omrehene nna fnanca eort - city of thornton · omrehene nna fnanca eort for the year ended december...

Comprehensive Annual Financial

Report

For the year ended

December 31, 2012

City of Thornton, Colorado Comprehensive Annual Financial Report

For the fiscal year ended December 31, 2012

Prepared by the Finance Deparment:

Charles Seest, Finance Director Maria Ostrom, Assistant Finance Director

JoAnn Koenig, Senior Accountant Rita Beauvais, Accountant Kim Newhart, Accountant Jamie Miller, Accountant

Mindy Gallo, Accounting Specialist Vanessa Bernal, Accounting Specialist Carla Montoya, Accounting Specialist

City of Thornton, Colorado

Table of Contents

Page Introductory Section

Letter of Transmittal v

City Officials x

Organizational Chart xi

Certificate of Achievement for Excellence in Financial Reporting xii

Financial Section

Report of Independent Certified Public Accountants 1

Management’s Discussion & Analysis 5

Basic Financial Statements

Government-wide Financial Statements

Statement of Net Position 14

Statement of Activities 15

Fund Financial Statements

Balance Sheet - Governmental Funds 18

Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 19

Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 20

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 21

Statement of Net Position – Proprietary Funds 22

Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds 24

Statement of Cash Flows – Proprietary Funds 26

Notes to Financial Statements 28

Required Supplementary Information

Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – General Fund – Non US GAAP Basis 54

Schedule of Funding Progress for the City Fire Pension Plan 55

Schedule of Funding Progress for the City Retiree Health Care Plan 56

Combining and Individual Statements and Schedules

Fund Descriptions – Non-Major Governmental Funds 58

Combining Balance Sheet – Non-Major Governmental Funds 60

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Non-Major Governmental Funds 64

Thornton Arts, Sciences, and Humanities Council Fund (TASHCO) Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 67

i


Table of Contents (Continued) Page

Financial Section (Continued) Combining and Individual Statements and Schedules (Continued)

Cash in Lieu Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 68

Conservation Trust Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 69

Parks Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 70

Open Space Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 71

Parks and Open Space Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 72

Adams County Open Space Sales Tax Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 73

Adams County Road & Bridge Sales Tax Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 74

136th Avenue General Improvement District Tax Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 75

E911 Authority Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 76

Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 77

Governmental Capital Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual

– Non US GAAP Basis 78Thornton Development Authority South Capital Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 79

Thornton Development Authority North Capital Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 80

Thornton Development Authority 144th Capital Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 81

Fund Descriptions – Major Enterprise Funds 82

Water Fund Schedule of Revenues, Expenses, and Changes in Net Position – Budget and Actual

– Non US GAAP Basis 83

Sewer Fund Schedule of Revenues, Expenses, and Changes in Net Position – Budget and Actual


Fund Descriptions – Non-Major Enterprise Funds

Combining Statement of Net Position – Non-Major Enterprise Funds 86

Combining Statement of Revenues, Expenses, and Changes in Fund Net Position - Non-Major Enterprise Funds 87

Combining Statement of Cash Flows – Non-Major Enterprise Funds 88

Sanitation Fund Schedule of Revenues, Expenses, and Changes in Fund Balance – Budget and Actual


Golf Course Fund Schedule of Revenues, Expenses, and Changes in Fund Balance – Budget and Actual


85

ii


Table of Contents (Continued) Page

Financial Section (Continued) Combining and Individual Statements and Schedules (Continued)

Fund Descriptions – Internal Service Funds 92

Combining Statement of Net Position - Internal Service Funds 93

Combining Statement of Revenues, Expenses, and Changes in Fund Net Position – Internal Service Funds 94

Combining Statement of Cash Flows – Internal Service Funds 96

Risk Management Fund Schedule of Revenues, Expenses, and Changes in Fund Balance – Budget and Actual


Information Technology Fund Schedule of Revenues, Expenses, and Changes in Fund Balance – Budget and Actual


Reprographics Fund Schedule of Revenues, Expenses, and Changes in Fund Balance – Budget and Actual

– Non US GAAP Basis 100 Consolidated Service Center Fund

Schedule of Revenues, Expenses, and Changes in Fund Balance – Budget and Actual 101

Other Schedules

Schedule of Investments 105

Local Highway Finance Report 106

Statistical Section (Un-audited)

Schedule 1 – Net Position by Component 111

Schedule 2 – Changes in Net Position 112

Schedule 3 – Fund Balances of Governmental Funds 114

Schedule 4 - Changes in Fund Balances of Governmental Funds 115

Schedule 5 – General Government Tax and Assessment Revenues by Source 116

Schedule 6 – Sales Tax Revenue by Type of Industry 118

Schedule 7 – Direct and Overlapping Sales Tax Rates 120

Schedule 8 – Principal Sales Taxpayers 121

Schedule 9 – Ratios of Outstanding Debt by Type 122

Schedule 10 – Ratios of General Bonded Debt Outstanding 124

Schedule 11 – Direct and Overlapping Governmental Activities Debt 125

Schedule 12 – Legal Debt Margin Information 126

Schedule 13 – Pledged-Revenue Coverage 127

Schedule 14 – Demographic and Economic Statistics 128

Schedule 15 – Principal Employers 129

Schedule 16 – Full-time Equivalent City Government Employees by Function 130

Schedule 17 – Operating Indicators by Function 131

Schedule 18 – Capital Asset Statistics by Function 132

iii

This Page Left Intentionally Blank

iv

Factors Affecting Financial Condition

The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City operates.

