD
DC Ranch CFD
REVENUES
Taxes - Local
Property
$ -
$ -
$ -
$ -
$ -
$ -
$ -
$ 137
Transaction Privilege
34,077
-
-
-
-
61,647
-
-
Transient Occupancy
-
-
-
-
-
-
-
-
Light and Power Franchise
-
-
-
-
-
-
-
-
Other Taxes
-
-
-
-
-
-
-
-
Taxes - Intergovernmental
Highway User Tax
19,136
-
-
-
-
-
-
-
Local Transportation Assistance Fund
610
-
-
-
-
-
-
-
Business and Liquor Licenses
-
-
-
-
-
-
-
-
Charges for Current Services
Building and Related Permits
31
-
-
-
-
-
-
-
Recreation Fees
-
-
-
-
-
-
-
-
WestWorld Equestrian Facility Fees
-
-
-
-
-
-
-
-
Fines, Fees, and Forfeitures
Court
-
-
-
-
-
-
-
-
Court Enhancement
-
-
-
-
-
-
-
-
Library
-
-
-
-
-
-
-
-
Police
-
-
-
-
-
-
-
-
Opioid Settlements
-
-
-
-
-
-
-
-
Property Rental
5
111
-
-
-
-
-
-
Interest Earnings
2,849
2
-
-
-
4,820
-
1
Intergovernmental
Federal Grants
-
1,508
505
1,906
9,585
-
-
-
State Grants
-
-
-
2,102
-
-
-
-
Miscellaneous
193
-
-
1,533
-
-
-
-
Developer Contributions
-
-
-
-
-
-
-
-
Streetlight and Services Districts
-
-
-
-
-
-
-
-
Contributions and Donations
-
-
-
1,191
-
-
-
-
Reimbursements from Outside Sources
477
-
-
-
17
-
-
-
Other
-
-
-
-
-
-
-
-
Total Revenues
57,378
1,621
505
6,732
9,602
66,467
-
138
EXPENDITURES
Current
General Government
Mayor and City Council
-
-
-
13
-
-
-
-
City Court
-
-
-
-
-
-
-
-
City Treasurer
-
-
-
-
-
-
13
120
Other General Government
-
-
-
-
-
-
5
-
Public Works
25,159
-
-
871
-
-
-
-
Community and Economic Development
-
-
-
7
-
-
-
-
Public Safety
-
-
-
3,440
-
-
-
-
Community Services
2,239
1,626
254
1,698
9,620
-
-
-
Administrative Services
14
-
-
822
-
-
-
-
Streetlight and Services Districts
-
-
-
-
-
-
-
-
Debt Service
Principal
48
-
-
-
-
-
-
-
Interest and Fiscal Charges
1
-
-
-
-
-
-
-
Capital Outlay
1,626
-
-
263
1
-
-
-
Total Expenditures
29,087
1,626
254
7,114
9,621
-
18
120
Excess (Deficiency) of Revenues over (under) Expenditures
28,291
(5)
251
(382)
(19)
66,467
(18)
18
OTHER FINANCING SOURCES (USES)
Transfers In
1
-
-
-
-
-
207
-
Transfers Out
(34,738)
(26)
-
-
-
(39,007)
-
-
Financing of Leases
78
-
-
271
-
-
-
-
Total Other Financing Sources (Uses)
(34,659)
(26)
-
271
-
(39,007)
207
-
Net Change in Fund Balances (Deficits)
(6,368)
(31)
251
(111)
(19)
27,460
189
18
Fund Balances (Deficits) - Beginning
38,455
30
(307)
(1,539)
829
137,684
(132)
11
Fund Balances (Deficits) - Ending
$ 32,087
$ (1)
$ (56)
$ (1,650)
$ 810
$ 165,144
$ 57
$ 29
(continued)
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Special Revenue Governmental Funds
For the Fiscal Year Ended June 30, 2025 (in thousands)
154
City of Scottsdale, Arizona
Via Linda Road
CFD
Waterfront
Commercial CFD
Streetlight
Districts
Special Programs
Tourism
Development
Stadium Facility
Total
REVENUES
Taxes - Local
Property
$ -
$ 14
$ -
$ -
$ -
$ -
$ 151
Transaction Privilege
-
-
-
-
-
-
95,724
Transient Occupancy
-
-
-
-
34,735
-
34,735
Light and Power Franchise
-
-
-
214
-
-
214
Other Taxes
-
-
-
7,824
-
-
7,824
Taxes - Intergovernmental
Highway User Tax
-
-
-
-
-
-
19,136
Local Transportation Assistance Fund
-
-
-
-
-
-
610
Business and Liquor Licenses
-
-
-
49
-
-
49
Charges for Current Services
Building and Related Permits
-
-
-
116
-
-
147
Recreation Fees
-
-
-
3,588
-
29
3,617
WestWorld Equestrian Facility Fees
-
-
-
1,410
-
-
1,410
Fines, Fees, and Forfeitures
Court
-
-
-
125
-
-
125
Court Enhancement
-
-
-
2,272
-
-
2,272
Library
-
-
-
94
-
-
94
Police
-
-
-
105
-
-
105
Opioid Settlements
-
-
-
992
-
-
992
Property Rental
-
-
-
769
3,938
1,152
5,975
Interest Earnings
1
-
-
231
410
171
8,485
Intergovernmental
Federal Grants
-
-
-
-
-
-
13,504
State Grants
-
-
-
-
-
-
2,102
Miscellaneous
-
-
-
4,148
-
-
5,874
Developer Contributions
-
-
-
2,929
-
-
2,929
Streetlight and Services Districts
-
-
602
-
-
-
602
Contributions and Donations
-
-
-
432
-
1,218
2,841
Reimbursements from Outside Sources
-
-
-
174
11
93
772
Other
-
-
-
103
-
-
103
Total Revenues
1
14
602
25,575
39,094
2,663
210,392
EXPENDITURES
Current
General Government
Mayor and City Council
-
-
-
-
-
-
13
City Court
-
-
-
1,980
-
-
1,980
y
g
City Treasurer
12
15
-
-
-
-
160
Other General Government
3
-
-
-
-
-
8
Public Works
-
-
-
-
-
-
26,030
Community and Economic Development
-
-
-
445
22,353
-
22,805
Public Safety
-
-
-
1,305
-
-
4,745
Community Services
-
-
-
4,553
-
724
20,714
Administrative Services
-
-
-
-
-
-
836
Streetlight and Services Districts
-
-
577
-
-
-
577
Debt Service
Principal
-
-
-
1,015
-
15
1,078
Interest and Fiscal Charges
-
-
-
266
-
1
268
Capital Outlay
-
-
-
2
254
122
2,268
Total Expenditures
15
15
577
9,566
22,607
862
81,482
Excess (Deficiency) of Revenues over (under) Expenditures
(14)
(1)
25
16,009
16,487
1,801
128,910
OTHER FINANCING SOURCES (USES)
Transfers In
61
-
-
12
1,037
-
1,318
Transfers Out
-
-
-
(8,923)
(19,923)
(660)
(103,277)
Financing of Leases
-
-
-
4
-
-
353
Total Other Financing Sources and (Uses)
61
-
-
(8,907)
(18,886)
(660)
(101,606)
Net Change in Fund Balances (Deficits)
47
(1)
25
7,102
(2,399)
1,141
27,304
Fund Balances (Deficits) - Beginning
5
7
(79)
23,981
15,444
5,106
219,495
Fund Balances (Deficits) - Ending
$ 52
$ 6
$ (54)
$ 31,083
$ 13,045
$ 6,247
$ 246,799
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Special Revenue Governmental Funds
For the Fiscal Year Ended June 30, 2025 (in thousands)
155
City of Scottsdale, Arizona
Original
Final
Actual Amounts
Budgetary Basis
Budget to GAAP
Differences
Actual Amounts
GAAP Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
REVENUES
Taxes - Local
Transaction Privilege
31,720
$
31,720
$
34,077
$
-
$
34,077
$
2,357
$
Taxes - Intergovernmental
Highway User Tax
19,344
19,344
19,136
-
19,136
(208)
Local Transportation Assistance Fund
610
610
610
-
610
-
Charges for Current Services
Building and Related Permits
-
-
31
-
31
31
Property Rental
6
6
5
-
5
(1)
Interest Earnings
3,747
3,747
2,849
-
2,849
(898)
Intergovernmental
Miscellaneous
90
90
193
-
193
103
Reimbursements from Outside Sources
21
21
477
-
477
456
Total Revenues
55,538
55,538
57,378
-
57,378
1,840
EXPENDITURES
Current
Public Works
30,234
29,834
26,739
(1,580)
25,159
3,095
Community Services
2,167
2,167
2,238
1
2,239
(71)
Administrative Services
19
19
19
(5)
14
-
Debt Service
Principal
-
-
-
48
48
-
Interest and Fiscal Charges
-
-
-
1
1
-
Capital Outlay
-
-
-
1,626
1,626
-
Total Expenditures
32,420
32,020
28,996
91
29,087
3,024
Excess of Revenues over Expenditures
23,118
23,518
28,382
(91)
28,291
4,864
OTHER FINANCING SOURCES (USES)
Transfers In
-
-
1
-
1
1
Transfers Out
(34,064)
(34,064)
(34,738)
-
(34,738)
(674)
Financing of Leases
-
-
-
78
78
-
Sale of General Capital Assets
10
10
-
-
-
(10)
Total Other Financing Sources (Uses)
(34,054)
(34,054)
(34,737)
78
(34,659)
(683)
Net Change in Fund Balance
(10,936)
$
(10,536)
$
(6,355)
$
(13)
$
(6,368)
$
4,181
$
Explanation of Differences:
Items recorded as revenues/other financing sources for GAAP
purposes that are not recorded for budget purposes:
Financing of Leases
78
$
The city budgets for certain expenditures on the cash basis, rather
than on the modified accrual basis:
Payroll Accruals
13
Non-Cash Operating Expenditures
78
Total Expenditures
91
Net Decrease in Fund Balance - Budget to GAAP
(13)
$
Differences in Presentation between Budget and GAAP Basis:
The city records capitalized expenditures as capital outlay on the GAAP basis; however, for budget purposes they are included in the associated division's
expenditures. These differences have no bearing on the fund balance since the overall total expenditures are the same.
Transportation – Special Revenue Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual
For the Fiscal Year Ended June 30, 2025 (in thousands)
Budgeted Amounts
The city records principal and interest payments related to the subscription-based information technology arrangements, lease activity, and contracts payable on a
GAAP basis; however, for budget purposes they are included in the associated division's expenditures. These differences have no bearing on the fund balance since
the overall total expenditures are the same.
156
City of Scottsdale, Arizona
Original
Final
Actual Amounts
Budgetary Basis
Budget to GAAP
Differences
Actual Amounts
GAAP Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
REVENUES
Property Rental
66
$
66
$
55
$
56
$
111
$
(11)
$
Interest Earnings
-
-
-
2
2
-
Intergovernmental
Federal Grants
3,194
3,194
1,566
(58)
1,508
(1,628)
Total Revenues
3,260
3,260
1,621
-
1,621
(1,639)
EXPENDITURES
Current
Community Services
3,236
3,232
1,633
(7)
1,626
1,599
Total Expenditures
3,236
3,232
1,633
(7)
1,626
1,599
Excess (Deficiency) of Revenues over (under) Expenditures
24
28
(12)
7
(5)
(40)
OTHER FINANCING USES
Transfers Out
(23)
(23)
(26)
-
(26)
(3)
Total Other Financing Uses
(23)
(23)
(26)
-
(26)
(3)
Net Change in Fund Balance
1
$
5
$
(38)
$
7
$
(31)
$
(43)
$
Explanation of Differences:
The city budgets for certain expenditures on the cash basis,
rather than on the modified accrual basis:
Payroll Accruals
$ (7)
Community Development Block Grant – Special Revenue Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual
For the Fiscal Year Ended June 30, 2025 (in thousands)
Budgeted Amounts
157
City of Scottsdale, Arizona
Original
Final
Actual Amounts
Budgetary Basis
Budget to GAAP
Differences
Actual Amounts
GAAP Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
REVENUES
Intergovernmental
Federal Grants
1,439
$
1,439
$
505
$
-
$
505
$
(934)
$
Total Revenues
1,439
1,439
505
-
505
(934)
EXPENDITURES
Current
Community Services
1,439
1,439
251
3
254
1,188
Total Expenditures
1,439
1,439
251
3
254
1,188
Excess of Revenues over Expenditures
-
-
254
(3)
251
254
Net Change in Fund Balance
$ -
$ -
$ 254
$ (3)
$ 251
$ 254
Explanation of Differences:
The city budgets for certain expenditures on the cash basis,
rather than on the modified accrual basis:
Payroll Accruals
$ 3
HOME – Special Revenue Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual
For the Fiscal Year Ended June 30, 2025 (in thousands)
Budgeted Amounts
158
City of Scottsdale, Arizona
Original
Final
Actual Amounts
Budgetary Basis
Budget to GAAP
Differences
Actual Amounts
GAAP Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
REVENUES
Intergovernmental
Federal Grants
8,929
$
845
$
1,906
$
-
$
1,906
$
1,061
$
State Grants
1,687
144
2,102
-
2,102
1,958
Miscellaneous
-
-
1,533
-
1,533
1,533
Contributions and Donations
3,696
2,990
1,191
-
1,191
(1,799)
Reimbursements from Outside Sources
574
574
-
-
-
(574)
Total Revenues
14,886
4,553
6,732
-
6,732
2,179
EXPENDITURES
Current
General Government
Mayor and City Council
5
11
13
-
13
(2)
Public Works
-
871
871
-
871
-
Community and Economic Development
5
-
7
-
7
(7)
Public Safety
6,696
2,488
3,368
72
3,440
(880)
Community Services
7,108
2,906
1,746
(48)
1,698
1,160
Administrative Services
1,072
822
822
-
822
-
Capital Outlay
-
-
-
263
263
-
Total Expenditures
14,886
7,098
6,827
287
7,114
271
Excess (Deficiency) of Revenues over (under) Expenditures
-
(2,545)
(95)
(287)
(382)
2,450
OTHER FINANCING SOURCES
Financing of Leases
-
-
-
271
271
-
Total Other Financing Sources
-
-
-
271
271
-
Net Change in Fund Balance
-
$
(2,545)
$
(95)
$
(16)
$
(111)
$
2,450
$
Explanation of Differences:
Items recorded as revenues/other financing sources for GAAP
purposes that are not recorded for budget purposes:
Financing of Leases
$ 271
The city budgets for certain expenditures on the cash basis,
rather than on the modified accrual basis:
Payroll Accruals
16
Non-Cash Operating Expenditures
271
Total Expenditures
287
Net Decrease in Fund Balance - Budget to GAAP
(16)
$
Differences in Presentation between Budget and GAAP Basis:
The city records capitalized expenditures as capital outlay on the GAAP basis; however, for budget purposes they are included in the associated division's
expenditures. These differences have no bearing on the fund balance since the overall total expenditures are the same.
Grants – Special Revenue Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual
For the Fiscal Year Ended June 30, 2025 (in thousands)
Budgeted Amounts
159
City of Scottsdale, Arizona
Original
Final
Actual Amounts
Budgetary Basis
Budget to GAAP
Differences
Actual Amounts
GAAP Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
REVENUES
Intergovernmental
Federal Grants
$ 8,970
$ 8,970
$ 9,585
$ -
$ 9,585
$ 615
Reimbursements from Outside Sources
-
-
17
-
17
17
Total Revenues
8,970
8,970
9,602
-
9,602
632
EXPENDITURES
Current
Community Services
8,970
8,962
9,621
(1)
9,620
(659)
Capital Outlay
-
-
-
1
1
-
Total Expenditures
8,970
8,962
9,621
-
9,621
(659)
Excess (Deficiency) of Revenues over (under) Expenditures
-
8
(19)
-
(19)
(27)
Net Change in Fund Balance
$ -
$ 8
$ (19)
$ -
$ (19)
$ (27)
Explanation of Differences:
Housing Choice Voucher Program – Special Revenue Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual
For the Fiscal Year Ended June 30, 2025 (in thousands)
Budgeted Amounts
The city records capitalized expenditures as capital outlay on the GAAP basis; however, for budget purposes they are included in the associated division's
expenditures. These differences have no bearing on the fund balance since the overall total expenditures are the same.
160
City of Scottsdale, Arizona
Original
Final
Actual Amounts
Budgetary Basis
Budget to GAAP
Differences
Actual Amounts
GAAP Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
REVENUES
Taxes - Local
Transaction Privilege
$ 57,360
$ 57,360
$ 61,647
$ -
$ 61,647
$ 4,287
Interest Earnings
4,902
4,902
4,820
-
4,820
(82)
Total Revenues
62,262
62,262
66,467
-
66,467
4,205
EXPENDITURES
Total Expenditures
-
-
-
-
-
-
Excess of Revenues over Expenditures
62,262
62,262
66,467
-
66,467
4,205
OTHER FINANCING USES
Transfers Out
(44,184)
(44,184)
(39,007)
-
(39,007)
5,177
Total Other Financing Uses
(44,184)
(44,184)
(39,007)
-
(39,007)
5,177
Net Change in Fund Balance
$ 18,078
$ 18,078
$ 27,460
$ -
$ 27,460
$ 9,382
Preserve Privilege Tax – Special Revenue Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual
For the Fiscal Year Ended June 30, 2025 (in thousands)
Budgeted Amounts
161
City of Scottsdale, Arizona
Original
Final
Actual Amounts
Budgetary Basis
Budget to GAAP
Differences
Actual Amounts
GAAP Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
REVENUES
Streetlight and Services Districts
570
$
570
$
602
$
-
$
602
$
32
$
Total Revenues
570
570
602
-
602
32
EXPENDITURES
Current
Streetlight and Services Districts
572
572
577
-
577
(5)
Total Expenditures
572
572
577
-
577
(5)
Excess (Deficiency) of Revenues over (under) Expenditures
(2)
(2)
25
-
25
27
Net Change in Fund Balance
(2)
$
(2)
$
25
$
-
$
25
$
27
$
Streetlight Districts – Special Revenue Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual
For the Fiscal Year Ended June 30, 2025 (in thousands)
Budgeted Amounts
162
City of Scottsdale, Arizona
Original
Final
Actual Amounts
Budgetary Basis
Budget to GAAP
Differences
Actual Amounts
GAAP Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
REVENUES
Taxes - Local
Light and Power Franchise
$ 265
$ 265
$ 214
$ -
$ 214
$ (51)
Other Taxes
7,896
7,896
7,824
-
7,824
(72)
Business and Liquor Licenses
50
50
49
-
49
(1)
Charges for Current Services
Building and Related Permits
416
416
116
-
116
(300)
Recreation Fees
3,256
3,256
3,588
-
3,588
332
WestWorld Equestrian Facility Fees
1,234
1,234
1,410
-
1,410
176
Fines, Fees, and Forfeitures
Court
123
123
125
-
125
2
Court Enhancement
2,488
2,488
2,272
-
2,272
(216)
Library
117
117
94
-
94
(23)
Police
95
95
105
-
105
10
Opioid Settlements
-
-
992
-
992
992
Property Rental
283
283
769
-
769
486
Interest Earnings
237
237
231
-
231
(6)
Intergovernmental
Miscellaneous
5,002
5,002
4,148
-
4,148
(854)
Developer Contributions
50
50
2,929
-
2,929
2,879
Contributions and Donations
1,093
1,093
432
-
432
(661)
Reimbursements from Outside Sources
404
404
174
-
174
(230)
Other
118
118
103
-
103
(15)
Total Revenues
23,127
23,127
25,575
-
25,575
2,448
EXPENDITURES
Current
General Government
Mayor and City Council
59
59
-
-
-
59
City Court
2,152
2,137
1,970
10
1,980
167
Public Works
256
256
-
-
-
256
Community and Economic Development
689
689
445
-
445
244
Public Safety
5,909
5,886
2,523
(1,218)
1,305
3,363
Community Services
6,563
6,657
4,545
8
4,553
2,112
Debt Service
Principal
38
38
48
967
1,015
(10)
Interest and Fiscal Charges
20
20
13
253
266
7
Capital Outlay
-
-
-
2
2
-
Total Expenditures
15,686
15,742
9,544
22
9,566
6,198
Excess of Revenues over Expenditures
7,441
7,385
16,031
(22)
16,009
8,646
OTHER FINANCING SOURCES (USES)
Transfers In
10
10
12
-
12
2
Transfers Out
(8,601)
(8,601)
(8,923)
-
(8,923)
(322)
Financing of Leases
-
-
-
4
4
-
Total Other Financing Sources (Uses)
(8,591)
(8,591)
(8,911)
4
(8,907)
(320)
Net Change in Fund Balance
$ (1,150)
$ (1,206)
$ 7,120
$ (18)
$ 7,102
$ 8,326
Explanation of Differences:
Items recorded as revenues/other financing sources for GAAP
purposes that are not recorded for budget purposes:
Financing of Leases
$ 4
The City budgets for certain expenditures on the cash basis,
rather than on the modified accrual basis:
Payroll Accruals
18
Non-Cash Operating Expenditures
4
Total Expenditures
22
Net Decrease in Fund Balance - Budget to GAAP
(18)
$
Differences in Presentation between Budget and GAAP Basis:
The city records capitalized expenditures as capital outlay on the GAAP basis; however, for budget purposes they are included in the associated division's
expenditures. These differences have no bearing on the fund balance since the overall total expenditures are the same.
Special Programs – Special Revenue Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual
For the Fiscal Year Ended June 30, 2025 (in thousands)
Budgeted Amounts
The city records principal and interest payments related to the subscription-based information technology arrangements, lease activity, and contracts payable
on a GAAP basis; however, for budget purposes they are included in the associated division's expenditures. These differences have no bearing on the fund
balance since the overall total expenditures are the same.
163
City of Scottsdale, Arizona
Original
Final
Actual Amounts
Budgetary Basis
Budget to GAAP
Differences
Actual Amounts
GAAP Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
REVENUES
Taxes - Local
Transient Occupancy Tax
$ 31,561
$ 31,561
$ 34,735
$ -
$ 34,735
$ 3,174
Property Rental
3,246
3,246
3,913
25
3,938
667
Interest Earnings
687
687
410
-
410
(277)
Reimbursements from Outside Sources
25
25
11
-
11
(14)
Total Revenues
35,519
35,519
39,069
25
39,094
3,550
EXPENDITURES
Current
Community and Economic Development
21,865
21,868
22,602
(249)
22,353
(734)
Capital Outlay
-
-
-
254
254
-
Total Expenditures
21,865
21,868
22,602
5
22,607
(734)
Excess of Revenues over Expenditures
13,654
13,651
16,467
20
16,487
2,816
OTHER FINANCING SOURCES (USES)
Transfers In
-
1,000
1,037
-
1,037
37
Transfers Out
(17,244)
(18,544)
(19,923)
-
(19,923)
(1,379)
Total Other Financing Sources (Uses)
(17,244)
(17,544)
(18,886)
-
(18,886)
(1,342)
Net Change in Fund Balance
$ (3,590)
$ (3,893)
$ (2,419)
$ 20
$ (2,399)
$ 1,474
Explanation of Differences:
Items recorded as revenues for GAAP purposes that are not
recorded for budget purposes:
Amortized Lease Revenue
25
$
The City budgets for certain expenditures on the cash basis,
rather than on the modified accrual basis:
Payroll Accruals
5
Net Increase in Fund Balance - Budget to GAAP
20
$
Differences in Presentation between Budget and GAAP Basis:
The city records capitalized expenditures as capital outlay on the GAAP basis; however, for budget purposes they are included in the associated division's
expenditures. These differences have no bearing on the fund balance since the overall total expenditures are the same.
Tourism Development – Special Revenue Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual
For the Fiscal Year Ended June 30, 2025 (in thousands)
Budgeted Amounts
164
City of Scottsdale, Arizona
Original
Final
Actual Amounts
Budgetary Basis
Budget to GAAP
Differences
Actual Amounts
GAAP Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
REVENUES
Charges for Current Services
Recreation Fees
$ -
$ -
$ 29
$ -
$ 29
$ 29
Property Rental
1,050
1,050
1,152
-
1,152
102
Interest Earnings
188
188
171
-
171
(17)
Contributions and Donations
727
727
1,218
-
1,218
491
Reimbursements from Outside Sources
288
288
93
-
93
(195)
Total Revenues
2,253
2,253
2,663
-
2,663
410
EXPENDITURES
Current
Community Services
1,654
1,654
859
(135)
724
795
Debt Service
Principal
-
-
-
15
15
-
Interest and Fiscal Charges
-
-
-
1
1
-
Capital Outlay
-
-
-
122
122
-
Total Expenditures
1,654
1,654
859
3
862
795
Excess of Revenues over Expenditures
599
599
1,804
(3)
1,801
1,205
OTHER FINANCING USES
Transfers Out
(660)
(660)
(660)
-
(660)
-
Total Other Financing Uses
(660)
(660)
(660)
-
(660)
-
Net Change in Fund Balance
$ (61)
$ (61)
$ 1,144
$ (3)
$ 1,141
$ 1,205
Explanation of Differences:
The city budgets for certain expenditures on the cash basis,
rather than on the modified accrual basis:
Payroll Accruals
$ 3
Differences in Presentation between Budget and GAAP Basis:
The city records capitalized expenditures as capital outlay on the GAAP basis; however, for budget purposes they are included in the associated division's
expenditures. These differences have no bearing on the fund balance since the overall total expenditures are the same.
Stadium Facility – Special Revenue Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual
For the Fiscal Year Ended June 30, 2025 (in thousands)
Budgeted Amounts
The city records principal and interest payments related to the subscription-based information technology arrangements, lease activity, and contracts payable on
a GAAP basis; however, for budget purposes they are included in the associated division's expenditures. These differences have no bearing on the fund balance
since the overall total expenditures are the same.
165
City of Scottsdale, Arizona
Municipal
Property
Corporation
Debt Service
Stabilization
DC Ranch CFD
Waterfront
Commercial CFD
Total
ASSETS
Cash and Investments
$ -
$ 5,055
$ -
$ -
$ 5,055
Cash with Fiscal Agent
14,228
-
1,301
239
15,768
Receivables (net of allowance for uncollectibles)
Interest
4
-
-
-
4
Property Tax
-
-
60
-
60
Total Assets
$ 14,232
$ 5,055
$ 1,361
$ 239
$ 20,887
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities
Matured Bond Interest Payable
$ 2,063
$ -
$ 62
$ 20
2,145
Matured Bonds Payable
12,165
-
1,165
190
13,520
Total Liabilities
14,228
-
1,227
210
15,665
Deferred Inflows of Resources
Unavailable Revenues
-
-
26
-
26
Total Liabilities and Deferred Inflows of Resources
14,228
-
1,253
210
15,691
Fund Balances
Restricted
4
2,372
108
29
2,513
Committed
-
2,683
-
-
2,683
Total Fund Balances
4
5,055
108
29
5,196
Total Liabilities, Deferred Inflows of Resources, and
Fund Balances
$ 14,232
$ 5,055
$ 1,361
$ 239
$ 20,887
Combining Balance Sheet
Nonmajor Debt Service Governmental Funds
June 30, 2025 (in thousands)
166
City of Scottsdale, Arizona
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Debt Service Governmental Funds
For the Fiscal Year Ended June 30, 2025 (in thousands)
Municipal
Property
Corporation
Debt Service
Stabilization
DC Ranch CFD
Waterfront
Commercial CFD
Total
REVENUES
Taxes - Local
Property
$ -
$ -
$ 1,568
$ 232
$ 1,800
Interest Earnings
12
-
-
-
12
Total Revenues
12
-
1,568
232
1,812
EXPENDITURES
Debt Service
Principal
19,290
-
1,165
190
20,645
Interest and Fiscal Charges
4,155
-
124
42
4,321
Total Expenditures
23,445
-
1,289
232
24,966
Excess (Deficiency) of Revenues over (under) Expenditures
(23,433)
-
279
-
(23,154)
OTHER FINANCING SOURCES (USES)
Transfers In
23,437
-
-
-
23,437
Total Other Financing Sources (Uses)
23,437
-
-
-
23,437
Net Change in Fund Balances
4
-
279
-
283
Fund Balances - Beginning
-
5,055
(171)
29
4,913
Fund Balances - Ending
$ 4
$ 5,055
$ 108
$ 29
$ 5,196
167
City of Scottsdale, Arizona
Original
Final
Actual Amounts
Budgetary Basis
Budget to GAAP
Differences
Actual Amounts
GAAP Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
REVENUES
Taxes - Local
Property
28,616
$
28,616
$
29,117
$
5,059
$
34,176
$
501
$
Interest
-
-
2
-
2
2
Total Revenues
28,616
28,616
29,119
5,059
34,178
503
EXPENDITURES
Debt Service
Principal
58,063
58,063
55,595
-
55,595
2,468
Interest and Fiscal Charges
11,887
11,887
10,018
-
10,018
1,869
Bond Issuance Costs
-
-
522
-
522
(522)
Total Expenditures
69,950
69,950
66,135
-
66,135
3,815
Deficiency of Revenues under Expenditures
(41,334)
(41,334)
(37,016)
5,059
(31,957)
4,318
OTHER FINANCING SOURCES
Transfers In
38,817
38,817
38,850
-
38,850
33
Issuance of Long-Term Capital-Related Debt
-
-
141
-
141
141
Premium on Long-Term Debt Issued
-
-
384
-
384
384
Total Other Financing Sources
38,817
38,817
39,375
-
39,375
558
Net Change in Fund Balance
(2,517)
$
(2,517)
$
2,359
$
5,059
$
7,418
$
4,876
$
Explanation of Differences:
The city budgets for certain revenues on the cash basis,
rather than on the modified accrual basis:
Property Tax Maricopa County Qasimyar Settlement
$ 5,059
General Obligation Bond Debt Service Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual
For the Fiscal Year Ended June 30, 2025 (in thousands)
Budgeted Amounts
168
City of Scottsdale, Arizona
Original
Final
Actual Amounts
Budgetary Basis
Budget to GAAP
Differences
Actual Amounts
GAAP Basis
Variance Between
Final Budget and
Actual Amounts
Budgetary Basis
REVENUES
Interest Earnings
-
$
-
$
12
$
-
$
12
$
12
$
Total Revenues
-
-
12
-
12
12
EXPENDITURES
Debt Service
Principal
19,290
19,290
19,290
-
19,290
-
Interest and Fiscal Charges
4,407
4,407
4,155
-
4,155
252
Total Expenditures
23,697
23,697
23,445
-
23,445
252
Deficiency of Revenues under Expenditures
(23,697)
(23,697)
(23,433)
-
(23,433)
264
OTHER FINANCING SOURCES
Transfers In
23,700
23,700
23,436
1
23,437
(264)
Total Other Financing Sources
23,700
23,700
23,436
1
23,437
(264)
Net Change in Fund Balance
3
$
3
$
3
$
1
$
4
$
-
$
Municipal Property Corporation Debt Service Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual
For the Fiscal Year Ended June 30, 2025 (in thousands)
Budgeted Amounts
169
City of Scottsdale, Arizona
General
Obligation Bonds
Preserve
Privilege Tax
Total
ASSETS
Cash and Investments
$ 92,265
$ -
$ 92,265
Total Assets
$ 92,265
$ -
$ 92,265
LIABILITIES AND FUND BALANCES
(DEFICITS)
Liabilities
Accounts Payable
$ 2,148
$ -
$ 2,148
Total Liabilities
2,148
-
2,148
Fund Balances (Deficits)
Restricted
90,148
-
90,148
Unassigned
(31)
-
(31)
Total Fund Balances (Deficits)
90,117
-
90,117
Total Liabilities and Fund Balances (Deficits)
$ 92,265
$ -
$ 92,265
Combining Balance Sheet
Nonmajor Capital Projects Governmental Funds
June 30, 2025 (in thousands)
170
City of Scottsdale, Arizona
General Obligation
Bonds
Preserve Privilege
Tax
Total
REVENUES
Interest Earnings
$ 387
$ -
$ 387
Net Increase in the Fair Value of Investments
102
-
102
Total Revenues
489
-
489
EXPENDITURES
Current
Public Safety
130
-
130
Community Services
-
31
31
Administrative Services
2
-
2
Capital Outlay
17,066
122
17,188
Total Expenditures
17,198
153
17,351
Deficiency of Revenues under Expenditures
(16,709)
(153)
(16,862)
OTHER FINANCING SOURCES
Transfers In
-
157
157
Issuance of Long-Term Capital-Related Debt
102,109
-
102,109
Premium on Long-Term Debt Issued
4,891
-
4,891
Total Other Financing Sources
107,000
157
107,157
Net Change in Fund Balances
90,291
4
90,295
Fund Balances (Deficits) - Beginning
(174)
(4)
(178)
Fund Balances - Ending
$ 90,117
$ -
$ 90,117
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Capital Projects Governmental Funds
For the Fiscal Year Ended June 30, 2025 (in thousands)
171
City of Scottsdale, Arizona
Rassner
Memorial
Scottsdale Library
Endowment
Scottsdale
Community
Endowment
Scottsdale
Employee
Endowment
Herbert R.
Drinkwater
Youth Services
Endowment
Total
ASSETS
Cash and Investments
$ 464
$ 154
$ 47
$ 37
$ 702
Total Assets
$ 464
$ 154
$ 47
$ 37
$ 702
LIABILITIES AND FUND BALANCES
Liabilities
Total Liabilities
$ -
$ -
$ -
$ -
$ -
Fund Balances
Nonspendable
446
148
45
36
675
Restricted
18
6
2
1
27
Total Fund Balances
464
154
47
37
702
Total Liabilities and Fund Balances
$ 464
$ 154
$ 47
$ 37
$ 702
Combining Balance Sheet
Nonmajor Permanent Governmental Funds
June 30, 2025 (in thousands)
172
City of Scottsdale, Arizona
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Permanent Governmental Funds
For the Fiscal Year Ended June 30, 2025 (in thousands)
Rassner Memorial
Scottsdale Library
Endowment
Scottsdale
Community
Endowment
Scottsdale
Employee
Endowment
Herbert R.
Drinkwater
Youth Services
Endowment
Total
REVENUES
Net Increase in the Fair Value of Investments
$ 44
$ 15
$ 5
$ 4
$ 68
Total Revenues
44
15
5
4
68
EXPENDITURES
Current
Community Services
25
8
3
2
38
Total Expenditures
25
8
3
2
38
Excess of Revenues over Expenditures
19
7
2
2
30
Net Change in Fund Balances
19
7
2
2
30
Fund Balances - Beginning
445
147
45
35
672
Fund Balances - Ending
$ 464
$ 154
$ 47
$ 37
$ 702
173
City of Scottsdale, Arizona
INTERNAL SERVICE FUNDS
Internal Service Funds are used to report activities that provide goods or services to other funds, departments,
or agencies of the primary government and its component units on a cost-reimbursement basis.
Fleet Management Fund
This fund accounts for the expenses associated with purchasing and maintaining the city’s motor
vehicles.
Self-Insurance Fund
This fund accounts for the administration of the city’s self-insurance program. This fund provides
coverage of unemployment, self-insured benefits, workers’ compensation, and property and liability
claims.
Computer Replacement Fund
This fund accounts for the expenses associated with purchasing the city’s computers, monitors, and
printers.
174
City of Scottsdale, Arizona
Fleet
Management
Self-Insurance
Computer
Replacement
Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Assets
Current Assets
Cash and Investments
22,145
$
58,388
$
1,785
$
82,318
$
Receivables (net of allowance for uncollectibles)
Miscellaneous
100
348
-
448
Supplies Inventory
1,624
-
-
1,624
Prepaid Items
219
-
-
219
Total Current Assets
24,088
$
58,736
$
1,785
$
84,609
$
Noncurrent Assets
Net Pension OPEB Asset
158
45
-
203
Equity in Joint Venture
4
-
-
4
Capital Assets
Buildings and Improvements
19,003
-
-
19,003
Motor Vehicles
119,295
-
-
119,295
Machinery and Equipment
1,492
44
5,375
6,911
Construction in Progress
8,903
-
-
8,903
Leases
19
8
-
27
Subscription-Based Information Technology Arrangements
2
512
-
514
Less Accumulated Depreciation/Amortization
(77,954)
(554)
(3,267)
(81,775)
Total Capital Assets (net of accumulated depreciation/amortization)
70,760
10
2,108
72,878
Total Noncurrent Assets
70,922
55
2,108
73,085
Total Assets
95,010
58,791
3,893
157,694
Deferred Outflows of Resources
Pension OPEB-Related Amounts
9
3
-
12
Pension-Related Amounts
747
222
-
969
Total Deferred Outflows of Resources
756
225
-
981
LIABILITIES AND DEFERRED INFLOWS OF RESOURCES
Liabilities
Current Liabilities
Accounts Payable
829
1,453
391
2,673
Accrued Payroll and Benefits
250
82
-
332
Accrued Compensated Absences - Due within one year
280
77
-
357
Leases - Due within one year
4
2
-
6
Other Payables - Due within one year
-
9,839
-
9,839
Unearned Revenue
-
21
-
21
Total Current Liabilities
1,363
11,474
391
13,228
Noncurrent Liabilities
Accrued Compensated Absences - Due in more than one year
143
32
-
175
Leases - Due in more than one year
9
3
-
12
Net Pension Liabilities
4,136
1,173
-
5,309
Other Payables - Due in more than one year
-
13,633
-
13,633
Total Noncurrent Liabilities
4,288
14,841
-
19,129
Total Liabilities
5,651
26,315
391
32,357
Deferred Inflows of Resources
OPEB-Related Amounts
53
15
-
68
Pension-Related Amounts
314
89
-
403
Total Deferred Inflows of Resources
367
104
-
471
NET POSITION
Net Investment in Capital Assets
70,318
5
1,717
72,040
Unrestricted
19,430
32,591
1,785
53,807
Total Net Position
89,748
$
32,597
$
3,502
$
125,847
$
Combining Statement of Fund Net Position
Internal Service Funds
June 30, 2025 (in thousands)
175
City of Scottsdale, Arizona
Fleet
Management
Self-Insurance
Computer
Replacement
Total
Operating Revenues
Charges for Sales and Services
Billings to User Programs
29,901
$
49,728
$
950
$
80,579
$
Self-Insurance Contributions - Employee
-
9,425
-
9,425
Self-Insurance Contributions - Retiree
-
176
-
176
State Contributions
-
73
-
73
Other
642
1,285
-
1,927
Total Operating Revenues
30,543
60,687
950
92,180
Operating Expenses
Costs of Sales and Services
Fleet Management Operations
17,000
-
-
17,000
Self-Insurance Administration
-
4,244
-
4,244
Self-Insurance Claims
-
8,571
-
8,571
Self-Insurance Benefits
-
38,854
-
38,854
Insurance and Bond Premiums
-
7,365
-
7,365
Computer Replacement
-
-
543
543
Depreciation/Amortization
11,255
124
780
12,159
Total Operating Expenses
28,255
59,158
1,323
88,736
Operating Income (Loss)
2,288
1,529
(373)
3,444
Non-Operating Revenues (Expenses)
Property Tax
-
1,259
-
1,259
Gain (Loss) on Sale of Capital Assets
286
-
(14)
272
Net Non-Operating Revenues (Expenses)
286
1,259
(14)
1,531
Income (Loss) Before Contributions and Transfers
2,574
2,788
(387)
4,975
Capital Contributions
2,179
-
-
2,179
Transfers In
-
128
-
128
Transfers Out
-
(146)
-
(146)
Change in Net Position
4,753
2,770
(387)
7,136
Total Net Position - Beginning
84,995
29,827
3,889
118,711
Total Net Position - Ending
89,748
$
32,597
$
3,502
$
125,847
$
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position
Internal Service Funds
For the Fiscal Year Ended June 30, 2025 (in thousands)
176
City of Scottsdale, Arizona
Combining Statement of Cash Flows
Internal Service Funds
For the Fiscal Year Ended June 30, 2025 (in thousands)
Fleet
Management
Self-Insurance
Computer
Replacement
Total
Cash Flows from Operating Activities
Cash Received from Customers
29,959
$
59,462
$
950
$
90,371
$
Cash Payments to Suppliers for Goods/Services
(12,305)
(56,856)
(543)
(69,704)
Cash Payments to Employees for Services
(5,277)
(2,022)
-
(7,299)
Other Cash Receipts
642
1,285
-
1,927
Net Cash Provided by (Used for) Operating Activities
13,019
1,869
407
15,295
Cash Flows from Non-Capital Financing Activities
Property Tax
-
1,259
-
1,259
Transfers In
-
128
-
128
Transfers Out
-
(146)
-
(146)
Net Cash Provided by (Used for) Non-Capital Financing Activities
-
1,241
-
1,241
Cash Flows from Capital and Related Financing Activities
Acquisition of Capital Assets
(18,592)
(116)
(816)
(19,524)
Sale of Capital Assets
4,311
-
-
4,311
Net Cash Provided by (Used for) Capital and Related Financing Activities
(14,281)
(116)
(816)
(15,213)
Net Increase in Cash and Cash Equivalents
(1,262)
2,994
(409)
1,323
Cash and Cash Equivalents at Beginning of Year
23,407
55,394
2,194
80,995
Cash and Cash Equivalents at End of Year
22,145
$
58,388
$
1,785
$
82,318
$
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used for) Operating Activities
Operating Income (Loss)
2,288
$
1,529
$
(373)
$
3,444
$
Income Provided by (Used for) Operating Activities
Depreciation/Amortization
11,255
124
780
12,159
Current Year Pension Contributions
(443)
(136)
-
(579)
Change Equity in Joint Venture
1
-
-
1
Change in Accounts Receivable
58
54
-
112
Change in Inventories
(213)
-
-
(213)
Change in Accounts Payable
(185)
(2,287)
-
(2,472)
Change in Unearned Revenue
-
8
-
8
Change in Accrued Payroll
41
12
-
53
Change in Compensated Absences Payable
57
27
-
84
Change in Claims Payable
-
2,513
-
2,513
Change in Net Pension/OPEB Liability
(197)
(75)
-
(272)
Change in Deferred Outflows of Resources Related to Pensions
253
72
-
325
Change in Deferred Inflows of Resources Related to Pensions
104
28
-
132
Total Adjustments
10,731
340
780
11,851
Net Cash Provided by (Used for) Operating Activities
13,019
$
1,869
$
407
$
15,295
$
Supplemental Disclosure of Non-Cash Investing, Capital, and Financing Activities
Changes to Property, Plant, and Equipment
Contributions of Capital Assets from Other Funds
2,179
$
-
$
-
$
2,179
$
Retirement of Assets
(347)
-
(14)
(361)
Total Non-Cash Investing, Capital, and Financing Activities
1,832
$
-
$
(14)
$
1,818
$
177
City of Scottsdale, Arizona
OTHER SUPPLEMENTARY INFORMATION
Debt Requirements
The Schedule of Changes in Long-Term Debt for the current fiscal year presents the city’s debt by type
without regard to fund classification.