Local Economy

Due to the impact of the recent economic downturn and mortgage crisis, commercial and residential construction within the City has flattened and will take some time to return to the levels we saw in 2006 and earlier. Although investment earnings continued to decline, sales tax collections and vehicle revenues increased. There are several factors that position Thornton well once the economy rebounds:

The City is one of the few remaining areas in metro Denver with large amounts ofdevelopable land.

Major street and utility infrastructure is already in place in prime commercial and retail areas. The City is located only 12 miles directly west of Denver International Airport (30 driving

miles) and has a number of major arterials that lead to the airport. Interstate 25 and the E-470 toll way run through major portions of the City. Both the North Washington Street Corridor Urban Renewal Area and the recently created East

144th Avenue and Interstate 25 urban renewal plan area puts in place the vehicle to fundadditional infrastructure improvements necessary for new development through taxincrement financing.

The City is located near the University of Colorado and the US 36 Highway technologycorridor, which is in close proximity to the CU campus.

Construction activity increased relative to the previous year. In 2006, permits reflected healthy activity with 1,000 permits being issued. In 2009, the City hit a 16 year low with 240 permits. In 2012, the City issued 307 single family permits for residential construction with an estimated value of $72,544,133 and 10 permits for new commercial construction with an estimated value of $38,126,994. The 2012 population number came in at 121,211, adding 1,064 residents for the year.

-

200

400

600

800

1,000

1,200

1,400

1,600

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Residential Building Permits 2003-2012

vii

Sales tax collections (including retail and audit assessments), the largest single revenue stream received by the general government, totaled $51,074,263 in 2012. In 2012, sales tax collections increased 7.5% over 2011.

Property values increased 0.3% from 2011 in assessed valuation, totaling $897,730,980 for 2012. The property taxes associated with this assessed valuation will be collected in 2013. The assessed value still remains below the 2008 valuation of $918,468,770.

Long Term Financial Planning

During 2011, the Council passed a resolution revising the City’s existing financial policies related to fund balances and cash reserves. The updated General Fund policy recognizes three categories of reserves: catastrophic events which include acts of nature and large scale emergencies, economic stabilization events for shortfalls in primary revenues, and other unanticipated events to cover any situation that did not qualify as a catastrophe or economic event. These three categories represent 7%, 7%, and 3% of current year budget, respectively. Council also established that utilization of any reserve would require a two-thirds affirmative vote. In the event that a cash reserve is utilized or the level falls below the amount set forth by policy, the City Council shall approve a plan within two years of such event to restore levels to the required amount. In addition to the General Fund, financial policies (related to fund balances and cash reserves) also exist for the City’s Governmental Capital Fund and the utility enterprise funds (including Water, Sewer, and Sanitation).

$-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Sales Tax Collections 2003-2012

$-

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Assessed Valuation 2003-2012

viii


CITY OFFICIALS

December 31, 2012

Mayor and City Council

Mayor: Heidi Williams

Council Members: Ward 1 Ward 1 Ward 2 Ward 2 Ward 3 Ward 3 Ward 4 Ward 4

Mack Goodman Jenice Dove

Eva HenryVal Vigil

Lynne FoxBeth Humenik

Randy Drennen Eric Tade

Administrative

City Manager: Jack Ethredge

City Attorney: Margaret Emerich

Presiding Municipal Judge: Charles Rose

Assistant City Manager: Joyce Hunt

Deputy City Manager - Management Services: Charles W. Long

Deputy City Manager - Infrastructure: Bud Elliot

Deputy City Manager - City Development: Jeff Coder

Police Chief: Randy Nelson

Fire Chief: John Staley

Community Services Executive Director: Mike Soderberg

Economic Development Director: Mike Masciola

Finance Director: Charles Seest

Assistant Finance Director: Maria Ostrom

City Clerk: Nancy Vincent

x

www.eidebai l ly.com

440 Indiana St., Ste. 200 | Golden, CO 80401-5021 | TF 877.882.7929 | T 303.986.2454 | F 303.980.5029 | EOE

Independent Auditor’s Report To the Mayor and City Council City of Thornton, Colorado Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Thornton, Colorado, as of and for the year ended December 31, 2012, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Audit Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Thornton, Colorado, as of December 31, 2012, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

1

Emphasis of a Matter Effect of Adopting New Accounting Standards As described in Note A18 to the financial statements, the City adopted the provisions of GASB Statement No. 60 Accounting and Financial Reporting for Service Concession Arrangements, GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, GASB Statement No. 63 Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 64 Derivative Instruments: Application of Hedge Accounting Termination Provisions—an amendment of GASB Statement No. 53. The opinion is not modified with the implementation of these GASB Statements. Correction of Error As described in Note A 19 to the financial statements, certain assets contributed prior to December 31, 2011 were identified in 2012. Accordingly, an adjustment has been made to net position and capital assets as of January 1, 2012 to correct the error. The opinion is not modified as a result of this restatement. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that management’s discussion and analysis and budgetary comparison information on pages 5 through 12 and 54 and the schedule of funding progress on pages 55 through 56 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Thornton, Colorado’s financial statements. The introductory section, combining and individual fund financial statements, individual budget schedules, schedule of investments, Local Highway Finance Report, and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements, budget schedules, schedule of investments and Local Highway Finance Report on pages 60 through 107 were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, this information is fairly stated in all material respects in relation to the financial statements as a whole.

2

The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 28, 2013 on our consideration of the City of Thornton’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Thornton’s internal control over financial reporting and compliance.

Golden, Colorado May 28, 2013

3


4

City of Thornton, Colorado Management’s Discussion and Analysis

December 31, 2012

As management of the City of Thornton (“the City”), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2012. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal at the front of this report, and the City’s financial statements which follow this section.

Financial Highlights

The City’s assets exceeded its liabilities at the close of the most recent fiscal year by $977,561,443. This total isdivided between Governmental Activities of $366,941,556 and Business-type Activities of $610,619,887.

The City’s total net position increased by $18,629,864. This total is divided between a decrease in GovernmentalActivities of $12,266,343 and an increase in Business-type Activities of $30,896,207.

The City’s Governmental Activities show revenues of $125,015,806. The largest revenue source is sales and usetaxes ($73,606,406) followed by charges for services ($15,853,276) and property taxes ($11,719,559). Chargesfor services consists of the administrative fee charged to the enterprise funds ($5,760,261, 36.3%), finesand forfeitures ($2,915,446, 18.4%), recreation and related charges ($2,739,802, 17.3%), ambulancecharges ($1,735,086, 11.0%), and other miscellaneous charges ($2,702,681, 17.0%). The Governmentalexpenses were $135,391,943. More details are provided in the Government-wide Financial Analysis section.

The City’s Business-type Activities show revenues of $81,071,762. The largest revenue source is charges forservices ($50,894,288) followed by capital grants and contributions ($16,413,623). Capital grants andcontributions consists of payments for connections to the City’s water and sewer systems ($14,924,200, 91%),infrastructure donated to the City by developers ($576,947, 3%), and assets contributed from governmentalactivities to the golf course operation ($912,476, 6%). The Business-type expenses were $50,175,555. Moredetails are provided in the Government-wide Financial Analysis section.

General Fund total fund balance increased by $50,300 (0.1%) from prior year. City Council policy requires theGeneral Fund to maintain a total fund balance at an amount equal to specified percentages of the current yearGeneral Fund budget. (Catastrophic 7%, Stabilization 7%, Other 3% and TABOR reserve per State Statute). Atthe end of the current fiscal year, total fund balance was $27,493,906 or 31% of General Fund budgetedexpenditures.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad view of the City’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the City’s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, police, fire, ambulance, city development, infrastructure, and community services. The business-type activities of the City include water, sewer, sanitation, and the golf course.

The government-wide financial statements can be found on pages 14-15 of this report.

5


December 31, 2012

Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds.

Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City maintains 16 individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, the Governmental Capital Project Fund, and the Thornton Development Authority 144th Capital Fund which are considered to be major funds. Data from the other 13 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report.

The City adopts an annual appropriated budget for its General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with this budget, which can be found on page 54 of this report.

The basic governmental fund financial statements can be found on pages 18-21 of this report.

Proprietary funds. The City maintains two different types of proprietary funds; enterprise and internal service. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for water, sewer, sanitation, and the golf course. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses four internal service funds: Risk Management to account for the costs related to a comprehensive program to manage the City’s property, liability, work related injury risk, dental and vision; Information Technology to account for computer support and maintenance; Reprographics to account for copying and mailing and the Consolidated Service Center to account for fuel purchased and utilized by Adams County School District 12. Because these services predominately benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water, Sewer, Sanitation and Golf Course Funds. Only the Water and Sewer Funds are considered to be major funds of the City. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report.

The basic proprietary fund financial statements can be found on pages 22-27 of this report.

Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 28-52 of this report.

Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain supplementary information. The combining statements referred to earlier in connection with non-major governmental funds and proprietary funds are presented immediately following the basic financial statements. Combining and individual fund statements and schedules can be found on pages 58-101 of this report.

Government-wide Financial Analysis

As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. Assets exceeded liabilities by $977,561,443 at the close of the most recent fiscal year (see Table 1).

6

Table 1Net Position

As of December 31,

Governmental activities Business-type activities Total2012 2011 2012 2011-restated 2012 2011-restated

Current and other assets 129,731,654$ 143,090,002$ 121,430,371$ 99,383,638$ 251,162,025$ 242,473,640$

Capital assets 334,797,372 337,301,254 560,414,966 559,626,723 895,212,338 896,927,977

Total assets 464,529,026$ 480,391,256$ 681,845,337$ 659,010,361$ 1,146,374,363$ 1,139,401,617$

Long-term liabilities outstanding 57,306,712 60,151,081 58,746,749 65,624,036 116,053,461 125,775,117

Other liabilities 40,280,758 41,032,276 12,478,701 13,662,645 52,759,459 54,694,921

Total liabilities 97,587,470$ 101,183,357$ 71,225,450$ 79,286,681$ 168,812,920$ 180,470,038$

Net position:

Net investment in capital assets 277,932,039 277,075,485 497,107,782 489,517,504 775,039,821 766,592,989

Restricted 5,098,730 5,064,308 15,431,413 4,141,250 20,530,143 9,205,558

Unrestricted 83,910,787 97,068,106 98,080,692 86,064,926 181,991,479 183,133,032

Total net position 366,941,556$ 379,207,899$ 610,619,887$ 579,723,680$ 977,561,443$ 958,931,579$

7


December 31, 2012

By far the largest portion of the City’s net position (79%) reflects its net investment in capital assets (e.g., land, buildings, machinery, and equipment), less any related debt used to acquire those assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

An additional portion of the City’s net position (2%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position ($181,991,479) may be used to meet the government’s ongoing obligations to citizens and creditors.