Debt issued by community facilities districts is included for full disclosure although such debt is not legally an
obligation of the city.
178
City of Scottsdale, Arizona
Schedule of Changes in Long-Term Debt*
For the Fiscal Year Ended June 30, 2025 (in thousands)
Refunding
Accretions,
Amortizations,
Bonds
Bonds
and Contract
Governmental Business-type
Final
July 1, 2024
Issued
Retired
Issued
Defeased
Adjustments
June 30, 2025
Activities
Activities
Payment Date
GENERAL OBLIGATION BONDS
Governmental Activities
2014 GO Preservation
1,430
$
-
$
705
$
-
$
-
$
-
$
725
$
725
$
-
$
07/01/26
2015 GO Refunding Various Purpose
35,020
-
8,015
-
-
-
27,005
27,005
-
07/01/28
2015 GO Refunding Preservation
3,485
-
815
-
-
-
2,670
2,670
-
07/01/28
2017A GO Preservation
17,410
-
-
-
-
-
17,410
17,410
-
07/01/34
2017 GO Refunding Various Purpose
18,810
-
3,207
-
-
-
15,603
15,603
-
07/01/29
2017 GO Refunding Preservation
11,280
-
1,013
-
-
-
10,267
10,267
-
07/01/34
2017C GO Various Purpose
7,180
-
2,575
-
-
-
4,605
4,605
-
07/01/27
2020 GO Taxable Refunding Preservation
151,475
-
33,150
-
-
-
118,325
118,325
-
07/01/34
2021 GO Various Purpose
26,450
-
1,275
-
-
-
25,175
25,175
-
07/01/40
2021 GO Taxable Various Purpose
16,860
-
915
-
-
-
15,945
15,945
-
07/01/40
2023 GO Various Purpose
32,200
-
1,900
-
-
-
30,300
30,300
-
07/01/42
2023 GO Taxable Various Purpose
37,510
-
2,025
-
-
-
35,485
35,485
-
07/01/42
2025 GO Various Purpose
-
102,250
-
-
-
-
102,250
102,250
-
07/01/45
2014 GO Preserve Issuance Premium
50
-
-
-
-
(25)
25
25
-
2015 GO Refunding Series Issuance Premium
5,035
-
-
-
-
(1,258)
3,777
3,777
-
2017A GO Preserve Series Issuance Premium
1,618
-
-
-
-
(162)
1,456
1,456
-
2017 GO Refunding Series Issuance Premium
3,912
-
-
-
-
(391)
3,521
3,521
-
2017C GO Various Purpose Issuance Premium
1,096
-
-
-
-
(365)
731
731
-
2021 GO Various Purpose Issuance Premium
2,984
-
-
-
-
(186)
2,798
2,798
-
2021 GO Taxable Various Purpose Issuance Premium
481
-
-
-
-
(30)
451
451
-
2023 GO Various Purpose Issuance Premium
3,829
-
-
-
-
(213)
3,616
3,616
-
2023 GO Taxable Various Purpose Issuance Premium
668
-
-
-
-
(37)
631
631
-
2025 GO Various Purpose Issuance Premium
-
5,274
-
-
-
(15)
5,259
5,259
-
Total General Obligation Bonds
378,783
$
107,524
$
55,595
$
-
$
-
$
(2,682)
$
428,030
$
428,030
$
-
$
(continued)
179
City of Scottsdale, Arizona
Schedule of Changes in Long-Term Debt*
For the Fiscal Year Ended June 30, 2025 (in thousands)
Refunding
Accretions,
Amortizations,
Bonds
Bonds
and Contract
Governmental Business-type
Final
July 1, 2024
Issued
Retired
Issued
Defeased
Adjustments
June 30, 2025
Activities
Activities
Payment Date
MUNICIPAL PROPERTY CORPORATION BONDS
Governmental Activities
2006 MPC Refunding
35,040
$
-
$
3,650
$
-
$
-
$
-
$
31,390
$
31,390
$
-
$
07/01/34
2014 MPC Refunding
7,125
-
7,125
-
-
-
-
-
-
08/01/24
2015A MPC
6,795
-
620
-
-
-
6,175
6,175
-
07/01/34
2015A MPC Taxable
8,690
-
735
-
-
-
7,955
7,955
-
07/01/34
2019A MPC
7,735
-
380
-
-
-
7,355
7,355
-
07/01/39
2019B MPC Taxable
26,640
-
1,490
-
-
-
25,150
25,150
-
07/01/39
2021B MPC Taxable Refunding
61,490
-
5,290
-
-
-
56,200
56,200
-
07/01/35
2006 Refunding Series Issuance Premium
2,471
-
-
-
-
(247)
2,224
2,224
-
2014 Refunding Series Issuance Premium
609
-
593
-
-
(16)
-
-
-
2015A Series Issuance Premium
546
-
-
-
-
(54)
492
492
-
2015A Taxable Series Issuance Premium
138
-
-
-
-
(14)
124
124
-
2019A Series Issuance Premium
948
-
-
-
-
(63)
885
885
-
2019B Taxable Series Issuance Premium
60
-
-
-
-
(5)
55
55
-
Subtotal Governmental Activities
158,287
-
19,883
-
-
(399)
138,005
138,005
-
Business-type Activities
2006 MPC Refunding
32,995
-
4,915
-
-
-
28,080
-
28,080
07/01/30
2015A MPC Bonds Water/Sewer
10,295
-
940
-
-
-
9,355
-
9,355
07/01/34
2015 MPC Refunding
10,140
-
4,940
-
-
-
5,200
-
5,200
07/01/26
2017 MPC Refunding
37,340
-
2,545
-
-
-
34,795
-
34,795
07/01/34
2017A MPC Bonds Water
29,155
-
1,740
-
-
-
27,415
-
27,415
07/01/37
2017B MPC Bonds Aviation
17,600
-
1,040
-
-
-
16,560
-
16,560
07/01/37
2021A MPC Refunding
7,920
-
-
-
-
-
7,920
-
7,920
07/01/30
2021B MPC Taxable Refunding
59,095
-
1,330
-
-
-
57,765
-
57,765
07/01/36
2025 MPC Bonds Water/Sewer
-
112,375
-
-
-
112,375
-
112,375
07/01/45
2006 Refunding Series Issuance Premium
3,381
-
-
-
-
(563)
2,818
-
2,818
2015A Series Issuance Premium
827
-
-
-
-
(83)
744
-
744
2015 Refunding Series Issuance Premium
1,181
-
-
-
-
(591)
590
-
590
2017 Refunding Series Issuance Premium
3,282
-
-
-
-
(328)
2,954
-
2,954
2017A Series Issuance Premium
2,127
-
-
-
-
(163)
1,964
-
1,964
2017B Series Issuance Premium
1,087
-
-
-
-
(83)
1,004
-
1,004
2021A Refunding Issuance Premium
1,880
-
-
-
-
(313)
1,567
-
1,567
2025 Series Issuance Premium
-
8,203
-
-
(24)
8,179
-
8,179
Subtotal Business-type Activities
218,305
120,578
17,450
-
-
(2,148)
319,285
-
319,285
Total Municipal Property Corporation Bonds
376,592
$
120,578
$
37,333
$
-
$
-
$
(2,547)
$
457,290
$
138,005
$
319,285
$
COMMUNITY FACILITIES DISTRICT BONDS
Governmental Activities
DC Ranch Refunding Series 2012
3,615
$
-
$
1,165
$
-
$
-
$
-
$
2,450
$
2,450
$
-
$
07/15/27
Waterfront Commercial Refunding Series 2019
1,658
-
190
-
-
-
1,468
1,468
-
07/15/32
DC Ranch 2012 Issuance Premium
118
-
-
-
-
(39)
79
79
-
Total Community Facilities District Bonds
5,391
$
-
$
1,355
$
-
$
-
$
(39)
$
3,997
$
3,997
$
-
$
Total Bonds
760,766
$
228,102
$
94,283
$
-
$
-
$
(5,269)
$
889,316
$
570,031
$
319,285
$
*This exhibit includes both Governmental Activities and Business-type Activities debt (paid out of Enterprise Funds).
(continued)
180
City of Scottsdale, Arizona
Schedule of Changes in Long-Term Debt*
For the Fiscal Year Ended June 30, 2025 (in thousands)
Refunding
Accretions,
Amortizations,
Bonds
Bonds
and Contract
Governmental Business-type
Final
July 1, 2024
Issued
Retired
Issued
Defeased
Adjustments
June 30, 2025
Activities
Activities
Payment Date
CONTRACTS PAYABLE
Governmental Activities
PNC Bank
245
$
-
$
48
$
-
$
-
$
-
$
197
$
197
$
-
$
01/01/33
Field Maintenance Equipment - Community Services
84
-
31
-
-
-
53
53
-
03/30/27
I.T. Hardware Equipment - Public Safety - 2024
1,457
-
334
-
-
-
1,123
1,123
-
10/01/27
Total Contracts
1,786
$
-
$
413
$
-
$
-
$
-
$
1,373
$
1,373
$
-
$
LEASES
Governmental Activities
Baseball Facility - Community Services
1,051
$
-
$
8
$
-
$
-
$
-
$
1,043
$
1,043
$
-
$
12/01/52
Distributed Antenna System - Administrative Services
40
-
7
-
-
-
33
33
-
12/01/29
Data Center Space - Administrative Services
588
-
247
-
-
-
341
341
-
09/01/26
Street Maintenance Equipment - Public Works
20
78
43
-
-
-
55
55
-
11/24/24
Vehicles - Public Safety
895
701
442
-
-
(16)
1,138
1,138
-
06/01/28
Imaging Equipment - Various Governmental Funds
799
53
189
-
-
-
663
663
-
03/01/29
Imaging Equipment - Fleet Management
16
-
3
-
-
-
13
13
-
03/01/29
Imaging Equipment - Risk Management
6
-
2
-
-
-
4
4
-
11/01/27
Situational Awareness Cameras - Public Safety
422
271
159
-
-
-
534
534
-
08/11/27
Document Inserter - City Treasurer
160
-
31
-
-
-
129
129
-
02/01/29
Equipment storage and maintenance warehouse - Public Safety
-
718
160
-
-
-
558
558
-
09/01/27
Temporary Fire Station - Public Safety
-
119
34
-
-
-
85
85
-
11/05/26
Subtotal Governmental Activities
3,997
1,940
1,325
-
-
(16)
4,596
4,596
-
Business-type Activities
Imaging Equipment - Water and Sewer Utility
78
-
18
-
-
-
60
-
60
03/01/29
Imaging Equipment - Airport
12
-
3
-
-
-
9
-
9
03/01/28
Imaging Equipment - Solid Waste
6
-
2
-
-
-
4
-
4
08/01/27
Water Quality Monitoring and Treatment Software - Water and Sewer Utility
20
-
10
-
-
-
10
-
10
02/16/26
Subtotal Business-type Activities
116
-
33
-
-
-
83
-
83
Total Leases
4,113
$
1,940
$
1,358
$
-
$
-
$
(16)
$
4,679
$
4,596
$
83
$
SUBSCRIPTIONS
Governmental Activities
Event Registration and Management System - Public Safety
4
$
-
$
4
$
-
$
-
$
-
$
-
$
-
$
-
$
01/14/25
Platform for Payroll and HRIS Services - Administrative Services/City Treasurer
428
-
207
-
-
-
221
221
-
04/01/26
Risk Management Information System - Self Insurance
115
-
115
-
-
-
-
-
-
07/01/24
Core Enterprise User Plan - Administrative Services
92
-
92
-
-
-
-
-
-
10/18/24
Digital Signage and Program/Event Communications - Community Services
18
-
18
-
-
-
-
-
-
08/29/24
E-mail and Communication Management Service - Administrative Services
28
-
-
-
-
-
28
28
-
08/01/24
Evacuation Planning Software - Public Safety
22
-
1
-
-
-
21
21
-
11/13/25
Situational Awareness Software - Public Safety
130
-
30
-
-
-
100
100
-
08/11/27
Enterprise Software (FY 2024) - Administrative Services
4,744
-
842
-
-
-
3,902
3,902
-
08/01/28
Server Software (FY 2024) - Administrative Services
98
-
17
-
-
-
81
81
-
08/01/28
Network Automation Software - Administrative Services
190
-
92
-
-
-
98
98
-
11/11/25
Imaging - Administrative Services
282
-
135
-
-
-
147
147
-
12/03/25
Geospatial Technology System - Public Works/Administrative Services
68
-
35
-
-
-
33
33
-
07/01/25
Advanced Network Management - Administrative Services
1,152
-
204
-
-
-
948
948
-
03/15/29
Computer Aided Dispatch Subscription - Public Safety
178
-
-
-
-
-
178
178
-
07/01/25
Security and Compliance Automation Platform - Administrative Services
64
-
32
-
-
-
32
32
-
04/19/26
Investigative Software and Storage (FY 2024) - Public Safety
2,067
-
474
-
-
-
1,593
1,593
-
10/01/27
Cyber Asset Attack Surface Management Tool - Administrative Services
131
-
82
-
-
-
49
49
-
12/02/25
Investment and Debt Management Software - City Treasurer
-
103
53
-
-
-
50
50
-
05/01/26
Time and Attendance Management- Administrative Services
-
313
110
-
-
-
203
203
-
12/01/26
Accurint Virtual Crime Center - Public Safety
-
228
48
-
-
-
180
180
-
08/01/28
eDiscovery software subscription - City Attorney
-
136
70
-
-
-
66
66
-
01/01/26
Subtotal Governmental Activities
9,811
780
2,661
-
-
-
7,930
7,930
-
Business-type Activities
Water Quality Monitoring and Treatment Software - Water and Sewer Utility
61
-
30
-
-
-
31
-
31
02/16/26
Geospatial Technology System - Water and Sewer Utility
19
-
9
-
-
-
10
-
10
07/01/25
Geospatial Technology System - Solid Waste
4
-
2
-
-
-
2
-
2
07/01/25
Water and Wastewater Compliance - Water and Sewer Utility
-
199
67
-
-
-
132
-
132
11/08/26
Subtotal Business-type Activities
84
199
108
-
-
-
175
-
175
Total Subscriptions
9,895
$
979
$
2,769
$
-
$
-
$
-
$
8,105
$
7,930
$
175
$
*This exhibit includes both Governmental Activities and Business-type Activities debt (paid out of Enterprise Funds).
(continued)
181
City of Scottsdale, Arizona
Schedule of Changes in Long-Term Debt*
For the Fiscal Year Ended June 30, 2025 (in thousands)
Refunding
Accretions,
Amortizations,
Bonds
Bonds
and Contract
Governmental Business-type
Final
July 1, 2024
Issued
Retired
Issued
Defeased
Adjustments
June 30, 2025
Activities
Activities
Payment Date
PUBLIC-PUBLIC PARTNERSHIPS
Governmental Activities
Bureau of Reclamation\Westworld
1,824
$
-
$
157
$
-
$
-
$
-
$
1,667
$
1,667
$
-
$
2032
Bureau of Reclamation\TPC
2,544
-
127
-
-
-
2,417
2,417
-
2035
Total Public-Public Partnerships
4,368
$
-
$
284
$
-
$
-
$
-
$
4,084
$
4,084
$
-
$
TOTAL BONDS, CONTRACTS, LEASES, SUBSCRIPTIONS,
AND PUBLIC-PUBLIC PARTNERSHIPS
780,928
$
231,021
$
99,107
$
-
$
-
$
(5,285)
$
907,557
$
588,014
$
319,543
$
Compensated Absences
35,819
$
4,072
$
City Total Other Postemployment Benefit Liability
893
-
Net Pension Liabilities
302,426
33,476
Risk Management Claims
23,472
-
Pollution Remediation Obligation
-
46,276
Total Long-Term Debt
950,624
$
403,367
$
*This exhibit includes both Governmental Activities and Business-type Activities debt (paid out of Enterprise Funds).
182
City of Scottsdale, Arizona
183
City of Scottsdale, Arizona
Statistical Section
Contents
Page
Financial Trends
184
These schedules contain trend information to help the reader understand how the city’s
financial performance and well-being have changed over time.
Revenue Capacity
193
These schedules contain information to help the reader assess the city’s most significant
local revenue sources, property tax, and sales and use taxes.
Debt Capacity
200
These schedules present information to help the reader assess the affordability of the
city’s current levels of outstanding debt and the city’s ability to issue additional debt in
the future.
Demographic and Economic Information
206
These schedules offer economic and demographic indicators to help the reader understand
the environment within which the city’s financial activities take place.
Operating Information
208
These schedules contain service and infrastructure data to help the reader understand
how the information in the city’s financial report relates to the services the city provides
and the activities it performs.
184
City of Scottsdale, Arizona
Table I
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Governmental Activities
Net Investment in Capital Assets
3,406,976
$
3,530,134
$
3,604,063
$
3,675,567
$
3,748,249
$
4,065,844
$
4,162,863
$
4,247,801
$
4,468,449
$
4,602,117
$
Restricted
122,932
125,366
123,057
119,657
146,017
189,263
266,758
330,043
350,415
412,106
Unrestricted
(3,679)
(43,632)
(27,779)
(5,012)
23,905
63,519
132,712
234,291
303,529
331,744
Total Governmental Activities Net Position
3,526,229
$
(1)
3,611,868
$
3,699,341
$
(3)
3,790,212
$
3,918,171
$
(4)
4,318,626
$
4,562,333
$
4,812,135
$
(5)
5,122,393
$
(6)
5,345,967
$
Business-type Activities
Net Investment in Capital Assets
1,059,001
$
1,069,475
$
1,099,864
$
1,093,556
$
1,102,183
$
1,157,026
$
1,195,005
$
1,221,022
$
1,316,476
$
1,317,956
$
Restricted
47,521
48,911
48,926
52,204
52,728
51,596
54,717
54,119
4,907
5,500
Unrestricted
255,503
256,129
250,500
282,796
301,788
291,368
284,046
284,450
311,128
401,256
Total Business-type Activities Net Position
1,362,025
$
(2)
1,374,515
$
1,399,290
$
1,428,556
$
1,456,699
$
1,499,990
$
1,533,768
$
1,559,591
$
1,632,511
$
1,724,712
$
Primary Government
Net Investment in Capital Assets
4,465,977
$
4,599,609
$
4,703,927
$
4,769,123
$
4,850,432
$
5,222,870
$
5,357,868
$
5,468,823
$
5,784,925
$
5,920,073
$
Restricted
170,453
174,277
171,983
171,861
198,745
240,859
321,475
384,162
355,322
417,606
Unrestricted
251,824
212,497
222,721
277,784
325,693
354,887
416,758
518,741
614,657
733,000
Total Primary Government Net Position
4,888,254
$
4,986,383
$
5,098,631
$
5,218,768
$
5,374,870
$
5,818,616
$
6,096,101
$
6,371,726
$
6,754,904
$
7,070,679
$
(1)In fiscal year 2016, beginning net position was restated due to an adjustment to capital assets and the recognition of the city's involvement in a joint venture.
(2)In fiscal year 2016, beginning net position was restated due to the recognition of the city's involvement in a joint venture.
(3)In fiscal year 2018, beginning net position was restated due to the implementation of GASB Statement No. 75 and to record the city's endowment funds.
(4)In fiscal year 2020, beginning net position was restated due to the implementation of GASB Statement No. 87.
(5)In fiscal year 2023, beginning net position was restated due to the implementation of GASB Statement No. 94.
(6)In fiscal year 2024, beginning net position was restated due to the implementation of GASB Implementation Guide 2021-1.
City of Scottsdale, Arizona
(in thousands)
(accrual basis of accounting)
Last Ten Fiscal Years
Net Position by Component
185
City of Scottsdale, Arizona
Table IIa
2016
2017(1)
2018(2)
2019
2020
2021
2022
2023
2024
2025
Expenses
Governmental Activities
General Government
Mayor and City Council
813
$
869
$
638
$
704
$
770
$
725
$
894
$
898
$
1,027
$
1,065
$
City Clerk
1,129
845
695
952
1,171
1,209
1,211
1,090
968
1,159
City Attorney
6,893
6,460
6,486
6,890
6,731
6,860
7,389
7,679
8,059
8,636
City Auditor
821
802
800
898
1,045
1,069
1,103
1,117
1,046
960
City Court
4,964
5,421
5,530
5,509
6,047
6,298
6,558
6,475
7,357
7,823
City Manager
1,974
2,288
3,062
3,691
4,647
3,766
5,083
5,639
2,035
3,033
City Treasurer
5,658
5,792
6,071
8,209
9,825
9,688
9,593
10,327
11,683
12,338
Other General Government
-
-
-
-
-
-
-
-
10,567
8
Public Works
38,291
40,035
42,205
47,420
99,218
100,705
109,623
110,284
115,686
119,100
Community and Economic Development
102,892
102,813
102,153
102,680
41,946
35,999
46,396
49,554
51,851
50,400
Public Safety
136,261
172,452
153,256
153,817
173,352
172,141
175,466
182,910
206,102
221,440
Community Services
53,322
54,155
54,710
56,730
64,247
64,769
72,628
80,219
87,734
95,668
Administrative Services
20,264
19,326
21,173
17,974
19,375
19,189
24,705
21,486
34,605
32,174
Scottsdale AZ CARES
-
-
-
-
-
11,742
2,555
321
117
-
Streetlight and Service Districts
589
589
605
584
555
545
535
529
533
577
(Gain) Loss on In-Substance Defeasance of Debt
-
(32)
-
-
34
-
-
-
-
-
Interest on Long-Term Debt
31,665
28,462
28,724
26,364
23,928
17,043
16,857
15,619
16,029
14,290
Bond Issuance Costs
-
672
-
-
-
-
-
-
-
-
Total Governmental Activities Expenses
405,536
440,949
426,108
432,422
452,891
451,748
480,596
494,147
555,399
568,671
Business-type Activities
Water Utility
100,854
95,745
96,493
96,010
105,222
106,778
109,606
117,079
124,386
126,586
Sewer Utility
42,058
50,535
52,142
50,462
57,847
54,152
55,167
66,634
58,401
46,530
Airport
3,894
4,151
7,624
5,370
6,764
7,024
9,150
9,257
9,685
11,009
Solid Waste
20,786
20,181
19,735
21,790
23,195
25,290
26,850
28,755
29,176
29,849
Total Business-type Activities Expenses
167,592
170,612
175,994
173,632
193,028
193,244
200,773
221,725
221,648
213,974
Total Primary Government Expenses
573,128
$
611,561
$
602,102
$
606,054
$
645,919
$
644,992
$
681,369
$
715,872
$
777,047
$
782,645
$
(1)In fiscal year 2017, the city adopted GASB Statement No. 86, which requires the recognition of a gain/loss when bonds are defeased in-substance using existing resources.
(2)In fiscal year 2018, the city instituted the practice of allocating bond issuance costs amongst the relevant functions.
City of Scottsdale, Arizona
(in thousands)
(accrual basis of accounting)
Last Ten Fiscal Years
Changes in Net Position
186
City of Scottsdale, Arizona
Table IIb
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Program Revenue
Governmental Activities
Charges for Services:
General Government
Mayor and City Council
155
$
157
$
149
$
142
$
146
$
160
$
162
$
175
$
70
$
88
$
City Clerk
148
178
165
171
227
175
173
154
66
74
City Attorney
656
688
1,082
792
795
741
597
702
1,514
1,563
City Auditor
176
167
181
203
210
221
218
222
145
145
City Court
-
-
-
-
-
-
-
-
-
-
City Manager
225
226
411
349
373
562
529
539
1,198
1,478
City Treasurer
2,610
2,583
2,688
3,036
3,045
3,521
3,542
4,612
7,436
7,728
Other General Government
-
-
-
-
-
-
-
-
-
-
Public Works
6,149
2,041
1,569
1,567
1,763
113
167
223
67
14
Community and Economic Development
17,464
18,455
19,503
20,562
22,102
17,457
41,773
17,655
21,993
23,531
Public Safety
11,459
11,739
11,203
11,107
11,088
10,251
11,891
11,104
14,002
16,421
Community Services
6,269
6,268
6,820
7,078
9,908
11,338
14,375
35,335
18,302
18,285
Administrative Services
2,926
3,096
3,094
2,617
2,815
1,987
2,954
2,971
2,498
203
Scottsdale AZ CARES
-
-
-
-
-
-
-
-
-
-
Streetlight and Services Districts
577
602
584
591
617
529
524
525
489
602
Operating Grants and Contributions
29,708
29,724
30,760
34,233
55,604
52,751
53,960
55,318
56,708
49,232
Capital Grants and Contributions
82,162
107,334
60,819
35,620
50,088
305,241
87,927
52,556
116,728
48,752
Total Governmental Activities Revenues
160,684
183,258
139,028
118,068
158,781
405,047
218,792
182,091
241,216
168,116
Business-type Activities
Charges for Services:
Water Utility
110,560
107,031
117,537
109,947
119,345
130,843
124,640
129,022
151,260
164,928
Sewer Utility
39,741
40,434
40,666
45,419
44,047
45,391
49,823
51,066
50,924
57,329
Airport
4,404
4,390
4,335
5,493
5,851
7,695
9,209
10,489
10,905
11,649
Solid Waste
20,120
20,269
19,687
21,344
22,650
25,532
27,177
31,080
33,738
36,656
Capital Grants and Contributions
22,545
17,539
23,865
17,833
26,631
34,573
38,822
31,597
43,641
31,074
Total Business-type Activities Revenues
197,370
189,663
206,090
200,036
218,524
244,034
249,671
253,254
290,468
301,636
Total Primary Government Revenues
358,054
$
372,921
$
345,118
$
318,104
$
377,305
$
649,081
$
468,463
$
435,345
$
531,684
$
469,752
$
Net (Expense)/Revenue
Governmental Activities
(244,852)
$
(257,691)
$
(287,080)
$
(314,354)
$
(294,110)
$
(46,701)
$
(261,804)
$
(312,056)
$
(314,183)
$
(400,555)
$
Business-type Activities
29,778
19,051
30,096
26,404
25,496
50,790
48,898
31,529
68,820
87,662
Total Primary Government Net Expense
(215,074)
$
(238,640)
$
(256,984)
$
(287,950)
$
(268,614)
$
4,089
$
(212,906)
$
(280,527)
$
(245,363)
$
(312,893)
$
City of Scottsdale, Arizona
(in thousands)
(accrual basis of accounting)
Last Ten Fiscal Years
Changes in Net Position
187
City of Scottsdale, Arizona
Table IIc
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
General Revenues and Other Changes
in Net Position
Governmental Activities
Taxes
265,416
$
262,144
$
287,456
$
306,274
$
316,478
$
340,559
$
408,581
$
424,622
$
431,798
$
434,283
$
Intergovernmental - Unrestricted
57,630
61,851
66,299
70,380
75,300
85,177
86,281
103,128
122,241
112,293
Interest and Investment Income
2,955
1,132
2,218
11,860
14,605
2,487
(13,201)
10,879
40,323
51,042
Miscellaneous and Special Items
9,987
10,568
10,548
9,130
7,248
10,387
16,088
14,493
16,697
15,926
Transfers
7,174
7,635
7,756
7,581
8,432
8,546
7,762
8,660
9,652
10,585
Total Governmental Activities
343,162
343,330
374,277
405,225
422,063
447,156
505,511
561,782
620,711
624,129
Business-type Activities
Taxes
145
158
144
167
128
177
232
261
233
262
Interest and Investment Income
2,531
916
2,291
10,276
10,951
870
(7,590)
3,319
13,148
14,862
Transfers
(7,174)
(7,635)
(7,756)
(7,581)
(8,432)
(8,546)
(7,762)
(8,660)
(9,652)
(10,585)
Total Business-type Activities
(4,498)
(6,561)
(5,321)
2,862
2,647
(7,499)
(15,120)
(5,080)
3,729
4,539
Total Primary Government
338,664
$
336,769
$
368,956
$
408,087
$
424,710
$
439,657
$
490,391
$
556,702
$
624,440
$
628,668
$
Change in Net Position
Governmental Activities
98,310
$
85,639
$
87,197
$
90,871
$
127,953
$
400,455
$
243,707
$
249,726
$
306,528
$
223,574
$
Business-type Activities
25,280
12,490
24,775
29,266
28,143
43,291
33,778
26,449
72,549
92,201
Total Primary Government
123,590
$
98,129
$
111,972
$
120,137
$
156,096
$
443,746
$
277,485
$
276,175
$
379,077
$
315,775
$
City of Scottsdale, Arizona
(in thousands)
(accrual basis of accounting)
Last Ten Fiscal Years
Changes in Net Position
188
City of Scottsdale, Arizona
Table III
2016
2017
2018(1)
2019
2020
2021
2022
2023
2024
2025
General Fund
Nonspendable
249
$
269
$
264
$
271
$
278
$
304
$
404
$
486
$
570
$
18,356
$
Restricted
-
-
-
-
-
-
-
-
-
-
Committed
-
-
-
-
-
-
-
-
-
-
Assigned
-
-
-
-
-
-
-
-
-
-
Unassigned
65,347
58,518
72,809
97,097
136,390
170,994
191,490
226,509
246,432
285,927
Total General Fund
65,596
$
58,787
$
73,073
$
97,368
$
136,668
$
171,298
$
191,894
$
226,995
$
247,002
$
304,283
$
All Other Governmental Funds
Nonspendable
-
$
-
$
619
$
604
$
555
$
681
$
599
$
609
$
644
$
675
$
Restricted
116,847
105,777
115,391
112,267
133,424
200,495
250,160
342,895
328,284
460,246
Committed
52,508
58,644
62,867
65,100
67,703
81,703
98,518
155,759
204,861
180,453
Assigned
-
-
-
-
-
-
-
-
-
-
Unassigned, Reported in:
Special Revenue Funds
(1,010)
(2,175)
(681)
(708)
(2,807)
(2,111)
(4,153)
(3,959)
(4,174)
(1,967)
Debt Service Funds
-
-
-
(589)
-
-
-
-
(171)
-
Capital Project Funds
(4,720)
(11,205)
(6,957)
(13,154)
(7,594)
(4,689)
(24,834)
(23,171)
(45,328)
(14,541)
Total All Other Governmental Funds
163,625
$
151,041
$
171,239
$
163,520
$
191,281
$
276,079
$
320,290
$
472,133
$
484,116
$
624,866
$
(1)In fiscal year 2018, beginning fund balance was restated due to the recognition of the city's endowment funds.
City of Scottsdale, Arizona
(in thousands)
(modified accrual basis of accounting)
Last Ten Fiscal Years
Fund Balances of Governmental Funds
189
City of Scottsdale, Arizona
Table IVa
2016(1)
2017
2018
2019
2020
2021
2022
2023
2024
2025
Revenues
Taxes - Local
264,414
$
264,299
$
288,335
$
310,433
$
317,143
$
340,782
$
409,773
$
438,942
$
434,239
$
441,472
$
Taxes - Intergovernmental
70,526
75,978
81,197
83,962
87,760
98,603
99,642
114,500
133,032
122,415
Business and Liquor Licenses
1,894
1,861
1,768
1,918
1,869
1,708
1,915
2,862
2,746
2,721
Charges for Current Services
24,404
25,225
27,063
29,774
30,009
34,702
36,960
35,960
41,176
46,124
Fines, Fees, and Forfeitures
10,617
10,532
10,387
8,960
8,831
7,816
8,679
8,074
10,619
11,244
Property Rental
4,922
5,854
5,859
6,089
4,031
7,221
11,366
10,045
11,884
12,472
Interest Earnings
2,373
2,634
4,224
6,956
8,595
6,790
6,379
14,029
25,456
28,795
Net Increase (Decrease) in the Fair Value of Investments
582
(1,502)
(2,006)
4,904
6,010
(4,303)
(19,580)
(3,150)
14,867
22,247
Intergovernmental
16,070
20,725
27,335
25,479
47,850
36,004
40,157
59,267
48,223
73,856
Developer Contributions
319
498
835
412
1,128
2,723
4,012
7,679
3,478
3,639
Streetlight and Services Districts
577
602
584
591
617
529
524
525
489
602
Contributions and Donations
2,268
2,589
2,333
2,575
9,069
4,398
3,841
3,640
2,430
3,141
Reimbursements from Outside Sources
1,942
2,266
1,840
2,415
2,193
2,121
4,058
1,989
2,515
1,976
Indirect Costs
6,501
6,993
7,455
6,899
7,614
7,370
7,217
7,191
8,313
9,345
Other
954
1,110
869
751
737
488
1,037
2,264
1,261
1,374
Total Revenues
408,363
$
419,664
$
458,078
$
492,118
$
533,456
$
546,952
$
615,980
$
703,817
$
740,728
$
781,423
$
(1)In fiscal year 2016, moved "Sale of General Capital Assets" from "Other" within the "Revenues" section to "Sale of General Capital Assets" within the "Other Financing Sources (Uses)" section.
City of Scottsdale, Arizona
(in thousands)
(modified accrual basis of accounting)
Last Ten Fiscal Years
Changes in Fund Balances of Governmental Funds
190
City of Scottsdale, Arizona
Table IVb
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Expenditures
General Government
Mayor and City Council
818
$
887
$
653
$
747
$
782
$
723
$
878
$
930
$
1,035
$
1,095
City Clerk
1,138
873
735
1,004
1,163
1,246
1,256
1,082
972
1,180
City Attorney
7,118
6,576
6,747
7,471
6,826
6,597
7,276
7,565
8,052
9,106
City Auditor
824
823
816
948
1,049
1,045
1,099
1,197
1,063
981
City Court
4,975
5,381
5,692
5,797
5,970
6,194
6,528
6,696
7,330
7,939
City Manager
1,965
2,200
3,094
3,746
4,531
3,621
4,987
5,877
1,812
3,026
City Treasurer
5,785
5,657
5,979
8,593
9,714
9,418
9,544
10,632
11,558
13,971
Other General Government
-
-
-
-
-
-
-
-
10,567
8
Public Works
32,850
33,636
35,013
35,154
44,382
41,410
45,228
48,271
52,940
56,922
Community and Economic Development
42,735
46,320
47,696
48,860
34,431
31,259
41,973
45,541
46,821
48,041
Public Safety
128,527
137,304
136,075
146,250
157,557
153,754
210,701
198,067
209,835
217,099
Community Services
45,508
46,224
47,056
48,786
52,924
48,034
56,679
67,439
68,445
74,128
Administrative Services
15,648
15,919
16,309
15,279
14,727
19,307
17,167
18,392
27,550
28,726
Scottsdale AZ CARES
-
-
-
-
-
12,974
2,259
-
-
-
Streetlight and Services Districts
589
589
605
584
555
545
535
529
533
577
Debt Service
Principal
53,313
57,956
68,017
66,053
70,076
68,955
70,557
70,918
81,447
80,808
Interest and Fiscal Charges
34,664
31,285
32,052
29,752
27,854
20,634
19,111
17,918
17,740
15,496
Payment to Refunded Bonds Escrow Agent
-
-
-
-
6,983
-
-
-
-
-
Bond Issuance Costs
-
672
241
-
508
1,745
-
845
-
522
Capital Outlay
26,674
75,099
54,311
64,395
80,009
70,417
87,417
148,652
187,042
144,891
Total Expenditures
403,131
$
467,401
$
461,091
$
483,419
$
520,041
$
497,878
$
583,195
$
650,551
$
734,742
$
704,516
$
Excess (Deficiency) of Revenues over
(under) Expenditures
5,232
$
(47,737)
$
(3,013)
$
8,699
$
13,415
$
49,074
$
32,785
$
53,266
$
5,986
$
76,907
$
City of Scottsdale, Arizona
(in thousands)
(modified accrual basis of accounting)
Last Ten Fiscal Years
Changes in Fund Balances of Governmental Funds
191
City of Scottsdale, Arizona
Table IVc
2016(1)
2017
2018
2019
2020
2021
2022
2023
2024
2025
Other Financing Sources (Uses)
Transfers In
85,080
$
101,427
$
103,926
$
108,177
$
119,124
$
135,337
$
136,575
$
178,154
$
204,755
$
160,804
$
Transfers Out
(79,079)
(94,074)
(96,272)
(100,735)
(110,525)
(126,874)
(129,030)
(169,542)
(195,142)
(150,201)
Financing of Leases
-
-
-
244
1,025
122
1,517
916
1,978
1,940
Financing of Subscription-Based I.T.
Arrangements
-
-
-
-
-
4,746
302
2,486
11,944
779
Financing of Contracts Payable
-
-
-
-
-
-
1,009
265
1,876
-
Issuance of Refunding Bonds
-
58,480
-
-
2,563
239,545
-
-
-
-
Issuance of Long-Term Capital-Related Debt
-
17,410
25,500
-
42,550
51,160
-
73,705
-
102,250
Premium on Long-Term Debt Issued
-
12,955
3,496
-
1,323
4,200
-
4,850
-
5,275
Payment to Refunded Bonds Escrow Agent
-
(68,105)
-
-
(2,563)
(238,102)
-
-
-
-
Sale of General Capital Assets
4,806
251
214
191
149
220
21,649
42,844
593
277
Total Other Financing Sources (Uses)
10,807
28,344
36,864
7,877
53,646
70,354
32,022
133,678
26,004
121,124
Net Change in Fund Balances
16,039
$
(19,393)
$
33,851
$
16,576
$
67,061
$
119,428
$
64,807
$
186,944
$
31,990
$
198,031
$
Debt Service as a Percentage of Non-capital
Expenditures
23.4%
22.7%
24.3%
22.5%
22.2%
21.0%
18.1%
17.7%
18.1%
17.2%
(1)In fiscal year 2016, moved "Sale of General Capital Assets" from "Other" within the "Revenues" section to "Sale of General Capital Assets" within the "Other Financing Sources (Uses)" section.
City of Scottsdale, Arizona
(dollars in thousands)
(modified accrual basis of accounting)
Last Ten Fiscal Years
Changes in Fund Balances of Governmental Funds
192
City of Scottsdale, Arizona
Table V
Sales and Use Taxes
Fiscal Year
Property
Privilege and Use -
General
Privilege and Use -
McDowell Mtn
Preserve
Privilege and Use -
Transportation
Privilege and Use -
Public Safety
Transient
Occupancy
2016
61,956
$
104,995
$
36,029
$
19,938
$
10,294
$
17,397
$
2017
63,320
103,081
35,489
19,615
10,140
18,951
2018
63,577
116,679
40,089
22,044
11,454
19,837
2019
68,738
122,152
41,909
27,788
(1)
11,974
22,407
2020
67,911
122,923
42,331
35,022
12,094
18,793
2021
69,826
136,511
46,921
39,023
13,406
18,013
2022
72,602
165,535
57,013
47,586
16,289
31,863
2023
67,634
181,553
62,550
52,373
17,872
36,492
2024
73,214
175,426
60,427
50,902
17,265
34,597
2025
73,260
179,114
61,647
51,688
17,613
34,735
Franchise Taxes
Fiscal Year
Cable TV
Franchise
Light and Power
Franchise
State Shared Sales
State Revenue
Sharing
Other
2016
3,816
$
8,826
$
20,647
$
26,173
$
913
$
2017
3,896
8,655
21,755
28,976
921
2018
4,391
9,106
23,719
30,549
931
2019
3,293
8,832
25,187
30,269
3,102
2020
5,445
8,231
26,395
33,015
4,177
2021
4,204
8,456
30,615
37,207
4,209
2022
3,825
9,490
34,247
33,718
5,342
2023
3,625
10,155
35,884
47,853
6,488
2024
3,358
11,181
36,693
64,406
7,636
2025
3,164
11,259
37,509
51,990
8,795
(1)The Privilege and Use-Transportation tax rate increased from 0.2 percent to 0.3 percent, effective February 1, 2019.