At the end of the current fiscal year, the City is able to report positive balances of net position; both for the government as a whole, as well as for its separate governmental and business-type activities (see Table 2).

The government’s net position increased by $18,629,864 during the current fiscal year. This increase is due to revenues exceeding expenses (161%) for business-type activities which are explained below.

Governmental activities. Below is information regarding Governmental activities (see Table 2).

Governmental activities decreased the City’s net position by $12,266,343 .

• Sales and use taxes ($73,606,406, 59% of total revenues), charges for services ($15,853,276, 13% of totalrevenues) and property taxes ($11,719,559, 9% of total revenues) represent the three largest inflows.

In 2012, governmental revenues increased by $5,464,743 (5%) from 2011. Sales and use taxes represented thelargest increase ($6,130,400) due to audit assessments and a continued recovery of the economy.

Expenses increased by $13,316,141 (11%) over 2011: The bulk of the increase was an advance to the TDA 144th

Capital Fund to fund necessary improvements in the 144th corridor.

Business-type activities. Below is information regarding Business-type activities (see Table 2).

Business-type activities increased the City’s net position by $30,896,207, accounting for 166% of the totalgrowth in the government’s net position.

Charges for services ($50,894,288, 63% of total revenues), miscellaneous revenue ($11,558,397, 14% of totalrevenues) and tap fees, which are included in grants and contributions, ($15,501,147, 19% of total revenues)represent the three largest inflows to business-type activities.

Revenues increased by $16,871,976 (27%) in 2012 compared to 2011. An increase in resident sale of water($2,337,156), an increase in oil and gas revenue received on property owned by the City ($2,286,335), and anincrease in grants and contributions ($9,625,296) encompass the majority of the increase in total revenues.

Expenses increased $1,549,883 (3%) from 2011. This increase in expenses was primarily due to the creation ofthe Golf Course fund ($1,375,657).

Financial Analysis of the Government’s Funds

As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The following details are contained in the fund financial statements.

Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

As of the end of the current fiscal year, the City governmental funds reported combined ending fund balances of $91,182,412, a decrease of $14,969,547 in comparison with the prior year as a result of expenditures exceeding revenues. The primary reason for this decrease is due to an advance to the TDA 144th Capital Fund to fund necessary improvements in the 144th corridor. Approximately 47% of year end fund balance ($42,875,494) is available for spending at the government’s discretion.

The remainder of fund balance ($48,306,918) is nonspendable, restricted or committed to indicate that it is not available for new spending. The two largest are advances ($13,130,698, 27%) and commitments made by Council ($16,616,000, 34%).

8

Table 2

Changes in Net Position

For Years Ended December 31,

Governmental activities Business-type activities Total

2012 2011 2012 2011-restated 2012 2011-restated

Revenues:

Program revenues:

Charges for services 15,853,276$ 15,802,255$ 50,894,288$ 46,215,887$ 66,747,564$ 62,018,142$

Operating grants and

contributions 5,572,187 4,989,148 - - 5,572,187 4,989,148

Capital grants and

contributions 7,899,630 10,080,966 16,413,623 6,788,327 24,313,253 16,869,293

General revenues:

Sales and use taxes 73,606,406 67,476,006 - - 73,606,406 67,476,006

Property taxes 11,719,559 11,778,013 - - 11,719,559 11,778,013

Franchise taxes 4,818,327 4,893,344 - - 4,818,327 4,893,344

E911 taxes 1,080,585 986,856 - - 1,080,585 986,856

Other taxes 1,606,794 1,367,398 - - 1,606,794 1,367,398

Earnings on investments 963,440 904,954 1,198,760 892,446 2,162,200 1,797,400

Gain on sale of assets 24,402 42,245 28,964 7,307 53,366 49,552

Miscellaneous 1,871,200 1,229,878 11,558,397 9,318,089 13,429,597 10,547,967

Total revenues 125,015,806 119,551,063 80,094,032 63,222,056 205,109,838 182,773,119

Expenses:

General government 31,840,827 19,275,165 - - 31,840,827 19,275,165

Police 26,295,237 25,877,812 - - 26,295,237 25,877,812

Fire 12,188,210 11,960,138 - - 12,188,210 11,960,138

City development 13,467,929 12,261,174 - - 13,467,929 12,261,174

Streets, traffic, and

engineering 26,533,674 28,491,153 - - 26,533,674 28,491,153

Community services 22,473,148 21,346,877 - - 22,473,148 21,346,877

Interest on long-term

debt 2,592,918 2,863,483 - - 2,592,918 2,863,483

Water - - 31,995,137 31,980,077 31,995,137 31,980,077

Sewer - - 12,112,574 11,960,169 12,112,574 11,960,169

Sanitation - - 4,692,187 4,685,426 4,692,187 4,685,426

Golf - - 1,375,657 - 1,375,657 -

Total expenses 135,391,943 122,075,802 50,175,555 48,625,672 185,567,498 170,701,474

Increase in net position before transfers (10,376,137) (2,524,739) 29,918,477 14,596,384 19,542,340 12,071,645

Transfers (1,890,206) - 977,730 - (912,476) -

Increase (decrease)

in net position (12,266,343) (2,524,739) 30,896,207 14,596,384 18,629,864 12,071,645

Net position, Jan 1 379,207,899 381,732,638 579,723,680 565,127,296 958,931,579 946,859,934

Net position, Dec 31 366,941,556$ 379,207,899$ 610,619,887$ 579,723,680$ 977,561,443$ 958,931,579$

9


December 31, 2012

The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the General Fund was 27% ($7,467,599) of total fund balance ($27,493,906). 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 8% of total actual General Fund expenditures, while total fund balance represents 31% of that same amount.