Intergovernmental
City of Scottsdale, Arizona
Tax Revenues By Source
Last Ten Fiscal Years
(modified accrual basis of accounting)
(in thousands)
193
City of Scottsdale, Arizona
Table VI
2016
2017(1)
2018
2019(2)
2020
2021
2022
2023
2024
2025(3)
Amusement
297,461
$
Automotive
1,403,834
$
1,489,632
$
1,558,428
$
1,792,335
$
1,725,497
$
1,940,656
$
1,984,944
$
2,037,030
$
2,046,757
$
2,138,488
Construction
969,281
901,684
962,050
997,164
1,044,980
1,223,155
1,193,366
1,596,705
1,748,177
1,913,684
Food Stores
713,187
677,978
763,117
796,551
860,447
883,237
878,442
945,114
985,835
960,056
Hotel/Motel
543,121
641,146
682,078
730,329
595,455
551,361
965,649
1,053,661
1,022,072
1,037,902
Major Department Stores
927,469
888,674
966,996
970,656
944,390
1,037,297
1,147,151
1,205,502
1,192,745
1,180,016
Manufacturing
246,398
Miscellaneous Retail Stores
1,708,411
1,785,097
2,010,364
2,200,161
2,438,658
3,054,740
3,683,694
3,828,950
3,903,186
4,022,080
Other Taxable Activity
728,596
756,718
926,445
1,059,397
1,119,896
1,368,741
1,697,911
1,881,617
1,917,642
323,539
Rentals
1,417,607
1,380,366
1,644,191
1,719,075
1,747,873
1,746,613
2,132,353
2,227,753
2,230,629
1,885,118
Restaurants
961,340
957,757
1,065,825
1,144,395
1,008,526
1,170,867
1,518,421
1,684,960
1,693,772
1,673,451
Services with Retail Sales
826,674
Utilities
497,773
451,318
467,609
455,118
466,345
476,372
478,033
524,314
553,790
565,974
Wholesale
381,735
Total
9,870,619
$
9,930,370
$
11,047,103
$
11,865,181
$
11,952,067
$
13,453,039
$
15,679,964
$
16,985,606
$
17,294,605
$
17,452,576
$
City Sales Tax
1.65%
1.65%
1.65%
1.75%
1.75%
1.75%
1.75%
1.75%
1.75%
1.75%
(3) Four new categories were extracted from Other Taxable Activity: Amusement, Manufacturing, Services with Retail Sales, and Wholesale. Effective July 1, 2025, the privilege tax rate decreased to 1.70%.
(2) Effective February 1, 2019, the privilege tax rate increased to 1.75%.
(1) Effective January 1, 2017, the Arizona Department of Revenue took over all collection and administration of privilege, use, jet fuel, and bed taxes.
City of Scottsdale, Arizona
Taxable Sales Subject to Privilege (Sales) Tax by Category
Last Ten Fiscal Years
(dollars in thousands)
194
City of Scottsdale, Arizona
City of Scottsdale, Arizona
Direct and Overlapping Sales Tax Rates
Last Ten Fiscal Years
Table VII
Fiscal
Year
City Direct
Rate
County
Rate
State
Rate
Fiscal
Year
City Direct
Rate
County
Rate
State
Rate
2016
1.65%
0.70%
5.60%
2016
1.45%
0.00%
5.60%
2017
1.65%
0.70%
5.60%
2017
1.45%
0.00%
5.60%
2018
1.65%
0.70%
5.60%
2018
1.45%
0.00%
5.60%
2019
1.75% (2)
0.70%
5.60%
2019
1.55% (2)
0.00%
5.60%
2020
1.75%
0.70%
5.60%
2020
1.55%
0.00%
5.60%
2021
1.75%
0.70%
5.60%
2021
1.55%
0.00%
5.60%
2022
1.75%
0.70%
5.60%
2022
1.55%
0.00%
5.60%
2023
1.75%
0.70%
5.60%
2023
1.55%
0.00%
5.60%
2024
1.75%
0.70%
5.60%
2024
1.55%
0.00%
5.60%
2025
1.75% (3)
0.70%
5.60%
2025
1.55% (3)
0.00%
5.60%
Fiscal
Year
City Direct
Rate
County
Rate
State
Rate
Fiscal
Year
City Direct
Rate
County
Rate
State
Rate
2016
5.00%
1.77%
5.50%
2016
0.0180
0.0031
0.0305
2017
5.00%
1.77%
5.50%
2017
0.0180
0.0031
0.0305
2018
5.00%
1.77%
5.50%
2018
(1)
0.0180
0.0031
0.0305
2019
5.00%
1.77%
5.50%
2019
0.0180
0.0031
0.0305
2020
5.00%
1.77%
5.50%
2020
0.0180
0.0031
0.0305
2021
5.00%
1.77%
5.50%
2021
0.0180
0.0031
0.0305
2022
5.00%
1.77%
5.50%
2022
0.0180
0.0031
0.0305
2023
5.00%
1.77%
5.50%
2023
0.0180
0.0031
0.0305
2024
5.00%
1.77%
5.50%
2024
0.0180
0.0031
0.0305
2025
5.00%
1.77%
5.50%
2025
0.0180
0.0031
0.0305
Source: City Tax Audit Section
Note: The following gives a general description of each tax. Complete details for each tax can be found in Appendix C of the Scottsdale Revised City Code.
Privilege (Sales) Tax applies to the sale, lease, license for use, and/or rental transactions.
Use Tax applies to the storage or use of items within the city on which no privilege tax has been paid.
Transient Occupancy Tax applies to transactions involving transient lodging.
Jet Fuel Tax applies to transactions involving the sale of jet fuel.
(1) Effective August 9, 2017, the city can only tax the first 10 million gallons by each purchaser in a calendar year.
(2) Effective February 1, 2019, the city transaction privilege tax rate increased to 1.75% and the use tax rate increased to 1.55%.
(3) Effective July 1, 2025, the city transaction privilege tax rate decreased to 1.70% and the use tax rate decreased to 1.5%
Transient Occupancy Tax Rates
Jet Fuel Tax Rates (cents per gallon)
Privilege (Sales) Tax Rates
Use Tax Rates
195
City of Scottsdale, Arizona
Table VIII
Number of
Filers
Percentage
of Total
Tax
Revenue
Percentage
of Total
Number of
Filers
Percentage
of Total
Tax
Revenue
Percentage
of Total
Amusement
480
1.19%
37,637
$
12.13%
Automotive
731
1.81%
34,296
11.05%
593
2.52%
23,674
$
13.83%
Construction
2,806
6.95%
16,670
5.37%
5,832
24.75%
16,995
9.93%
Food Stores
265
0.66%
18,419
5.94%
185
0.79%
11,820
6.91%
Hotel/Motel
518
1.28%
20,870
6.73%
78
0.33%
9,175
5.36%
Major Department Stores
28
0.07%
69,712
22.46%
26
0.11%
15,291
8.94%
Manufacturing
4,837
11.98%
6,036
1.95%
Miscellaneous Retail Stores
10,661
26.41%
33,283
10.73%
5,456
23.15%
29,959
17.50%
Other Taxable Activity
2,332
5.78%
29,581
9.53%
4,380
18.59%
16,751
9.79%
Rentals
7,926
19.64%
10,100
3.25%
5,632
23.90%
23,897
13.97%
Restaurants
965
2.39%
5,550
1.79%
1,070
4.54%
16,101
9.41%
Services with Retail Sales
4,681
11.60%
4,757
1.53%
Utilities
489
1.21%
7,302
2.35%
312
1.32%
7,455
4.36%
Wholesale
3,644
9.03%
16,110
5.19%
Total
40,363
100.00%
310,323
$
100.00%
23,564
100.00%
171,118
$
100.00%
Note: Due to confidentiality issues, the names of the ten largest revenue payers cannot be disclosed. The categories are intended to provide alternative information regarding the sources of the city's revenue. Transient
Occupancy taxes are not included in the Tax Revenue for this table. The "Other Taxable Activity" category includes all license fees, penalties, and interest. Beginning January 1, 2017, the Arizona Department of Revenue took
over all collection and administration of privilege, use, and jet fuel taxes. Due to the changes in the source of the data and the tax law, the number and classification of filers for the two years above may have differences.
Effective February 1, 2019, the transaction privilege tax rate increased to 1.75% and the use tax rate increased to 1.55%. Effective July 1, 2025, the transaction privilege tax rate decreased to 1.70% and the use tax rate decreased
to 1.50%. Fiscal Year 2025 split out additional industries from the other taxable activity category: Amusement, Manufacturing, Services with Retail Sales, and Wholesale.
Fiscal Year 2025
Fiscal Year 2016
City of Scottsdale, Arizona
Sales Tax Revenue Payers by Industry
Current Year and Nine Years Ago
(dollars in thousands)
196
City of Scottsdale, Arizona
Table IX
Fiscal Year
Operating
Debt Service
Total City
Operating
Debt Service
and Budget
Override
EVIT
Total School
2016
0.5293
$
0.6244
$
1.1537
$
2.8332
$
1.0263
$
0.0500
$
3.9095
$
2017
0.5071
0.6219
1.1290
2.8566
1.0033
0.0500
3.9099
2018
0.4956
0.5889
1.0845
2.7463
0.9864
0.0500
3.7827
2019
0.5316
0.5705
1.1021
2.5675
1.1364
0.0500
3.7539
2020
0.5198
0.5214
1.0412
2.5928
1.0538
0.0500
3.6966
2021
0.5273
0.5043
1.0316
2.6334
0.9939
0.0500
3.6773
2022
0.5039
0.5042
1.0081
2.5261
0.9318
0.0500
3.5079
2023
0.4970
0.4101
0.9071
2.4282
0.9165
0.0500
3.3947
2024
0.5150
0.4664
0.9814
2.4454
0.9312
0.0500
3.4266
2025
0.4958
0.4358
0.9316
2.2289
1.0215
0.0500
3.3004
Fiscal Year
County
Operating
Community
College
County
Flood
County
Education
Equalization
Fire District
Assistance
Central AZ
Project
County Free
Library
County
Special
Health Care
Total
County
Total Direct
and
Overlapping
2016
1.3609
$
1.4940
$
0.1592
$
0.5054
$
0.0116
$
0.1400
$
0.0556
$
0.3021
$
4.0288
$
9.0920
$
2017
1.4009
1.4651
0.1792
0.5010
0.0112
0.1400
0.0556
0.3053
4.0583
9.0972
2018
1.4009
1.4096
0.1792
0.4875
0.0102
0.1400
0.0556
0.2851
3.9681
8.8353
2019
1.4009
1.3754
0.1792
0.4741
0.0107
0.1400
0.0556
0.2941
3.9300
8.7860
2020
1.4009
1.3285
0.1792
0.4566
0.0095
0.1400
0.0556
0.3333
3.9036
8.6414
2021
1.4009
1.2881
0.1792
0.4426
0.0090
0.1400
0.0556
0.3046
3.8200
8.5289
2022
1.3459
1.2257
0.1792
0.4263
0.0086
0.1400
0.0556
0.2970
3.6783
8.1943
2023
1.2473
1.1894
0.1592
0.0000
0.0082
0.1400
0.0505
0.2488
3.0434
7.3452
2024
1.2044
1.1388
0.1536
0.0000
0.0081
0.1400
0.0488
0.2716
2.9653
7.3733
2025
1.1591
1.1047
0.1470
0.0000
0.0080
0.1400
0.0470
0.2665
2.8723
7.1043
Source: Maricopa County Department of Finance Publications On-Line "Tax Rate 2024".
Note: The city has Community Facilities Districts (CFDs) that levy property taxes independent of the city to property owners within a designated area. For fiscal year 2025 the rates were as follows: DC Ranch CFD - $0.4108 and the Waterfront
Commercial CFD - $4.6196.
City of Scottsdale, Arizona
Property Tax Rates
Direct and Overlapping Governments
Last Ten Fiscal Years
Overlapping Rates
Scottsdale Unified School District
County-Wide Jurisdictions
City Direct Rate
Overlapping Rates
197
City of Scottsdale, Arizona
Table X
Percentage of
Percentage of
Taxable
Total Taxable
Taxable
Total Taxable
Assessed
Assessed
Assessed
Assessed
Taxpayer
Value
Rank
Value
Value
Rank
Value
Arizona Public Service Company
79,127
$
1
0.990%
59,358
$
1
1.150%
Scottsdale Fashion Square LLC (1)
48,124
2
0.602%
27,657
2
0.536%
SDQ FEE LLC
24,454
3
0.306%
17,359
3
0.336%
18700 Hayden Road LLC (Cavasson)
23,172
4
0.290%
-
-
-
Camden USA Inc
19,844
5
0.248%
-
-
-
FMT Scottsdale Owner LLC (IMPS)
17,270
6
0.216%
-
-
-
Weingarten Nostat Inc.
17,031
7
0.213%
-
-
-
Portales Corporate Center LLC
15,996
8
0.200%
12,717
8
0.246%
Scottsdale Promenade LLC (2)
14,620
9
0.183%
13,029
7
0.252%
Southwest Gas Corporation
14,249
10
0.178%
-
-
-
General Dynamics Decision Systems Inc
-
-
-
-
-
-
Gainey Drive Associates
-
-
-
13,712
4
0.266%
Scottsdale Fashion Square LLC
-
-
-
13,303
5
0.258%
Qwest Corporation
-
-
-
13,183
6
0.255%
WJ Small Grandchildren Trust/Etal
-
-
-
12,344
9
0.239%
Dial Corporation
-
-
-
10,470
10
0.203%
Total
273,887
$
3.426%
193,132
$
3.741%
(1) In 2016, Scottsdale Fashion Square was listed twice. Scottsdale Fashion Square LLC/Etal and Scottsdale Fashion Square LLC were listed in the Principal Property Taxpayers.
(2) Scottsdale Promenade LLC was known as Excel Promenade LLC in 2016. Excel Promenade was acquired by Scottsdale Promenade LLC in 2022.
Note: The Salt River Project Agricultural Improvement and Power District's (SRP) assessed valuation is not reflected in the total assessed valuation of the city. SRP is subject to a "voluntary contribution" in-lieu of
ad valorem taxation. The 2024 assessed valuation of the SRP within the city is $21,187,923 as provided by SRP.
City of Scottsdale, Arizona
Principal Property Taxpayers
Current Year and Nine Years Ago
(dollars in thousands)
2025
2016
Source: The Maricopa County Assessor's Office.
198
City of Scottsdale, Arizona
Table XI
Personal
Property
Fiscal Year
Ended June 30th
Residential
Property
Commercial
Property
Vacant Land
Historic and
Special Use
Assessed Value
Total Taxable
Assessed Value
Total Direct
Tax Rate
2016 P
3,608,260
$
1,197,395
$
759,840
$
3,143
$
196,631
$
(603,538)
$
5,161,731
$
0.53
$
2016 S
4,210,065
1,306,932
912,980
3,541
196,972
(674,098)
5,956,392
0.62
2017 P
3,842,636
1,209,059
723,452
1,075
217,238
(594,547)
5,398,913
0.51
2017 S
4,510,655
1,451,267
996,458
1,488
217,243
(757,790)
6,419,321
0.62
2018 P
4,071,866
1,268,544
747,981
1,155
223,277
(614,085)
5,698,738
0.50
2018 S
4,794,346
1,650,245
1,135,084
1,716
223,276
(876,231)
6,928,436
0.59
2019 P
4,301,223
1,335,470
737,727
1,187
221,801
(600,412)
5,996,996
0.53
2019 S
5,014,035
1,726,614
1,137,771
1,816
229,030
(885,997)
7,223,269
0.57
2020 P
4,555,026
1,397,576
756,975
1,266
227,231
(614,956)
6,323,118
0.52
2020 S
5,356,377
1,848,894
1,217,117
2,032
236,828
(959,355)
7,701,893
0.52
2021 P
4,813,338
1,465,046
770,044
1,207
241,822
(674,280)
6,617,177
0.53
2021 S
5,719,222
1,988,445
1,215,429
1,873
252,043
(1,022,311)
8,154,701
0.50
2022 P
5,069,144
1,547,914
799,978
1,280
232,722
(694,052)
6,956,986
0.50
2022 S
6,125,758
2,131,654
1,263,825
1,917
233,873
(1,046,330)
8,710,697
0.50
2023 P
5,373,234
1,625,295
785,066
1,364
241,948
(698,108)
7,328,799
0.50
2023 S
6,631,122
2,134,568
1,217,942
2,174
243,283
(1,030,404)
9,198,685
0.41
2024 P
5,692,566
1,651,650
793,012
1,599
230,103
(737,677)
7,631,253
0.52
2024 S
8,528,816
2,422,944
1,397,709
3,202
231,386
(1,189,801)
11,394,256
0.47
2025 P
5,995,210
1,659,544
823,378
3,206
214,400
(700,663)
7,995,077
0.50
2025 S
10,867,077
2,683,421
1,649,457
6,626
215,458
(1,288,976)
14,133,063
0.44
Source: Arizona Department of Revenue Abstract of the Assessment Roll and Maricopa County Tax Levy Reports on County Finance website.
(dollars in thousands, excluding the Total Direct Tax Rate)
Real Property
City of Scottsdale, Arizona
Assessed Value of Taxable Property
Last Ten Fiscal Years
Less Tax
Exempt
Property
199
City of Scottsdale, Arizona
Table XII
Fiscal Year Ended
June 30
Total Tax Levy for
Fiscal Year
Adjusted Total Tax
Levy as of Current
Fiscal Year
Amount
Percentage of Levy
Collections in
Subsequent
Years
Amount
Percentage of
Adjusted Levy
2016
59,533
$
59,115
$
58,714
$
98.6%
378
$
59,092
$
100.0%
2017
60,982
60,413
60,056
98.5%
251
60,307
99.8%
2018
61,861
61,095
60,721
98.2%
280
61,001
99.8%
2019
65,816
64,873
64,982
98.3%
(115)
64,867
100.0%
2020
65,521
64,395
64,273
97.6%
118
64,391
100.0%
2021
68,465
66,926
67,423
98.8%
(501)
66,922
100.0%
2022
70,334
68,459
69,082
98.2%
(629)
68,453
100.0%
2023
66,494
64,478
65,395
98.3%
(922)
64,473
100.0%
2024
75,522
73,157
73,502
97.3%
(378)
73,124
100.0%
2025
73,002
72,814
71,887
98.5%
-
71,887
98.7%
Collected within the
Fiscal Year of the Levy
Source: "Total Tax Levy for Fiscal Year" amounts = Maricopa County Tax Levy Reports on County Finance website, including resolution adjustments. "Collections" amounts = Maricopa County Finance Office Secured Tax Levy Report.
"Adjusted Levy" reflects "Resolution" amounts. Amounts represent property taxes recorded in the General, Debt Service, and Self-Insurance Funds.
City of Scottsdale, Arizona
Property Tax Levies and Collections
Last Ten Fiscal Years
(dollars in thousands)
Total Collections to Date
200
City of Scottsdale, Arizona
Table XIII
Fiscal Year
Ended June 30
General
Obligation
Bonds
Municipal
Property
Corporation
Bonds
Scottsdale
Preserve
Authority
Bonds
Certificates of
Participation
Community
Facilities
District
Bonds
Contracts
Payable
Leases
Public-Public
Partnerships
Subscriptions
2016
585,931
$
232,970
$
43,489
$
9,546
$
24,694
$
-
$
156
$
2,683
$
-
$
2017
590,910
221,535
17,823
7,264
21,860
-
95
2,529
-
2018
568,259
208,828
13,215
4,914
19,244
-
32
2,375
-
2019
521,632
193,165
8,432
2,493
16,707
-
219
2,221
-
2020
467,788
218,786
2,825
-
13,808
-
2,373
2,068
-
2021
475,212
202,825
1,448
-
11,084
451
1,799
1,914
4,387
2022
421,589
187,101
-
-
8,256
1,314
2,568
1,760
3,417
2023
442,783
172,808
-
-
6,740
1,083
2,947
4,620
4,363
2024
378,783
158,287
-
-
5,391
1,786
3,997
4,368
9,811
2025
428,029
138,005
-
-
3,997
1,373
4,596
4,084
7,930
Fiscal Year
Ended June 30
Revenue
Bonds
Municipal
Property
Corporation
Bonds
Leases
Subscriptions
Total Primary
Government
Percentage
of Personal
Income
Per Capita
2016
28,176
$
295,807
$
-
$
-
$
1,223,452
$
10.26%
5,292
$
2017
24,710
353,773
-
-
1,240,499
9.98%
5,212
2018
21,069
336,407
-
-
1,174,343
8.96%
4,843
2019
17,258
318,235
-
-
1,080,362
7.45%
4,232
2020
13,262
299,138
-
-
1,020,048
6.59%
3,952
2021
9,062
285,707
-
70
993,959
6.57%
4,118
2022
4,646
265,472
-
24
896,147
5.68%
3,691
2023
-
242,431
96
144
878,015
5.16%
3,612
2024
-
218,305
116
84
780,928
4.12%
3,195
2025
-
319,285
83
175
907,557
4.46%
3,687
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
See Table XVIII - Schedule of Demographic and Economic Statistics for personal income and population data.
Business-type Activities
City of Scottsdale, Arizona
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(dollars in thousands, except for Per Capita)
Governmental Activities
201
City of Scottsdale, Arizona
Table XIV
Fiscal Year
Ended June 30
Governmental
Activities -
General
Obligation Bonds
Less: Amounts
Available in
Debt Service
Fund
Net General
Bonded Debt
Percentage of
Total Taxable
Assessed Value
of Property
Per Capita
2016
585,931
$
11,529
$
574,402
$
9.6%
2,484
$
2017
590,910
11,516
579,394
9.0%
2,434
2018
568,259
2,471
565,788
8.2%
2,333
2019
521,632
1,394
520,238
7.2%
2,038
2020
467,788
1,042
466,746
6.1%
1,808
2021
475,212
3,469
471,743
5.8%
1,955
2022
421,589
8,714
412,875
4.7%
1,700
2023
442,783
7,291
435,492
4.7%
1,791
2024
378,783
105
378,678
3.3%
1,549
2025
428,029
7,523
420,506
3.0%
1,708
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
See the Schedule of Demographic and Economic Statistics on Table XVIII for population data.
City of Scottsdale, Arizona
Ratios of Net General Bonded Debt Outstanding
Last Ten Fiscal Years
See the Schedule of Assessed Value of Taxable Property on Table XI for property value data.
(dollars in thousands, except Per Capita)
202
City of Scottsdale, Arizona
Table XV
Governmental Unit
Debt Outstanding
Estimated
Percentage
Applicable
Estimated Share of
Overlapping Debt
Debt repaid with property taxes
Maricopa County Community College District
26,675
$
13.7069%
3,656
$
Maricopa County Special Healthcare District
512,560
13.7069%
70,256
Balsz Elementary School District No. 31
47,575
6.1087%
2,906
Scottsdale Unified School District No. 48
228,229
69.3641%
158,309
Paradise Valley Unified School District No. 69
351,583
29.5379%
103,850
Cave Creek Unified School District No. 93
16,160
62.2436%
10,059
Fountain Hills Unified School District No. 98
2,570
3.3749%
87
Phoenix Union High School District No. 210
455,605
0.3624%
1,651
Western Maricopa Education Center District No. 402
80,870
6.1030%
4,935
Subtotal, overlapping debt
355,709
City direct debt
588,014
100.0000%
588,014
Total direct and overlapping debt
943,723
$
(dollars in thousands)
Notes:
The proportion of overlapping debt applicable to the city is computed on the ratio of 2024-25 net assessed limited property value for the overlapping jurisdiction within the city
to the total net assessed limited property valuation of the overlapping jurisdiction.
City of Scottsdale, Arizona
Direct and Overlapping Governmental Activities Debt
As of June 30, 2025
Sources: The various entities; State and County Abstract of the Assessment Roll, Arizona Department of Revenue; Property Tax Rates and Assessed Values, Arizona Tax Research
Association; and Maricopa County 2024 Tax Levy, Maricopa County Department of Finance.
Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those
overlapping governments that is borne by the residents and businesses of the City of Scottsdale. This process recognizes that, when considering the government's ability to issue
and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a
resident, and therefore responsible for repaying the debt of each overlapping government.
203
City of Scottsdale, Arizona
Table XVIa
2016 (1)
2017 (2)
2018
2019
2020
2021
2022
2023
2024
2025
20% Limitation
Debt Limit Equal to 20% of Assessed Valuation
1,191,278
$
1,283,864
$
1,385,687
$
1,444,654
$
1,540,379
$
1,630,940
$
1,742,139
$
1,839,737
$
2,278,851
$
2,826,613
$
Total Net Debt Applicable to 20% Limit
513,768
521,179
511,046
479,265
433,865
444,366
395,172
411,487
351,404
388,518
Excess Premium
8,180
10,637
10,415
10,181
12,713
11,549
13,996
12,193
15,288
Legal 20% Debt Margin (Available
Borrowing Capacity)
677,510
$
754,505
$
864,004
$
954,974
$
1,096,333
$
1,173,861
$
1,335,418
$
1,414,254
$
1,915,254
$
2,422,807
$
Total Net Debt Applicable to the 20% Limit
as a Percentage of 20% Debt Limit
43.13%
41.23%
37.65%
33.90%
28.83%
28.03%
23.35%
23.13%
15.96%
14.29%
6% Limitation
Debt Limit Equal to 6% of Assessed Valuation
357,384
$
385,159
$
415,706
$
433,396
$
462,114
$
489,282
$
522,642
$
551,921
$
683,655
$
847,984
$
Total Net Debt Applicable to 6% Limit
37,747
26,116
14,419
3,950
-
3,859
3,713
8,128
7,706
17,247
Excess Premium
-
-
-
-
426
410
929
881
1,307
Legal 6% Debt Margin (Available
Borrowing Capacity)
319,637
$
359,043
$
401,287
$
429,446
$
462,114
$
484,997
$
518,519
$
542,864
$
675,068
$
829,430
$
Total Net Debt Applicable to the 6% Limit
as a Percentage of 6% Debt Limit
10.56%
6.78%
3.47%
0.91%
0.00%
0.88%
0.79%
1.64%
1.26%
2.19%
(1)Restated fiscal year 2016 debt limit and debt margin amounts to reflect the usage of the secondary, as opposed to the primary, valuation amount.
(2)Beginning in fiscal year 2017, a change in state law requires the "Excess Premium" to be included with the debt subject to the legal debt margin limitations.
(dollars in thousands)
Last Ten Fiscal Years
Legal Debt Margin Information
City of Scottsdale, Arizona
204
City of Scottsdale, Arizona
Table XVIb
Legal Debt Margin Calculation for Fiscal Year 2025
Assessed Valuation as of June 30, 2025
14,133,063
$
20% Limitation
Debt Limit Equal to 20% of Assessed Valuation
2,826,613
$
Debt applicable to limit:
General Obligation Bonds
388,518
Excess Premium
15,288
Legal 20% Debt Margin (Available Borrowing Capacity)
2,422,807
$
6% Limitation
Debt Limit Equal to 6% of Assessed Valuation
847,984
$
Debt applicable to limit:
General Obligation Bonds
17,247
Excess Premium
1,307
Legal 6% Debt Margin (Available Borrowing Capacity)
829,430
$
Notes:
General obligation bonds of community facilities districts are not subject to or included in this computation since they are not bonds of the City of Scottsdale,
Arizona.
City of Scottsdale, Arizona
Legal Debt Margin Information
As of June 30, 2025
(in thousands)
Source: City of Scottsdale, City Treasurer
Under Arizona law, cities can issue general obligation bonds for purposes of water, sewers, artificial light, parks, playgrounds and recreational facilities, open space
preserves, public safety, and streets and transportation facilities, but outstanding bonds issued for such purposes may not exceed 20 percent of the city's net assessed
valuation. Outstanding general obligation bonded debt for all other purposes may not exceed 6 percent of the city's net assessed valuation.
205
City of Scottsdale, Arizona
Table XVII
Fiscal Year
Ended
June 30
Operating
Revenue(1)
Less:
Operating
Expenses
Net
Operating
Revenue
Development
Fee Revenue
Net
Revenue
Debt
Service
Principal
Debt
Service
Interest
Coverage
Excise
Tax(2)
Debt
Service
Principal(3)
Debt
Service
Interest(3)
Coverage
2016
152,612
$
81,586
$
71,026
$
5,156
$
76,182
$
3,055
$
1,487
$
16.77
194,560
$
20,215
$
23,220
$
4.48
2017
148,310
85,909
62,401
6,072
68,473
3,195
1,354
15.05
196,729
22,550
21,599
4.46
2018
160,161
87,130
73,031
6,525
79,556
3,370
1,195
17.43
216,643
26,290
23,908
4.32
2019
164,487
82,748
81,739
4,256
85,995
3,540
1,026
18.83
223,668
30,210
22,474
4.25
2020
173,739
98,549
75,190
7,777
82,967
3,725
849
18.14
230,539
33,675
21,906
4.15
2021
177,073
94,052
83,021
5,257
88,278
3,930
654
19.26
251,375
31,625
18,742
4.99
2022
167,200
97,184
70,016
5,902
75,918
4,145
447
16.53
284,031
32,795
15,929
5.83
2023
183,228
116,266
66,962
3,278
70,240
4,375
230
15.25
314,347
34,170
14,562
6.45
2024
-
-
-
-
N/A
-
-
N/A
332,395
35,935
13,061
6.78
2025
-
-
-
-
N/A
-
-
N/A
317,103
36,740
11,390
6.59
Fiscal Year
Ended
June 30
Sales Tax
Debt
Service
Principal
Debt
Service
Interest
Coverage
2016
36,029
$
4,340
$
2,143
$
5.56
2017
35,489
4,175
1,423
6.34
2018
40,089
4,365
734
7.86
2019
41,909
4,540
577
8.19
2020
42,331
4,780
350
8.25
2021
46,921
1,280
132
33.24
2022
57,013
1,350
68
40.21
2023
-
-
-
N/A
2024
-
-
-
N/A
2025
-
-
-
N/A
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
(1)Includes investment income.
(2)A de minimis amount of the excise taxes are pledged to specific purposes per various resolutions adopted by the City Council. Due to the immateriality of these amounts, they are not deducted from the pledged
revenue calculation above.
(3)Includes debt service payments paid out of revenue from the water and sewer fund, the special programs fund, the tourism development fund, and the stadium facility fund.
Scottsdale Preserve Authority Bonds
City of Scottsdale, Arizona
Pledged-Revenue Coverage
Last Ten Fiscal Years
(dollars in thousands)
Water and Sewer Revenue Bonds
Municipal Property Corporation Bonds
206
City of Scottsdale, Arizona
Table XVIII
Fiscal Year
Population(1)
Personal Income(2)
(in thousands)
Per Capita
Personal
Income(3)
Median
Age(4)
Charter and
Public School
Enrollment(5)
Fiscal Year End
Average
Unemployment
Rate(6)
2016
231,200
11,921,597
$
51,564
$
46.1
25,979
4.3%
2017
238,000
12,428,360
52,220
46.3
25,847
4.0%
2018
242,500
13,109,550
54,060
46.3
25,598
3.7%
2019
255,300
14,499,508
56,794
46.9
25,281
3.9%
2020
258,100
15,473,869
59,953
47.0
25,606
5.7%
2021
241,361
15,128,990
62,682
47.7
25,800
5.7%
2022
242,800
15,780,058
64,992
47.7
24,906
3.0%
2023
243,100
17,026,724
70,040
47.9
24,283
3.1%
2024
244,394
18,963,508
77,594
48.7
23,182
2.9%
2025
246,170
20,357,520
82,697
49.8
24,191
3.1%
Data Sources and Notes:
(1)U.S. Census; fiscal years 2016-2021 and 2023-2024 based on U.S. Census July 1 population estimates rounded to the nearest hundred.
Fiscal year 2021 based on U.S. Census 2020 population for April 1, 2020.
Fiscal year 2024 Source: https://www.census.gov/quickfacts/fact/table/scottsdalecityarizona/PST045221
Fiscal year 2024 Source: https://www.census.gov/quickfacts/fact/table/scottsdalecityarizona/INC910223
(2)Calculated by multiplying Per Capita Personal Income by Total Population divided by 1,000.
(3) Fiscal year 2016-2023: U.S Census, American Community Survey, 5-Year Estimates.
Fiscal year 2024 Source: https://www.census.gov/quickfacts/fact/table/scottsdalecityarizona/PST045221
Fiscal year 2025 Source: https://www.census.gov/quickfacts/fact/table/scottsdalecityarizona/POP645223
(4) U.S Census, American Community Survey, 5-Year Estimates.
(5)Arizona Department of Education based on Oct. 1 enrollment of fiscal year for all charter and district schools located within Scottsdale city boundaries.
(6) Arizona Office of Economic Opportunity, Prepared in Cooperation with the U.S. Department of Labor, Bureau of Labor Statistics. Prior year data adjusted.
City of Scottsdale, Arizona
Demographic and Economic Statistics
Last Ten Fiscal Years
207
City of Scottsdale, Arizona
Table XIX
Employer
Employees
Rank
Percentage of
Total City
Employment(1)
Employees
Rank
Percentage of
Total City
Employment
HonorHealth
7,451
1
3.37%
6,382
1
5.01%
Vanguard
3,073
2
1.39%
2,500
4
1.96%
City of Scottsdale
2,818
3
1.27%
2,148
5
1.69%
Scottsdale Unified School District(1)
2,557
4
1.15%
2,583
3
2.03%
General Dynamics Mission Systems
2,475
5
1.12%
1,945
6
1.53%
Axon
1,752
6
0.79%
Mayo Clinic
1,559
7
0.70%
1,851
7
1.45%
Fairmont Scottsdale Princess
1,413
8
0.64%
CVS Health
1,250
9
0.56%
2,800
2
2.20%
Nationwide
1,134
10
0.51%
1,800
8
1.41%
McKesson Corporation
1,350
9
1.06%
Yelp
1,000
10
0.79%
Total
25,482
11.51%
24,359
19.13%
Source: City of Scottsdale, Economic Development Department communications with employers, July 2025.
(1)Scottsdale Unified School District has administrative offices and some schools outside of Scottsdale city limits. 2025 numbers only report Scottsdale-based employees.
City of Scottsdale, Arizona
Principal Employers
Current Year and Nine Years Ago
2025
2016
208
City of Scottsdale, Arizona
Table XX
Function
2016
2017
2018(1)
2019(2)
2020(3)
2021
2022
2023
2024(4)
2025
General Government
Mayor and City Council
10.0
10.0
10.0
10.0
10.0
10.0
10.0
10.0
10.0
10.0
City Clerk
7.0
7.0
7.0
7.0
7.0
7.0
7.0
7.0
7.0
7.0
City Attorney
53.5
53.5
53.5
63.5
63.5
63.5
63.5
63.5
63.5
63.5
City Auditor
6.0
6.0
6.0
6.5
6.5
6.5
6.8
6.8
6.8
6.8
City Court
58.5
58.5
58.5
58.5
61.0
60.0
60.0
60.6
60.6
60.6
City Manager
7.2
7.2
16.2
17.2
25.3
24.2
26.2
26.7
9.2
13.7
City Treasurer
89.8
86.7
86.7
101.7
102.7
102.5
102.5
102.5
106.5
105.5
Public Works
205.8
206.8
210.8
210.8
237.0
238.2
241.5
243.7
249.7
250.7
Community and Economic Development
185.1
186.6
179.6
182.2
126.3
127.3
128.3
130.7
137.4
137.4
Public Safety
942.7
936.7
937.7
952.7
963.1
971.7
971.9
993.4
1,001.4
1,055.9
Community Services
469.6
474.6
476.7
476.9
511.2
502.5
505.0
502.3
508.6
510.1
Administrative Services
123.6
125.1
124.1
102.1
95.5
97.5
100.0
104.0
133.0
133.0
Water/Sewer Utilities
211.3
213.3
214.5
215.9
217.9
215.9
217.9
220.9
223.4
244.4
Airport
14.5
14.5
15.5
15.5
15.5
15.5
15.5
15.5
15.5
15.5
Solid Waste
90.8
92.8
92.8
96.8
96.4
96.4
99.4
101.4
106.4
106.4
Total
2,475.4
2,479.3
2,489.6
2,517.3
2,538.9
2,538.7
2,555.5
2,588.9
2,638.9
2,720.5
Source: The City of Scottsdale's Budget Department.
(1)Effective fiscal year 2018, Citizen Services was moved from Community and Economic Development to City Manager.
(2)Effective fiscal year 2019, Purchasing was moved from Administrative Services to City Treasurer, and Risk Management was moved from City Treasurer to City Attorney.
(3)Effective fiscal year 2020, Communications was moved from Administrative Services to City Manager, Emergency Management was moved from City Manager to Public Safety, Transportation was moved from Community and Economic
Development to Public Works, and WestWorld was moved from Community and Economic Development to Community Services.
(4)Effective fiscal year 2024, Communications and Government Relations was moved from City Manager to Administraive Services.
City of Scottsdale, Arizona
Full-time Equivalent City Government Employees by Function
Last Ten Fiscal Years
209
City of Scottsdale, Arizona
Table XXI
Division
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
General Government
City Attorney
% of cases resolved at first court appearance (arraignment)
39%
35%
35%
35%
28%
20%
27%
27%
29%
32%
City Auditor
# of reports performed
13
13
15
14
11
14
13
10
12
12
City Clerk
# of legal postings
1,000
1,067
1,033
946
950
912
882
1,017
981
1,237
# of minutes
61
56
70
63
59
63
67
70
64
70
City Court
Charges filed/
charges adjudicated (resolved)
100,920/
92,993
100,092/
85,295
95,301/
84,602
83,471/
78,390
88,444/
77,118
74,419/
65,915
96,471/
83,783
96,157/
88,418
91,958 /
88,677
90.577 / 81,588
City Treasurer
# of Accounts Payable payments issued(2)
31,648
31,268
32,074
30,401
29,206
28,051
29,205
29,399
46,904
47,760
# of customer contacts (utilities and licensing)
190,422
195,819
256,784
140,915
96,201
101,694
104,226
125,589
126,983
146,780
# of Purchasing purchase orders(3)
5,078
5,143
4,989
4,984
4,725
4,356
4,205
4,217
4,199
4,070
City Manager
% of survey respondents rating the "Overall Quality of Life in
Scottsdale" as good to excellent(4)
No Survey
96%
No Survey
96%
No Survey
97%
No Survey
95%
No Survey
91%
% of survey respondents rating "Your Neighborhood as a Place to Live"
as good to excellent(4)(5)
No Survey
93%
No Survey
97%
No Survey
94%
No Survey
92%
No Survey
93%
Total ad value equivalency generated(6)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Acres of land acquired for inclusion in the
McDowell Sonoran Preserve
0
420
0
0
0
0
0
0
0
0
% increase of Neighborhood Watch groups annually
5%
5%
2%
7%
1%
2%
4%
10%
21%
4%
Administrative Services
Human Resources
Citywide turnover(7)
9.6%
8.1%
9.8%
9.3%
10.7%
9.5%
20.4%
16.1%
12.7%
12.8%
HR operating cost as a % of city payroll
1.1%
1.2%
1.3%
1.2%
1.2%
1.2%
1.0%
1.1%
1.0%
1.3%
Information Technology
# of SPAM emails blocked (monthly) from being delivered to the city
(An average of 30 seconds per email is expended by staff)
2,686,000
2,117,633
1,512,355
1,026,016
2,032,000
820,000
1,562,340
1,670,481
364,000
1,486,674
Annual disk storage size (DAS, NAS, and SAN) (Terabytes)
58.6
67.2
82.8
86.9
98.3
103.5
114.0
159.0
162.0
179.5
(continued)
City of Scottsdale, Arizona
Operating Indicators by Division(1)
Last Ten Fiscal Years
210
City of Scottsdale, Arizona
Table XXI
Division
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
City of Scottsdale, Arizona
Operating Indicators by Division(1)
Last Ten Fiscal Years
Community Services
Preserve
McDowell Sonoran Preserve Annual Visitors – All trailheads
706,682
698,090
732,510
747,000
936,000
992,000
882,669
870,000
815,000
820,120
Parks and Recreation
# of square feet of medians and rights of way maintained
22,913,730
22,827,842
22,968,631
22,897,463
22,897,463
23,261,040
23,283,195
23,283,195
30,313,634
30,313,634
WestWorld
# of special events at WestWorld(8)
51
55
49
46
30
48
35
42
45
41
Community and Economic Development
Planning and Development Services
Customer wait-time (in minutes) at One Stop Shop
12
15
13
14
13
7
5
4
5
5
Provide applicant with pre-application meeting within 30 days of
submitting request.
95%
100%
99%
99%
100%
100%
100%
100%
100%
100%
% of inspections performed within 24 hours of the request
98%
98%
98%
98%
99%
99%
99%
100%
100%
98%
# of new Code Enforcement cases processed per year
13,781
13,797
12,594
13,676
12,358
12,076
11,226
12,251
9,941
21,131
Economic Development
Targeted job creation - # of companies/# of jobs
9 / 1,183
14 / 1,019
12 / 1,852
14 / 1,531
9 / 603
7 / 1,005
9 / 769
12 / 797
5 /1,063
5 /730
Tourism
Hotel/Motel average occupancy rate
67.9%
75.1%
69.1%
70.2%
55.6%
47.1%
61.9%
66.1%
65.0%
65.1%
# of Downtown special events coordinated
277
174
173
155
129
43
188
182
161
174
Aviation
Scottsdale Airport - takeoffs and landings
162,535
164,622
166,425
176,677
191,284
192,185
155,092
167,641
171,539
164,443
Public Safety
Police
# of calls for service(9)
233,531
268,767
271,438
267,923
272,696
238,349
255,691
229,060
217,993
216,850
Achieve the standard of six minutes or less for response to emergency
calls for service (includes medical and accident-related calls)
5:12
4:48
4:57
5:05
5:36
5:24
5:36
6:04
6:07
5:46
Percent of Emergency Calls Answered within 10 seconds (Target 91% of
the time)
91%
93%
98%
94%
88%
91%
92%
85%
88%
87%
Fire
Total incidents
35,098
36,407
36,877
37,750
37,456
37,317
41,353
40,675
37,940
38,960
Responses per capita
0.15
0.16
0.15
0.15
0.15
0.14
0.17
0.17
0.16
0.16
Travel time (enroute to onscene)
4:32
4:37
4:46
4:52
5:16
5:29
5:21
5:23
5:21
5:23
(continued)
211
City of Scottsdale, Arizona
Table XXI
Division
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
City of Scottsdale, Arizona
Operating Indicators by Division(1)
Last Ten Fiscal Years
Public Works
Public Works
Facility inventory maintained (square feet)(10)
2,925,697
2,925,697
2,925,697
2,961,661
2,978,196
2,978,196
3,012,519
3,044,769
2,960,169
3,000,722
# of active Capital Projects managed by CPM
155
150
161
180
185
190
196
171
173
151
Solid Waste
# of homes serviced by Residential Refuse Collection
81,187
81,665
82,236
82,711
83,189
83,680
83,993
84,905
84,976
85,186
# of citizens serviced annually by Household Hazardous Waste
collection program
3,345
2,770
2,509
2,629
2,426
2,393
2,581
2,449
2,594
2,503
Transportation and Street Operations
Actions to improve safety and efficiency of traffic flow (signal timing
changes and traffic control and speed limit studies)(11)
6,638
9,737
8,697
4,748
2,176
2,657
2,780
3,783
5,239
3,684
Total citywide transit ridership(12)
2,297,323
2,186,424
2,178,152
1,933,249
1,501,663
646,306
644,306
828,029
858,955
955,664
Water Resources
Water Service Connections
89,596
90,172
90,817
91,279
91,802
92,590
93,027
93,402
93,788
94,087
Drinking Water Supplied (million gallons per day)
67.5
67.0
70.9
66.3
67.6
74.0
67.7
65.8
68.7
71.8
Reclaimed Water Supplied (million gallons per day)
9.1
11.6
12.2
11.9
11.6
12.0
11.1
12.7
12.3
11.9
Sewer Service Connections
80,202
80,704
81,306
81,841
82,320
82,834
83,268
83,792
84,276
84,691
Sewage Treated (million gallons per day)
20.5
21.4
22.1
22.1
21.6
22.2
22.8
22.0
21.5
21.1
# of water meters read annually
1,078,500
1,085,590
1,072,498
1,099,164
1,099,085
1,110,050
1,112,651
1,121,844
1,123,745
1,128,072
Source: The City of Scottsdale's Budget department and applicable city divisions.
(1)This presentation is consistent with the organizational structure approved as part of the fiscal year 2025 Budget.
(2)Effective fiscal year 2022 the # of Accounts Payable payments issued figure presented includes all electronic payments.
(3)Effective fiscal year 2019 the # of Purchasing purchase orders was moved from Administrative Services to City Treasurer to align with an organizational change made by the City Manager.
(4)The complete results for the most recent survey, as well as archived copies of prior year surveys can be found at https://www.scottsdaleaz.gov, search "Survey".
(5)Effective fiscal year 2020 the percentage of survey respondents rating "Your Neighborhood as a Place to Live" as good to excellent was moved from Administrative Services to City Manager to align with an organizational changes.
(6)Effective fiscal year 2012 established more appropriate performance measures for the Communications Department activities and products (ad value equivalency). City ceased tracking this statistic effective fiscal year 2016.
(7)Effective fiscal year 2022 the increase in the citywide turnover rate is due to a methodology change.
(8)Effective fiscal year 2020 the # of special events at WestWorld was moved from Community and Economic Development to Community Services to align with an organizational change made by the City Manager.
(9)Measure is for the prior calendar year end, rather than fiscal year end.
(10)3.4 million square feet from fiscal year 2015 was calculated manually. The city hired a consultant who completed a building inventory in fiscal year 2016. Square footage was recalculated based on actual measurements.
(11)The statistic for "Actions to improve safety and efficiency of traffic flow (signal timing changes and traffic control and speed limit studies)" has decreased due to implementation of predefined special timing plans in response to
special events, construction, and accidents. Prior to fiscal year 2019, signal timing was changed from cycle to cycle when needed during special events, construction, or accidents based on observations.
(12)Effective fiscal year 2020 total citywide transit ridership was moved from Community and Economic Development to Public Works to align with an organizational change made by the City Manager.
212
City of Scottsdale, Arizona
Table XXII
Function
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Public Safety
Police
Stations
4
4
4
4
4
4
4
4
4
4
Police Vehicles
344
344
343
343
341
344
352
355
365
368
Fire Stations
15
15
15
15
15
15
15
15
15
15
Highways and Streets
Square Yards of Pavement (1)
21,036,767
21,023,295
21,046,327
20,071,109
19,933,597
20,080,026
20,080,026
20,080,026
20,080,025
20,430,847
Equivalent 12' Wide Lane Miles
2,877
2,846
2,990
2,851
2,831
2,852
2,852
2,801
2,852
2,902
Traffic Signals
307
295
296
296
308
311
315
314
320
337
Culture and Recreation
Parks
42
42
42
42
42
43
44
44
45
46
Parks Acreage
975
975
975
975
975
975
982
982
1,116
1,116
Aquatic Centers
4
4
4
4
4
4
4
4
4
4
Tennis/Pickleball Courts
64
64
64
70
70
70
72
72
74
74
Community Centers
6
6
6
6
6
6
6
6
6
6
Water
Water Mains (miles)
2,094
2,102
2,117
2,124
2,133
2,143
2,148
2,152
2,167
2,167
Fire Hydrants
11,052
11,135
11,213
11,301
11,375
11,480
11,582
11,622
11,676
11,677
Sewer
Sanitary Sewers (miles)
1,452
1,456
1,468
1,483
1,505
1,513
1,520
1,524
1,538
1,539
Storm Sewers (miles)
285
309
316
325
330
337
342
347
358
361
Source: City of Scottsdale's divisions.
(1) Pavement sq yards that does not include alleys (230,935) and parking lots (819,875) and streets not maintained by the city.
City of Scottsdale, Arizona
Capital Asset Statistics by Function
Last Ten Fiscal Years
City of Scottsdale, Arizona
City Treasurer’s Office
(480) 312-2437
Visit our website
www.ScottsdaleAZ.gov/Finance
Attachment 1a -
Communication to Governance
Page 1
November 17, 2025
To the Honorable Mayor and Members of the City Council
City of Scottsdale, Arizona
We have audited the financial statements of the governmental activities, the business-type activities,
each major fund, and the aggregate remaining fund information City of Scottsdale, Arizona (City) for
the year ended June 30, 2025. Professional standards require that we provide you with information
about our responsibilities under generally accepted auditing standards, Government Auditing
Standards, and the Uniform Guidance, as well as certain information related to the planned scope
and timing of our audit. We have communicated such information in our engagement letter provided
to you during the planning phase of the audit. Professional standards also require that we
communicate to you the following matters related to our audit.
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The
significant accounting policies used by City of Scottsdale, Arizona are described in Note 1 to the
financial statements. No new accounting policies were adopted and the application of existing
policies was not changed during the year. We noted no transactions entered into by the City during
the year for which there is a lack of authoritative guidance or consensus. All significant transactions
have been recognized in the financial statements in the proper period.
As described in Note 1 of the financial statements, the City implemented the provisions of the
Governmental Accounting Standards Board (GASB) Statement No. 101, Compensated Absences, for
the year ended June 30, 2025. GASB Statement No. 101 updates the recognition and measurement
guidance for compensated absences. The City’s analysis of compensated absences in effect at the
beginning of the year resulted in no changes to beginning balances reported in the financial
statements due to the implementation of this standard.
Accounting estimates are an integral part of the financial statements prepared by management and
are based on management’s knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are particularly sensitive because of
their significance to the financial statements and because of the possibility that future events
affecting them may differ significantly from those expected.
The most sensitive estimates affecting the financial statements were:
•
Management’s estimate of the useful lives of depreciable capital assets is based on the length
of time management estimates those assets will provide some economic benefit in the future.
•
Management’s estimate of the allowance for uncollectible receivable balances is based on
past experience and future expectation for collection of various account balances.
Page 2
•
Management’s estimate of the insurance claims incurred but not reported is based on
information provided by the entity’s third party administrators and subsequent claims
activity.
•
The assumptions used in the actuarial valuations of the pension and other post-employment
benefits are based on historical trends and industry standards.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing
our audit.
Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during
the audit, other than those that are clearly trivial, and communicate them to the appropriate level of
management. A misstatement is defined as a difference between the reported amount, classification,
presentation, or disclosure of a financial statement item and the amount, classification, presentation,
or disclosure that is required for the item to be presented fairly in accordance with the applicable
financial reporting framework. During the course of the audit we did not identify any uncorrected
misstatements which require communication.
In addition, as part of the professional services we provided to the City, we assisted with the
preparation of the Data Collection Form submission to the Federal Audit Clearinghouse.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor’s report. We are pleased to report that no such disagreements arose during
the course of our audit.
Management Representations
We have requested certain written representations from management, which are included in the
management representation letter provided to us at the conclusion of the audit.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation
involves application of an accounting principle to the City’s financial statements or a determination
of the type of auditor’s opinion that may be expressed on those statements, our professional
standards require the consulting accountant to check with us to determine that the consultant has
all the relevant facts. To our knowledge, there were no such consultations with other accountants
regarding auditing and accounting matters.
Page 3
Discussions with Management
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management throughout the course of the year. However, these discussions
occurred in the normal course of our professional relationship and our responses were not a
condition to our retention as the City’s auditors.
Compliance with Ethics Requirements Regarding Independence
The engagement team, others in our firm, and as appropriate, our firm, have complied with all
relevant ethical requirements regarding independence. Heinfeld, Meech & Co., P.C. continually
assesses client relationships to comply with relevant ethical requirements, including independence,
integrity, and objectivity, and policies and procedures related to the acceptance and continuance of
client relationships and specific engagements. Our firm follows the “Independence Rule” of the AICPA
Code of Professional Conduct and the rules of state boards of accountancy and applicable regulatory
agencies. It is the policy of the firm that all employees be familiar with and adhere to the
independence, integrity, and objectivity rules, regulations, interpretations, and rulings of the AICPA,
U.S. Government Accountability Office (GAO), and applicable state boards of accountancy.
Responsibility for Fraud
It is important for both management and the members of the governing body to recognize their role
in preventing, deterring, and detecting fraud. One common misconception is that the auditors are
responsible for detecting fraud. Auditors are required to plan and perform an audit to obtain
reasonable assurance that the financial statements do not include material misstatements caused by
fraud. Unfortunately most frauds which occur in an organization do not meet this threshold.
The attached document prepared by the Association of Certified Fraud Examiners (ACFE) is provided
as a courtesy to test the effectiveness of the fraud prevention measures of your organization. Some
of these steps may already be in place, others may not. Not even the most well-designed internal
controls or procedures can prevent and detect all forms of fraud. However, an awareness of fraud
related factors, as well as the active involvement by management and the members of the governing
body in setting the proper “tone at the top”, increases the likelihood that fraud will be prevented,
deterred and detected.
Additional Reports Issued
In addition to the auditor’s report on the financial statements we will also issue the following
documents related to this audit. These reports are typically issued within 60 days of the date of this
letter.
•
Single Audit Report
•
Independent Accountant’s Report on compliance of Highway User Revenue Fund
expenditures in accordance with Arizona Revised Statutes 9-481(B)(2)
•
Report on HUD Financial Data Schedules
•
Examination report on the Annual Expenditure Limitation Report
Other Important Communications Related to the Audit
Attached to this letter are a copy of the signed engagement letter provided to us at the initiation of
the audit, and a copy of the management representation letter provided to us at the conclusion of
the audit. If there are any questions on the purpose or content of these letters please contact the
engagement partner identified in the attached engagement letter.
Page 4
Restriction on Use
This information is intended solely for the use of the members of the City Council and management
of City of Scottsdale, Arizona and is not intended to be, and should not be, used by anyone other than
these specified parties.
Very truly yours,
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
Fraud Prevention Checklist
The most cost-effective way to limit fraud losses is to prevent fraud from occurring. This checklist is
designed to help organizations test the effectiveness of their fraud prevention measures.
1. Is ongoing anti-fraud training provided to all employees of the organization?
•
Do employees understand what constitutes fraud?
•
Have the costs of fraud to the company and everyone in it — including lost profits, adverse
publicity, job loss and decreased morale and productivity — been made clear to employees?
•
Do employees know where to seek advice when faced with uncertain ethical decisions, and
do they believe that they can speak freely?
•
Has a policy of zero-tolerance for fraud been communicated to employees through words
and actions?
2. Is an effective fraud reporting mechanism in place?
•
Have employees been taught how to communicate concerns about known or potential
wrongdoing?
•
Is there an anonymous reporting channel available to employees, such as a third-party
hotline?
•
Do employees trust that they can report suspicious activity anonymously and/or
confidentially and without fear of reprisal?
•
Has it been made clear to employees that reports of suspicious activity will be promptly and
thoroughly evaluated?
•
Do reporting policies and mechanisms extend to vendors, customers and other outside
parties?
3. To increase employees’ perception of detection, are the following proactive measures taken
and publicized to employees?
•
Is possible fraudulent conduct aggressively sought out, rather than dealt with passively?
•
Does the organization send the message that it actively seeks out fraudulent conduct
through fraud assessment questioning by auditors?
•
Are surprise fraud audits performed in addition to regularly scheduled audits?
•
Is continuous auditing software used to detect fraud and, if so, has the use of such software
been made known throughout the organization?
4. Is the management climate/tone at the top one of honesty and integrity?
•
Are employees surveyed to determine the extent to which they believe management acts
with honesty and integrity?
•
Are performance goals realistic?
•
Have fraud prevention goals been incorporated into the performance measures against
which managers are evaluated and which are used to determine performance-related
compensation?
•
Has the organization established, implemented and tested a process for oversight of fraud
risks by the board of directors or others charged with governance (e.g., the audit
committee)?
5. Are fraud risk assessments performed to proactively identify and mitigate the company’s
vulnerabilities to internal and external fraud?
6. Are strong anti-fraud controls in place and operating effectively, including the following?
•
Proper separation of duties
•
Use of authorizations
•
Physical safeguards
•
Job rotations
•
Mandatory vacations
7. Does the internal audit department, if one exists, have adequate resources and authority to
operate effectively and without undue influence from senior management?
8. Does the hiring policy include the following (where permitted by law)?
•
Past employment verification
•
Criminal and civil background checks
•
Credit checks
•
Drug screening
•
Education verification
•
References check
9. Are employee support programs in place to assist employees struggling with addictions,
mental/ emotional health, family or financial problems?
10. Is an open-door policy in place that allows employees to speak freely about pressures,
providing management the opportunity to alleviate such pressures before they become
acute?
11. Are anonymous surveys conducted to assess employee morale?
Page 1
June 2, 2025
Honorable Mayor, Members of the City Council, and Management
City of Scottsdale
7447 E. Indian School Rd. Suite 205
Scottsdale, AZ 85251
We are pleased to confirm our understanding of the services we are to provide for City of Scottsdale, Arizona
(City) for the year ended June 30, 2025. We encourage you to read this letter carefully as it includes important
information regarding the services we will be providing to the City. If there are any questions on the content
of the letter, or the services we will be providing, we would welcome the opportunity to meet with you to
discuss this information further.
Audit Scope and Objectives
We will audit the financial statements of the governmental activities, business‐type activities, each major
fund, and the aggregate remaining fund information, including the disclosures, which collectively comprise
the basic financial statements of City of Scottsdale, Arizona as of and for the year ended June 30, 2025.
Accounting standards generally accepted in the United States of America (GAAP) provide for certain required
supplementary information (RSI), such as management’s discussion and analysis (MD&A), and GASB‐required
supplementary pension and other post‐employment benefit information to supplement the City’s basic
financial statements. Such information, although not 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. As part
of our engagement, we will apply certain limited procedures to the City’s RSI in accordance with auditing
standards generally accepted in the United States of America (GAAS). These limited procedures will consist
of inquiries of management regarding 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 will 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.
The following RSI is required by GAAP and will be subjected to certain limited procedures, but will not be
audited:
1.
Management’s discussion and analysis
2.
Budgetary comparison schedules
3.
GASB‐required pension and other post‐employment benefits schedules
Page 2
We have also been engaged to report on supplementary information other than RSI that accompanies the
City’s financial statements. We will subject the following supplementary information to the auditing
procedures applied in our 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 themselves, and other additional procedures in accordance with GAAS, and
we will provide an opinion on it in relation to the financial statements as a whole.
1. Schedule of expenditures of federal awards
2. Combining and individual fund financial statements and schedules
3. Schedule of changes in long‐term debt
4. Financial Data Schedules (FDS) for HUD reporting
In connection with our audit of the basic financial statements, we will read the following other information
and consider whether a material inconsistency exists between the other information and the basic financial
statements, or the other information otherwise appears to be materially misstated. If, based on the work
performed, we conclude that an uncorrected material misstatement of the other information exists, we are
required to describe it in our report.
1. Other information included with the audited financial statements such as the transmittal letter and
statistical data
In addition, we will perform the necessary procedures to issue the applicable report for the following.
1.
Examination report on the Annual Expenditure Limitation Report
2.
Examination report on compliance for highway user revenue fund monies in accordance with ARS
§9‐481(B)(2)
3.
Agreed‐upon procedures related to the electronic submission and related hard copy documents
required by the U.S. Department of Housing and Urban Development
4.
Municipal Property Corporation Annual Financial Report
5.
McDowell Mountain Ranch Community Facilities District Annual Financial Report
6.
DC Ranch Community Facilities District Annual Financial Report
7.
Via Linda Road Community Facilities District Annual Financial Report
8.
Waterfront Commercial Community Facilities District Annual Financial Report
The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and issue an auditor’s report that
includes our opinions about whether your financial statements are fairly presented, in all material respects,
in conformity with GAAP and report on the fairness of the supplementary information when considered in
relation to the financial statements as a whole. Reasonable assurance is a high level of assurance but is not
absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and
Government Auditing Standards will always detect a material misstatement when it exists. Misstatements,
including omissions, can arise from fraud or error and are considered material if there is a substantial
likelihood that, individually or in the aggregate, they would influence the judgment of a reasonable user made
based on the financial statements. The objectives also include reporting on:
Internal control over financial reporting and compliance with provisions of laws, regulations,
contracts, and award agreements, noncompliance with which could have a material effect on the
financial statements in accordance with Government Auditing Standards.
Internal control over compliance related to major programs and an opinion (or disclaimer of opinion)
on compliance with federal statutes, regulations, and the terms and conditions of federal awards
that could have a direct and material effect on each major program in accordance with the Single
Audit Act Amendments of 1996 and Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform
Guidance).
Page 3
An important aspect to our expression of opinions on the financial statements is understanding the concept
of materiality. Our determination of materiality is a matter of professional judgment and is affected by our
perception of the financial information needs of users of the financial statements. For purposes of
determining materiality we may assume that reasonable users –
1. have a reasonable knowledge of business and economic activities and accounting and a willingness
to study the information in the financial statements with reasonable diligence;
2. understand that financial statements are prepared, presented, and audited to levels of materiality;
3. recognize the uncertainties inherent in the measurement of amounts based on the use of estimates,
judgment, and the consideration of future events; and
4. make reasonable judgements based on the information in the financial statements.
Auditor’s Responsibilities for the Audit of the Financial Statements and Single Audit
We will conduct our audit in accordance with GAAS; the standards for financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States; the Single Audit Act
Amendments of 1996; and the provisions of the Uniform Guidance, and will include tests of accounting
records for the City, a determination of major programs in accordance with Uniform Guidance, and other
procedures we consider necessary to enable us to express such opinions. As part of an audit in accordance
with GAAS and Government Auditing Standards, we exercise professional judgment and maintain
professional skepticism throughout the audit.
We will evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management. We will also evaluate the overall presentation of the financial
statements, including the disclosures, and determine whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation. We will plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or
(4) violations of laws or governmental regulations that are attributable to the City or to acts by management
or employees acting on behalf of the City. Because the determination of waste and abuse is subjective,
Government Auditing Standards do not expect auditors to perform specific procedures to detect waste or
abuse in the financial statements nor do they expect auditors to provide reasonable assurance of detecting
waste or abuse. However, auditors may consider whether and how to communicate such matters if they
become aware of them. Auditors may discover that waste or abuse are indicative of fraud or noncompliance
with provisions of laws, regulations, contract and grant agreements.
Because of the inherent limitations of an audit, combined with the inherent limitations of internal control,
and because we will not perform a detailed examination of all transactions, there is an unavoidable risk that
some material misstatements may not be detected by us, even though the audit is properly planned and
performed in accordance with GAAS and Government Auditing Standards. In addition, an audit is not
designed to detect immaterial misstatements or violations of laws or governmental regulations that do not
have a direct and material effect on the financial statements or major programs. However, we will inform the
appropriate level of management of any material errors, fraudulent financial reporting, or misappropriation
of assets that comes to our attention. We will also inform the appropriate level of management of any
violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. We
will include such matters in the reports required for a Single Audit. Our responsibility as auditors is limited to
the period covered by our audit and does not extend to any later periods for which we are not engaged as
auditors.
Page 4
In connection with this engagement, we may communicate with you or others via email transmission. As
emails can be intercepted and read, disclosed, or otherwise used or communicated by an unintended third
party, or may not be delivered to each of the parties to whom they are directed and only to such parties, we
cannot guarantee or warrant that emails from us will be properly delivered and read only by the addressee.
Therefore, we specifically disclaim and waive any liability or responsibility whatsoever for interception or
unintentional disclosure of emails transmitted by us in connection with the performance of this engagement.
In that regard, you agree that we shall have no liability for any loos or damage to any person or entity resulting
from the use of email transmissions, including any consequential, incidental, direct, indirect, or special
damages, such as loss of revenues or anticipated profits, or disclosure or communication of confidential or
proprietary information.
We will also conclude, based on the audit evidence obtained, whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going
concern for a reasonable period of time.
Our procedures will include tests of documentary evidence supporting the transactions recorded in the
accounts. Our procedures will also include, as deemed necessary, tests of the physical existence of
inventories, and direct confirmation of receivables and certain assets and liabilities by correspondence with
selected individuals, funding sources, creditors, and financial institutions. We will also request, if deemed
necessary, written representations from the City’s attorneys as part of the engagement, and they may bill
you for responding to this inquiry.
We have identified the following significant risks of material misstatement as part of our audit planning:
1.
Management override of controls
2.
Improper revenue recognition
3.
Unrealized investment losses
Audit Procedures – Internal Control
We will obtain an understanding of the City and its environment, including the system of internal control,
sufficient to identify and assess the risks of material misstatement of the financial statements, whether due
to error or fraud, and to design and perform audit procedures responsive to those risks and obtain evidence
that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentation, or the override of internal control.
Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to
preventing and detecting errors and fraud that are material to the financial statements and to preventing
and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct
and material effect on the financial statements. Our tests, if performed, will be less in scope than would be
necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report
on internal control issued pursuant to Government Auditing Standards.
As required by the Uniform Guidance, we will perform tests of controls over compliance to evaluate the
effectiveness of the design and operation of controls that we consider relevant to preventing or detecting
material noncompliance with compliance requirements applicable to each major federal award program.
However, our tests will be less in scope than would be necessary to render an opinion on those controls and,
accordingly, no opinion will be expressed in our report on internal control issued pursuant to the Uniform
Guidance.
Page 5
An audit is not designed to provide assurance on internal control or to identify significant deficiencies or
material weaknesses. Accordingly, we will express no such opinion. However, during the audit, we will
communicate to management and those charged with governance internal control related matters that are
required to be communicated under AICPA professional standards, Government Auditing Standards, and the
Uniform Guidance.
Audit Procedures – Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we will perform tests of the City’s compliance with the provisions of applicable laws,
regulations, contracts, and agreements, including grant agreements. However, the objective of those
procedures will not be to provide an opinion on overall compliance and we will not express such an opinion
in our report on compliance issued pursuant to Government Auditing Standards.
The Uniform Guidance requires that we also plan and perform the audit to obtain reasonable assurance about
whether the City has complied with federal statutes, regulations and the terms and conditions of federal
awards applicable to major programs. Our procedures will consist of tests of transactions and other
applicable procedures described in the OMB Compliance Supplement for the types of compliance
requirements that could have a direct and material effect on each of the City’s major programs. For federal
programs that are included in the OMB Compliance Supplement, our compliance and internal control
procedures will relate to the compliance requirements that the OMB Compliance Supplement identifies being
subject to audit. The purpose of these procedures will be to express an opinion on the City’s compliance with
requirements applicable to each of its major programs in our report on compliance issued pursuant to the
Uniform Guidance.
Responsibilities of Management for the Financial Statements and Single Audit
Our audit will be conducted on the basis that you acknowledge and understand your responsibility for (1)
designing, implementing, establishing and maintaining effective internal controls relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to fraud
or error, including internal controls over federal awards, and for evaluating and monitoring ongoing activities
to help ensure that appropriate goals and objectives are met; (2) following laws and regulations; (3) ensuring
that there is reasonable assurance that government programs are administered in compliance with
compliance requirements; and (4) ensuring that management is reliable and financial information is reliable
and properly reported.
Management is also responsible for implementing systems designed to achieve compliance with applicable
laws, regulations, contracts, and grant agreements. You are also responsible for the selection and application
of accounting principles; for the preparation and fair presentation of the financial statements, schedule of
expenditures of federal awards, and all accompanying information in conformity with accounting principles
generally accepted in the United States of America with the oversight of those charged with governance; and
for compliance with applicable laws and regulations (including federal statutes) and the provisions of
contracts and grant agreements (including award agreements). Your responsibilities also include identifying
significant contractor relationships in which the contractor has responsibility for program compliance and for
the accuracy and completeness of that information.
Page 6
Management is also responsible for making drafts of financial statements, schedule of expenditures of
federal awards, all financial records, and related information available to us; for the accuracy and
completeness of that information (including information from outside of the general and subsidiary ledgers);
and for the evaluation of whether there are any conditions or events, considered in the aggregate, that raise
substantial doubt about the City’s ability to continue as a going concern for the 12 months after the financial
statement date or shortly thereafter (for example, within an additional three months if currently known).
You are also responsible for providing us with (1) access to all information of which you are aware that is
relevant to the preparation and fair presentation of the financial statements, such as records,
documentation, identification of all related parties and all related‐party relationships and transactions, and
other matters; (2) access to personnel, accounts, books, records, supporting documentation, and other
information as needed to perform an audit under Uniform Guidance; (3) additional information we may
request for the purpose of the audit; and (4) and unrestricted access to persons within the City from whom
we determine it necessary to obtain audit evidence. At the conclusion of our audit, we will require certain
written representations from you about the financial statements; the schedule of expenditures of federal
awards; federal award programs; compliance with laws, regulations, contracts, and grant agreements; and
related matters.
Management’s responsibilities also include adjusting the financial statements to correct material
misstatements and confirming to us in the management representation letter that the effects of any
uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest
period presented are immaterial, both individually and in the aggregate, to the financial statements of each
opinion unit taken as a whole.
Management is responsible for the design and implementation of programs to prevent and detect fraud, and
for informing us about all known or suspected fraud affecting the City involving (1) management, (2)
employees who have significant roles in internal control, and (3) others where the fraud could have a material
effect on the financial statements. Your responsibilities include informing us of your knowledge of any
allegations of fraud or suspected fraud affecting the City received in communications from employees,
former employees, grantors, regulators, or others. In addition, you are responsible for identifying and
ensuring that the City complies with applicable laws, regulations, contracts, agreements, and grants. You are
also responsible taking timely and appropriate steps to remedy fraud and noncompliance with provisions of
laws, regulations, contracts, and grant agreements that we report. Additionally, as required by the Uniform
Guidance, it is management’s responsibility to evaluate and monitor noncompliance with federal statutes,
regulations, and the terms and conditions of federal awards; take prompt action when instances of
noncompliance are identified including noncompliance identified in audit findings; promptly follow up and
take corrective action on reported audit findings; and prepare a summary schedule of prior audit findings
and a separate corrective action plan. The summary schedule of prior audit findings should be available for
our review prior to issuance of our reports.
Management is responsible for identifying all federal awards received and understanding and complying with
the compliance requirements and for preparation of the schedule of expenditures of federal awards
(including notes and noncash assistance received, and COVID‐19 related concepts, such as lost revenues, if
applicable) in conformity with the Uniform Guidance. You agree to include our report on the schedule of
expenditures of federal awards in any document that contains and indicates that we have reported on the
schedule of expenditures of federal awards.
Page 7
You also agree to include the audited financial statements with any presentation of the schedule of
expenditures of federal awards that includes our report thereon or make the audited financial statements
readily available to intended users of the schedule of expenditures of federal awards no later than the date
the schedule of expenditures of federal awards is issued with our report thereon. Your responsibilities include
acknowledging to us in the written representation letter that (1) you are responsible for presentation of the
schedule of expenditures of federal awards in accordance with the Uniform Guidance; (2) you believe the
schedule of expenditures of federal awards, including its form and content, is fairly presented in accordance
with the Uniform Guidance; (3) the methods of measurement or presentation have not changed from those
used in the prior period (or, if they have changed, the reasons for such changes); and (4) you have disclosed
to us any significant assumptions or interpretations underlying the measurement or presentation of the
schedule of expenditures of federal awards.
Management is responsible for the preparation of the other supplementary information, which we have been
engaged to report on, in conformity with accounting principles generally accepted in the United States of
America (GAAP). You agree to include our report on the supplementary information in any document that
contains, and indicates that we have reported on, the supplementary information. You also agree to include
the audited financial statements with any presentation of the supplementary information that includes our
report thereon or to make the audited financial statements readily available to users of the supplementary
information no later than the date the supplementary information is issued with our report thereon. Your
responsibilities include acknowledging to us in a written representation letter that (1) you are responsible for
presentation of supplementary information in accordance with GAAP; (2) you believe the supplementary
information, including its form and content, is fairly presented in accordance with GAAP; (3) the methods of
measurement or presentation have not changed from those used in the prior period (or, if they have changed,
the reasons for such changes); and (4) you have disclosed to us any significant assumptions or interpretations
underlying the measurement or presentation of supplementary information.
Management is responsible for establishing and maintaining a process for tracking the status of audit findings
and recommendations. Management is also responsible for identifying and providing report copies of
previous financial audits, attestation engagements, performance audits or studies related to the objectives
discussed in the Audit Scope and Objectives section of this letter. This responsibility includes relaying to us
corrective actions taken to address significant findings and recommendations resulting from those audits,
attestation engagements, performance audits, or studies. You are also responsible for providing
management’s views on our current findings, conclusions, and recommendations, as well as your planned
corrective actions for the report, and for the timing and format for providing that information.
With regard to the electronic dissemination of audited financial statements, including financial statements
published electronically on your website, management understands that electronic sites are a means to
distribute information and, therefore, we are not required to read the information contained in these sites
or to consider the consistency of other information in the electronic site with the original document.
Page 8
Planned Scope of the Audit
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements; therefore, our audit will involve judgment about the number of transactions to be examined and
the areas to be tested. Our tests will not include a detailed check of all transactions for the period.
Our audit will include obtaining an understanding of the City and its environment, including internal control,
sufficient to assess the risks of material misstatement of the financial statements and to design the nature,
timing, and extent of further audit procedures. Material misstatements may result from (1) errors, (2)
fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental
regulations that are attributable to the City or to acts by management or employees acting on behalf of the
City. We will generally communicate our significant findings at the conclusion of the audit. However, some
matters could be communicated sooner, particularly if significant difficulties are encountered during the
audit where assistance is needed to overcome the difficulties or if the difficulties may lead to a modified
opinion. We will also communicate any internal control related matters that are required to be
communicated under professional standards.
Our audit of the financial statements does not relieve you of your responsibilities outlined in the
Responsibilities of Management of the Financial Statements section of this letter.
Timeliness of Financial Reporting and the Audit
One basic characteristic of financial reporting is timeliness, which indicates that if financial statements are to
be useful, they must be issued soon enough after the reported events to affect decisions. Timeliness alone
does not make information useful, but the passage of time usually diminishes the usefulness that the
information otherwise would have had.
To maintain a timely approach, we expect to begin our audit in June 2025 and conclude audit procedures and
date our report in October 2025.
Engagement Administration, Fees, and Other
Brittney Williams is the engagement partner and is responsible for supervising the engagement and signing
the reports or authorizing another individual to sign them.
We will provide copies of our reports to the City; however, management is responsible for distribution of the
reports and the financial statements. Unless restricted by law or regulation, or containing privileged and
confidential information, copies of our reports are made available for public inspection.
We understand that your employees will prepare all cash, accounts receivable or other confirmations we
request and will locate any documents selected by us for testing.
You may request that we perform additional services not addressed in this engagement letter. If this occurs,
we will communicate with you regarding the scope of the additional services and the estimated fees. We also
may issue a separate engagement letter covering the additional services. In the absence of any other written
communication form us documenting such additional services, our services will continue to be governed by
the terms of this engagement letter.
Page 9
We may, from time to time and depending on the circumstances, use third‐party service providers in serving
your account. We may share confidential information about you with these service providers but remain
committed to maintaining the confidentiality and security of your information. Accordingly, we maintain
internal policies, procedures, and safeguards to protect the confidentiality of your personal information. In
addition, we will secure confidentiality agreements with all service providers to maintain the confidentiality
of your information and we will take reasonable precautions to determine that they have appropriate
procedures in place to prevent the unauthorized release of your confidential information to others. In the
event that we are unable to secure an appropriate confidentiality agreement, you will be asked to provide
your consent prior to the sharing of your confidential information with the third‐party service provider.
Furthermore, we will remain responsible for the work provided by any such third‐party service providers.
We maintain internal policies, procedures, and safeguards to protect the confidentiality of your information.
We may, depending on the circumstances, use third‐party service providers in providing our professional
services. The following service providers may be utilized in the completion of our engagement:
•
Capital Confirmation, Inc. – electronic bank and account balance confirmation service
•
Citrix ShareFile – web‐based application service to transfer files
You hereby consent and authorize us to use the above service providers, if deemed necessary, to complete
the professional services outlined in this letter.
Heinfeld, Meech & Co., P.C. does not host any of the City’s information. Sharefile is used solely to transmit
data and is not intended to store the City’s information. The City is solely responsible for downloading any
deliverables and other records from Sharefile that the City wishes to retain for its own records at the
completion of the engagement. If the engagement occurs over multiple years, the City should download
such information at least annually. The data and deliverable and other records will either be removed from
Sharefile or otherwise become unavailable to the City after the completion of the audit. If the engagement
is multi‐year, the completion of the engagement occurs each year when the deliverables for that year are
delivered to the City.
At the conclusion of the engagement, we will complete the appropriate sections of the Data Collection Form
that summarizes our audit findings. It is management’s responsibility to electronically submit the reporting
package (including financial statements, schedule of expenditures of federal awards, summary schedule of
prior audit findings, auditor’s reports, and corrective action plan) along with the Data Collection Form to the
Federal Audit Clearinghouse. We will coordinate with you the electronic submission and certification. The
Data Collection Form and the reporting package must be submitted within the earlier of 30 calendar days
after receipt of the auditor’s reports or nine months after the end of the audit period.
The audit documentation for this engagement is the property of Heinfeld, Meech & Co., P.C., and constitutes
confidential information. However, subject to applicable laws and regulations, audit documentation and
appropriate individuals will be made available upon request and in a timely manner to a cognizant or
oversight agency or its designee, a federal agency providing direct or indirect funding, the U.S. Government
Accountability Office, or other authorized governmental agency for the purposes of a quality review of the
audit, to resolve audit findings, or to carry out oversight responsibilities. We will notify you of any such
request. If requested, access to such audit documentation will be provided under the supervision of Heinfeld,
Meech & Co., P.C., personnel. Furthermore, upon request, we may provide copies of selected audit
documentation to the aforementioned parties. These parties may intend, or decide, to distribute the copies
or information contained therein to others, including other governmental agencies.
Page 10
The audit documentation for this engagement will be retained for a minimum of seven (7) years after the
report release date, or for any additional period requested by a regulator, cognizant agency, oversight agency
for audit, or pass‐through entity. Upon expiration of the seven year period, or any additional period, we will
commence the process of destroying the contents of our engagement files. If we are aware that a federal
awarding agency, pass‐through entity, or auditee is contesting an audit finding, we will contact the party(ies)
contesting the audit finding for guidance prior to destroying the audit documentation.
In the event we are required to respond to a subpoena, court order or other legal process for the production
of documents and/or testimony relative to information we obtained and/or prepared during the course of
this engagement, you agree to compensate us at our hourly rates, for the time we expend in connection with
such response, and to reimburse us for all of our out‐of‐pocket costs incurred in that regard.
Any disagreement, controversy, or claim (“dispute”) that may arise from any aspect of our services, including
this engagement or any prior engagement, will be submitted to mediation. The parties will engage in the
mediation process in good faith once a written request to mediate has been given by any party. Any
mediation initiated as a result of this engagement shall be administered by The American Arbitration
Association, according to its mediation rules before resorting to litigation. The results of any such mediation
shall be binding only upon agreement of each party to be bound. Each party will bear its own costs in the
mediation. The fees and expenses of the mediator will be shared equally.
The nature of our services makes it difficult, with the passage of time, to gather and present evidence that
fully and fairly establishes the facts underlying any dispute that may arise between us. The parties agree that,
notwithstanding any statute or law of limitations that might otherwise apply to a dispute, including one
arising out of this agreement or the services performed under this agreement, for breach of contract or
fiduciary duty, tort, fraud, misrepresentation or any other cause of action or remedy, any action or legal
proceeding by you against us must be commenced within twenty‐four (24) months (“limitation period”) after
the date when we deliver our final audit report under this agreement to you, regardless of whether we do
other services for you relating to the audit report, or you shall be forever barred from commencing a lawsuit
or obtaining any legal or equitable relief or recovery. The limitation period applies and begins to run even if
you have not suffered any damage or loss, or have not become aware of the existence or possible existence
of a dispute.
Professional standards prohibit auditors from agreeing to indemnify attest clients for damages, losses or costs
arising from lawsuits, claims or settlements that relate, directly or indirectly, to the client’s acts. As such,
professional standards will prevail for indemnification clauses included in audit contracts. In addition, we are
unable to obtain waivers on our professional liability insurance policy for certain provisions, including
indemnification provisions, provisions requiring the firm to name the City as an additional insured party, and
a waiver of subrogation rights.
Professional standards require us to be independent with respect to you in the performance of these services.
Any discussion that you have with our personnel regarding potential employment with you could impair our
independence with respect to this engagement. Therefore, we request that you inform us prior to any such
discussions so that we can implement appropriate safeguards to maintain our independence and objectivity.
Further, any employment offers to any staff members working on this engagement without our prior
knowledge may require substantial additional procedures to ensure our independence. You will be
responsible for any additional costs incurred to perform these procedures.
Page 11
Our fee for these services will be at the amount outlined in our proposal. We exercised care in estimating the
fee and believe it accurately indicates the scope of the work. Our invoices for these fees will be rendered
each month as work progresses and are payable on presentation.
Our fees are based on anticipated cooperation from your personnel, timely receipt of information, and the
assumption that unexpected circumstances will not be encountered during the audit, including factors
beyond our control, such as new accounting pronouncements or legal requirements, additional advisory
services, and assistance in correcting errors in your financial records. We will plan the engagement based on
the assumption that your personnel will prepare and provide us with the items listed in our request for audit
information, including preparing requested schedules, retrieving supporting documents, and preparing
confirmations. If, for whatever reason, your personnel are unavailable to provide the necessary assistance in
a timely manner, it may substantially increase the work we have to do to complete the engagement resulting
in additional costs for the additional services provided. If additional time is necessary, we will discuss it with
before we invoice the additional costs. Additional fees incurred will be billed at the following hourly rates:
Partner ‐ $285; Manager ‐ $235; Senior ‐ $165; Staff ‐ $125.
If any term or provision of this agreement is determined to be invalid or unenforceable, such term or
provision will be deemed stricken, and all other terms and provisions will remain in full force and effect.
Reporting
We will issue written reports upon completion of our Single Audit. Our reports will be addressed to the
Honorable Mayor, Members of the City Council, and Management of the City. Circumstances may arise in
which our reports may differ from its expected form and content based on the results of our audit. Depending
on the nature of these circumstances, it may be necessary for us to modify our opinions, add a separate
section, or add an emphasis‐of‐matter or other‐matter paragraph to our auditor’s report, or if necessary,
withdraw from this engagement. If our opinions are other than unmodified, we will discuss the reasons with
you in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not
formed opinions, we may decline to express opinions or issue reports, or we may withdraw from this
engagement.