The Governmental Capital Projects Fund is funded primarily with sales and use taxes and provides for the repair, replacement and planned growth of infrastructure and other capital assets of the City government. At the end of the current fiscal year, assigned fund balance was 44% ($11,333,022) of total fund balance ($25,619,536).

Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.

Unrestricted net position of the Water, Sewer, Sanitation, and Golf Funds at the end of the year amounted to$77,966,342, $12,954,770, $6,350,142, and $809,438 respectively. The change in net position for the funds was $28,214,969, $735,324, $251,749, and $1,694,165, respectively.

General Fund Budgetary Highlights

Revenues and other financing sources were less than budgetary estimates and expenditures were less than appropriations. Expenditures were under budget by $1,895,113. The primary savings were personnel due to multiple vacancies throughout the year.

Capital Asset and Debt Administration

Capital assets. The City’s investment in capital assets for its governmental and business-type activities as of December 31, 2012, amounts to $895,212,338 (net of accumulated depreciation). This investment in capital assets includes land and water rights, building and improvements, leisure areas and improvements, general equipment, and infrastructure (see Table 3).

Major capital asset events during the current fiscal year included the following:

Governmental capital assets decreased in the current year by $2,503,882 net of accumulated depreciation.The City’s capital spending increased over 2011. Of the $30,931,273 spent on capital outlay in 2012, only$15,766,754 (51%) was capitalized with the remaining $15,164,519 of capital outlay being directlyexpensed, as the projects were ineligible for capitalization under the City’s policies and procedures. Themajority of these expenditures was for the street maintenance program. Of the spending that did getcapitalized at year-end, the largest project was for park improvements ($7,759,120, 49%) at the CarpenterRecreation Center at 112th and Colorado Blvd and the Thornton Trail Winds Park and Open Space at 136th

Ave and Holly Street which when completed will include lighted tennis courts, volleyball courts, basketballcourts, skate park, boathouse, carousel and other amenities. The primary decrease in capital asset valuewas due to depreciation expense ($18,729,099) with the infrastructure in streets, traffic and engineering($12,675,450, 68%) contributing the largest amount.

Proprietary funds had net additions of $788,243. During 2012, a few large projects were completed andcapitalized that were previously reported in construction in progress, including water line construction($14,533,204) and reservoir storage ($2,888,015).

Additional information on the City’s capital assets can be found in note E on pages 36-38 of this report.

Long-term debt. At the end of the current fiscal year, the City had total debt outstanding of $121,990,000 (see Table 4). Of this amount, $24,250,000 comprises general obligation debt backed by the full faith and credit of the government. However, per City charter, the general obligation bonds issued for the City’s municipal water system are excluded from the legal debt limitation because the bonds are being serviced by water operations. The remainder of the City’s debt represents certificates of participation of $30,110,000 and revenue bonds of $67,630,000 supported by a pledge of the City’s general sales and use tax collections ($26,780,000) and a pledge of charges for services of the Water and Sewer Funds ($40,850,000).

The City’s total debt decreased by $13,780,000 (10%) during the current fiscal year due to debt service payments throughout the year.

10

Table 3Capital Assets

(net of depreciation)As of December 31,

Governmental activities Business-type activities Total2012 2011 2012 2011-restated 2012 2011-restated

Land, water and land rights 46,296,896$ 46,377,540$ 183,106,058$ 182,413,634$ 229,402,954$ 228,791,174$

Source of supply - - 120,265,784 116,647,155 120,265,784 116,647,155

Water treatment plant - - 65,692,535 67,430,687 65,692,535 67,430,687

Collection, transmission, & distribution - - 169,403,943 137,347,526 169,403,943 137,347,526

Streets, traffic, and engineering 183,331,649 193,915,190 - - 183,331,649 193,915,190

Buildings, structures and improvements 47,508,027 49,153,112 13,721,000 31,923,372 61,229,027 81,076,484

Leisure areas and improvements 30,462,591 31,938,800 798,728 - 31,261,319 31,938,800

General equipment 10,390,677 10,913,804 3,852,035 3,675,086 14,242,712 14,588,890

Construction in progress 16,807,532 5,002,808 3,574,883 20,189,263 20,382,415 25,192,071

Total 334,797,372$ 337,301,254$ 560,414,966$ 559,626,723$ 895,212,338$ 896,927,977$

Table 4Outstanding Debt

General Obligation Bonds, Revenue Bonds, and Certificates of ParticipationAs of December 31,

Governmental activities Business-type activities Total2012 2011 2012 2011 2012 2011

General obligation bonds -$ -$ 24,250,000$ 32,260,000$ 24,250,000$ 32,260,000$

Revenue bonds 26,780,000 30,265,000 40,850,000 41,110,000 67,630,000 71,375,000

Certificates of participation 30,110,000 32,825,000 - - 30,110,000 32,825,000

Total 56,890,000$ 63,090,000$ 65,100,000$ 73,370,000$ 121,990,000$ 136,460,000$

11


December 31, 2012

Long-term debt (continued)

In 2012, the Standard & Poor’s rating on the City’s General Obligation Bonds, Series 2002; the Sales and Use Tax Bonds, Series 2002; the Water Enterprise Revenue Bonds, Series 2004, and the Sewer Revenue Bonds, Series 2005 was AA, and the Tax Increment Bonds, Series 2004 was A. . In 2012, Moody’s rated the City’s General Obligation Bonds, Series 2002, the Sewer Revenue Bonds, Series 2005, the Water Revenue Bonds, Series 2004, and the Water G.O. Capital Appreciation Bonds Aa2, the Sales and Use Tax, Series 2002, Aa3, and the Tax Increment Bonds, Series 2004 A2.

On May 6, 2013, the City issued $39,380,000 Water Enterprise Revenue Refunding Bonds, Series 2013. The bonds refunded the 2004 Series. These bonds are rated AA by Standard & Poor’s and Aa2 by Moody’s. Additional information on the City’s long-term debt can be found in note G on pages 39-42 of this report.

Economic Factors and Next Year’s Budgets and Rates

The December 31, 2012 unemployment rate for the City was 8.4%, which is slightly lower than last year. TheCity is lower than the county’s (Adams) rate of 9.2%, and slightly higher than the state’s annual unemploymentrate of 8.0%, and the national rate of 8.1%.

Inflation has decreased from 2011’s rate of 3.7%; the Consumer Price Index for the Denver-Boulder-Greeley areawas 1.9% in 2012 compared to the national inflation rate of 2.1%.

In 2012, the City’s occupancy rate is approximately 91% for retail space, 65% for office space and 91% forindustrial space.

The City’s population has increased approximately 1,064 people and is expected to continue to grow atapproximately the same pace in 2013.

In 2012, the City experienced an increase in building revenues over 2011. Although construction is up, it is stillbelow 2009 levels and is expected to remain flat in 2013.

In 2012, the City’s Water Fund had no rate increase and 5.8% in the Sewer Fund. In 2013, the City’s ratesincreased 3% for the Water Fund and 6% for the Sewer Fund.

The City’s investment earnings have declined for the sixth straight year. The City’s average pooled rate was4.90% in 2007, 3.93% in 2008, 2.18% in 2009, 2.02% in 2010, 1.42% in 2011, and 1.12% in 2012. The currentprojection for 2013’s rate is 1.05%. The City invests available funds with safety as the primary goal. Instabilityin the financial markets along with the protracted recession created an unprecedented flight to quality puttingdownward pressure on yields. Investment vehicles utilized by the City to ensure safety first are yielding interestrates at historic lows.

All of these factors were considered in preparing the City’s budget for the 2013 fiscal year.

Ending unassigned fund balance in the General Fund was $7,467,599. Anticipated revenues and the use of this fund balance are expected to be adequate to fund necessary governmental operations and to keep the fund balance in harmony with the City Council’s fund balance policy.

Requests for Information

This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City Treasurer, City of Thornton, 9500 Civic Center Drive, Thornton, CO 80229 or visit the City’s website at www.cityofthornton.net.

12

BASICFINANCIAL STATEMENTS

13

Governmental Business-typeActivities Activities Total

ASSETS Equity in pooled cash and investments 93,744,520$ 96,401,160$ 190,145,680$ Receivables, net Taxes 19,939,771 - 19,939,771 Accounts 4,022,178 4,171,704 8,193,882 Interest and other 354,548 713,677 1,068,225 Internal balances (3,747,456) 3,747,456 - Inventory of supplies 119,080 - 119,080 Prepaids and other assets 95,083 - 95,083 Land held for resale 10,635,873 142,379 10,778,252 Restricted assets Equity in pooled cash and investments 3,564,605 15,618,005 19,182,610 Bond issuance costs, net of accumulated amortization 1,003,452 635,990 1,639,442 Capital assets Land, water rights, and construction in progress 63,104,428 306,946,725 370,051,153 Depreciable buildings, property, and equipment, net 271,692,944 253,468,241 525,161,185

Total assets 464,529,026 681,845,337 1,146,374,363

LIABILITIES Accounts payable 8,441,139 2,789,865 11,231,004 Retainage payable 380,721 250,367 631,088 Accrued interest payable 278,606 191,254 469,860 Advances for construction 7,194,982 - 7,194,982 Unearned revenue 12,159,118 224,772 12,383,890 Other 1,891,487 122,427 2,013,914 Noncurrent liabilities Due within one year 9,934,705 8,900,016 18,834,721 Due in more than one year 57,306,712 58,746,749 116,053,461

Total liabilities 97,587,470 71,225,450 168,812,920

NET POSITION Net investment in capital assets 277,932,039 497,107,782 775,039,821 Restricted for

1,623,034 4,156,042 5,779,076 - 11,275,371 11,275,371

Debt service Construction pledge

Emergencies 3,475,696 - 3,475,696 Unrestricted 83,910,787 98,080,692 181,991,479

Total net position 366,941,556$ 610,619,887$ 977,561,443$

The accompanying notes are an integral part of these financial statements.