The Government Auditing Standards report on internal control over financial reporting and on compliance
and other matters will state that (1) the purpose of the report is solely to describe the scope of testing of
internal control and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of the City’s internal control or on compliance, and (2) the report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the City’s internal control and
compliance. The Uniform Guidance report on internal control over compliance will state that the purpose of
the report on internal control over compliance is solely to describe the scope of testing of internal control
over compliance and the results of that testing based on the requirements of the Uniform Guidance. Both
reports will state that the report is not suitable for any other purpose.
Government Auditing Standards require that we provide you with a copy of our most recent external peer
review report and any letter of comment, and any subsequent peer review reports and letters of comment
received during the period of the contract. Our 2024 peer review report accompanies this letter.
Page 12
We appreciate the opportunity to be of service to you and believe this letter accurately summarizes the
significant terms of our engagement. Please feel free to contact us at any time if you have any questions or
concerns. If you have any questions regarding this letter, please let us know. If you agree with the terms of
our engagement as described in this letter, please sign the enclosed copy and return it to us.
Very truly yours,
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
cc:
Lai Cluff, Acting City Auditor
RESPONSE
This letter correctly sets forth the understanding of City of Scottsdale, Arizona,
Printed Name: ____________________________________________
Title: ___________________________________________________
Signature: _______________________________________________
Date: ___________________________________________________
Lai Cluff
Acting City Auditor
06/02/2025
Grant Bennett Associates
A PROFESSIONAL CORPORATION
www.gbacpa.com
10850 Gold Center Drive, Suite 260
Rancho Cordova, CA 95670
Princeville, HI
916/922-5109 FAX 916/641-5200
888/763-7323
Together as One. Grant Bennett Associates is a Member of the Alliott Global Alliance of independent professional firms.
Report on the Firm’s System of Quality Control
October 4, 2024
To Heinfeld, Meech & Co., P.C. and the Peer Review Committee of the California Society of CPAs
We have reviewed the system of quality control for the accounting and auditing practice of Heinfeld, Meech &
Co., P.C. (the firm) in effect for the year ended May 31, 2024. Our peer review was conducted in accordance
with the Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the
American Institute of Certified Public Accountants (Standards).
A summary of the nature, objectives, scope, limitations of, and the procedures performed in a System Review as
described in the Standards may be found at www.aicpa.org/prsummary. The summary also includes an
explanation of how engagements identified as not performed or reported in conformity with applicable
professional standards, if any, are evaluated by a peer reviewer to determine a peer review rating.
Firm’s Responsibility
The firm is responsible for designing a system of quality control and complying with it to provide the firm with
reasonable assurance of performing and reporting in conformity with applicable professional standards in all
material respects. The firm is also responsible for evaluating actions to promptly remediate engagements
deemed as not performed or reported in conformity with professional standards, when appropriate, and for
remediating weaknesses in its system of quality control, if any.
Peer Reviewer’s Responsibility
Our responsibility is to express an opinion on the design of the system of quality control and the firm’s
compliance therewith based on our review.
Required Selections and Considerations
Engagements selected for review included engagements performed under Government Auditing Standards,
including compliance audits under the Single Audit Act and an audit of an employee benefit plan.
As a part of our peer review, we considered reviews by regulatory entities as communicated by the firm, if
applicable, in determining the nature and extent of our procedures.
Opinion
In our opinion, the system of quality control for the accounting and auditing practice of Heinfeld, Meech & Co.,
P.C. in effect for the year ended May 31, 2024, has been suitably designed and complied with to provide the
firm with reasonable assurance of performing and reporting in conformity with applicable professional
standards in all material respects. Firms can receive a rating of pass, pass with deficiency(ies) or fail. Heinfeld,
Meech & Co., P.C. has received a peer review rating of pass.
GRANT BENNETT ASSOCIATES
A PROFESSIONAL CORPORATION
Certified Public Accountants
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Attachment 1b - HURF
Compliance Report
(state compliance)
Independent Accountant’s Report
Honorable Mayor and Members of the City Council
City of Scottsdale, Arizona
We have examined the City of Scottsdale, Arizona’s (City) compliance as to whether highway user
revenue fund monies received by the City pursuant to Arizona Revised Statutes Title 28, Chapter 18,
Article 2, and any other dedicated state transportation revenues received by the City, were used
solely for authorized transportation purposes during the fiscal year ended June 30, 2025.
Management is responsible for the City’s compliance with those specified requirements. Our
responsibility is to express an opinion on the City’s compliance with the specified requirements based
on our examination.
Our examination was conducted in accordance with attestation standards established by the AICPA.
Those standards require that we plan and perform the examination to obtain reasonable assurance
about whether the City complied, in all material respects, with the specified requirements referenced
above. An examination involves performing procedures to obtain evidence about whether the City
complied with the specified requirements. The nature, timing, and extent of the procedures selected
depend on our judgment, including an assessment of the risks of material noncompliance, whether
due to fraud or error. We believe the evidence we obtained is sufficient and appropriate to provide
a reasonable basis for our opinion.
We are required to be independent and to meet our other ethical responsibilities in accordance with
relevant ethical requirements relating to the engagement.
Our examination does not provide a legal determination on the City’s compliance with specified
requirements.
In our opinion, the City of Scottsdale, Arizona complied, in all material respects, with the
aforementioned requirements for the fiscal year ended June 30, 2025.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
November 17, 2025
Attachment 2 - Single Audit
Report (federal compliance)
- In progress/to be provided at later date
Audit Committee Regular Meeting: December 12, 2025
Item 5(2): Single Audit Report
This agenda item will be provided as soon as it becomes available.
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
Honorable Mayor and Members of the City Council
City of Scottsdale, Arizona
We have audited, in accordance with the 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, the financial statements of the
governmental activities, the business‐type activities, each major fund, and the aggregate remaining
fund information of City of Scottsdale, Arizona, as of and for the year ended June 30, 2025, and the
related notes to the financial statements, which collectively comprise City of Scottsdale, Arizona’s
basic financial statements, and have issued our report thereon dated November 17, 2025. Our report
included an emphasis of matter paragraph as to comparability because of the implementation of
Governmental Accounting Standards Board Statement No. 101, Compensated Absences.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered City of Scottsdale,
Arizona’s internal control over financial reporting (internal control) as a basis for designing audit
procedures that are appropriate in the circumstances for the purpose of expressing our opinions on
the financial statements, but not for the purpose of expressing an opinion on the effectiveness of City
of Scottsdale, Arizona’s internal control. Accordingly, we do not express an opinion on the
effectiveness of City of Scottsdale, Arizona’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Scottsdale, Arizona’s financial
statements are free from material misstatement, we performed tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could
have a direct and material effect on the financial statements. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not
express such an opinion. The results of our tests disclosed no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
November 17, 2025
Attachment 3 -
DC Ranch Community Facilities District
(CFD) Annual Financial Report
DC Ranch Community Facilities District
(A Component Unit of the City of Scottsdale, Arizona)
Annual Financial Report
Fiscal Year Ended June 30, 2025
DC Ranch Community Facilities District
(A Component Unit of the City of Scottsdale, Arizona)
Annual Financial Report
Fiscal Year Ended June 30, 2025
Table of Contents
Independent Auditor’s Report.................................................................................................................... 1
Management’s Discussion and Analysis.................................................................................................... 4
BASIC FINANCIAL STATEMENTS
Statement of Net Position and Governmental Funds Balance Sheet................................................ 10
Statement of Activities and Governmental Funds Statement of Revenues,
Expenditures, and Changes in Fund Balances.......................................................................................11
Notes to the Basic Financial Statements.................................................................................................12
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – General Fund.........................................................................................................21
SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – Debt Service Fund................................................................................................23
Report on Internal Control and on Compliance
Report on Internal Control over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in Accordance with Government
Auditing Standards........................................................................................................................................24
DC Ranch Community Facilities District
For the Fiscal Year ended June 30, 2025
1
DC Ranch Community Facilities District
Independent Auditor’s Report
Board of Directors
DC Ranch Community Facilities District
Report on Audit of Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and each major
fund of DC Ranch Community Facilities District (District), a component unit of the City of Scottsdale,
Arizona, as of and for the year ended June 30, 2025, and the related notes to the financial statements,
which collectively comprise the District’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and each major fund of DC Ranch Community
Facilities District as of June 30, 2025, and the respective changes in financial position thereof for the year
then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Our responsibilities under those standards are
further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our
report. We are required to be independent of DC Ranch Community Facilities District, and to meet our
other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Emphasis of Matter
As discussed in Note 1, the financial statements of the DC Ranch Community Facilities District are intended
to present the net position and changes in net position that are attributable to the District, a component
unit of the City of Scottsdale, Arizona report. They do not purport to, and do not, present fairly the
financial position of the City of Scottsdale, Arizona as of June 30, 2025 and the changes in financial position
for the year ended in conformity with accounting principles generally accepted in the United States of
America. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
1
2
DC Ranch Community Facilities District
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue
as a going concern for one year beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance
and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing
standards and Government Auditing Standards will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user based on
the financial statements. In performing an audit in accordance with generally accepted auditing
standards and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is
expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control related
matters that we identified during the audit.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis, and budgetary comparison information, as listed in the table of contents, be
presented to supplement the basic financial statements. Such information is the responsibility of
management and, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
management’s responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence
to express an opinion or provide any assurance.
2
3
DC Ranch Community Facilities District
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the District’s basic financial statements. The Supplementary Budget information for the Debt
Service Fund is presented for purposes of additional analysis and is not a required part of the basic
financial statements. The Supplementary Budget information for the Debt Service Fund is the
responsibility of management and was derived from and relate directly to the underlying accounting and
other records used to prepare the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in
the United States of America. In our opinion, the Supplementary Budget information for the Debt Service
Fund information is fairly stated in all material respects in relation to the basic financial statements as a
whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our October 13, 2025, on our
consideration of DC Ranch Community Facilities District’s internal control over financial reporting and on
our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements
and other matters. The purpose of that report is solely to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide an
opinion on the effectiveness of the DC Ranch Community Facilities District’s internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering DC Ranch Community Facilities District’s internal control
over financial reporting and compliance.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
3
4
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
As management of the DC Ranch Community Facilities District (District), this section offers
readers a narrative overview and analysis of the financial activities for the District. The District
is one of the City of Scottsdale, Arizona’s component units for financial reporting purposes
for the fiscal year ended June 30, 2025.
Formed in 1997, the District is a special purpose taxing district and separate political subdivision
under Arizona statutes. As such, the District can levy taxes and issue bonds, independent of
the City of Scottsdale, Arizona (city). Property owners within the District boundaries pay for
District infrastructure and functions through secondary property tax assessments. City staff
administers the District and the costs of their services are reimbursed by District funds. The
Scottsdale City Council also serves as the District Board of Directors.
FINANCIAL HIGHLIGHTS
For the year ending 2024/25, the District:
• Tax collections and beginning fund balances were sufficient to pay debt service.
• Tax rate continued to comply with the city-imposed assessment limit of $3.00 per $100 assessed valuation;
the tax rate was $0.41 per $100 assessed valuation.
• Governmental funds reported a combined ending fund balance of $137,440. Of this amount, $29,068 was
in the General Fund and $108,372 was in the Debt Service Fund.
• Governmental fund revenues were more than expenditures by $298,357.
• Total long-term debt decreased by $1,165,000 due to scheduled principal payments.
• Significant bond indentures were in compliance.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis introduces the District’s basic financial statements. Because of its limited purpose,
the District’s basic financial statements are comprised of two components: (1) Statement of Net Position and
Governmental Funds Balance Sheet and the Statement of Activities and Governmental Funds Statement of
Revenues, Expenditures, and Changes in Fund Balance and (2) Notes to the Basic Financial Statements.
Because the District has only one governmental program, the government-wide and fund financial statements
are combined.
5
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Government-wide Financial Statements
The Statement of Net Position is designed to provide readers with a broad overview of the District’s finances,
in a manner similar to a private-sector business. The statement of net position presents information on all of
the District’s assets and liabilities, and deferred outflows/inflows of resources, with the difference reported
as net position. Over time, increases or decreases in net position may serve as useful indicators of whether or
not the financial position of the District is improving or deteriorating.
The Statement of Activities presents information showing how the District’s net position changed during the
most recent fiscal year. Changes in net position are reported when 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, such as revenues pertaining
to uncollected taxes and expenses related to accrued interest.
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 District, like the city, uses fund accounting to ensure
and demonstrate compliance with finance-related legal requirements. Debt Service Funds are restricted for
payment of debt and debt related costs, and the General Fund is unassigned.
The District maintains two governmental funds, General and Debt Service. Information is presented in the
Governmental Funds Balance Sheet and in the Governmental Funds Statement of Revenues, Expenditures,
and Changes in Fund Balances for the General Fund and Debt Service Fund.
The District adopts an annual budget for its General Fund and Debt Service Fund. Supplementary budgetary
schedules have been provided to demonstrate compliance with these budgets.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to acquire a full
understanding of the data provided in the basic financial statements.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents as required
supplementary information a comparison between budgeted and actual amounts within the General Fund.
6
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position.
The liabilities of the District exceeded its assets and deferred outflows at the close of the most recent fiscal
year by approximately $2.3 million (net position). The District’s purpose is to acquire and improve public
infrastructure in specified land areas. As a special purpose district and a separate political subdivision under
the Arizona Constitution, the District can levy taxes and issue bonds independently of the city. Property
owners in the designated areas are assessed for District taxes to pay the debt service over the life of the bonds.
The City Council serves as the Board of Directors. However, the city has no liability for the District’s debt. For
financial reporting purposes, transactions of the District are combined together and included as if they were
part of the city’s operations and the assets financed through the District are combined with the infrastructure
of the city. Because the capital assets are recorded in the city’s basic financial statements, the Statement of Net
Position for the District reflects a large liability without an offsetting asset.
Net Position
June 30, 2025 and 2024
2025
2024
ASSETS AND DEFERRED OUTFLOWS OF
RESOURCES
Current Assets
88,789
$
74,465
$
Noncurrent Assets
1,301,234
1,296,179
Total Assets
1,390,023
1,370,644
Deferred Outflows of Resources
79,985
119,977
Total Assets and Deferred Outflows of Resources
1,470,008
1,490,621
LIABILITIES
Current Liabilities
1,226,636
1,509,436
Noncurrent Liabilities
2,528,721
3,733,081
Total Liabilities
3,755,357
5,242,517
NET POSITION
Restricted
134,319
(149,218)
Unrestricted
(2,419,668)
(3,602,678)
Total Net Position
(2,285,349)
$
(3,751,896)
$
Governmental Activities
During the fiscal year, the District’s total net position increased by $1,466,547.
7
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Changes in Net Position
For the Fiscal Years Ended June 30, 2025 and 2024
2025
2024
REVENUES
Taxes
1,710,009
$
1,333,508
$
Interest
742
502
Total Revenues
1,710,751
1,334,010
EXPENSES
General Government
119,851
380,781
Debt Service
124,353
162,715
Total Expenses
244,204
543,496
Change in Net Position
1,466,547
790,514
Net Position, Beginning of Year
(3,751,896)
(4,542,410)
Net Position, End of Year
(2,285,349)
$
(3,751,896)
$
Governmental Activities
Revenues increased in fiscal 2024/25 due to an increase in tax revenue.
The District’s overall net position increased for Fiscal Year 2024/25 as the District continued to pay down the
long-term liabilities.
As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with legal
requirements related to special purpose districts and general obligation bonds.
Financial Analysis of the District’s Funds
The focus of the District’s governmental funds is to provide information on near-term inflows, outflows, and
balances of resources that are available for spending. Such information is useful in assessing the District’s
ability to pay the debt service on the general obligation bonds it issues to fund construction or acquisition of
public infrastructure.
As of the end of fiscal year 2025, the District’s governmental funds reported revenues more than expenditures
by $298,357 and an ending fund balance of $137,440. Of the total ending fund balance, $29,068 is in the
General Fund and $108,372 is in the Debt Service Fund.
Revenues totaled $1,706,929 for the fiscal year ended June 30, 2025, of which $1,706,187 was property tax
collected and $742 was from interest earnings.
Capital Assets and Debt Administration
The District was formed to finance and acquire or construct amenities that are subsequently dedicated to the
for operation. The District does not own or operate infrastructure. Since formation, District city bonds have
been issued, and the proceeds used to acquire or construct parks, paths, trails, roads, athletic fields and related
athletic field infrastructure.
8
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
The District has issued all of the authorized $20,000,000 in District general obligation bonds.
In the event that the District Board decides at a future time to dissolve the District, State statute provides that
all taxable property in the District will remain subject to the lien for the payment of the bonds until all bonds
have been defeased.
The District is not engaged in any significant activities other than providing for the levy of secondary property
taxes to pay debt service, maintenance and administrative fees.
Outstanding Debt
June 30, 2025 and 2024
2025
2024
General Obligation Bonds
2,450,000
$
3,615,000
$
Governmental Activities
The District’s total long-term debt decreased by $1,165,000 during the current fiscal year due to payment of
principal on the refunding bonds.
Next Year’s Budget and Rates
The fiscal year 2025/26 District budget includes a $0.32 tax rate per $100 of assessed value. This is a $0.08
decrease from the rate used for the fiscal year 2024/25 budget, and includes landscape and maintenance costs
of $107,000. The District’s long-term financial plan considers the uncertainty of the economy and takes a
cautious approach.
Requests for Information
This financial report is designed to provide a general overview of the District’s finances for all of those
with an interest in the government’s finances. If you have questions about this report or need additional
financial information, contact the Scottsdale City Treasurer’s Office at 7447 E. Indian School Road, Suite 210,
Scottsdale, AZ 85251.
9
DC Ranch Community Facilities District
Basic Financial Statements
10
DC Ranch Community Facilities District
Statement of Net Position and Governmental Funds Balance Sheet
June 30, 2025
General Fund
Debt Service
Fund
Total
Adjustments
Statement of
Net Position
ASSETS AND DEFERRED OUTFLOWS
OF RESOURCES
Assets
Current Assets
Cash
24,462
$
-
$
24,462
$
-
$
24,462
$
Taxes Receivable
4,606
59,721
64,327
-
64,327
Total Curent Assets
29,068
59,721
88,789
-
88,789
NonCurrent Assets
Restricted Cash
-
1,301,234
1,301,234
-
1,301,234
Total Assets
29,068
$
1,360,955
$
1,390,023
$
-
$
1,390,023
$
Deferred Outflows of Resources
Deferred Amounts on Refunding
79,985
79,985
Total Assets and Deferred Outflows of Resources
79,985
$
1,470,008
$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES/NET POSITION
Liabilities
Current Liabilities
Matured Bonds Payable
-
$
1,165,000
$
1,165,000
$
-
$
1,165,000
$
Bond Interest Payable
-
61,636
61,636
-
61,636
Total Current Liabilities
-
1,226,636
1,226,636
-
1,226,636
Noncurrent Liabilities
Due Within One Year
-
-
-
1,205,000
1,205,000
Due After One Year
-
-
-
1,323,721
1,323,721
Total Noncurrent Liabilities
-
-
-
2,528,721
2,528,721
Total Liabilities
-
1,226,636
1,226,636
2,528,721
3,755,357
Deferred Inflows of Resources
Unavailable Revenues
-
25,947
25,947
(25,947)
-
Total Liabilities and Deferred Inflows of Resources
-
1,252,583
1,252,583
2,502,774
3,755,357
Fund Balances/Net Position
Fund Balances
Restricted
-
-
-
-
-
Unassigned
29,068
108,372
137,440
(137,440)
-
Total Fund Balances
29,068
108,372
137,440
(137,440)
-
Total Liabilities, Deferred Inflows of Resources,
and Fund Balances
29,068
$
1,360,955
$
1,390,023
$
Net Position
Restricted for Debt Service
134,319
134,319
Unrestricted
(2,419,668)
(2,419,668)
Total Net Position
(2,285,349)
$
(2,285,349)
$
The accompanying notes to the basic financial statements are an integral part of this statement.
11
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
General Fund
Debt Service
Fund
Total
Adjustments
Statement of
Activities
REVENUES
Taxes
137,751
$
1,568,436
$
1,706,187
$
3,822
$
1,710,009
$
Interest
742
-
742
-
742
Total Revenues
138,493
1,568,436
1,706,929
3,822
1,710,751
EXPENDITURES/EXPENSES
Current
General Government
City Treasurer's Office
119,851
$
-
$
119,851
$
-
$
119,851
$
Debt Service
Principal Retirement
-
1,165,000
1,165,000
(1,165,000)
-
Interest and Fiscal Charges
-
123,721
123,721
632
124,353
Total Expenditures/Expenses
119,851
1,288,721
1,408,572
(1,164,368)
244,204
Change in Fund Balances/Net Position
18,642
279,715
298,357
1,168,190
1,466,547
Fund Balances/Net Position, Beginning of Year
10,426
(171,343)
(160,917)
(3,590,979)
(3,751,896)
Fund Balances/Net Position, End of Year
29,068
$
108,372
$
137,440
$
(2,422,789)
$
(2,285,349)
$
Statement of Activities and Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances
The accompanying notes to the basic financial statements are an integral part of this statement.
12
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the DC Ranch Community Facilities District (District), a component unit of the
City of Scottsdale, Arizona (city), conform to accounting principles generally accepted in the United States of
America applicable to governmental units as promulgated by the Governmental Accounting Standards Board.
A summary of the more significant accounting policies of the District follows.
A.
Reporting Entity
The DC Ranch Community Facilities District was formed by petition to the City of Scottsdale City Council in
March 1997. The District’s purpose is to acquire and improve public infrastructure in specified land areas. As
a special purpose district and separate political subdivision under the Arizona Constitution, the District can
levy taxes and issue bonds independently of the city. Property owners in the designated areas are assessed for
District taxes and thus for the costs of operating the District. The City Council serves as the Board of Directors;
however, the city has no liability for the District’s debt. For financial reporting purposes, transactions of the
DC Ranch Community Facilities District are included as if the District were part of the city’s operations.
B.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities)
report information on all of the nonfiduciary activities of the District. For the most part, the effect of
interfund activity has been removed from these statements. Governmental activities, which normally are
supported by taxes and miscellaneous revenues, are reported separately from business-type activities, which
rely to a significant extent on fees and charges for support. The District had no business-type activities during
the fiscal year.
Financial statements are provided for major governmental funds, with an adjustments column to arrive at
government-wide statement amounts.
C.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues
in the year for which they are levied.
13
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized when they are both earned and
available. Revenues are considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to
be available if they are collected within 31 days of the end of the current fiscal period. Expenditures generally
are recorded when a liability is incurred, as under accrual accounting, except expenditures related to claims
and judgments, which are recorded only when payment is due. However, since debt service resources are
provided during the current year for payment of governmental long-term principal and interest due early in
the following year, the expenditures and related liabilities have been recognized in the Debt Service Fund.
Property taxes associated with the current fiscal period are considered to be susceptible to accrual and have
been recognized as revenues of the current fiscal period. Interest is accrued in the current fiscal period when
the revenue is earned. All other revenue items are considered to be measurable and available only when cash
is received by the government.
The District reports the following major governmental funds:
The General Fund accounts for resources accumulated and used for the payment of other operating expenses
for the District, which may include insurance, legal fees, maintenance and administration costs.
The Debt Service Fund accounts for resources accumulated and used for the payment of governmental long-
term debt including principal, interest and related costs.
The spending order for the District is to use restricted funds and then unassigned funds as they are needed.
Currently the District has unassigned funds and does not have any nonspendable, committed or assigned
funds.
D.
Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund
Balance
1.
Cash and Investments
Arizona Revised Statutes authorize the District to invest public monies in the State or County
Treasurers’ investment pools, interest bearing savings accounts, certificates of deposit and repurchase
agreements in eligible depositories; bonds or other obligations of the United States government that
are guaranteed as to principal and interest by the United States government; or bonds of the State of
Arizona counties, cities, towns, school districts or special districts as specified by statute. As required by
statute, collateral is required for demand deposits, certificates of deposit, and repurchase agreements
at 100 percent of all deposits not covered by federal depository insurance.
A portion of cash and investments held by trustee at June 30, 2025, plus accrued interest, are restricted
as to usage.
2.
Restricted Assets
Cash and investments held by the District’s trustee are classified as restricted on the statement of net
position because their use is limited by applicable bond covenants.
14
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.
Capital Assets
Capital assets acquired or construction of infrastructure assets by the District are dedicated to the City
of Scottsdale, Arizona to maintain and operate. As a result, the District owns no capital assets.
4.
Long-term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations are
reported as liabilities in the applicable governmental activities. Bond premiums and discounts are
amortized over the life of the bonds using the straight-line method. Bonds payable are reported net
of the applicable bond premium or discount. Bond issuance costs are expensed when incurred.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. The face amount of debt issued is reported as
other financing sources. Premiums received on debt issuances are reported as other financing sources
while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt service expenditures.
5.
Deferred Outflows/Inflows of Resources
In addition to assets, the financial statements report a separate section for deferred outflows of
resources. This represents a consumption of net position that applies to a future period and so will not
be recognized as an outflow of resources (expense/expenditure) until then. The District only has one
item, deferred amount on refunding, that qualifies for reporting in this category. A deferred amount
on refunding results from the difference in the carrying value of refunded debt and its reacquisition
price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding
debt.
In addition to liabilities, the statement of net position will sometimes report a separate section for
deferred inflows of resources. Deferred inflows of resources represent an acquisition of net position
that applies to a future period and so will not be recognized as an inflow of resources (revenue) until
that time. The District has only one type of this item, which arises only under a modified accrual basis
of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue,
is reported only in the balance sheet.
15
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
6.
Net Position/Fund Balance
In the fund financial statements, governmental funds report nonspendable portions of fund balance
related to prepaids, inventories, long-term receivables, and corpus on any permanent fund. Restricted
funds are constrained by outside parties (statute, grantors, bond agreements, etc.). Committed fund
balances are established and modified by a resolution approved by the Board of Directors. The Board
of Directors passed a resolution authorizing the City of Scottsdale City Treasurer to assign fund
balances and their intended uses. Unassigned fund balances are considered the remaining amounts.
When an expenditure is incurred for purposes for which both restricted and unrestricted resources are
available, it is the District’s policy to use restricted resources first, then unrestricted resources. When
an expenditure is incurred for purposes for which committed, assigned and unassigned amounts are
available, it is the District’s policy to use committed first, then assigned, and finally unassigned amounts.
In the government-wide financial statements, net position is reported in two categories: restricted
and unrestricted. Restricted accounts for the portion of net position restricted by bond covenant.
Unrestricted is the remaining net position not included in the previous category.
E.
Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the
Unites States of America requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
16
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 2 – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS
A.
Amounts reported in the statement of net position are different because:
Tax revenues not available to pay current-period expenditures are deferred inflows in the funds.
25,947
$
Long-term liabilities, including bonds payable, are not due and payable in the current period;
therefore, are not reported in the funds.
(2,528,721)
Deferred amounts on refunding are long-term in nature and not reported in the funds.
79,985
Net adjustment to reduce total fund balance to arrive at net position.
(2,422,789)
Total Fund Balance
137,440
Total Net Position
(2,285,349)
$
B.
Amounts reported in the statement of activities are different because:
Tax revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds.
3,822
$
The repayment of the principal of long-term debt consumes the current financial resources of
governmental funds; however, it has no effect on net position.
1,165,000
Governmental funds report the effect of premiums, discounts, and similar items when debt is first
issued, whereas these amounts are amortized in the statement of activities.
(632)
Net adjustments to reconcile net changes in fund balances to change in net position.
1,168,190
Net change in Fund Balance
298,357
Change in Net Position
1,466,547
$
17
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 3 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A.
Budgetary Information
The District adopts an annual operating budget for revenues and expenditures for the General Fund and Debt
Service Fund on essentially the same modified accrual basis of accounting used to record actual expenditures.
Budgetary control over expenditures is exercised at the fund level.
B.
Deficit Fund Equity and Deficit Net Position
As described in Note 1, the District was formed to finance and acquire or construct infrastructure assets that
are subsequently dedicated to the city for operation. The District does not own or operate infrastructure.
Therefore, the Statement of Net Position reflects a large liability without an offsetting asset.
NOTE 4 – DETAILED NOTES ON ALL FUNDS
A.
Assets
1.
Deposits
Deposits – At June 30, 2025, the carrying amount of the District’s deposits and bank balance were
$1,325,696.
Custodial Credit Risk
Custodial credit risk is the risk that in the event of a bank failure, the Districts deposits may not
be returned to it. As of June 30, 2025, $1,301,234 of the District’s deposits were uninsured and
collateralized by securities held by the pledging bank’s trust department not in the District’s name, and
therefore exposed to custodial credit risk.
2.
Restricted Assets
Restricted cash at June 30, 2025, as follows:
Debt Service
Fund
Restricted Cash
$ 1,301,234
3.
Property Taxes Receivable
The Maricopa County Treasurer is responsible for collecting property taxes for all governmental
entities within the County. The County levies the property taxes due to the District in August. Two
equal installments, payable in October and March, become delinquent after the first business days in
November and May. During the year, the County also levies various personal property taxes that are
due the second Monday of the month following receipt of the tax notice and become delinquent
30 days later. A lien assessed against real and personal property attaches on the first day of January
preceding the assessment levy.
18
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 4 – DETAILED NOTES ON ALL FUNDS (CONTINUED)
Property taxes are recognized as revenues in the fiscal year they are levied in the government-wide
financial statements and represent a reconciling item between the government-wide and fund financial
statements. In the fund financial statements, property taxes are recognized as revenues in the fiscal
year they are levied and collected or if they are collected within 31 days subsequent to fiscal year-end.
Property taxes not collected within 31 days subsequent to fiscal year-end or collected in advance of
the fiscal year for which they are levied are reported as deferred inflows.
Property taxes receivable consist of uncollected property taxes as determined from the records of the
County Treasurer’s Office, and at June 30, 2025, were as follows:
General
Fund
Debt Service
Fund
Taxes Receivable
$ 4,606
$ 59,721
At the end of the current fiscal year, unavailable revenue reported in the debt service fund was as
follows:
Debt Service
Fund
Unavailable Property Taxes Receivable
$ 25,947
B.
Liabilities
Obligations Under Long-term Debt
General Obligation Bonds
The District issues general obligation bonds to provide funds to acquire and improve public
infrastructure in specified areas. General obligation bonds have been issued for governmental activities
only. The bonds with interest are payable semiannually. Bonds payable at June 30, 2025, consisted of
the outstanding general obligation bonds presented below:
Purpose
Interest Rates (%)
Amount
2012 DC Ranch Community Facilities District General Obligation
Refunding Bonds due in annual installments of $555,000 to $1,245,000
beginning July 15, 2013 through July 15, 2027. Original issue amount
$14,670,000.
3.41
$ 2,450,000
19
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 4 – DETAILED NOTES ON ALL FUNDS (CONTINUED)
Community facilities districts (CFDs) are created only by petition to the City Council by property
owners within the District areas. As board of directors for the District, the City Council has adopted a
formal policy that CFD debt will be permitted only when the ratio of the full cash value of the District
property (prior to improvements being installed), when compared to proposed District debt, is a
minimum of 3 to 1 prior to issuance of debt and 5 to 1 or higher after construction of improvements.
These ratios are verified by an appraisal paid for by the District and administered by the city. In
addition, cumulative debt of all CFDs cannot exceed 5 percent of the city’s full cash valuation.
The District’s bond issuance contains the following provisions that would constitute an event of
default by the District:
• Failure to pay the principal and interest when due and payable.
Changes in Long-term Liabilities
Governmental Activities
Beginning
Balance
Additions
Reductions
Ending
Balance
Due Within
One Year
Private Placement General Obligation Bonds
3,615,000
$
-
$
(1,165,000)
$
2,450,000
$
1,205,000
$
Plus Issuance Premium
118,081
-
(39,360)
78,721
-
Total
3,733,081
$
-
$
(1,204,360)
$
2,528,721
$
1,205,000
$
Annual debt service requirements to maturity for general obligation bonds are as follows:
Fiscal Year Ending June 30,
Principal
Interest
2026
1,205,000
$
83,545
$
2027
1,245,000
42,454
Total
2,450,000
$
125,999
$
NOTE 5 – OTHER INFORMATION
A.
Risk Management
The District is exposed to various risks of loss. The District carries commercial insurance for $1,000,000
per occurrence and $3,000,000 aggregate covering general liability exposures. The District also carries public
entity management liability insurance for $1,000,000 each wrongful act and $3,000,000 aggregate to cover
damages resulting from the conduct of duties by or for a public entity or its boards. There have been no
known losses in any of the past three fiscal years.
20
DC Ranch Community Facilities District
Required Supplementary Information
21
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Original and
Final Budget
Actual
Variance
REVENUES
Taxes
128,746
$
137,751
$
9,005
$
Interest Income
-
742
742
Total Revenues
128,746
138,493
9,747
EXPENDITURES
Current
General Government
City Treasurer's Office
125,600
119,851
5,749
Total Expenditures
125,600
119,851
5,749
Excess (Deficiency) of Revenues Over (Under) Expenditures
3,146
18,642
14,754
Net Change in Fund Balance
3,146
$
18,642
$
15,496
$
Schedule of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – General Fund
22
DC Ranch Community Facilities District
Supplementary Information
23
DC Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Original and
Final Budget
Actual
Variance
REVENUES
Taxes
1,291,679
$
1,568,436
$
276,757
$
Total Revenues
1,291,679
1,568,436
276,757
EXPENDITURES
Debt Service
Principal Retirement
1,165,000
1,165,000
-
Interest and Fiscal Charges
124,272
123,721
551
Total Expenditures
1,289,272
1,288,721
551
Excess of Revenues Over Expenditures
2,407
279,715
277,308
Net Change in Fund Balance
2,407
$
279,715
$
277,308
$
Schedule of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – Debt Service Fund
24
DC Ranch Community Facilities District
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
Board of Directors
DC Ranch Community Facilities District
We have audited, in accordance with the 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, the financial statements of the
governmental activities and each major fund of DC Ranch Community Facilities District, a component
unit of the City of Scottsdale, Arizona, as of and for the year ended June 30, 2025, and the related
notes to the financial statements, which collectively comprise DC Ranch Community Facilities
District’s basic financial statements and have issued our report thereon dated October 13, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered DC Ranch
Community Facilities District’s internal control over financial reporting (internal control) as a basis for
designing audit procedures that are appropriate in the circumstances for the purpose of expressing
our opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of DC Ranch Community Facilities District’s internal control. Accordingly, we do not
express an opinion on the effectiveness of DC Ranch Community Facilities District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that have not been identified.
25
DC Ranch Community Facilities District
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether DC Ranch Community Facilities District’s
financial statements are free from material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which
could have a direct and material effect on the financial statements. However, providing an opinion
on compliance with those provisions was not an objective of our audit, and accordingly, we do not
express such an opinion. The results of our tests disclosed no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
Attachment 3a -
DC Ranch Community Facilities District
(CFD) - Report on Internal Control over
Financial Reporting and Compliance
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
Board of Directors
DC Ranch Community Facilities District
We have audited, in accordance with the 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, the financial statements of the
governmental activities and each major fund of DC Ranch Community Facilities District, a component
unit of the City of Scottsdale, Arizona, as of and for the year ended June 30, 2025, and the related
notes to the financial statements, which collectively comprise DC Ranch Community Facilities
District’s basic financial statements and have issued our report thereon dated October 13, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered DC Ranch
Community Facilities District’s internal control over financial reporting (internal control) as a basis for
designing audit procedures that are appropriate in the circumstances for the purpose of expressing
our opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of DC Ranch Community Facilities District’s internal control. Accordingly, we do not
express an opinion on the effectiveness of DC Ranch Community Facilities District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that have not been identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether DC Ranch Community Facilities District’s
financial statements are free from material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which
could have a direct and material effect on the financial statements. However, providing an opinion
on compliance with those provisions was not an objective of our audit, and accordingly, we do not
express such an opinion. The results of our tests disclosed no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
Attachment 4 -
McDowell Mountain Ranch CFD
Annual Financial Report
Annual Financial Report
Fiscal Year Ended June 30, 2025
McDowell Mountain Ranch Community Facilities District
(A Component Unit of the City of Scottsdale, Arizona)
McDowell Mountain Ranch Community Facilities District
(A Component Unit of the City of Scottsdale, Arizona)
Annual Financial Report
Fiscal Year Ended June 30, 2025
Table of Contents
Independent Auditors’ Report................................................................................................................... 1
Management’s Discussion and Analysis.................................................................................................... 4
BASIC FINANCIAL STATEMENTS
Statement of Net Position and Governmental Funds Balance Sheet.................................................. 9
Statement of Activities and Governmental Funds Statement of Revenues, Expenditures, and
Changes in Fund Balances........................................................................................................................10
Notes to the Basic Financial Statements.................................................................................................11
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual –
General Fund..............................................................................................................................................20
Report on Internal Control and on Compliance
Report on Internal Control over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in Accordance with Government
Auditing Standards........................................................................................................................................21
McDowell Mountain Ranch Community Facilities District
For the Fiscal Year ended June 30, 2025
1
McDowell Mountain Ranch Community Facilities District
Independent Auditor’s Report
Board of Directors
McDowell Mountain Ranch Community Facilities District
Report on Audit of Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and the major
fund of McDowell Mountain Ranch Community Facilities District, (District), a component unit of the City
of Scottsdale, Arizona, as of and for the year ended June 30, 2025, and the related notes to the financial
statements, which collectively comprise the District’s basic financial statements as listed in the table of
contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and the major fund of the McDowell Mountain
Ranch Community Facilities District, as of June 30, 2025, and the respective changes in financial position
thereof for the year then ended in accordance with accounting principles generally accepted in the United
States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Our responsibilities under those standards are
further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our
report. We are required to be independent of McDowell Mountain Ranch Community Facilities District,
and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating
to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinions.
Emphasis of Matter
As discussed in Note 1, the financial statements of the McDowell Mountain Ranch Community Facilities
District are intended to present the net position and changes in net position that are attributable to the
District, a component unit of the City of Scottsdale, Arizona report. They do not purport to, and do not,
present fairly the financial position of the City of Scottsdale, Arizona as of June 30, 2025 and the changes
in financial position for the year ended in conformity with accounting principles generally accepted in the
United States of America. Our opinion is not modified with respect to this matter.
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McDowell Mountain Ranch Community Facilities District
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue
as a going concern for one year beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing
standards and Government Auditing Standards will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user based on the
financial statements. In performing an audit in accordance with generally accepted auditing standards and
Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is
expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control related
matters that we identified during the audit.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis and budgetary comparison information, as listed in the table of contents, be
presented to supplement the basic financial statements. Such information is the responsibility of
management and, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context.
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McDowell Mountain Ranch Community Facilities District
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 Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our October 13, 2025, on our
consideration of McDowell Mountain Ranch Community Facilities District’s internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements and other matters. The purpose of that report is solely to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing, and not
to provide an opinion on the effectiveness of the McDowell Mountain Ranch Community Facilities
District’s internal control over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government Auditing Standards in considering McDowell Mountain
Ranch Community Facilities District’s internal control over financial reporting and compliance.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
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McDowell Mountain Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
As management of the McDowell Mountain Ranch Community Facilities District (District),
this section offers readers a narrative overview and analysis of the financial activities for the
District. The District is one of the City of Scottsdale, Arizona’s component units for financial
reporting purposes for the fiscal year ended June 30, 2025.
Formed in 1994, the District is a special purpose taxing district and separate political subdivision
under Arizona statutes. As such, the District can levy taxes and issue bonds, independent of
the City of Scottsdale, Arizona (city). Property owners within the District boundaries pay for
District infrastructure and functions through secondary property tax assessments. City staff
administers the District and the costs of their services are reimbursed by District funds. The
Scottsdale City Council also serves as the District Board of Directors.
FINANCIAL HIGHLIGHTS
For the year ending 2024/25, the District:
• Earned interest and contributions from the City of Scottsdale’s General fund were sufficient to pay
expenses.
• Governmental funds reported an ending fund balance of $57,197.
• Governmental fund revenues and City of Scottsdale General fund contributions were more than expenditures
by $189,315.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis introduces the District’s basic financial statements. Because of its limited purpose,
the District’s basic financial statements are comprised of two components: (1) Statement of Net Position and
Governmental Funds Balance Sheet and the Statement of Activities and Governmental Funds Statement of
Revenues, Expenditures, and Changes in Fund Balance and (2) Notes to the Basic Financial Statements.
Because the District has only one governmental program, the government-wide and fund financial statements
are combined.
Government-wide Financial Statements
The Statement of Net Position is designed to provide readers with a broad overview of the District’s finances,
in a manner similar to a private-sector business. The statement of net position presents information on all of
the District’s assets and liabilities, and deferred outflows/inflows of resources, with the difference reported
as net position. Over time, increases or decreases in net position may serve as useful indicators of whether or
not the financial position of the District is improving or deteriorating.
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McDowell Mountain Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
The Statement of Activities presents information showing how the District’s net position changed during the
most recent fiscal year. Changes in net position are reported when 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, such as revenues pertaining
to uncollected taxes and expenses related to accrued interest.
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 District, like the city, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements.
The District maintains one governmental fund. The General fund for the District is unassigned and therefore
not restricted for a specific purpose. Information is presented in the Governmental Funds Balance Sheet and
in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances for the
General Fund.