Statement of Net PositionDecember 31, 2012

14

Operating CapitalCharges for Grants and Grants and Governmental Business-Type

Functions/Activities Expenses Services Contributions Contributions Activities Activities TotalGovernmental: General government 31,840,827$ 6,143,674$ -$ 22,428$ (25,674,725)$ (25,674,725)$ Police 26,295,237 3,014,682 917,627 - (22,362,928) (22,362,928) Fire 12,188,210 1,753,060 127,329 - (10,307,821) (10,307,821) City development 13,467,929 2,172,200 4,069 - (11,291,660) (11,291,660) Streets, traffic & engineering 26,533,674 - 3,896,632 5,986,007 (16,651,035) (16,651,035) Community services 22,473,148 2,769,660 626,530 1,891,195 (17,185,763) (17,185,763) Interest on long-term debt 2,592,918 - - - (2,592,918) (2,592,918)

Total governmental activities 135,391,943 15,853,276 5,572,187 7,899,630 (106,066,850) (106,066,850)

Business-type: Water 31,995,137 33,188,946 - 14,533,116 15,726,925$ 15,726,925 Sewer 12,112,574 11,725,967 - 968,031 581,424 581,424 Other enterprise funds 6,067,844 5,979,375 - 912,476 824,007 824,007

Total business-type activities 50,175,555 50,894,288 - 16,413,623 17,132,356 17,132,356

Total City of Thornton 185,567,498$ 66,747,564$ 5,572,187$ 24,313,253$ (106,066,850) 17,132,356 (88,934,494)

General revenues: Sales and use taxes 73,606,406 - 73,606,406 Property taxes 11,719,559 - 11,719,559 Franchise taxes 4,818,327 - 4,818,327 E911 taxes 1,080,585 - 1,080,585 Other taxes 1,606,794 - 1,606,794 Earnings on investments 963,440 1,198,760 2,162,200 Gain on sale of assets 24,402 28,964 53,366 Miscellaneous 1,871,200 11,558,397 13,429,597 Transfers: (1,890,206) 977,730 (912,476)

Total general revenues 93,800,507 13,763,851 107,564,358

Change in net position (12,266,343) 30,896,207 18,629,864

Net position, January 1, restated 379,207,899 579,723,680 958,931,579

Net position, December 31 366,941,556$ 610,619,887$ 977,561,443$



Statement of ActivitiesFor the year ended December 31, 2012

Program Revenues Net (Expense) Revenue andChanges in Net Position

15


16

FUND FINANCIAL STATEMENTS

17


Balance SheetGovernmental FundsDecember 31, 2012

Governmental Other TotalGeneral Capital TDA 144th Governmental Governmental

Fund Fund Capital Fund Funds FundsASSETS Equity in pooled cash and investments Unrestricted 27,417,415$ 17,448,844$ 818,232$ 41,452,443$ 87,136,934$ Restricted - 255,838 - 3,308,767 3,564,605 Receivables, net Taxes 12,506,654 2,950,692 - 4,482,425 19,939,771 Accounts 2,072,814 385,453 - 218,352 2,676,619 Interest 97,959 65,449 123 167,679 331,210 Inventory of supplies 119,080 - - - 119,080 Prepaid items and other assets 542 - - 1,366 1,908 Advance to other funds 100,000 13,030,698 - - 13,130,698 Land held for resale - - - 10,635,873 10,635,873

Total assets 42,314,464$ 34,136,974$ 818,355$ 60,266,905$ 137,536,698$

LIABILITIES Accounts payable 5,157,060$ 1,593,543$ 742,936$ 456,285$ 7,949,824$ Retainage payable - 38,041 - 342,680 380,721 Third party development advances - 6,642,521 - 552,461 7,194,982 Deferred revenue 9,304,961 68,628 - 2,785,529 12,159,118 Advance from other funds - - 16,778,154 - 16,778,154 Other 358,537 174,705 - 1,358,245 1,891,487

Total liabilities 14,820,558 8,517,438 17,521,090 5,495,200 46,354,286

FUND BALANCES Nonspendable Advances 100,000 13,030,698 - - 13,130,698 Inventories 119,080 - - - 119,080 Land held for resale - - - 10,635,873 10,635,873 Prepaids 542 - - 1,366 1,908 Restricted Capital projects - - - 1,685,748 1,685,748 Communications 384,805 - - - 384,805 Debt service - 15 - 1,623,019 1,623,034 Emergencies 3,475,696 - - - 3,475,696 Public safety 6,228 - - - 6,228 Other purposes - - - 48,091 48,091 Committed Reserves 15,616,000 1,000,000 - - 16,616,000 Other purposes 323,956 255,801 - - 579,757 Assigned Capital projects - 11,333,022 - 28,453,071 39,786,093 Debt service - - - 78,256 78,256 Parks and open space - - - 11,704,682 11,704,682 Public safety - - - 241,947 241,947 Other purposes - - - 299,652 299,652 Unassigned 7,467,599 - (16,702,735) - (9,235,136)

Total fund balances (deficit) 27,493,906 25,619,536 (16,702,735) 54,771,705 91,182,412

Total liabilities and fund balances 42,314,464$ 34,136,974$ 818,355$ 60,266,905$ 137,536,698$


18


Reconciliation of the Balance Sheet of Governmental Fundsto the Statement of Net Position

December 31, 2012

Total fund balances for governmental funds (page 18) 91,182,412$

Amounts reported for governmental activities in the statement of net position are different because:

Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Those assets consist of: Land and land rights 46,296,896 Construction in progress 16,807,532 Streets, Traffic & Engineering, net of $169,920,589 accumulated depreciation 183,331,649 Buildings and improvements, net of $20,720,300 accumulated depreciation 47,508,027 Leisure areas & improvements, net of $24,099,671 accumulated depreciation 30,462,591 General equipment, net of $20,585,904 accumulated depreciation 9,631,498 Total capital assets 334,038,193

Other long-term assets are not available to pay for current-period expenditures and, therefore, are not included in the funds. 1,123,187