The District adopts an annual budget for its General Fund. A supplementary budgetary schedule has been
provided to demonstrate compliance with this budget.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to acquire a full
understanding of the data provided in the basic financial statements.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents as required
supplementary information a comparison between budgeted and actual amounts within the General Fund.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position.
The assets of the District exceeded its liabilities at the close of the most recent fiscal year by $57,199 (net
position). The District’s purpose is to acquire and improve public infrastructure in specified land areas. As a
special purpose district and a separate political subdivision under the Arizona Constitution, the District can
levy taxes and issue bonds independently of the city. Property owners in the designated areas are assessed
for District taxes to pay the debt service over the life of the bonds. The City Council serves as the Board
of Directors. However, the city has no liability for the District’s debt. For financial reporting purposes,
transactions of the District are combined together and included as if they were part of the city’s operations
and the assets financed through the District are combined with the infrastructure of the city.
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McDowell Mountain Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Net Position
June 30, 2025 and 2024
2025
2024
ASSETS
Current Assets
57,199
$
70,804
$
Total Assets
57,199
70,804
LIABILITIES
Current Liabilities
-
201,862
Total Liabilities
-
201,862
NET POSITION
Unrestricted
57,199
(131,058)
Total Net Position
57,199
$
(131,058)
$
Governmental Activities
During the fiscal year, the District’s total net position increased by $188,257.
Changes in Net Position
For the Fiscal Years Ended June 30, 2025 and 2024
2025
2024
REVENUES
Taxes
(5,772)
$
-
$
Interest
326
826
Contributions from City
206,570
-
Total Revenues
201,124
826
EXPENSES
General Government
12,867
11,771
Other General Government
-
202,202
Total Expenses
12,867
213,973
Change in Net Position
188,257
(213,147)
Net Position, Beginning of Year
(131,058)
82,089
Net Position, End of Year
57,199
$
(131,058)
$
Governmental Activities
Revenues increased in fiscal year 2024/25 due to contributions from the City of Scottsdale. On May 20, 2025
the City Council authorized contributions from the City of Scottsdale of $206,570 to cover property tax
refunds required from the Qasimyar v. Maricopa County lawsuit.
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McDowell Mountain Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with legal
requirements related to special purpose districts.
Financial Analysis of the District’s Funds
The focus of the District’s governmental funds is to provide information on near-term inflows, outflows, and
balances of resources that are available for spending.
As of the end of fiscal year 2024/25, the District’s governmental funds reported revenues more than
expenditures by $189,315 and an ending fund balance of $57,197. The entire fund balance is unassigned.
Revenues totaled $202,182 for the fiscal year ended June 30, 2025.
Capital Assets and Debt Administration
The District was formed to finance and acquire or construct amenities that are subsequently dedicated to the
city for operation. The District does not own or operate infrastructure. Since formation, District bonds have
been issued, and the proceeds used for the completion of Thompson Peak Parkway and other infrastructure,
such as water and sewer lines necessary for the McDowell Mountain Ranch development.
The District has issued $18,860,000 of the $20,000,000 authorized bonds. In fiscal years 1998/99 and
2012/2013, the City Council and the District Board approved the issuance of refunding bonds to consolidate
and reduce the costs of the District debt. Refunding bonds totaling $11,555,000 were issued. All outstanding
bonds were paid in full as of June 30, 2022.
Next Year’s Budget and Rates
The District will not levy taxes since all debt has been satisfied. The fiscal year 2025/26 budget includes
estimated ongoing expenses until the District is dissolved.
Future Discontinuance of District
The District has no further long-term obligations; as of fiscal year ending June 30, 2022, all debt was paid in
full. Per Arizona Revised Statutes § 48-724 (Dissolution of District), unless qualified electors of the District
vote to dissolve the District sooner, the District will remain open until the District Board determines the
District has been inactive for at least five years and has no future purpose, and the District Board adopts and
records a resolution dissolving the District.
Until the District is dissolved, the ongoing planned activities for the District will be administrative and may
include payment of annual audit fees, preparation of the resolution fees, insurance, publication/advertising
costs, budget preparation costs, etc.
Requests for Information
This financial report is designed to provide a general overview of the District’s finances for all of those
with an interest in the government’s finances. If you have questions about this report or need additional
financial information, contact the Scottsdale City Treasurer’s Office at 7447 E. Indian School Road, Suite 210,
Scottsdale, AZ 85251.
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McDowell Mountain Ranch Community Facilities District
Basic Financial Statements
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McDowell Mountain Ranch Community Facilities District
Statement of Net Position and Governmental Funds Balance Sheet
June 30, 2025
General
Fund
Adjustments
Statement of
Net Position
ASSETS
Assets
Current Assets
Cash
57,048
$
-
$
57,048
$
Taxes Receivable
151
-
151
Total Assets
57,199
$
-
$
57,199
$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES/NET POSITION
Liabilities
Total Liabilities
-
$
-
$
-
$
Deferred Inflows of Resources
Unavailable Revenues
2
(2)
-
Total Liabilities and Deferred Inflows of Resources
2
(2)
-
Fund Balances/Net Position
Fund Balances
Unassigned
57,197
(57,197)
-
Total Fund Balances
57,197
(57,197)
-
Total Liabilities, Deferred Inflows of Resources,
and Fund Balances
57,199
$
Net Position
Unrestricted
57,199
57,199
Total Net Position
57,199
$
57,199
$
The accompanying notes to the basic financial statements are an integral part of this statement.
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McDowell Mountain Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
General
Fund
Adjustments
Statement of
Activities
REVENUES
Taxes
(4,714)
$
(1,058)
$
(5,772)
$
Interest
326
-
326
Contributions from City
206,570
-
-
Total Revenues
202,182
(1,058)
201,124
EXPENDITURES/EXPENSES
Current
General Government
City Treasurer's Office
12,867
$
-
$
12,867
$
Total Expenditures/Expenses
12,867
-
12,867
Change in Fund Balances/Net Position
189,315
(1,058)
188,257
Fund Balances/Net Position, Beginning of Year
(132,118)
1,060
(131,058)
Fund Balances/Net Position, End of Year
57,197
$
2
$
57,199
$
Statement of Activities and Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund
The accompanying notes to the basic financial statements are an integral part of this statement.
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McDowell Mountain Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the McDowell Mountain Ranch Community Facilities District (District), a
component unit of the City of Scottsdale, Arizona (city), conform to accounting principles generally accepted
in the United States of America applicable to governmental units as promulgated by the Governmental
Accounting Standards Board. A summary of the more significant accounting policies of the District follows.
A.
Reporting Entity
The McDowell Mountain Ranch Community Facilities District was formed by petition to the City of Scottsdale
City Council in January 1994. The District’s purpose is to acquire and improve public infrastructure in specified
land areas. As a special purpose district and separate political subdivision under the Arizona Constitution, the
District can levy taxes and issue bonds independently of the city. Property owners in the designated areas are
assessed for District taxes and thus for the costs of operating the District. The City Council serves as the
Board of Directors; however, the city has no liability for the District’s debt. For financial reporting purposes,
transactions of the McDowell Mountain Ranch Community Facilities District are included as if the District
were part of the city’s operations.
B.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities)
report information on all of the nonfiduciary activities of the District. For the most part, the effect of
interfund activity has been removed from these statements. Governmental activities, which normally are
supported by taxes and miscellaneous revenues, are reported separately from business-type activities, which
rely to a significant extent on fees and charges for support. The District had no business-type activities during
the fiscal year.
Financial statements are provided for major governmental funds, with an adjustments column to arrive at
government-wide statement amounts.
C.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues
in the year for which they are levied.
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McDowell Mountain Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized when they are both earned and
available. Revenues are considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to
be available if they are collected within 31 days of the end of the current fiscal period. Expenditures generally
are recorded when a liability is incurred, as under accrual accounting, except expenditures related to claims and
judgments, which are recorded only when payment is due.
Property taxes associated with the current fiscal period are considered to be susceptible to accrual and have
been recognized as revenues of the current fiscal period. Interest is accrued in the current fiscal period when
the revenue is earned. All other revenue items are considered to be measurable and available only when cash
is received by the government.
The District reports the following major governmental fund:
The General Fund accounts for resources accumulated and used for the payment of other operating expenses
for the District, which may include insurance, legal fees and administration costs.
The spending order for the District is to use restricted funds and then unassigned funds as they are needed.
Currently the District does not have any unassigned, nonspendable, committed or assigned funds.
D.
Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund
Balance
1.
Cash and Investments
Arizona Revised Statutes authorize the District to invest public monies in the State or County
Treasurers’ investment pools, interest bearing savings accounts, certificates of deposit and repurchase
agreements in eligible depositories; bonds or other obligations of the United States government that
are guaranteed as to principal and interest by the United States government; or bonds of the State of
Arizona counties, cities, towns, school districts or special districts as specified by statute. As required by
statute, collateral is required for demand deposits, certificates of deposit, and repurchase agreements
at 100 percent of all deposits not covered by federal depository insurance.
Cash and investments held at June 30, 2025, plus accrued interest, are unrestricted as to usage.
2.
Capital Assets
Capital assets acquired or construction of infrastructure assets by the District are dedicated to the city
of Scottsdale, Arizona to maintain and operate. As a result, the District owns no capital assets.
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McDowell Mountain Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.
Long-term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations are
reported as liabilities in the applicable governmental activities. Bond premiums and discounts are
amortized over the life of the bonds using the straight-line method. Bonds payable are reported net
of the applicable bond premium or discount. Bond issuance costs are expensed when incurred.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. The face amount of debt issued is reported as
other financing sources. Premiums received on debt issuances are reported as other financing sources
while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt service expenditures.
4.
Deferred Outflows/Inflows of Resources
In addition to assets, the financial statements report a separate section for deferred outflows of
resources. This represents a consumption of net position that applies to a future period and so will
not be recognized as an outflow of resources (expense/expenditure) until then. The District has no
items that qualify as a deferred outflow of resources.
In addition to liabilities, the statement of net position will sometimes report a separate section for
deferred inflows of resources. Deferred inflows of resources represent an acquisition of net position
that applies to a future period and so will not be recognized as an inflow of resources (revenue) until
that time. The District has only one type of this item, which arises only under a modified accrual basis
of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue,
is reported only in the balance sheet.
5.
Net Position/Fund Balance
In the fund financial statements, governmental funds report nonspendable portions of fund balance
related to prepaids, inventories, long-term receivables, and corpus on any permanent fund. Restricted
funds are constrained by outside parties (statute, grantors, bond agreements, etc.). Committed fund
balances are established and modified by a resolution approved by the Board of Directors. The Board
of Directors passed a resolution authorizing the City of Scottsdale City Treasurer to assign fund
balances and their intended uses. Unassigned fund balances are considered the remaining amounts.
When an expenditure is incurred for purposes for which both restricted and unrestricted resources are
available, it is the District’s policy to use restricted resources first, then unrestricted resources. When
an expenditure is incurred for purposes for which committed, assigned and unassigned amounts are
available, it is the District’s policy to use committed first, then assigned, and finally unassigned amounts.
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McDowell Mountain Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In the government-wide financial statements, net position is reported as unrestricted.
E.
Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the
Unites States of America requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
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McDowell Mountain Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 2 – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS
A.
Amounts reported in the statement of net position are different because:
Tax revenues not available to pay current-period expenditures are deferred inflows in the funds.
2
$
Net adjustment to reduce total fund balance to arrive at net position.
2
Total Fund Balance
57,197
Total Net Position
57,199
$
B.
Amounts reported in the statement of activities are different because
Tax revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds.
(1,058)
$
Net adjustments to reconcile net changes in fund balances to change in net position.
(1,058)
Net change in Fund Balance
189,315
Change in Net Position
188,257
$
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McDowell Mountain Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 3 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A.
Budgetary Information
The District adopts an annual operating budget for revenues and expenditures for the General Fund on
essentially the same modified accrual basis of accounting used to record actual expenditures. Budgetary
control over expenditures is exercised at the fund level.
NOTE 4 – DETAILED NOTES ON ALL FUNDS
A.
Assets
1.
Deposits
Deposits – At June 30, 2025, the carrying amount of the District’s cash balance was $57,048.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that in the event of a bank failure, the District’s deposits
may not be returned. As of June 30, 2025, the District had no deposits that were exposed to custodial
credit risk.
2.
Property Taxes Receivable
The Maricopa County Treasurer is responsible for collecting property taxes for all governmental
entities within the County. The County levies the property taxes due to the District in August. Two
equal installments, payable in October and March, become delinquent after the first business days
in November and May. A lien assessed against real property attaches on the first day of January
preceding the assessment levy.
Property taxes are recognized as revenues in the fiscal year they are levied in the government-wide
financial statements and represent a reconciling item between the government-wide and fund financial
statements. In the fund financial statements, property taxes are recognized as revenues in the fiscal
year they are levied and collected or if they are collected within 31 days subsequent to fiscal year-end.
Property taxes not collected within 31 days subsequent to fiscal year-end or collected in advance of
the fiscal year for which they are levied are reported as deferred inflows.
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McDowell Mountain Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 4 – DETAILED NOTES ON ALL FUNDS (CONTINUED)
Property taxes receivable consist of uncollected property taxes as determined from the records of the
County Treasurer’s Office, and at June 30, 2025, were as follows:
General
Fund
Taxes Receivable
$ 151
At the end of the current fiscal year, unavailable revenue reported in the governmental fund was as
follows:
General
Fund
Unavailable Property Taxes
Receivable
$ 2
3.
Contributions
On May 20, 2025 the City Council authorized contributions from the City of Scottsdale of $206,570
to cover property tax refunds required from the Qasimyar v. Maricopa County lawsuit.
B.
Liabilities
Obligations Under Long-term Debt
General Obligation Bonds
The District issued general obligation bonds to provide funds to acquire and improve public
infrastructure in specified areas. General obligation bonds were issued for governmental activities
only. All bonds have been paid in full.
Community facilities districts (CFDs) are created only by petition to the City Council by property
owners within the District areas. As board of directors for the District, the City Council has adopted a
formal policy that CFD debt will be permitted only when the ratio of the full cash value of the District
property (prior to improvements being installed), when compared to proposed District debt, is a
minimum of 3 to 1 prior to issuance of debt and 5 to 1 or higher after construction of improvements.
These ratios are verified by an appraisal paid for by the District and administered by the city. In
addition, cumulative debt of all CFDs cannot exceed 5 percent of the city’s full cash valuation.
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McDowell Mountain Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
Changes in Long-term Liabilities
Since all debt service obligations were satisfied on June 30, 2022, there were no changes in Long-
term Liabilities.
NOTE 5 – OTHER INFORMATION
A.
Risk Management
The District is exposed to various risks of loss. The District carries commercial insurance for $1,000,000
per occurrence and $3,000,000 aggregate covering general liability exposures. The District also carries public
entity management liability insurance for $1,000,000 each wrongful act and $3,000,000 aggregate to cover
damages resulting from the conduct of duties by or for a public entity or its boards. There have been no
known losses in any of the past three fiscal years.
B.
Future Discontinuance of District
The District has no further long-term obligations; as of fiscal year ending June 30, 2022, all debt was paid in
full. Per Arizona Revised Statutes § 48-724 (Dissolution of District), unless qualified electors of the District
vote to dissolve the District sooner, the District will remain open until the District Board determines the
District has been inactive for at least five years and has no future purpose, and the District Board adopts and
records a resolution dissolving the District.
Until the District is dissolved, the ongoing planned activities for the District will be administrative and may
include payment of annual audit fees, annual tax preparation and filing fees, preparation of the resolution fees,
insurance, publication/advertising costs, budget preparation costs, etc.
19
McDowell Mountain Ranch Community Facilities District
Required Supplementary Information
20
McDowell Mountain Ranch Community Facilities District
For the Fiscal Year Ended June 30, 2025
Original and
Final Budget
Actual
Variance
REVENUES
Taxes
-
$
(4,714)
$
(4,714)
$
Interest Income
-
326
326
Contributions from City
-
206,570
206,570
Total Revenues
-
202,182
202,182
EXPENDITURES
Current
General Government
City Treasurer's Office
69,766
12,867
56,899
Total Expenditures
69,766
12,867
56,899
Excess (Deficiency) of Revenues Over (Under) Expenditures
(69,766)
189,315
259,081
Net Change in Fund Balance
(69,766)
$
189,315
$
259,081
$
Schedule of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – General Fund
21
McDowell Mountain Ranch Community Facilities District
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
Board of Directors
McDowell Mountain Ranch Community Facilities District
We have audited, in accordance with the 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, the financial statements of the
governmental activities and the major fund of McDowell Mountain Ranch Community Facilities
District, a component unit of the City of Scottsdale, Arizona, as of and for the year ended
June 30, 2025, and the related notes to the financial statements, which collectively comprise
McDowell Mountain Ranch Community Facilities District’s basic financial statements and have issued
our report thereon dated October 13, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered McDowell Mountain
Ranch Community Facilities District’s internal control over financial reporting (internal control) as a
basis for designing audit procedures that are appropriate in the circumstances for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an opinion
on the effectiveness of McDowell Mountain Ranch Community Facilities District’s internal control.
Accordingly, we do not express an opinion on the effectiveness of McDowell Mountain Ranch
Community Facilities District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that have not been identified.
22
McDowell Mountain Ranch Community Facilities District
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether McDowell Mountain Ranch Community
Facilities District’s financial statements are free from material misstatement, we performed tests of
its compliance with certain provisions of laws, regulations, contracts, and grant agreements,
noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit,
and accordingly, we do not express such an opinion. The results of our tests disclosed no instances
of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
Attachment 4a -
McDowell Mountain Ranch (CFD) -
Report on Internal Control over Financial
Reporting and Compliance
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
Board of Directors
McDowell Mountain Ranch Community Facilities District
We have audited, in accordance with the 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, the financial statements of the
governmental activities and the major fund of McDowell Mountain Ranch Community Facilities
District, a component unit of the City of Scottsdale, Arizona, as of and for the year ended
June 30, 2025, and the related notes to the financial statements, which collectively comprise
McDowell Mountain Ranch Community Facilities District’s basic financial statements and have issued
our report thereon dated October 13, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered McDowell Mountain
Ranch Community Facilities District’s internal control over financial reporting (internal control) as a
basis for designing audit procedures that are appropriate in the circumstances for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an opinion
on the effectiveness of McDowell Mountain Ranch Community Facilities District’s internal control.
Accordingly, we do not express an opinion on the effectiveness of McDowell Mountain Ranch
Community Facilities District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that have not been identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether McDowell Mountain Ranch Community
Facilities District’s financial statements are free from material misstatement, we performed tests of
its compliance with certain provisions of laws, regulations, contracts, and grant agreements,
noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit,
and accordingly, we do not express such an opinion. The results of our tests disclosed no instances
of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
Attachment 5 -
Municipal Property Corporation (MPC)
Annual Financial Report
Annual Financial Report
Fiscal Year Ended June 30, 2025
City of Scottsdale Municipal Property Corporation
(A Component Unit of the City of Scottsdale, Arizona)
City of Scottsdale Municipal Property Corporation
(A Component Unit of the City of Scottsdale, Arizona)
Annual Financial Report
Fiscal Year Ended June 30, 2025
Table of Contents
Independent Auditor’s Report.................................................................................................................... 1
Management’s Discussion and Analysis.................................................................................................... 4
BASIC FINANCIAL STATEMENTS
Statement of Net Position and Governmental Funds Balance Sheet.................................................. 9
Statement of Activities and Governmental Funds Statement of Revenues,
Expenditures, and Changes in Fund Balances.......................................................................................10
Notes to the Basic Financial Statements.................................................................................................11
Report on Internal Control and on Compliance
Report on Internal Control over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in Accordance with Government
Auditing Standards........................................................................................................................................24
City of Scottsdale Municipal Property Corporation
For the Fiscal Year ended June 30, 2025
City of Scottsdale Municipal Property Corporation
For the Fiscal Year ended June 30, 2025
Board Members
David Smith
President
John Arnold
Vice President
Dennis Robbins
Secretary
Ken Harder
Treasurer
Fred Socoloff
Director
1
Municipal Property Corporation
Independent Auditor’s Report
Board of Directors
City of Scottsdale Municipal Property Corporation
Report on Audit of Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and the major
fund of City of Scottsdale Municipal Property Corporation (Corporation), a component unit of the City of
Scottsdale, Arizona, as of and for the year ended June 30, 2025, and the related notes to the financial
statements, which collectively comprise the Corporation’s basic financial statements as listed in the table
of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and the major funds of the City of Scottsdale
Municipal Property Corporation, as of June 30, 2025, and the respective changes in financial position
thereof for the year then ended in accordance with accounting principles generally accepted in the United
States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Our responsibilities under those standards are
further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our
report. We are required to be independent of City of Scottsdale Municipal Property Corporation, and to
meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to
our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Emphasis of Matter
As discussed in Note 1, the financial statements of the City of Scottsdale Municipal Property Corporation
are intended to present the net position and changes in net position that are attributable to the
Corporation, a component unit of the City of Scottsdale, Arizona report. They do not purport to, and do
not, present fairly the financial position of the City of Scottsdale, Arizona as of June 30, 2025 and the
changes in financial position for the year ended in conformity with accounting principles generally
accepted in the United States of America. Our opinion is not modified with respect to this matter.
2
Municipal Property Corporation
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the Corporation’s ability to
continue as a going concern for one year beyond the financial statement date, including any currently
known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing
standards and Government Auditing Standards will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user based on the
financial statements. In performing an audit in accordance with generally accepted auditing standards and
Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Corporation’s internal control. Accordingly, no such opinion is
expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the Corporation’s ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control related
matters that we identified during the audit.
3
Municipal Property Corporation
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis, as listed in the table of contents, be presented to supplement the basic financial
statements. Such information is the responsibility of management and, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who considers it to
be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 13,
2025, on our consideration of City of Scottsdale Municipal Property Corporation’s internal control over
financial reporting and on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements and other matters. The purpose of that report is solely to describe the
scope of our testing of internal control over financial reporting and compliance and the results of that
testing, and not to provide an opinion on the effectiveness of the City of Scottsdale Municipal Property
Corporation’s internal control over financial reporting or on compliance. That report is an integral part of
an audit performed in accordance with Government Auditing Standards in considering City of Scottsdale
Municipal Property Corporation’s internal control over financial reporting and compliance.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
4
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
This section offers readers of the City of Scottsdale Municipal Property Corporation’s financial statements a
narrative overview and analysis of the financial activities of the Corporation for the fiscal year ended June 30,
2025. The Corporation is a component unit of the City of Scottsdale, Arizona (city).
FINANCIAL HIGHLIGHTS
For the fiscal year ending 2024/25, the Corporation’s:
• Total assets and deferred outflows of resources were greater than liabilities, resulting in an ending fund
balance of $44,795,778 (net position).
• Net change in fund balance was $44,795,778.
• Debt Service Fund and Capital Projects Fund reported an ending fund balance of $12,678 and $44,783,100
respectively.
• Issued $112,375,000 in new bonds for the construction of water and sewer improvements.
• Bond indentures were in compliance.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis introduces the Corporation’s basic financial statements. Because of its limited
purpose, the Corporation’s basic financial statements are comprised of two components: (1) Statement of Net
Position and Governmental Funds Balance Sheet and the Statement of Activities and Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances and (2) Notes to the Basic Financial
Statements. Because the Corporation only has one governmental program, the government-wide and fund
financial statements are combined.
Government-wide Financial Statements
The Statement of Net Position is designed to provide readers with a broad overview of the Corporation’s finances,
in a manner similar to a private-sector business. The statement of net position presents information on all
of the Corporation’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources with
the difference reported as net position. Over time, increases or decreases in net position may serve as useful
indicators of whether or not the financial position of the Corporation is improving or deteriorating.
The Statement of Activities presents information showing how the Corporation’s net position changed during
the most recent fiscal year. Changes in net position are reported when 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, such as expenses related
to accrued interest.
5
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
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 Corporation, like the city, uses fund accounting to ensure
and demonstrate compliance with finance-related legal requirements.
The Corporation maintains two governmental funds, a Debt Service Fund and a Capital Projects Fund.
Information is presented on the Statement of Net Position and Governmental Funds Balance Sheet and the
Statement of Activities and Governmental Funds Statement of Revenues, Expenditures, and Changes in
Fund Balances.
The Corporation does not adopt an annual appropriated budget for its revenues and expenditures. The debt
service payments are budgeted as part of the city’s annual budget.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to a full understanding
of the data provided in the financial statements.
Government-wide Financial Analysis
As noted earlier, net position over time, may serve as useful indicators of a Corporation’s financial position.
The total assets and deferred outflows of resources were greater than total liabilities, resulting in an ending
fund balance for the close of the most recent fiscal year of $44,795,778 (net position).
6
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Net Position
June 30, 2025 and 2024
2025
2024
ASSETS AND DEFERRED OUTFLOWS OF
RESOURCES
Assets
536,265,381
$
407,112,054
$
Deferred Outflows of Resources
10,352,634
11,946,742
Total Assets and Deferred Outflows of Resources
546,618,015
$
419,058,796
$
LIABILITIES AND DEFERRED INFLOWS OF
RESOURCES
Long-Term Liabilities Outstanding
457,289,633
$
376,592,832
$
Other Liabilities
44,532,604
42,465,964
Total Liabilities
501,822,237
419,058,796
NET POSITION
Restricted for Debt Service
12,678
-
Restricted for Capital Projects
44,783,100
-
Total Net Position
44,795,778
$
-
$
Governmental Activities
Over the fiscal year, the Corporation’s total net position increased by $44,795,778. Total revenue increased by
$118,878,723 primarily as a result of new debt issued. Total expenses increased by $74,082,945 primarily due
to capital project expenses.
Changes in Net Position
For the Fiscal Years Ended June 30, 2025 and 2024
2025
2024
REVENUES
Sales Contract Income
130,417,203
$
11,767,758
$
Investment Income
244,158
15,021
Other Revenue
141
-
Total Revenues
130,661,502
11,782,779
EXPENSES
General Government
75,431,171
-
Interest and Fiscal Charges
9,857,643
11,782,779
Bond Sale Costs
576,910
-
Total Expenses
85,865,724
11,782,779
Increase\(Decrease) in Net Position
44,795,778
(176,199)
Net Position, Beginning of Year
-
176,199
Net Position, End of Year
44,795,778
$
-
$
Governmental Activities
7
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Financial Analysis of the Corporation’s Funds
The focus of the Corporation’s governmental funds is to provide information on near-term inflows,
outflows, and balances of resources that are available for spending. Such information is useful in assessing
the Corporation’s ability to pay the debt service on the bonds it issues to fund construction or acquisition of
public infrastructure.
As of June 30, 2025, the Corporation’s governmental funds reported combined ending fund balances of
$44,795,778. The fund balance for the Debt Service Fund was $12,678. The fund balance for the Capital
Projects Fund was $44,783,100 which represents unspent funds due to a debt issuance in the current fiscal
year.
Debt Administration
The total net Excise Revenue Debt at June 30, 2025 was $457,289,633. The Corporation’s total long-term debt
increased by $80,696,801 during the current fiscal year due to the issuance of new bonds net the 2014 MPC
bond redemption, payment of the principal on outstanding debt and amortization of deferred amounts.
Outstanding Debt
For the Fiscal Years Ended June 30, 2025 and 2024
2025
2024
Excise Revenue Bonds
457,289,633
$
376,592,832
$
Governmental Activities
Economic Factors
The city’s long-term financial plan considers the uncertainty of the economy and takes a cautious approach.
Requests for Information
This financial report is designed to provide a general overview of the Corporation’s finances for all of those
with an interest. If you have questions about this report or need additional financial information, contact the
Scottsdale City Treasurer’s Office at 7447 E. Indian School Road, Suite 210, Scottsdale, AZ 85251.
8
Municipal Property Corporation
Basic Financial Statements
9
Municipal Property Corporation
Statement of Net Position and Governmental Funds Balance Sheet
June 30, 2025
Debt
Service
Fund
Capital
Projects
Fund
Total
Governmental
Funds
Adjustments
(see Note 2.A.)
Statement
of Net
Position
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Assets
Restricted Cash and Short-term Investments
35,300,024
$
53,802,921
$
89,102,945
$
-
$
89,102,945
$
Interest Receivable
11,166
214,271
225,437
225,437
Amount Due from City of Scottsdale
446,936,999
-
446,936,999
-
446,936,999
Total Assets
482,248,189
$
54,017,192
536,265,381
$
-
$
536,265,381
$
Deferred Outflows of Resources
Deferred Amounts on Refunding
10,352,634
10,352,634
Total Assets and Deferred Outflows of Resources
10,352,634
$
546,618,015
$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES/NET POSITION
Liabilities
Accounts Payable
-
$
9,234,092
$
9,234,092
$
-
$
9,234,092
$
Bond Interest Payable
5,683,512
-
5,683,512
-
5,683,512
Matured Bonds Payable
29,615,000
-
29,615,000
-
29,615,000
Long-term Liabilities
Due Within One Year
-
-
-
35,255,000
35,255,000
Due After One Year
-
-
-
422,034,633
422,034,633
Total Liabilities
35,298,512
9,234,092
44,532,604
457,289,633
501,822,237
Deferred Inflows of Resources
Unavailable Revenue
446,936,999
-
446,936,999
(446,936,999)
-
Fund Balances
Restricted
12,678
44,783,100
44,795,778
(44,795,778)
-
Unassigned
-
-
-
-
-
Total Fund Balances
12,678
44,783,100
44,795,778
(44,795,778)
-
Total Liabilities, Deferred Inflows of Resources, and Fund
Balances
482,248,189
$
54,017,192
$
536,265,381
$
Net Position
44,795,778
$
44,795,778
$
Restricted for Debt Service
12,678
12,678
Restricted for Capital Projects
44,783,100
44,783,100
Total Net Position
44,795,778
$
44,795,778
$
The accompanying notes to the basic financial statements are an integral part of this statement.
10
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Debt Service
Fund
Capital Projects
Fund
Total
Governmental
Funds
Adjustments
(see Note 2.B.)
Statement of
Activities
REVENUES
Sales Contract Income from City of Scottsdale
48,126,294
$
-
$
48,126,294
$
82,290,909
$
130,417,203
$
Investment Income
29,887
214,271
244,158
-
244,158
Other Revenues
141
-
141
-
141
Total Revenues
48,156,322
214,271
48,370,593
82,290,909
130,661,502
EXPENDITURES/EXPENSES
Current
General Government
-
-
-
75,431,171
75,431,171
Capital Improvements
-
75,431,171
75,431,171
(75,431,171)
-
Debt Service
Principal
36,740,000
-
36,740,000
(36,740,000)
-
Interest and Fiscal Charges
11,405,156
-
11,405,156
(1,547,513)
9,857,643
Bond Sale Costs
576,910
-
576,910
-
576,910
Total Expenditures
48,722,066
75,431,171
124,153,237
(38,287,513)
85,865,724
Excess (Deficiency) of Revenues over Expenditures
(565,744)
(75,216,900)
(75,782,644)
120,578,422
44,795,778
Other Financing Sources (Uses)
Proceeds of Bonds
-
112,375,000
112,375,000
(112,375,000)
-
Bond Premium
578,422
7,625,000
8,203,422
(8,203,422)
-
Total Other Financing Sources (Uses)
578,422
120,000,000
120,578,422
(120,578,422)
-
Net change in Fund Balances
12,678
44,783,100
44,795,778
-
44,795,778
Fund Balance/Net Position, Beginning of Year
-
-
-
-
-
Fund Balances/Net Position, End of Year
12,678
$
44,783,100
$
44,795,778
$
-
$
44,795,778
$
The accompanying notes to the basic financial statements are an integral part of this statement.
Statement of Activities and Governmental Funds Statement of Revenues, Expenditures, and
Changes in Fund Balances
11
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the City of Scottsdale Municipal Property Corporation (Corporation) a component
unit of the City of Scottsdale, Arizona (city) conform to accounting principles generally accepted in the United
States of America applicable to governmental units as promulgated by the Governmental Accounting Standards
Board. A summary of the more significant accounting policies of the Corporation follows.
A.
Reporting Entity
The City of Scottsdale Municipal Property Corporation, a nonprofit corporation, was incorporated in February
1967 under the laws of the State of Arizona, for the purpose of constructing or otherwise acquiring or
equipping buildings, structures or improvements on land owned by the City of Scottsdale, Arizona for the
benefit, common good and general welfare of the city and its inhabitants. Upon dissolution, any remaining
assets are to be distributed to the city. The Corporation is governed by a Board of Directors approved by the
city. For financial reporting purposes, transactions of the Corporation are included as if the Corporation were
part of the city’s operations.
B.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e. the Statement of Net Position and the Statement of Activities)
report information on all of the nonfiduciary activities of the Corporation. For the most part, the effect
of interfund activity has been removed from these statements. Governmental activities, which normally are
supported by taxes and miscellaneous revenues, are reported separately from business-type activities, which rely
to a significant extent on rates, fees and charges for support. The Corporation had no business-type activities
during the fiscal year.
Financial statements are provided for major governmental funds, with an adjustment column to arrive at
government-wide financial statement amounts.
C.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus and
the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability
is incurred, regardless of the timing of related cash flows.
Governmental fund financial statements are reported using the current financial resources measurement focus
and the modified accrual basis of accounting. Revenues are recognized when they are both earned and available.
Revenues are considered to be available when they are collectible within the current period or soon enough
thereafter to pay liabilities of the current period. For this purpose, the Corporation considers revenues to be
available if they are collected within 31 days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting, except expenditures related to claims and
judgments, which are recorded only when payment is due. However, since debt service resources are provided
during the current year for payment of governmental long-term principal and interest due early in the following
year, the expenditures and related liabilities have been recognized in the Debt Service Fund.
12
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Sales contract payments from the city and interest associated with the current fiscal period are considered to
be susceptible to accrual and have been recognized as revenues of the current fiscal period. All other revenue
items are considered to be measurable and available only when cash is received by the Corporation.
The Corporation reports the following major governmental funds:
• The Debt Service Fund accounts for the resources accumulated and used for the payment of long-term debt
including principal, interest and related costs.
• The Capital Projects Fund accounts for resources accumulated and used for the acquisition or construction
of major capital facilities.
When both restricted and unrestricted funds are available for use, it is the Corporation’s policy to use restricted
funds first, and then unrestricted funds.
D.
Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund
Balance
1.
Cash and Investments
Arizona Revised Statutes authorize the Corporation to invest public monies in the State or County
Treasurers’ investment pools, interest bearing savings accounts, certificates of deposit and repurchase
agreements in eligible depositories, bonds or other obligations of the United States government that
are guaranteed as to principal and interest by the United States government, or bonds of the State of
Arizona counties, cities, towns, school districts or special districts as specified by statute. As required by
statute, collateral is required for demand deposits, certificates of deposit, and repurchase agreements
at 100 percent of all deposits not covered by federal depository insurance. This policy is in compliance
with the Corporation’s by-laws and trust agreements.
Cash and investments held by a trustee at June 30, 2025, plus accrued interest, are restricted as to
usage.
The Corporation’s deposits at June 30, 2025 were collateralized with securities held by the pledging
financial institution’s trust department or agency in the Corporation’s name.
2.
Capital Assets
Capital assets acquired or constructed by the Corporation are dedicated to the City of Scottsdale,
Arizona to maintain and operate. As a result, the Corporation owns no capital assets.
13
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.
Long-term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations are
reported as liabilities in the applicable governmental activities. Bond premiums and discounts are
amortized over the life of the bonds using the straight-line method. Bonds payable are reported net
of the applicable bond premium or discount. Bond issuance costs are expensed as incurred.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. The face amount of debt issued is reported as
other financing sources. Premiums received on debt issuances are reported as other financing sources
while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt service expenditures.
4.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position reports a separate section for deferred outflows of
resources. This represents a consumption of net position that applies to a future period and so will
not be recognized as an outflow of resources (expense/expenditure) until then.
The Corporation has only one item that qualifies for reporting in this category. It is the deferred
amount on refunding. A deferred amount on refunding results from the difference in the carrying
value of refunded debt and its reacquisition price. This amount is deferred and amortized over the
shorter of, the life of the refunded or refunding debt.
In addition to liabilities, the statement of net position will sometimes report a separate section for
deferred inflows of resources. Deferred inflows of resources represent an acquisition of net position
that applies to a future period and so will not be recognized as an inflow of resources (revenue) until
that time. The Corporation has only one type of this item, which arises only under a modified accrual
basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable
revenue, is reported only in the governmental funds balance sheet.
5.
Net Position/Fund Balance
In the fund financial statements, governmental funds report nonspendable portions of fund balance
related to prepaids, inventories, long term receivables, and corpus on any permanent fund. Restricted
funds are constrained from outside parties (statute, grantors, bond agreements, etc.). Committed fund
balances are established and modified by a resolution approved by the Board of Directors. The Board
of Directors has not authorized anyone to assign fund balances and their intended uses. Unassigned
fund balances are considered the remaining amounts. The Corporation has not formally adopted a
spending priority policy and therefore use the spending priority indicated in GASB Statement No.
54, Fund Balance Reporting and Governmental Fund Type Definitions. When an expenditure is incurred for
purposes for which both restricted and unrestricted fund balance is available, GASB 54 indicates to
use restricted first, then unrestricted fund balance. When an expenditure is incurred for purposes for
which committed, assigned and unassigned amounts are available, GASB 54 indicates to use committed
first, then assigned, and finally unassigned amounts.
14
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In the government-wide financial statements, net position is reported in two categories: restricted net
position and unrestricted net position. Restricted net position accounts for the portion of net position
restricted by bond covenants. Unrestricted net position is the remaining net position not included in
the previous category.
E.
Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in
the Unites States of America may require management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. Actual results may differ from those
estimates.
15
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 2 – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS
A.
Amounts Reported in the Statement of Net Position are Different Because:
Amounts due from the City of Scottsdale for retirement of debt
are long-term in nature and are deferred inflows in the
governmental funds.
Prior Year Receivable
364,646,090
$
New Debt Issued
112,375,000
Debt Service Payments Made
(36,740,000)
Amortization Amount on Refunding
1,594,108
Deferred Premium on New Bonds
8,203,422
Amortization of Premium on Existing Bonds
(3,141,621)
446,936,999
$
Long-term liabilities applicable to the Corporation's
governmental activities are not due and payable in the current
period and accordingly are not reported as fund payables in the
governmental funds.
Bonds Payable
(433,690,000)
Deferred Issuance Premium
(23,599,633)
(457,289,633)
Deferred Amount on Refunding are long-term in nature and are
not reported as deferred outflows of resources in the
governmental funds.
10,352,634
10,352,634
Net adjustment to reduce total fund balance in the
governmental funds to arrive at net position.
-
Total Fund Balances
44,795,778
Total Net Position
44,795,778
$
16
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 2 – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS (CONTINUED)
B.
Amounts Reported in the Statement of Activities are Different Because:
Contractual agreement provides for repayment of debt by the City to the
Corporation; thus, in the statement of activities revenues are recorded at the
inception of the agreement rather than as received. Revenues recognized in
the fund statements are those that provide current financial resources.
Changes in the total debt outstanding will result in adjustments to the revenue
in the statement of activities.
New Debt Issued
112,375,000
$
Debt Service Payments Made
(36,740,000)
Amortization Amount on Refunding
1,594,108
Deferred Premium on New Bonds
8,203,422
Amortization of Premium on Existing Bonds
(3,141,621)
82,290,909
$
Interest expense in the statement of activities differs from the amount
reported in governmental funds because additional accrued and accreted
interest was calculated for bonds payable and additional interest expense was
recognized on the amortization of amount on refunding and premiums which
are expended within the funds statements.
Amortization of Deferred Amount on Refunding Bonds
(1,594,108)
Amortization of Premium on Existing Bonds
3,141,621
1,547,513
Repayment of bond principal is reported as an expenditure in governmental
funds, and thus, has the effect of reducing fund balance because current
financial resources have been used. For the statement of activities, however,
the principal payments reduce the liabilities in the statement of net position
and do not result in an expense in the statement of activities.
Principal Payments Made
36,740,000
36,740,000
Bond proceeds are reported as financing sources in governmental funds and
thus contribute to the change in fund balance. In the statement of activities,
however, issuing debt increases long-term liabilities in the statement of net
position and does not affect the statement of activities.
Bond Proceeds
(112,375,000)
Premium on Bonds
(8,203,422)
(120,578,422)
Net Adjustment To Reduce Net Change In Fund Balances To Arrive
At Net Change In Net Position
-
Net Change In Fund Balances
44,795,778
Net Change In Net Position
44,795,778
$
17
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 3 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A.
Budgetary Information
The Corporation does not adopt an annual appropriation budget. However, debt service payments are
budgeted as part of the city’s annual budget.
NOTE 4 – DETAILED NOTES ON ALL FUNDS
A.
Assets
Deposits and Investments
Deposits – At June 30, 2025, the Corporation’s deposits consisted of the following:
Fair
Value
Short-Term Investments
89,102,945
$
Custodial Credit Risk
Custodial credit risk is the risk that in the event of a bank failure, the Corporation’s deposits may not
be returned to it. As of June 30, 2025, $88,602,945 of the Corporation’s deposits was uninsured and
collateralized by securities held by the pledging bank’s trust department not in the Corporation’s name,
and therefore exposed to custodial credit risk.
B.
Liabilities
Obligations Under Long-term Debt
The Corporation issues bonds which are repaid through the city’s excise tax collections and other unrestricted
revenues. The use of property taxes to repay these bonds is specifically prohibited by law. The following
bonds, or portions thereof, are paid out of the city’s Water and Sewer Fund:
• a portion of the 2006 MPC Excise Tax Revenue Refunding Bonds,
• the 2015 MPC Excise Tax Revenue Refunding Bonds,
• a portion of the 2015A MPC Excise Tax Revenue Bonds,
• the 2017 MPC Excise Tax Revenue Refunding Bonds,
• the 2017A MPC Excise Tax Revenue Bonds,
• the 2021A MPC Excise Tax Revenue Refunding Bonds,,
• a portion of the 2021B MPC Taxable Refunding Bonds,
• the 2025 MPC Excise Tax Revenue Bonds.
18
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 4 – DETAILED NOTES ON ALL FUNDS (CONTINUED)
The 2017B MPC Excise Tax Revenue Bonds are paid out of the city’s Aviation Fund.
In a prior year, the Corporation refinanced bond issues through the issuance of refunding bonds. The
proceeds from the issuance of the bonds were used to purchase U.S. government securities that were placed
in an irrevocable trust with an escrow agent to provide debt service payments on the bonds being refunded.
As a result, the refunded bonds are considered to be defeased and the liability has been removed from the
governmental activities column of the Corporation’s financial statements.
2017 MPC Excise Tax Revenue Refunding Bonds
38,350,000
38,350,000
$
Refunded in Prior Years
19
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 4 – DETAILED NOTES ON ALL FUNDS (CONTINUED)
Bonds payable at June 30, 2025 consisted of the outstanding bonds presented below:
Classified in Debt Service Fund - General Government Purposes
Municipal Property Corporation Bonds
Bonds
Outstanding
2006 Municipal Property Corporation Excise Tax Revenue Refunding Bonds (issued November 29, 2006) due in
annual installments of $1,200,000 to $4,975,000 through July 1, 2034; interest at 5 percent. Original issue
amount $55,450,000.
$ 31,390,000
2015A Municipal Property Corporation Excise Tax Revenue Bonds (issued January 6, 2015) due in annual
installments of $205,000 to $865,000 through July 1, 2034; interest at 3 percent to 5 percent. On February 17,
2021, $685,000 due in 2027 was refunded. Original issue amount $12,200,000.
6,175,000
2015A Municipal Property Corporation Taxable Revenue Bonds (issued January 6, 2015) due in annual
installments of $275,000 to $1,025,000 through July 1, 2034; interest at 2 percent to 4 percent. Original issue
amount $14,615,000.
7,955,000
2019A Municipal Property Corporation Excise Tax Revenue Bonds (issued October 23, 2019) due in annual
installments of $205,000 to $645,000 through July 1, 2039; interest at 3 percent to 5 percent. Original issue
amount $9,275,000.
7,355,000
2019B Municipal Property Corporation Taxable Excise Tax Revenue Bonds (issued October 23, 2019) due in
annual installments of $940,000 to $2,125,000 through July 1, 2039; interest at 1.85 percent to 2.9 percent.
Original issue amount $33,275,000.
25,150,000
2021B Municipal Property Corporation Taxable Excise Tax Revenue Refunding Bonds (issued February 17,
2021) due in annual installments of $330,000 to $9,410,000 through July 1, 2035; interest at 0.14 percent to 1.91
percent. Original issue amount $71,325,000.
56,200,000
Total Municipal Property Corporation Bonds Outstanding-General Government
$ 134,225,000
20
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 4 – DETAILED NOTES ON ALL FUNDS (CONTINUED)
Classified in Debt Service Fund - Water and Sewer Purposes
Municipal Property Corporation Bonds
Bonds
Outstanding
2006 Municipal Property Corporation Excise Tax Revenue Refunding Bonds (issued November 29, 2006) due in
annual installments of $3,600,000 to $10,140,000 through July 1, 2030; interest at 5 percent. Original issue
amount $110,510,000.
$ 28,080,000
2015A Municipal Property Corporation Excise Tax Revenue Bonds (issued January 6, 2015) due in annual
installments of $310,000 to $1,305,000 through July 1, 2034; interest at 3 percent to 5 percent. On February 17,
2021, $1,040,000 due in 2027 was refunded. Original issue amount $18,485,000.
9,355,000
2015 Municipal Property Corporation Excise Tax Revenue Refunding Bonds (issued March 26, 2015) due in
annual installments of $3,788,459 to $5,822,479 through July 1, 2028; interest at 5 percent. On February 17,
2021, $11,257,479 due 2027 through 2028 was refunded. Original issue amount $46,811,731.
5,200,000
2017 Municipal Property Corporation Excise Tax Revenue Refunding Bonds (issued March 1, 2017) due in
annual installments of $2,015,000 to $12,630,000 through July 1, 2036; interest at 3 percent to 5 percent. On
February 17, 2021, $38,350,000 due 2031 through 2033 and 2035 through 2036 was defeased. Original issue
amount $79,970,000.
34,795,000
2017A Municipal Property Corporation Excise Tax Revenue Bonds (issued May 24, 2017) due in annual
installments of $1,080,000 to $2,730,000 through July 1, 2037; interest at 3 percent to 5 percent. Original issue
amount $39,065,000.
27,415,000
2021A Municipal Property Corporation Excise Tax Revenue Refunding Bonds (issued February 17, 2021) due in
a single installment of $7,920,000 on July 1, 2030; interest at 5 percent. Original issue amount $7,920,000.
7,920,000
2021B Municipal Property Corporation Taxable Excise Tax Revenue Refunding Bonds (issued February 17,
2021) due in annual installments of $145,000 to $12,750,000 through July 1, 2036; interest at 0.14 percent to 1.96
percent. Original issue amount $63,860,000.
57,765,000
2025 Municipal Property Corporation Excise Tax Revenue Bonds (issued June 11, 2025) due in annual
installments of $1,600,000 to $10,000,000 through July 1, 2045; interest at 4 percent to 5 percent. Original issue
amount $112,375,000.
112,375,000
Total Municipal Property Corporation Bonds Outstanding-Water and Sewer
$ 282,905,000
2017B Municipal Property Corporation Excise Tax Revenue Bonds (issued May 24, 2017) due in annual
installments of $645,000 to $1,655,000 through July 1, 2037; interest at 3 percent to 5 percent. Original issue
amount $23,520,000.
16,560,000
Total Municipal Property Corporation Bonds Outstanding-Aviation
$ 16,560,000
Total bonds outstanding
$ 433,690,000
The bonds may be redeemed in whole or in part on any interest payment date, at redemption prices reflecting
a premium above par, plus accrued interest to the date of redemptions.
The city is obligated under contracts to pay the Corporation amounts sufficient to retire the Corporation’s
bonds and related interest in exchange for the assets acquired or constructed in connection with the issuance
of bonds. The city has collateralized the bonds of the Corporation by (1) a first lien pledge of all excise,
transaction privilege, and franchise taxes collected by the city, except those taxes required by law to be expended
for specific purposes, and (2) a pledge of all net revenue derived by the city from the facilities constructed or
acquired with the bonds proceeds. The Corporation retains legal title to the properties until the amounts due
from the city are paid in full. The city has the sole right to the use of the facilities and is responsible for all
operating and maintenance costs.
21
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 4 – DETAILED NOTES ON ALL FUNDS (CONTINUED)
The sales contract agreements mentioned above are for an amount equal to the Corporation’s bonded debt
and interest thereon. Accordingly, the accompanying balance sheet reflects a receivable from the city the
present value of the amounts due thereunder, which corresponds to the principal portion plus premium and
deferred amount on refunding of the bonded debt payable.
The city has pledged to maintain three-times the debt service, as security for bonds issued by the Corporation.
The city has committed to make sales contract payments to the Corporation each year sufficient to cover the
principal and interest requirements on the Corporation’s bonds. The Corporation has pledged, as sole security
for the bonds, the annual sales contract payments from the city. Total principal and interest remaining on the
debt is $545,833,134.
The MPC bond issuances, for both governmental and business-type activities, contain the following provisions
that would constitute an event of default by the MPC:
• Non-punctual payment of principal or interest.
• Default in the performance or observance of any covenant, agreement, or condition in the indenture or
in the bonds not cured within 30 days of notice of default. The MPC is also considered to be in default
if the issue is not curable within 30 days and corrective action is not diligently pursued to the satisfaction
of the trustee within 30 days.
• Bankruptcy, insolvency, and/or receivership.
• Default on any bonds which are on a parity basis with the bonds in question.
If any of the events of default transpire, the MPC bond trustee may file a suit or suits in equity or at law and
appoint a receiver to collect and properly disburse pledged MPC revenues for debt service payments. Any
amounts recovered through such proceedings shall be paid first to the costs and expenses incurred by the
trustee, its agents, attorneys and counsel, and of all proper expenses, liabilities and advances incurred or made
by the trustee or any registered owner(s) of the bonds in question. If a residual amount were to remain, it
would be applied to the then-owed or unpaid amount related to the bonds. If insufficient funds were to exist,
the residual amount would be allocated on a pro-rata basis to) the then-owed or unpaid amount related to the
bonds.
22
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 5 – CHANGES IN LONG TERM DEBT
A.
Summary of Changes
The Corporation issued new debt of $112,375,000 with a premium of $8,203,422, and an all-in true interest
cost of 3.91%, for the purpose of constructing assets.
The Corporation redeemed in advance of maturity $7,125,000 remaining of the 2014 Refunding bonds.
The Corporation made principal payments of $36,740,000 amortized deferred issuance premiums of $3,141,621
and deferred amount on refundings of $1,594,108 during the current fiscal year.
The following is a summary of changes in long-term debt:
Municipal
Deferred
Long Term
Beginning Balances
358,055,000
$
18,537,832
$
376,592,832
$
Increases:
New Bond Issue
112,375,000
8,203,422
120,578,422
Decreases:
Existing Bonds
(36,740,000)
(3,141,621)
(39,881,621)
Ending Balances
433,690,000
$
23,599,633
$
457,289,633
$
23
Municipal Property Corporation
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 5 – CHANGES IN LONG TERM DEBT (CONTINUED)
The following is a summary of annual debt service requirements to maturity as of June 30, 2025:
Fiscal Year
Principal
Interest
Total
2026
35,255,000
15,902,458
51,157,458
2027
36,680,000
14,180,467
50,860,467
2028
38,495,000
12,953,169
51,448,169
2029
40,635,000
11,716,894
52,351,894
2030
36,800,000
10,167,119
46,967,119
2031-2035
158,235,000
32,386,415
190,621,415
2036-2040
64,440,000
11,998,318
76,438,318
2041-2045
23,150,000
2,838,294
25,988,294
Total
433,690,000
$
112,143,134
$
545,833,134
$
NOTE 6 – OTHER INFORMATION
A.
Risk Management
The Corporation is exposed to various risks of loss related to torts; theft of, damage to and destruction
of assets; errors and omissions; and natural disasters. The Corporation does not have separate insurance
coverage but is included under the City of Scottsdale, Arizona’s self-insured risk management program. The
city is self-insured for the first $2,000,000 of public liability; coverage in excess of this amount is provided
through the purchase of commercial insurance. For more information on the city’s self-insurance, please see
the city’s Annual Comprehensive Financial Report, Note V.A.
24
Municipal Property Corporation
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
Board of Directors
City of Scottsdale Municipal Property Corporation
We have audited, in accordance with the 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, the financial statements of the
governmental activities and each major fund of City of Scottsdale Municipal Property Corporation, a
component unit of the City of Scottsdale, Arizona, as of and for the year ended June 30, 2025, and
the related notes to the financial statements, which collectively comprise City of Scottsdale Municipal
Property Corporation’s basic financial statements and have issued our report thereon dated
October 13, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered City of Scottsdale
Municipal Property Corporation’s internal control over financial reporting (internal control) as a basis
for designing audit procedures that are appropriate in the circumstances for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an opinion
on the effectiveness of City of Scottsdale Municipal Property Corporation’s internal control.
Accordingly, we do not express an opinion on the effectiveness of City of Scottsdale Municipal
Property Corporation’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that have not been identified.
25
Municipal Property Corporation
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Scottsdale Municipal Property
Corporation’s financial statements are free from material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements,
noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit,
and accordingly, we do not express such an opinion. The results of our tests disclosed no instances
of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
Attachment 5a -
Municipal Property Corporation (MPC) -
Report on Internal Control over Financial
Reporting and Compliance
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
Board of Directors
City of Scottsdale Municipal Property Corporation
We have audited, in accordance with the 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, the financial statements of the
governmental activities and each major fund of City of Scottsdale Municipal Property Corporation, a
component unit of the City of Scottsdale, Arizona, as of and for the year ended June 30, 2025, and
the related notes to the financial statements, which collectively comprise City of Scottsdale Municipal
Property Corporation’s basic financial statements and have issued our report thereon dated
October 13, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered City of Scottsdale
Municipal Property Corporation’s internal control over financial reporting (internal control) as a basis
for designing audit procedures that are appropriate in the circumstances for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an opinion
on the effectiveness of City of Scottsdale Municipal Property Corporation’s internal control.
Accordingly, we do not express an opinion on the effectiveness of City of Scottsdale Municipal
Property Corporation’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that have not been identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Scottsdale Municipal Property
Corporation’s financial statements are free from material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements,
noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit,
and accordingly, we do not express such an opinion. The results of our tests disclosed no instances
of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
Attachment 6 -
Via Linda Road CFD
Annual Financial Report
Annual Financial Report
Fiscal Year Ended June 30, 2025
Via Linda Road Community Facilities District
(A Component Unit of the City of Scottsdale, Arizona)
Via Linda Road Community Facilities District
(A Component Unit of the City of Scottsdale, Arizona)
Annual Financial Report
Fiscal Year Ended June 30, 2025
Table of Contents
Independent Auditor’s Report.................................................................................................................... 1
Management’s Discussion and Analysis.................................................................................................... 4
BASIC FINANCIAL STATEMENTS
Statement of Net Position and Governmental Funds Balance Sheet................................................ 10
Statement of Activities and Governmental Funds Statement of Revenues,
Expenditures, and Changes in Fund Balances.......................................................................................11
Notes to the Basic Financial Statements.................................................................................................12
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – General Fund.........................................................................................................20
Report on Internal Control and on Compliance
Report on Internal Control over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in Accordance with Government
Auditing Standards........................................................................................................................................21
Via Linda Road Community Facilities District
For the Fiscal Year ended June 30, 2025
1
Via Linda Road Community Facilities District
Independent Auditor’s Report
Board of Directors
Via Linda Road Community Facilities District
Report on Audit of Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and the major
fund of Via Linda Road Community Facilities District (District), a component unit of the City of Scottsdale,
Arizona, as of and for the year ended June 30, 2025, and the related notes to the financial statements,
which collectively comprise the District’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and the major fund of the Via Linda Road
Community Facilities District, as of June 30, 2025, and the respective changes in financial position thereof
for the year then ended in accordance with accounting principles generally accepted in the United States
of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Our responsibilities under those standards are
further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our
report. We are required to be independent of Via Linda Road Community Facilities District, and to meet
our other ethical responsibilities in accordance with the relevant ethical requirements relating to our
audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
Emphasis of Matter
As discussed in Note 1, the financial statements of the Via Linda Road Community Facilities District are
intended to present the net position and changes in net position that are attributable to the District, a
component unit of the City of Scottsdale, Arizona report. They do not purport to, and do not, present
fairly the financial position of the City of Scottsdale, Arizona as of June 30, 2025 and the changes in
financial position for the year ended in conformity with accounting principles generally accepted in the
United States of America. Our opinion is not modified with respect to this matter.
1
2
Via Linda Road Community Facilities District
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue
as a going concern for one year beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing
standards and Government Auditing Standards will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user based on the
financial statements. In performing an audit in accordance with generally accepted auditing standards and
Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is
expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control related
matters that we identified during the audit.
2
3
Via Linda Road Community Facilities District
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis and budgetary comparison information, as listed in the table of contents, be
presented to supplement the basic financial statements. Such information is the responsibility of
management and, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
management’s responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence
to express an opinion or provide any assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 13,
2025, on our consideration of Via Linda Road Community Facilities District’s internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements and other matters. The purpose of that report is solely to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing, and not
to provide an opinion on the effectiveness of the Via Linda Road Community Facilities District’s internal
control over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering Via Linda Road Community Facilities
District’s internal control over financial reporting and compliance.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
3
4
Via Linda Road Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
As management of the Via Linda Road Community Facilities District (District), this section
offers readers a narrative overview and analysis of the financial activities for the District. The
District is one of the City of Scottsdale, Arizona’s component units for financial reporting
purposes for the fiscal year ended June 30, 2025.
Formed in 1998, the District is a special purpose taxing district and separate political subdivision
under Arizona statutes. As such, the District can levy taxes and issue bonds, independent of
the City of Scottsdale, Arizona (city). Property owners within the District boundaries pay for
District infrastructure and functions through secondary property tax assessments. City staff
administers the District and the costs of their services are reimbursed by District funds. The
Scottsdale City Council also serves as the District Board of Directors.
FINANCIAL HIGHLIGHTS
For the year ending 2024/25, the District’s:
• Earned interest and contributions from the City of Scottsdale’s General fund were sufficient to pay
expenses.
• Governmental funds reported an ending fund balance of $51,835.
• Governmental fund revenues and City of Scottsdale General fund contributions were more than expenditures
by $46,375.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis introduces the District’s basic financial statements. Because of its limited purpose,
the District’s basic financial statements are comprised of two components: (1) Statement of Net Position and
Governmental Funds Balance Sheet and the Statement of Activities and Governmental Funds Statement of
Revenues, Expenditures, and Changes in Fund Balance and (2) Notes to the Basic Financial Statements.
Because the District has only one governmental program, the government-wide and fund financial statements
are combined.
5
Via Linda Road Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Government-wide Financial Statements
The Statement of Net Position is designed to provide readers with a broad overview of the District’s finances,
in a manner similar to a private-sector business. The statement of net position presents information on all of
the District’s assets and liabilities, and deferred outflows/inflows of resources, with the difference reported
as net position. Over time, increases or decreases in net position may serve as useful indicators of whether or
not the financial position of the District is improving or deteriorating.
The Statement of Activities presents information showing how the District’s net position changed during the
most recent fiscal year. Changes in net position are reported when 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, such as revenues pertaining
to uncollected taxes and expenses related to accrued interest.
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 District, like the city, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements.
The District maintains one general governmental fund. The General fund for the District is unassigned and
therefore not restricted for a specific purpose. Information is presented in the Governmental Funds Balance
Sheet and in the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances
for the General Fund.
The District adopts an annual budget for its General Fund. A supplementary budgetary schedule has been
provided to demonstrate compliance with this budget.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to acquire a full
understanding of the data provided in the basic financial statements.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents as required
supplementary information a comparison between budgeted and actual amounts within the General Fund.
6
Via Linda Road Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position.
The assets of the District exceeded its liabilities at the close of the most recent fiscal year by $51,835 (net
position). The District’s purpose is to acquire and improve public infrastructure in specified land areas. As a
special purpose district and a separate political subdivision under the Arizona Constitution, the District can
levy taxes and issue bonds independently of the city. Property owners in the designated areas are assessed
for District taxes to pay the debt service over the life of the bonds. The City Council serves as the Board
of Directors. However, the city has no liability for the District’s debt. For financial reporting purposes,
transactions of the District are combined together and included as if they were part of the city’s operations
and the assets financed through the District are combined with the infrastructure of the city.
Net Position
June 30, 2025 and 2024
2025
2024
ASSETS
Current Assets
51,835
$
65,346
$
Total Assets
51,835
65,346
LIABILITIES
Current Liabilities
-
59,886
Total Liabilities
-
59,886
NET POSITION
Unrestricted
51,835
5,460
Total Net Position
51,835
$
5,460
$
Governmental Activities
During the fiscal year, the District’s total net position increased by $46,375.
7
Via Linda Road Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Changes in Net Position
For the Fiscal Years Ended June 30, 2025 and 2024
2025
2024
REVENUES
Taxes
(2,529)
$
-
$
Interest
429
807
Contributions from City
61,331
-
Total Revenues
59,231
807
EXPENSES
General Government
12,856
76,786
Total Expenses
12,856
76,786
Change in Net Position
46,375
(75,979)
Net Position, Beginning of Year
5,460
81,439
Net Position, End of Year
51,835
$
5,460
$
Governmental Activities
Revenues increased in fiscal year 2024/25 due to contributions from the City of Scottsdale. On May 20,
2025 the City Council authorized contributions from the City of Scottsdale of $61,331 to cover property tax
refunds required from the Qasimyar v. Maricopa County lawsuit.
8
Via Linda Road Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Financial Analysis of the District’s Funds
The focus of the District’s governmental funds is to provide information on near-term inflows, outflows, and
balances of resources that are available for spending.
As of the end of fiscal year 2024/25 the District’s governmental funds reported revenues and other financing
sources more than expenditures by $46,375 and an ending fund balance of $51,835. The entire fund balance
is unassigned.
Revenues totaled $59,231 for the fiscal year ended June 30, 2025.
Capital Assets and Debt Administration
The District was formed to finance and acquire or construct amenities that are subsequently dedicated to the
city for operation. The District does not own or operate infrastructure. Since formation, District bonds have
been issued, and the proceeds used to acquire or construct an extension of Via Linda Road eastward and the
development of trailheads.
The District has issued $3,225,000 of the $3,500,000 authorized bonds. In fiscal year 2012/13, the City
Council and the District Board approved the issuance of $2,000,000 refunding bonds to reduce the total debt
service payments. All outstanding bonds were paid in full as of June 30, 2023.
Next Year’s Budget and Rates
The District will not levy taxes since all debt has been satisfied. The fiscal year 2024/25 budget includes
estimated ongoing expenses until the District is dissolved.
Future Discontinuance of District
The District has no further long-term obligations; as of fiscal year ending June 30, 2023, all debt was paid in
full. Per Arizona Revised Statutes § 48-724 (Dissolution of District), unless qualified electors of the District
vote to dissolve the District sooner, the District will remain open until the District Board determines the
District has been inactive for at least five years and has no future purpose, and the District Board adopts and
records a resolution dissolving the District.
Until the District is dissolved, the ongoing planned activities for the District will be administrative and may
include payment of annual audit fees, preparation of the resolution fees, insurance, publication/advertising
costs, budget preparation costs, etc.
Requests for Information
This financial report is designed to provide a general overview of the District’s finances for all of those
with an interest in the government’s finances. If you have questions about this report or need additional
financial information, contact the Scottsdale City Treasurer’s Office at 7447 E. Indian School Road, Suite 210,
Scottsdale, AZ 85251.
9
Via Linda Road Community Facilities District
Basic Financial Statements
10
Via Linda Road Community Facilities District
Statement of Net Position and Governmental Funds Balance Sheet
June 30, 2025
General Fund
Adjustments
Statement of
Net Position
ASSETS AND DEFERRED OUTFLOWS
OF RESOURCES
Assets
Current Assets
Cash
51,835
$
-
$
51,835
$
Total Assets
51,835
$
-
$
51,835
$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES/NET POSITION
Liabilities
Total Liabilities and Deferred Inflows of Resources
-
$
-
$
-
$
Fund Balances/Net Position
Fund Balances
Unassigned
51,835
(51,835)
-
Total Fund Balances
51,835
(51,835)
-
Total Liabilities, Deferred Inflows of Resources,
and Fund Balances
51,835
$
Net Position
Unrestricted
51,835
51,835
Total Net Position
51,835
$
51,835
$
The accompanying notes to the basic financial statements are an integral part of this statement.
11
Via Linda Road Community Facilities District
For the Fiscal Year Ended June 30, 2025
General Fund
Adjustments
Statement of
Activities
REVENUES
Taxes
(2,529)
$
-
$
(2,529)
$
Interest
429
-
429
Contributions from City
61,331
-
61,331
Total Revenues
59,231
-
59,231
EXPENDITURES/EXPENSES
Current
General Government
City Treasurer's Office
12,856
$
-
$
12,856
$
Total Expenditures/Expenses
12,856
-
12,856
Change in Fund Balances/Net Position
46,375
-
46,375
Fund Balances/Net Position, Beginning of Year
5,460
-
5,460
Fund Balances/Net Position, End of Year
51,835
$
-
$
51,835
$
Statement of Activities and Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances
The accompanying notes to the basic financial statements are an integral part of this statement.
12
Via Linda Road Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the Via Linda Road Community Facilities District (District), a component unit of
the City of Scottsdale, Arizona (city), conform to accounting principles generally accepted in the United States
of America applicable to governmental units as promulgated by the Governmental Accounting Standards
Board. A summary of the more significant accounting policies of the District follows.
A.
Reporting Entity
The Via Linda Road Community Facilities District was formed by petition to the City of Scottsdale City
Council in April 1998. The District’s purpose is to acquire and improve public infrastructure in specified
land areas. As a special purpose district and separate political subdivision under the Arizona Constitution,
the District can levy taxes and issue bonds independently of the city. Property owners in the designated areas
are assessed for District taxes and thus for the costs of operating the District. The City Council serves as the
Board of Directors; however, the city has no liability for the District’s debt. For financial reporting purposes,
transactions of the Via Linda Road Community Facilities District are included as if the District were part of
the city’s operations.
B.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities)
report information on all of the nonfiduciary activities of the District. For the most part, the effect of
interfund activity has been removed from these statements. Governmental activities, which normally are
supported by taxes and miscellaneous revenues, are reported separately from business-type activities, which
rely to a significant extent on fees and charges for support. The District had no business-type activities during
the fiscal year.
Financial statements are provided for major governmental funds, with an adjustments column to arrive at
government-wide statement amounts.
C.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues
in the year for which they are levied.
13
Via Linda Road Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized when they are both earned and
available. Revenues are considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to
be available if they are collected within 31 days of the end of the current fiscal period. Expenditures generally
are recorded when a liability is incurred, as under accrual accounting, except expenditures related to claims and
judgments, which are recorded only when payment is due.
Property taxes associated with the current fiscal period are considered to be susceptible to accrual and have
been recognized as revenues of the current fiscal period. Interest is accrued in the current fiscal period when
the revenue is earned. All other revenue items are considered to be measurable and available only when cash
is received by the government.
The District reports the following major governmental funds:
The General Fund accounts for resources accumulated and used for the payment of other operating expenses
for the District, which may include insurance, legal fees and administration costs.
The spending order for the District is to use restricted funds and then unassigned funds as they are needed.
Currently the District does not have any unassigned, nonspendable, committed or assigned funds.
D.
Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund
Balance
1.
Cash and Investments
Arizona Revised Statutes authorize the District to invest public monies in the State or County
Treasurers’ investment pools, interest bearing savings accounts, certificates of deposit and repurchase
agreements in eligible depositories; bonds or other obligations of the United States government that
are guaranteed as to principal and interest by the United States government; or bonds of the State of
Arizona counties, cities, towns, school districts or special districts as specified by statute. As required by
statute, collateral is required for demand deposits, certificates of deposit, and repurchase agreements
at 100 percent of all deposits not covered by federal depository insurance.
14
Via Linda Road Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.
Capital Assets
Capital assets acquired or construction of infrastructure assets by the District are dedicated to the City
of Scottsdale, Arizona to maintain and operate. As a result, the District owns no capital assets.
3.
Long-term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations are
reported as liabilities in the applicable governmental activities. Bond premiums and discounts are
amortized over the life of the bonds using the straight-line method. Bonds payable are reported net
of the applicable bond premium or discount. Bond issuance costs are expensed when incurred.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. The face amount of debt issued is reported as
other financing sources. Premiums received on debt issuances are reported as other financing sources
while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt service expenditures.
4.
Deferred Outflows/Inflows of Resources
In addition to assets, the financial statements report a separate section for deferred outflows of
resources. This represents a consumption of net position that applies to a future period and so will
not be recognized as an outflow of resources (expense/expenditure) until then. The District has no
items that qualify as a deferred outflow of resources.
In addition to liabilities, the statement of net position will sometimes report a separate section for
deferred inflows of resources. Deferred inflows of resources represent an acquisition of net position
that applies to a future period and so will not be recognized as an inflow of resources (revenue) until
that time. The District has only one type of this item, which arises only under a modified accrual basis
of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue,
is reported only in the balance sheet.
5.
Net Position/Fund Balance
In the fund financial statements, governmental funds report nonspendable portions of fund balance
related to prepaids, inventories, long-term receivables, and corpus on any permanent fund. Restricted
funds are constrained by outside parties (statute, grantors, bond agreements, etc.). Committed fund
balances are established and modified by a resolution approved by the Board of Directors. The Board
of Directors passed a resolution authorizing the City of Scottsdale City Treasurer to assign fund
balances and their intended uses. Unassigned fund balances are considered the remaining amounts.
When an expenditure is incurred for purposes for which both restricted and unrestricted resources are
available, it is the District’s policy to use restricted resources first, then unrestricted resources. When
an expenditure is incurred for purposes for which committed, assigned and unassigned amounts are
available, it is the District’s policy to use committed first, then assigned, and finally unassigned amounts.
15
Via Linda Road Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In the government-wide financial statements, net position is reported as unrestricted.
E.
Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the
Unites States of America requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
16
Via Linda Road Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 2 – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS
A.
Amounts reported in the statement of net position are the same.
B.
Amounts reported in the statement of activities are the same.
NOTE 3 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A.
Budgetary Information
The District adopts an annual operating budget for revenues and expenditures for the General Fund on
essentially the same modified accrual basis of accounting used to record actual expenditures. Budgetary
control over expenditures is exercised at the fund level.
NOTE 4 – DETAILED NOTES ON ALL FUNDS
A.
Assets
1.
Deposits
Deposits – At June 30, 2025, the carrying amount of the District’s cash balance was $51,835.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that in the event of a bank failure, the District’s deposits
may not be returned. As of June 30, 2025, the District had no deposits that were exposed to custodial
credit risk.
2.
Contributions
On May 20, 2025 the City Council authorized contributions from the City of Scottsdale of $61,331 to
cover property tax refunds required from the Qasimyar v. Maricopa County lawsuit.
17
Via Linda Road Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 4 – DETAILED NOTES ON ALL FUNDS (CONTINUED)
B.
Liabilities
Obligations Under Long-term Debt
General Obligation Bonds
The District issues general obligation bonds to provide funds to acquire and improve public
infrastructure in specified areas. General obligation bonds have been issued for governmental activities
only. General obligation bonds were issued for governmental activities only. All bonds have been paid
in full.
Community facilities districts (CFDs) are created only by petition to the City Council by property
owners within the District areas. As board of directors for the District, the City Council has adopted a
formal policy that CFD debt will be permitted only when the ratio of the full cash value of the District
property (prior to improvements being installed), when compared to proposed District debt, is a
minimum of 3 to 1 prior to issuance of debt and 5 to 1 or higher after construction of improvements.
These ratios are verified by an appraisal paid for by the District and administered by the city. In
addition, cumulative debt of all CFDs cannot exceed 5 percent of the city’s full cash valuation.
Changes in Long-term Liabilities
Since all debt service obligations were satisfied on June 30, 2023, there were no changes in Long-term
Liabilities.
NOTE 5 – OTHER INFORMATION
A.
Risk Management
The District is exposed to various risks of loss. The District carries commercial insurance for $1,000,000
per occurrence and $3,000,000 aggregate covering general liability exposures. The District also carries public
entity management liability insurance for $1,000,000 each wrongful act and $1,000,000 aggregate to cover
damages resulting from the conduct of duties by or for a public entity or its boards. There have been no
known losses in any of the past three fiscal years.
18
Via Linda Road Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 5 – OTHER INFORMATION (CONTINUED)
B.
Future Discontinuance of District
The District has no further long-term obligations; as of fiscal year ending June 30, 2023, all debt was paid in
full. Per Arizona Revised Statutes § 48-724 (Dissolution of District), unless qualified electors of the District
vote to dissolve the District sooner, the District will remain open until the District Board determines the
District has been inactive for at least five years and has no future purpose, and the District Board adopts and
records a resolution dissolving the District.
Until the District is dissolved, the ongoing planned activities for the District will be administrative and may
include payment of annual audit fees, annual tax preparation and filing fees, preparation of the resolution fees,
insurance, publication/advertising costs, budget preparation costs, etc.
19
Via Linda Road Community Facilities District
Required Supplementary Information
20
Via Linda Road Community Facilities District
For the Fiscal Year Ended June 30, 2025
Original and
Final Budget
Actual
Variance
REVENUES
Taxes
-
$
(2,529)
$
(2,529)
$
Interest Income
-
429
429
Contributions from City
-
61,331
61,331
Total Revenues
-
59,231
59,231
EXPENDITURES
Current
General Government
City Treasurer's Office
65,694
12,856
52,838
Total Expenditures
65,694
12,856
52,838
Excess (Deficiency) of Revenues Over (Under) Expenditures
(65,694)
46,375
112,069
Net Change in Fund Balance
(65,694)
$
46,375
$
112,069
$
Schedule of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – General Fund
21
Via Linda Road Community Facilities District
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
Board of Directors
Via Linda Road Community Facilities District
We have audited, in accordance with the 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, the financial statements of the
governmental activities and the major fund of Via Linda Road Community Facilities District, a
component unit of the City of Scottsdale, Arizona, as of and for the year ended June 30, 2025, and
the related notes to the financial statements, which collectively comprise Via Linda Road Community
Facilities District’s basic financial statements and have issued our report thereon dated October 13,
2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Via Linda Road
Community Facilities District’s internal control over financial reporting (internal control) as a basis for
designing audit procedures that are appropriate in the circumstances for the purpose of expressing
our opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of Via Linda Road Community Facilities District’s internal control. Accordingly, we do
not express an opinion on the effectiveness of Via Linda Road Community Facilities District’s internal
control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that have not been identified.
22
Via Linda Road Community Facilities District
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether Via Linda Road Community Facilities
District’s financial statements are free from material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements,
noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit,
and accordingly, we do not express such an opinion. The results of our tests disclosed no instances
of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
Attachment 6a -
Via Linda Road CFD - Report on
Internal Control over Financial Reporting and
Compliance
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
Board of Directors
Via Linda Road Community Facilities District
We have audited, in accordance with the 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, the financial statements of the
governmental activities and the major fund of Via Linda Road Community Facilities District, a
component unit of the City of Scottsdale, Arizona, as of and for the year ended June 30, 2025, and
the related notes to the financial statements, which collectively comprise Via Linda Road Community
Facilities District’s basic financial statements and have issued our report thereon dated October 13,
2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Via Linda Road
Community Facilities District’s internal control over financial reporting (internal control) as a basis for
designing audit procedures that are appropriate in the circumstances for the purpose of expressing
our opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of Via Linda Road Community Facilities District’s internal control. Accordingly, we do
not express an opinion on the effectiveness of Via Linda Road Community Facilities District’s internal
control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that have not been identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether Via Linda Road Community Facilities
District’s financial statements are free from material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements,
noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit,
and accordingly, we do not express such an opinion. The results of our tests disclosed no instances
of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
Attachment 7 - Waterfront
Commercial CFD
Annual Financial Report
Annual Financial Report
Fiscal Year Ended June 30, 2025
Waterfront Commercial Community Facilities District
(A Component Unit of the City of Scottsdale, Arizona)
Waterfront Commercial Community Facilities District
(A Component Unit of the City of Scottsdale, Arizona)
Annual Financial Report
Fiscal Year Ended June 30, 2025
Table of Contents
Independent Auditors’ Report................................................................................................................... 1
Management’s Discussion and Analysis.................................................................................................... 4
BASIC FINANCIAL STATEMENTS
Statement of Net Position and Governmental Funds Balance Sheet................................................ 10
Statement of Activities and Governmental Funds Statement of Revenues, Expenditures, and
Changes in Fund Balances........................................................................................................................11
Notes to the Basic Financial Statements.................................................................................................12
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – General Fund.........................................................................................................23
SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – Debt Service Fund................................................................................................25
Report on Internal Control and on Compliance
Report on Internal Control over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in Accordance with Government
Auditing Standards........................................................................................................................................26
Waterfront Commercial Community Facilities District
For the Fiscal Year ended June 30, 2025
1
Waterfront Commercial Community Facilities District
Independent Auditor’s Report
Board of Directors
Waterfront Commercial Community Facilities District
Report on Audit of Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and each major
fund of Waterfront Commercial Community Facilities District (District), a component unit of the City of
Scottsdale, Arizona, as of and for the year ended June 30, 2025, and the related notes to the financial
statements, which collectively comprise the District’s basic financial statements as listed in the table of
contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and each major fund of the Waterfront
Commercial Community Facilities District, as of June 30, 2025, and the respective changes in financial
position thereof for the year then ended in accordance with accounting principles generally accepted in
the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Our responsibilities under those standards are
further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our
report. We are required to be independent of Waterfront Commercial Community Facilities District, and
to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to
our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Emphasis of Matter
As discussed in Note 1, the financial statements of the Waterfront Commercial Community Facilities
District are intended to present the net position and changes in net position that are attributable to the
District, a component unit of the City of Scottsdale, Arizona report. They do not purport to, and do not,
present fairly the financial position of the City of Scottsdale, Arizona as of June 30, 2025 and the changes
in financial position for the year ended in conformity with accounting principles generally accepted in the
United States of America. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
1
2
Waterfront Commercial Community Facilities District
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue
as a going concern for one year beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing
standards and Government Auditing Standards will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user based on the
financial statements. In performing an audit in accordance with generally accepted auditing standards and
Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is
expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control related
matters that we identified during the audit.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis and budgetary comparison information, as listed in the table of contents, be
presented to supplement the basic financial statements. Such information is the responsibility of
management and, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context.
2
3
Waterfront Commercial Community Facilities District
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.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the District’s basic financial statements. The Supplementary Budget information for the Debt
Service Fund is presented for purposes of additional analysis and is not a required part of the basic
financial statements. Such information is the responsibility of management and was derived from and
relates directly to the underlying accounting and other records used to prepare the basic financial
statements. Such information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion,
the Supplementary Budget information for the Debt Service Fund information is fairly stated in all material
respects in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 13,
2025, on our consideration of Waterfront Commercial Community Facilities District’s internal control over
financial reporting and on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements and other matters. The purpose of that report is solely to describe the
scope of our testing of internal control over financial reporting and compliance and the results of that
testing, and not to provide an opinion on the effectiveness of the Waterfront Commercial Community
Facilities District’s internal control over financial reporting or on compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards in considering Waterfront
Commercial Community Facilities District’s internal control over financial reporting and compliance.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
3
4
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
As management of the Waterfront Commercial Community Facilities District (District), we
offer readers a narrative overview and analysis of the financial activities for the District. The
District is one of the City of Scottsdale, Arizona’s component units for financial reporting
purposes for the fiscal year ended June 30, 2025.
Formed in 2005, the District is a special purpose taxing district and separate political subdivision
under Arizona statutes. As such, the District can levy taxes and issue bonds, independent of
the City of Scottsdale, Arizona (city). Property owners within the District boundaries pay for
District infrastructure and functions through secondary property tax assessments. City staff
administers the District and the costs of their services are reimbursed by District funds. The
Scottsdale City Council also serves as the District Board of Directors.
FINANCIAL HIGHLIGHTS
For the year ending 2024/25, the District’s:
• Tax collections and beginning fund balances were sufficient to pay debt service.
• The tax rate was $4.62 per $100 assessed valuation.
• Governmental funds reported a combined ending fund balance of $35,388. Of this amount, $6,252 was
in the General Fund and $29,136 was in the Debt Service Fund.
• Governmental fund expenditures were more than revenues by $40; the tax rate increased from $4.42 in
fiscal year 2023/24 to $4.62.
• Total long-term debt decreased by $190,000 due to scheduled principal payments.
• Bond indentures were in compliance.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis introduces the District’s basic financial statements. Because of its limited purpose,
the District’s basic financial statements are comprised of two components: (1) Statement of Net Position and
Governmental Funds Balance Sheet and the Statement of Activities and Governmental Funds Statement of
Revenues, Expenditures, and Changes in Fund Balance and (2) Notes to the Basic Financial Statements.
Because the District has only one governmental program, the government-wide and fund financial statements
are combined.
5
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Government-wide Financial Statements
The Statement of Net Position is designed to provide readers with a broad overview of the District’s finances,
in a manner similar to a private-sector business. The statement of net position presents information on all of
the District’s assets and liabilities, and deferred outflows/inflows of resources, with the difference reported
as net position. Over time, increases or decreases in net position may serve as useful indicators of whether or
not the financial position of the District is improving or deteriorating.
The Statement of Activities presents information showing how the District’s net position changed during the
most recent fiscal year. Changes in net position are reported when 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, such as revenues pertaining
to uncollected taxes and expenses related to accrued interest.
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 District, like the city, uses fund accounting to ensure
and demonstrate compliance with finance-related legal requirements. Debt Service Funds are restricted for
payment of debt and debt related costs, and the General Fund is unassigned.
The District maintains two governmental funds, General and Debt Service. Information is presented in the
Governmental Funds Balance Sheet and in the Governmental Funds Statement of Revenues, Expenditures,
and Changes in Fund Balances for the General Fund and Debt Service Fund.
The District adopts an annual budget for its General Fund and Debt Service Fund. Supplementary budgetary
schedules have been provided to demonstrate compliance with these budgets.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to acquire a full
understanding of the data provided in the basic financial statements.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents as required
supplementary information a comparison between budgeted and actual amounts within the General Fund.
6
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position.
The liabilities of the District exceeded its assets at the close of the most recent fiscal year by approximately
$1.4 million (net position). The District’s purpose is to acquire and improve public infrastructure in specified
land areas. As a special purpose district and a separate political subdivision under the Arizona Constitution,
the District can levy taxes and issue bonds independently of the city. Property owners in the designated areas
are assessed for District taxes to pay the debt service over the life of the bonds. The City Council serves as the
Board of Directors. However, the city has no liability for the District’s debt. For financial reporting purposes,
transactions of the District are combined together and included as if they were part of the city’s operations
and the assets financed through the District are combined with the infrastructure of the city. Because the
capital assets are recorded in the city’s basic financial statements, the Statement of Net Position for the
District reflects a large liability without an offsetting asset.
Net Position
June 30, 2025 and 2024
2025
2024
ASSETS
Current Assets
6,451
$
7,093
$
Noncurrent Assets
239,433
236,138
Total Assets
245,884
243,231
LIABILITIES
Current Liabilities
210,476
207,761
Noncurrent Liabilities
1,468,000
1,658,000
Total Liabilities
1,678,476
1,865,761
NET POSITION
Restricted
29,156
28,684
Unrestricted
(1,461,748)
(1,651,214)
Total Net Position
(1,432,592)
$
(1,622,530)
$
Governmental Activities
7
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
During the fiscal year, the District’s total net position increased by $189,938.
Changes in Net Position
For the Fiscal Years Ended June 30, 2025 and 2024
2025
2024
REVENUES
Taxes
246,623
$
232,165
$
Total Revenues
246,623
232,165
EXPENSES
General Government
15,332
11,786
Debt Service
41,353
45,922
Total Expenses
56,685
57,708
Change in Net Position
189,938
174,457
Net Position, Beginning of Year
(1,622,530)
(1,796,987)
Net Position, End of Year
(1,432,592)
$
(1,622,530)
$
Governmental Activities
Revenues increased in fiscal year 2024/25 due to an increase in taxes levied and expenses decreased due to
reduction of interest on long-term debt, increasing the District’s net position.
As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with legal
requirements related to special purpose districts and general obligation bonds.
Financial Analysis of the District’s Funds
The focus of the District’s governmental funds is to provide information on near-term inflows, outflows, and
balances of resources that are available for spending. Such information is useful in assessing the District’s
ability to pay the debt service on the general obligation bonds it issues to fund construction or acquisition of
public infrastructure.
As of the end of fiscal year 2024/25 the District’s governmental funds reported expenditures over revenues
by $40 and an ending fund balance of $35,388. Of the total ending fund balance, $6,252 is in the General
Fund and $29,136 is in the Debt Service Fund.
Revenues totaled $246,645 for the fiscal year ended June 30, 2025, of which all was property taxes.
8
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Management’s Discussion and Analysis
Capital Assets and Debt Administration
The District was formed to finance and acquire or construct amenities that are subsequently dedicated to
the city for operation. The District does not own or operate infrastructure. Since formation, District bonds
have been issued, and the proceeds used to acquire or construct public amenities including retail space and
permanent parking easement.
The District has issued $3,805,000 of the $9,000,000 authorized bonds. In fiscal year 2019/20, the City
Council and the District Board approved the issuance of $2,563,000 in refunding bonds to reduce the total
debt service payments over the remaining life of the bonds.
In the event that the District Board decides at a future time to dissolve the District, State statute provides that
all taxable property in the District will remain subject to the lien for the payment of the bonds until all bonds
have been defeased.
The District is not engaged in any significant activities other than providing for the levy of secondary property
taxes to pay debt service and administrative fees.
Outstanding Debt
June 30, 2025 and 2024
2025
2024
General Obligation Bonds
1,468,000
$
1,658,000
$
Governmental Activities
The District’s total long-term debt decreased by $190,000 during the current fiscal year due to the payment of
principal on the general obligation refunding bonds.
Next Year’s Budget and Rates
The fiscal year 2025/26 District budget includes a $4.55 tax rate per $100 of assessed value. This is a $.07
decrease from the rate used in the fiscal year 2024/25 budget. The District’s long-term financial plan considers
the uncertainty of the economy and takes a cautious approach.
Requests for Information
This financial report is designed to provide a general overview of the District’s finances for all of those
with an interest in the government’s finances. If you have questions about this report or need additional
financial information, contact the Scottsdale City Treasurer’s Office at 7447 E. Indian School Road, Suite 210,
Scottsdale, AZ 85251.
9
Waterfront Commercial Community Facilities District
Basic Financial Statements
10
Waterfront Commercial Community Facilities District
Statement of Net Position and Governmental Funds Balance Sheet
June 30, 2025
General Fund
Debt Service
Fund
Total
Adjustments
Statement of
Net Position
ASSETS AND DEFERRED OUTFLOWS
OF RESOURCES
Assets
Current Assets
Cash
6,241
$
-
$
6,241
$
-
$
6,241
$
Taxes Receivable
11
199
210
-
210
Total Current Assets
6,252
199
6,451
-
6,451
Noncurrent Assets
Restricted Cash
-
239,433
239,433
-
239,433
Total Assets
6,252
$
239,632
$
245,884
$
-
$
245,884
$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES/NET POSITION
Liabilities
Current Liabilities
Matured Bonds Payable
-
$
190,000
$
190,000
$
-
$
190,000
$
Bond Interest Payable
-
20,476
20,476
-
20,476
Total Current Liabilities
-
210,476
210,476
-
210,476
Noncurrent Liabilities
Due Within One Year
-
-
-
195,000
195,000
Due After One Year
-
-
-
1,273,000
1,273,000
Total Noncurrent Liabilities
-
-
-
1,468,000
1,468,000
Total Liabilities
-
210,476
210,476
1,468,000
1,678,476
Deferred Inflows of Resources
Unavailable Revenues
-
20
20
(20)
-
Total Liabilities and Deferred Inflows of Resources
-
210,496
210,496
1,467,980
1,678,476
Fund Balances/Net Position
Fund Balances
Restricted
-
29,136
29,136
(29,136)
-
Unassigned
6,252
-
6,252
(6,252)
-
Total Fund Balances
6,252
29,136
35,388
(35,388)
-
Total Liabilities, Deferred Inflows of Resources,
and Fund Balances
6,252
$
239,632
$
245,884
$
Net Position
Restricted for Debt Service
29,156
29,156
Unrestricted
(1,461,748)
(1,461,748)
Total Net Position
(1,432,592)
$
(1,432,592)
$
The accompanying notes to the basic financial statements are an integral part of this statement.
11
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
General Fund
Debt Service
Fund
Total
Adjustments
Statement of
Activities
REVENUES
Taxes
14,798
$
231,847
$
246,645
$
(22)
$
246,623
$
Total Revenues
14,798
231,847
246,645
(22)
246,623
EXPENDITURES/EXPENSES
Current
General Government
City Treasurer's Office
15,332
$
-
$
15,332
$
-
$
15,332
$
Debt Service
Principal Retirement
-
190,000
190,000
(190,000)
-
Interest and Fiscal Charges
-
41,353
41,353
-
41,353
Total Expenditures/Expenses
15,332
231,353
246,685
(190,000)
56,685
Change in Fund Balances/Net Position
(534)
494
(40)
189,978
189,938
Fund Balances/Net Position, Beginning of Year
6,786
28,642
35,428
(1,657,958)
(1,622,530)
Fund Balances/Net Position, End of Year
6,252
$
29,136
$
35,388
$
(1,467,980)
$
(1,432,592)
$
Statement of Activities and Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances
The accompanying notes to the basic financial statements are an integral part of this statement.
12
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the Waterfront Commercial Community Facilities District (District), a component
unit of the City of Scottsdale, Arizona (city), conform to accounting principles generally accepted in the
United States of America applicable to governmental units as promulgated by the Governmental Accounting
Standards Board. A summary of the more significant accounting policies of the District follows.
A.
Reporting Entity
The Waterfront Commercial Community Facilities District was formed by petition to the City of Scottsdale City
Council in September 2005. The District’s purpose is to acquire and improve public infrastructure in specified
land areas. As a special purpose district and separate political subdivision under the Arizona Constitution,
the District can levy taxes and issue bonds independently of the city. Property owners in the designated areas
are assessed for District taxes and thus for the costs of operating the District. The City Council serves as the
Board of Directors; however, the city has no liability for the District’s debt. For financial reporting purposes,
transactions of the Waterfront Commercial Community Facilities District are included as if the District were
part of the city’s operations.
B.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities)
report information on all of the nonfiduciary activities of the District. For the most part, the effect of
interfund activity has been removed from these statements. Governmental activities, which normally are
supported by taxes and miscellaneous revenues, are reported separately from business-type activities, which
rely to a significant extent on fees and charges for support. The District had no business-type activities during
the fiscal year.
Financial statements are provided for major governmental funds, with an adjustments column to arrive at
government-wide statement amounts.
C.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a
liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues
in the year for which they are levied.
13
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized when they are both earned and
available. Revenues are considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to
be available if they are collected within 31 days of the end of the current fiscal period. Expenditures generally
are recorded when a liability is incurred, as under accrual accounting, except expenditures related to claims
and judgments, which are recorded only when payment is due. However, since debt service resources are
provided during the current year for payment of governmental long-term principal and interest due early in
the following year, the expenditures and related liabilities have been recognized in the Debt Service Fund.
Property taxes associated with the current fiscal period are considered to be susceptible to accrual and have
been recognized as revenues of the current fiscal period. Interest is accrued in the current fiscal period when
the revenue is earned. All other revenue items are considered to be measurable and available only when cash
is received by the government.
The District reports the following major governmental funds:
The General Fund accounts for resources accumulated and used for the payment of other operating expenses
for the District, which may include insurance, legal fees and administration costs.
The Debt Service Fund accounts for resources accumulated and used for the payment of governmental long-
term debt including principal, interest and related costs.
The spending order for the District is to use restricted funds and then unassigned funds as they are needed.
Currently the District has unassigned funds and does not have any nonspendable, committed or assigned
funds.
D.
Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund
Balance
1.
Cash and Investments
Arizona Revised Statutes authorize the District to invest public monies in the State or County
Treasurers’ investment pools, interest bearing savings accounts, certificates of deposit and repurchase
agreements in eligible depositories; bonds or other obligations of the United States government that
are guaranteed as to principal and interest by the United States government; or bonds of the State of
Arizona counties, cities, towns, school districts or special districts as specified by statute. As required by
statute, collateral is required for demand deposits, certificates of deposit, and repurchase agreements
at 100 percent of all deposits not covered by federal depository insurance.
A portion of cash and investments held by trustee at June 30, 2025, plus accrued interest, are restricted
as to usage.
2.
Restricted Assets
Cash and investments held by the District’s trustee are classified as restricted on the statement of net
position because their use is limited by applicable bond covenants.
14
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.
Capital Assets
Capital assets acquired or construction of infrastructure assets by the District are dedicated to the City
of Scottsdale, Arizona to maintain and operate. As a result, the District owns no capital assets.
4.
Long-term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations are
reported as liabilities in the applicable governmental activities. Bond premiums and discounts are
amortized over the life of the bonds using the straight-line method. Bonds payable are reported net
of the applicable bond premium or discount. Bond issuance costs are expensed when incurred.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as
well as bond issuance costs, during the current period. The face amount of debt issued is reported as
other financing sources. Premiums received on debt issuances are reported as other financing sources
while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt service expenditures.
5.
Deferred Outflows/Inflows of Resources
In addition to assets, the financial statements report a separate section for deferred outflows of
resources. This represents a consumption of net position that applies to a future period and so will
not be recognized as an outflow of resources (expense/expenditure) until then. The District has no
items that qualify as a deferred outflow of resources.
In addition to liabilities, the statement of net position will sometimes report a separate section for
deferred inflows of resources. Deferred inflows of resources represent an acquisition of net position
that applies to a future period and so will not be recognized as an inflow of resources (revenue) until
that time. The District has only one type of this item, which arises only under a modified accrual basis
of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue,
is reported only in the balance sheet.
6.
Net Position/Fund Balance
In the fund financial statements, governmental funds report nonspendable portions of fund balance
related to prepaids, inventories, long-term receivables, and corpus on any permanent fund. Restricted
funds are constrained by outside parties (statute, grantors, bond agreements, etc.). Committed fund
balances are established and modified by a resolution approved by the Board of Directors. The Board
of Directors passed a resolution authorizing the City of Scottsdale City Treasurer to assign fund
balances and their intended uses. Unassigned fund balances are considered the remaining amounts.
When an expenditure is incurred for purposes for which both restricted and unrestricted resources are
available, it is the District’s policy to use restricted resources first, then unrestricted resources. When
an expenditure is incurred for purposes for which committed, assigned and unassigned amounts are
available, it is the District’s policy to use committed first, then assigned, and finally unassigned amounts.
15
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In the government-wide financial statements, net position is reported in two categories: restricted
and unrestricted. Restricted accounts for the portion of net position restricted by bond covenant.
Unrestricted is the remaining net position not included in the previous category.
E. Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the
Unites States of America requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
16
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 2 – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS
A.
Amounts reported in the statement of net position are different because:
Tax revenues not available to pay current-period expenditures are deferred inflows in the funds.
20
$
Long-term liabilities, including bonds payable, are not due and payable in the current period; therefore,
are not reported in the governmental funds.
(1,468,000)
Net adjustment to total fund balance to arrive at net position.
(1,467,980)
Total Fund Balance
35,388
Total Net Position
(1,432,592)
$
B.
Amounts reported in the statement of activities are different because:
Tax revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds.
(22)
$
The repayment of the principal of long-term debt consumes the current financial resources of
governmental funds; however, it has no effect on net position.
190,000
Net adjustments to reconcile net changes in fund balances to change in net position.
189,978
Net change in Fund Balance
(40)
Change in Net Position
189,938
$
17
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 3 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A.
Budgetary Information
The District adopts an annual operating budget for revenues and expenditures for the General Fund and Debt
Service Fund on essentially the same modified accrual basis of accounting used to record actual expenditures.
Budgetary control over expenditures is exercised at the fund level.
B.
Deficit Net Position
As described in Note 1, the District was formed to finance and acquire or construct infrastructure assets that
are subsequently dedicated to the city for operation. The District does not own or operate infrastructure.
Therefore, the Statement of Net Position reflects a large liability without an offsetting asset.
18
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 4 – DETAILED NOTES ON ALL FUNDS
A.
Assets
1.
Deposits
Deposits – At June 30, 2025, the carrying amount of the District’s deposits and bank balance were
$245,674.
Custodial Credit Risk
Custodial credit risk is the risk that in the event of a bank failure, the District’s deposits may not be
returned to it. As of June 30, 2025, the District’s deposits were fully insured.
2.
Restricted Assets
Restricted cash at June 30, 2025, as follows:
Debt Service
Fund
Restricted Cash
$ 239,433
3.
Property Taxes Receivable
The Maricopa County Treasurer is responsible for collecting property taxes for all governmental
entities within the County. The County levies the property taxes due to the District in August. Two
equal installments, payable in October and March, become delinquent after the first business days in
November and May. During the year, the County also levies various personal property taxes that are
due the second Monday of the month following receipt of the tax notice and become delinquent
30 days later. A lien assessed against real and personal property attaches on the first day of January
preceding the assessment levy.
Property taxes are recognized as revenues in the fiscal year they are levied in the government-wide
financial statements and represent a reconciling item between the government-wide and fund financial
statements. In the fund financial statements, property taxes are recognized as revenues in the fiscal
year they are levied and collected or if they are collected within 31 days subsequent to fiscal year-end.
Property taxes not collected within 31 days subsequent to fiscal year-end or collected in advance of
the fiscal year for which they are levied are reported as deferred inflows.
Property taxes receivable consist of uncollected property taxes as determined from the records of the
County Treasurer’s Office, and at June 30, 2025, were as follows:
19
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 4 – DETAILED NOTES ON ALL FUNDS (CONTINUED)
General
Fund
Debt Service
Fund
Taxes Receivable
$ 11
$ 199
At the end of the current fiscal year, unavailable revenue reported in the governmental fund was as
follows:
Debt Service
Fund
Unavailable Property Taxes Receivable
$ 20
B.
Liabilities
Obligations Under Long-term Debt
General Obligation Bonds
The District issues general obligation bonds to provide funds to acquire and improve public
infrastructure in specified areas. General obligation bonds have been issued for governmental activities
only. The bonds are generally callable with interest payable semiannually. Bonds payable at June 30,
2025, consisted of the outstanding general obligation bonds presented below:
Purpose
Interest Rate (%)
Amount
2019 Waterfront Commercial Community Facilities District General
Obligation Refunding Bonds (issued November 14, 2019) due in annual
installments of $172,000 to $225,000 beginning July 15, 2020 through
July 15, 2032. Original issue amount $2,563,000.
2.60
$ 1,468,000
20
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 4 – DETAILED NOTES ON ALL FUNDS (CONTINUED)
Community facilities districts (CFDs) are created only by petition to the City Council by property
owners within the District areas. As board of directors for the District, the City Council has adopted a
formal policy that CFD debt will be permitted only when the ratio of the full cash value of the District
property (prior to improvements being installed), when compared to proposed District debt, is a
minimum of 3 to 1 prior to issuance of debt and 5 to 1 or higher after construction of improvements.
These ratios are verified by an appraisal paid for by the District and administered by the city. In
addition, cumulative debt of all CFDs cannot exceed 5 percent of the city’s full cash valuation. As of
June 30, 2025, the District has issued $3,805,000 of the $9,000,000 bonds that were authorized.
The District’s bond issuance contains the following provisions that would constitute an event of
default by the District:
• Failure to pay the principal and interest when due and payable.
• Default in the performance or observance of any covenant, agreement, or obligation not cured
within 30 days of notice of default. No event of default will be deemed to have occurred so long as
a course of action has been commenced within 30 days and is diligently prosecuted to completion.
• Any representation or warranty by the District that proves to have been materially incorrect when
made or confirmed.
• Bankruptcy, insolvency, and/or receivership.
• Default and/or acceleration of payment of any other District indebtedness.
• Actual or asserted invalidity or impairment of the District Documents or the Series 2019 Bonds.
If any non-punctual payment of principal or interest occurs, the CFD bond trustee may recover the
costs and expenses of administration and collection related to the unpaid amounts. Additionally, the
Waterfront CFD bond trustee shall be entitled to a writ of mandamus compelling performance.
Changes in Long-Term Liabilities
Governmental Activities
Beginning
Balance
Additions
Reductions
Ending
Balance
Due Within
One Year
Private Placement General Obligation Bonds
1,658,000
$
-
$
(190,000)
$
1,468,000
$
195,000
$
Total
1,658,000
$
-
$
(190,000)
$
1,468,000
$
195,000
$
21
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Notes to the Basic Financial Statements
NOTE 4 – DETAILED NOTES ON ALL FUNDS (CONTINUED)
Annual debt service requirements to maturity for general obligation bonds are as follows:
Fiscal Year Ending June 30,
Principal
Interest
2026
195,000
$
36,260
$
2027
200,000
31,443
2028
204,000
26,503
2029
209,000
21,464
2030
215,000
16,302
2031-2032
445,000
16,549
Total
1,468,000
$
148,521
$
NOTE 5 – OTHER INFORMATION
A.
Risk Management
The District is exposed to various risks of loss. The District carries commercial insurance for $1,000,000
per occurrence and $3,000,000 aggregate covering general liability exposures. The District also carries public
entity management liability insurance for $1,000,000 each wrongful act and $3,000,000 aggregate to cover
damages resulting from the conduct of duties by or for a public entity or its boards. There have been no
known losses in any of the past three fiscal years.
B.
Concentration Information
The District has one major taxpayer that accounts for approximately fifty percent of full cash valuation.
Delinquent payments by this taxpayer could result in a significant loss of revenue.
C.
Excess of Expenditures over Appropriation
The District General fund exceeded the expenditure appropriation by $2,132 for the payment of a legally
required arbitrage report. The additional expenditures incurred were funded by the available fund balances
within the respective fund.
22
Waterfront Commercial Community Facilities District
Required Supplementary Information
23
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Original and
Final Budget
Actual
Variance
REVENUES
Taxes
16,041
$
14,798
$
(1,243)
$
Total Revenues
16,041
14,798
(1,243)
EXPENDITURES
Current
General Government
City Treasurer's Office
13,200
15,332
(2,132)
Total Expenditures
13,200
15,332
(2,132)
Excess (Deficiency) of Revenues Over (Under) Expenditures
2,841
(534)
(3,375)
Net Change in Fund Balance
2,841
$
(534)
$
(3,375)
$
Schedule of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – General Fund
24
Waterfront Commercial Community Facilities District
Supplementary Information
25
Waterfront Commercial Community Facilities District
For the Fiscal Year Ended June 30, 2025
Original and
Final Budget
Actual
Variance
REVENUES
Taxes
230,352
$
231,847
$
1,495
$
Total Revenues
230,352
231,847
1,495
EXPENDITURES
Debt Service
Principal Retirement
190,000
190,000
-
Interest and Fiscal Charges
42,953
41,353
1,600
Total Expenditures
232,953
231,353
1,600
Excess (Deficiency) of Revenues Over (Under) Expenditures
(2,601)
494
3,095
Net Change in Fund Balance
(2,601)
$
494
$
3,095
$
Schedule of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – Debt Service Fund
26
Waterfront Commercial Community Facilities District
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
Board of Directors
Waterfront Commercial Community Facilities District
We have audited, in accordance with the 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, the financial statements of the
governmental activities and each major fund of Waterfront Commercial Community Facilities District,
a component unit of the City of Scottsdale, Arizona, as of and for the year ended June 30, 2025, and
the related notes to the financial statements, which collectively comprise Waterfront Commercial
Community Facilities District’s basic financial statements and have issued our report thereon dated
October 13, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Waterfront
Commercial Community Facilities District’s internal control over financial reporting (internal control)
as a basis for designing audit procedures that are appropriate in the circumstances for the purpose
of expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of Waterfront Commercial Community Facilities District’s internal
control. Accordingly, we do not express an opinion on the effectiveness of Waterfront Commercial
Community Facilities District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that have not been identified.
27
Waterfront Commercial Community Facilities District
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether Waterfront Commercial Community
Facilities District’s financial statements are free from material misstatement, we performed tests of
its compliance with certain provisions of laws, regulations, contracts, and grant agreements,
noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit,
and accordingly, we do not express such an opinion. The results of our tests disclosed no instances
of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
Attachment 7a -
Waterfront Commercial CFD -
Report on Internal Control over Financial
Reporting and Compliance
Independent Auditor’s Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance with
Government Auditing Standards
Board of Directors
Waterfront Commercial Community Facilities District
We have audited, in accordance with the 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, the financial statements of the
governmental activities and each major fund of Waterfront Commercial Community Facilities District,
a component unit of the City of Scottsdale, Arizona, as of and for the year ended June 30, 2025, and
the related notes to the financial statements, which collectively comprise Waterfront Commercial
Community Facilities District’s basic financial statements and have issued our report thereon dated
October 13, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Waterfront
Commercial Community Facilities District’s internal control over financial reporting (internal control)
as a basis for designing audit procedures that are appropriate in the circumstances for the purpose
of expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of Waterfront Commercial Community Facilities District’s internal
control. Accordingly, we do not express an opinion on the effectiveness of Waterfront Commercial
Community Facilities District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that have not been identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether Waterfront Commercial Community
Facilities District’s financial statements are free from material misstatement, we performed tests of
its compliance with certain provisions of laws, regulations, contracts, and grant agreements,
noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit,
and accordingly, we do not express such an opinion. The results of our tests disclosed no instances
of noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
October 13, 2025
Attachment 8a
Communication to Governance
DC Ranch, McDowell Mtn Ranch, Via
Linda Rd, Waterfront Commercial CFDs
Page 1
October 15, 2025
To the Board of Directors
We have audited the financial statements of the governmental activities and each major fund, as
applicable of the DC Ranch CFD, McDowell Mountain Ranch CFD, Via Linda Road CFD, and the
Waterfront CFD (Districts’), all component units of the City of Scottsdale, Arizona, as of and for the
year ended June 30, 2025. Professional standards require that we provide you with information about
our responsibilities under generally accepted auditing standards, Government Auditing Standards, as
well as certain information related to the planned scope and timing of our audit. We have
communicated such information in our engagement letters’ provided to you during the planning
phase of the audit. Professional standards also require that we communicate to you the following
matters related to our audits.
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The
significant accounting policies used by the Districts’ are described in Note 1 to the financial
statements. No new accounting policies were adopted, and the application of existing policies were
not changed during the year. We noted no transactions entered into by the Districts’ during the year
for which there is a lack of authoritative guidance or consensus. All significant transactions have been
recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and
are based on management’s knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are particularly sensitive because of
their significance to the financial statements and because of the possibility that future events
affecting them may differ significantly from those expected.
The most sensitive estimates affecting the financial statements were:
•
Management’s estimate of the allowance for uncollectible receivable balances is based on
past experience and future expectation for collection of various account balances.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing
our audits.
Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during
the audits, other than those that are clearly trivial, and communicate them to the appropriate level
of management. A misstatement is defined as a difference between the reported amount,
classification, presentation, or disclosure of a financial statement item and the amount, classification,
Page 2
presentation, or disclosure that is required for the item to be presented fairly in accordance with the
applicable financial reporting framework. During the course of the audits, we did not identify any
uncorrected misstatements which require communication.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor’s report. We are pleased to report that no such disagreements arose during
the course of our audits.
Management Representations
We have requested certain written representations from management, which are included in the
management representation letters’ provided to us at the conclusion of the audit.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation
involves application of an accounting principle to the Component Unit’s financial statements or a
determination of the type of auditor’s opinion that may be expressed on those statements, our
professional standards require the consulting accountant to check with us to determine that the
consultant has all the relevant facts. To our knowledge, there were no such consultations with other
accountants regarding auditing and accounting matters.
Discussions with Management
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management throughout the course of the year. However, these discussions
occurred in the normal course of our professional relationship and our responses were not a
condition to our retention as the Component Unit’s auditors.
Other Matters
An emphasis-of-matter paragraph has been included in the auditor’s reports to indicate that the
financial statements are intended to present the net positions and changes in net positions that are
attributable to the Districts’ alone and do not purport to, and do not, present fairly the financial
position of the City of Scottsdale, Arizona as of June 30, 2025, and the changes in financial position
for the year ended in conformity with accounting principles generally accepted in the United States
of America. Our opinions are not modified with respect to these matters.
Compliance with Ethics Requirements Regarding Independence
The engagement team, others in our firm, and as appropriate, our firm, have complied with all
relevant ethical requirements regarding independence. Heinfeld, Meech & Co., P.C. continually
assesses client relationships to comply with relevant ethical requirements, including independence,
integrity, and objectivity, and policies and procedures related to the acceptance and continuance of
client relationships and specific engagements. Our firm follows the “Independence Rule” of the AICPA
Code of Professional Conduct and the rules of state boards of accountancy and applicable regulatory
agencies. It is the policy of the firm that all employees be familiar with and adhere to the
independence, integrity, and objectivity rules, regulations, interpretations, and rulings of the AICPA,
U.S. Government Accountability Office (GAO), and applicable state boards of accountancy.
Page 3
Responsibility for Fraud
It is important for both management and the members of the governing body to recognize their role
in preventing, deterring, and detecting fraud. One common misconception is that the auditors are
responsible for detecting fraud. Auditors are required to plan and perform an audit to obtain
reasonable assurance that the financial statements do not include material misstatements caused by
fraud. Unfortunately, most frauds which occur in an organization do not meet this threshold.
The attached document prepared by the Association of Certified Fraud Examiners (ACFE) is provided
as a courtesy to test the effectiveness of the fraud prevention measures of your organization. Some
of these steps may already be in place, others may not. Not even the most well-designed internal
controls or procedures can prevent and detect all forms of fraud. However, an awareness of fraud
related factors, as well as the active involvement by management and the members of the governing
body in setting the proper “tone at the top”, increases the likelihood that fraud will be prevented,
deterred and detected.
Additional Reports Issued
In addition to the auditors’ report on the financial statements we will also issue the following
documents related to these audits. These reports are typically issued within 60 days of the date of
this letter.
•
Report on internal control over financial reporting and on compliance in accordance with
Government Auditing Standards
Other Important Communications Related to the Audit
Attached to this letter are copies of the signed engagement letters’ provided to us at the initiation of
the audits, and copies of the management representation letters’ provided to us at the conclusion of
the audits. If there are any questions on the purpose or content of these letters’ please contact the
engagement partner identified in the attached engagement letter.
Restriction on Use
This information is intended solely for the use of the members of the Board of Directors and
management of the Districts’ and is not intended to be, and should not be, used by anyone other
than these specified parties.
Very truly yours,
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
Fraud Prevention Checklist
The most cost-effective way to limit fraud losses is to prevent fraud from occurring. This checklist is
designed to help organizations test the effectiveness of their fraud prevention measures.
1. Is ongoing anti-fraud training provided to all employees of the organization?
•
Do employees understand what constitutes fraud?
•
Have the costs of fraud to the company and everyone in it — including lost profits, adverse
publicity, job loss and decreased morale and productivity — been made clear to employees?
•
Do employees know where to seek advice when faced with uncertain ethical decisions, and
do they believe that they can speak freely?
•
Has a policy of zero-tolerance for fraud been communicated to employees through words
and actions?
2. Is an effective fraud reporting mechanism in place?
•
Have employees been taught how to communicate concerns about known or potential
wrongdoing?
•
Is there an anonymous reporting channel available to employees, such as a third-party
hotline?
•
Do employees trust that they can report suspicious activity anonymously and/or
confidentially and without fear of reprisal?
•
Has it been made clear to employees that reports of suspicious activity will be promptly and
thoroughly evaluated?
•
Do reporting policies and mechanisms extend to vendors, customers and other outside
parties?
3. To increase employees’ perception of detection, are the following proactive measures taken
and publicized to employees?
•
Is possible fraudulent conduct aggressively sought out, rather than dealt with passively?
•
Does the organization send the message that it actively seeks out fraudulent conduct
through fraud assessment questioning by auditors?
•
Are surprise fraud audits performed in addition to regularly scheduled audits?
•
Is continuous auditing software used to detect fraud and, if so, has the use of such software
been made known throughout the organization?
4. Is the management climate/tone at the top one of honesty and integrity?
•
Are employees surveyed to determine the extent to which they believe management acts
with honesty and integrity?
•
Are performance goals realistic?
•
Have fraud prevention goals been incorporated into the performance measures against
which managers are evaluated and which are used to determine performance-related
compensation?
•
Has the organization established, implemented and tested a process for oversight of fraud
risks by the board of directors or others charged with governance (e.g., the audit
committee)?
5. Are fraud risk assessments performed to proactively identify and mitigate the company’s
vulnerabilities to internal and external fraud?
6. Are strong anti-fraud controls in place and operating effectively, including the following?
•
Proper separation of duties
•
Use of authorizations
•
Physical safeguards
•
Job rotations
•
Mandatory vacations
7. Does the internal audit department, if one exists, have adequate resources and authority to
operate effectively and without undue influence from senior management?
8. Does the hiring policy include the following (where permitted by law)?
•
Past employment verification
•
Criminal and civil background checks
•
Credit checks
•
Drug screening
•
Education verification
•
References check
9. Are employee support programs in place to assist employees struggling with addictions,
mental/ emotional health, family or financial problems?
10. Is an open-door policy in place that allows employees to speak freely about pressures,
providing management the opportunity to alleviate such pressures before they become
acute?
11. Are anonymous surveys conducted to assess employee morale?
Attachment 8b
Communication to Governance
Municipal Property Corporation (MPC)
Page 1
October 15, 2025
To the Board of Directors
City of Scottsdale Municipal Property Corporation
We have audited the financial statements of governmental activities and each major fund of City of
Scottsdale Municipal Property Corporation (Corporation), a component unit of the City of Scottsdale,
Arizona, as of and for the year ended June 30, 2025. Professional standards require that we provide
you with information about our responsibilities under generally accepted auditing standards,
Government Auditing Standards, as well as certain information related to the planned scope and
timing of our audit. We have communicated such information in our engagement letter provided to
you during the planning phase of the audit. Professional standards also require that we communicate
to you the following matters related to our audit.
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The
significant accounting policies used by City of Scottsdale Municipal Property Corporation are
described in Note 1 to the financial statements. No new accounting policies were adopted and the
application of existing policies was not changed during the year. We noted no transactions entered
into by the Corporation during the year for which there is a lack of authoritative guidance or
consensus. All significant transactions have been recognized in the financial statements in the proper
period.
Accounting estimates are an integral part of the financial statements prepared by management and
are based on management’s knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are particularly sensitive because of
their significance to the financial statements and because of the possibility that future events
affecting them may differ significantly from those expected.
The most sensitive estimates affecting the financial statements were:
•
Management’s estimate of the allowance for uncollectible receivable balances is based on
past experience and future expectation for collection of various account balances.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing
our audit.
Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during
the audit and communicate them to the appropriate level of management. A misstatement is defined
Page 2
as a difference between the reported amount, classification, presentation, or disclosure of a financial
statement item and the amount, classification, presentation, or disclosure that is required for the
item to be presented fairly in accordance with the applicable financial reporting framework. During
the course of the audit we did not identify any uncorrected misstatements which require
communication.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor’s report. We are pleased to report that no such disagreements arose during
the course of our audit.
Management Representations
We have requested certain written representations from management, which are included in the
management representation letter provided to us at the conclusion of the audit.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation
involves application of an accounting principle to the Corporation’s financial statements or a
determination of the type of auditor’s opinion that may be expressed on those statements, our
professional standards require the consulting accountant to check with us to determine that the
consultant has all the relevant facts. To our knowledge, there were no such consultations with other
accountants regarding auditing and accounting matters.
Discussions with Management
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management throughout the course of the year. However, these discussions
occurred in the normal course of our professional relationship and our responses were not a
condition to our retention as the Corporation’s auditors.
Other Matters
As discussed in Note 1, the financial statements of the Municipal Property Corporation are intended
to present the net position and changes in net position that are attributable to the Corporation, a
component unit of the City of Scottsdale, Arizona report. They do not purport to, and do not, present
fairly the financial position of the City of Scottsdale, Arizona as of June 30, 2025 and the changes in
financial position for the year ended in conformity with accounting principles generally accepted in
the United States of America. Our opinion is not modified with respect to this matter.
Compliance with Ethics Requirements Regarding Independence
The engagement team, others in our firm, and as appropriate, our firm, have complied with all
relevant ethical requirements regarding independence. Heinfeld, Meech & Co., P.C. continually
assesses client relationships to comply with relevant ethical requirements, including independence,
integrity, and objectivity, and policies and procedures related to the acceptance and continuance of
client relationships and specific engagements. Our firm follows the “Independence Rule” of the AICPA
Code of Professional Conduct and the rules of state boards of accountancy and applicable regulatory
agencies. It is the policy of the firm that all employees be familiar with and adhere to the
independence, integrity, and objectivity rules, regulations, interpretations, and rulings of the AICPA,
U.S. Government Accountability Office (GAO), and applicable state boards of accountancy.
Page 3
Responsibility for Fraud
It is important for both management and the members of the governing body to recognize their role
in preventing, deterring, and detecting fraud. One common misconception is that the auditors are
responsible for detecting fraud. Auditors are required to plan and perform an audit to obtain
reasonable assurance that the financial statements do not include material misstatements caused by
fraud. Unfortunately most frauds which occur in an organization do not meet this threshold.
The attached document prepared by the Association of Certified Fraud Examiners (ACFE) is provided
as a courtesy to test the effectiveness of the fraud prevention measures of your organization. Some
of these steps may already be in place, others may not. Not even the most well-designed internal
controls or procedures can prevent and detect all forms of fraud. However, an awareness of fraud
related factors, as well as the active involvement by management and the members of the governing
body in setting the proper “tone at the top”, increases the likelihood that fraud will be prevented,
deterred and detected.
Additional Reports Issued
In addition to the auditor’s report on the financial statements we will also issue the following
documents related to this audit. These reports are typically issued within 60 days of the date of this
letter.
•
Report on internal control over financial reporting and on compliance in accordance with
Government Auditing Standards
Other Important Communications Related to the Audit
Attached to this letter are a copy of the signed engagement letter provided to us at the initiation of
the audit, and a copy of the management representation letter provided to us at the conclusion of
the audit. If there are any questions on the purpose or content of these letters please contact the
engagement partner identified in the attached engagement letter.
Restriction on Use
This information is intended solely for the use of the members of the Board of Directors and
management of City of Scottsdale Municipal Property Corporation and is not intended to be, and
should not be, used by anyone other than these specified parties.
Very truly yours,
Heinfeld, Meech & Co., P.C.
Scottsdale, Arizona
Fraud Prevention Checklist
The most cost-effective way to limit fraud losses is to prevent fraud from occurring. This checklist is
designed to help organizations test the effectiveness of their fraud prevention measures.
1. Is ongoing anti-fraud training provided to all employees of the organization?
•
Do employees understand what constitutes fraud?
•
Have the costs of fraud to the company and everyone in it — including lost profits, adverse
publicity, job loss and decreased morale and productivity — been made clear to employees?
•
Do employees know where to seek advice when faced with uncertain ethical decisions, and
do they believe that they can speak freely?
•
Has a policy of zero-tolerance for fraud been communicated to employees through words
and actions?
2. Is an effective fraud reporting mechanism in place?
•
Have employees been taught how to communicate concerns about known or potential
wrongdoing?
•
Is there an anonymous reporting channel available to employees, such as a third-party
hotline?
•
Do employees trust that they can report suspicious activity anonymously and/or
confidentially and without fear of reprisal?
•
Has it been made clear to employees that reports of suspicious activity will be promptly and
thoroughly evaluated?
•
Do reporting policies and mechanisms extend to vendors, customers and other outside
parties?
3. To increase employees’ perception of detection, are the following proactive measures taken
and publicized to employees?
•
Is possible fraudulent conduct aggressively sought out, rather than dealt with passively?
•
Does the organization send the message that it actively seeks out fraudulent conduct
through fraud assessment questioning by auditors?
•
Are surprise fraud audits performed in addition to regularly scheduled audits?
•
Is continuous auditing software used to detect fraud and, if so, has the use of such software
been made known throughout the organization?
4. Is the management climate/tone at the top one of honesty and integrity?
•
Are employees surveyed to determine the extent to which they believe management acts
with honesty and integrity?
•
Are performance goals realistic?
•
Have fraud prevention goals been incorporated into the performance measures against
which managers are evaluated and which are used to determine performance-related
compensation?
•
Has the organization established, implemented and tested a process for oversight of fraud
risks by the board of directors or others charged with governance (e.g., the audit
committee)?
5. Are fraud risk assessments performed to proactively identify and mitigate the company’s
vulnerabilities to internal and external fraud?
6. Are strong anti-fraud controls in place and operating effectively, including the following?
•
Proper separation of duties
•
Use of authorizations
•
Physical safeguards
•
Job rotations
•
Mandatory vacations
7. Does the internal audit department, if one exists, have adequate resources and authority to
operate effectively and without undue influence from senior management?
8. Does the hiring policy include the following (where permitted by law)?
•
Past employment verification
•
Criminal and civil background checks
•
Credit checks
•
Drug screening
•
Education verification
•
References check
9. Are employee support programs in place to assist employees struggling with addictions,
mental/ emotional health, family or financial problems?
10. Is an open-door policy in place that allows employees to speak freely about pressures,
providing management the opportunity to alleviate such pressures before they become
acute?
11. Are anonymous surveys conducted to assess employee morale?
FY 2024/25
Annual Financial Audit
City Council Meeting – January 13, 2026
Lai Cluff, Acting City Auditor
Brittney Williams, CPA, Heinfeld, Meech & Co., P.C.
Item 18
Background
• Charter requires City Council to designate
CPAs to perform an independent audit of
City’s annual financial statements.
• Council assigned financial audit contract
responsibility to City Auditor.
• Audit Committee received the FY 2024/25
financial audit reports at its December 12th
meeting.
1
Summary of Financial Audit Reports
Annual Comprehensive Financial Report
Unmodified opinion – financial statements
are fairly presented in all material respects.
Component Units’ Financial Reports
• Community Facilities Districts
(4 CFDs: DC Ranch, McDowell Mountain Ranch,
Via Linda Road, Waterfront)
• Municipal Property Corporation (MPC)
➢Unmodified opinions on each
2
Related Communications
Communication to Governance – for City and
each Component Unit
Addresses key points such as:
• Accounting practices, significant estimates –
no issues
• Audit adjustments or disagreements with
management – no issues
• Other similar matters - no issues
3
Federal Funding/Compliance Reports
Single Audit Report:
Report on Internal Control and
Compliance based on the Financial
Statement audit
• No significant deficiencies, material
weaknesses or issues related to
noncompliance.
Completion of the Single Audit anticipated
late January/ February 2026.
4
Other funding/compliance reports
State funding/compliance report
• Highway User Revenue Fund (HURF) uses -
City complied with state requirements
Other reports to be completed in
February/ March 2026:
• HUD-required financial schedule – (federal)
• Annual Expenditure Limitation Report – (state)
5
Requested Action
Accept the FY 2024/25 financial audit reports as submitted by
the City’s external financial auditors, Heinfeld, Meech & Co.
P.C.
6