Governmental funds report the effect of issuance costs when debt is first issued, whereas these amounts are deferred and amortized over the life of the bonds. 1,003,452

The City's defined benefit pension plan has a net pension asset 93,175

Internal service funds are used by the City to account for the financing of goods or services provided by one department or agency to other departments or agencies. The assets and liabilities of the internal service funds are included in the governmental activities in the statement of net position. 3,824,686

Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. All liabilities - both current and long-term - are reported in the statement of net position. Balances at December 31, 2012 are: Accrued interest on bonds and certificates of participation (278,606) Bonds payable, net of unamortized premium (27,603,901) Obligation under certificates of participation (29,283,805) Post employment benefits (1,527,000) Compensated absences (5,630,237)

Total long-term liabilities (64,323,549)

Total net position governmental activities (page 14) 366,941,556$

19


Statement of Revenues, Expenditures, and Changes in Fund BalancesGovernmental Funds

For the year ended December 31, 2012

Governmental Other TotalGeneral Capital TDA 144th Governmental Governmental

Fund Fund Capital Fund Funds FundsREVENUES Taxes Sales and use 48,677,623$ 10,325,899$ -$ 14,602,884$ 73,606,406$ Property 8,980,988 - - 2,738,571 11,719,559 Franchise 4,818,327 - - - 4,818,327 E911 - - - 1,080,585 1,080,585 Other 1,606,794 - - - 1,606,794 Licenses and permits 2,139,568 - - - 2,139,568 Intergovernmental 5,152,212 2,384,778 - 3,542,522 11,079,512 Governmental grants 788,415 845,994 - 651,108 2,285,517 Charges for services 10,504,227 - - - 10,504,227 Fines and forfeitures 2,915,446 - - - 2,915,446 Lease - 98,787 - - 98,787 Interest 280,156 202,593 419 480,272 963,440 Miscellaneous 740,888 86,655 - 451,823 1,279,366

Total revenues 86,604,644 13,944,706 419 23,547,765 124,097,534

EXPENDITURES Current General government 17,100,793 - 12,075,247 - 29,176,040 Police 24,537,205 - - - 24,537,205 Fire and ambulance 11,572,631 - - - 11,572,631 City development 6,652,180 - - - 6,652,180 Infrastructure 10,838,187 - - - 10,838,187 Community services 15,566,185 - - 83,233 15,649,418 Capital outlay 1,983,799 3,804,185 4,593,828 20,549,461 30,931,273 Debt service Principal retirement - 2,715,000 - 3,485,000 6,200,000 Interest and bond fees - 1,257,090 34,079 1,241,248 2,532,417

Total expenditures 88,250,980 7,776,275 16,703,154 25,358,942 138,089,351

Excess (deficiency) of revenues over (under) expenditures (1,646,336) 6,168,431 (16,702,735) (1,811,177) (13,991,817)

OTHER FINANCING SOURCES (USES) Transfers in 1,770,005 - - 1,877,019 3,647,024 Transfers out (73,369) (1,017,580) - (3,533,805) (4,624,754)

Total other financingsources (uses) 1,696,636 (1,017,580) - (1,656,786) (977,730)

Net change in fund balances 50,300 5,150,851 (16,702,735) (3,467,963) (14,969,547)

Fund balances, January 1 27,443,606 20,468,685 - 58,239,668 106,151,959

Fund balances, December 31 27,493,906$ 25,619,536$ (16,702,735)$ 54,771,705$ 91,182,412$


20

Reconciliation of the Statement of Revenues, Expenditures, and Changes inFund Balances of Governmental Funds to the Statement of Activities


Net change in fund balances - total governmental funds (page 20) (14,969,547)$

Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capitalized capital outlays ($15,766,756) less work in progress deletions ($0), did not exceed depreciation ($18,482,765) in the current period. (2,716,009)

The net effect of various miscellaneous transactions involving capital assets is to increase net position (contributions of $983,067 plus the gain of $24,402 less the 5,796 revenue recognized at the fund level of $89,197 in the sale of capital assets, less $912,476 for assets, net of depreciation transferred to the Golf Course Fund)

Decrease in long term receivable (netted against revenue recognized at the fund level) (224,400)

Repayment of bond and lease principal is reported as an expenditure in the governmental funds. However, the repayment reduces long-term liabilities on the statement of net position, so this transaction has no effect on net position. Repayments: To bond holders 3,485,000 To Capital Asset Finance Corporation for certificates of participation 2,715,000 Net adjustment 6,200,000

The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. (102,087)

Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for transactions that are not normally paid with expendable available financial resources. In the statement of activities, however, which is presented on the accrual basis, expenses and liabilities are reported regardless of when financial resources are available. In addition, interest on long-term debt is not recognized under the modified accrual basis of accounting until due, rather than as it accrues. This adjustment combines the net changes of two balances.

Adjustment to compensated absences (209,474) Adjustment to post employment benefit obligation (441,000) Accrued interest on bonds 41,586 Combined adjustment (608,888)

The City has a defined benefit pension plan that currently carries a net pension asset which decreased in the current year, increasing the City's pension expense at the governmental activities level. (95,683)

Internal service funds are used by the City to account for the financing of goods or services provided by one department or agency to other departments or agencies. The net revenues of the internal service funds are reported with governmental activities. 244,475

Change in net position governmental activities (page 15) (12,266,343)$


21


Statement of Net PositionProprietary Funds

December 31, 2012

Business-type Activities GovernmentalActivities

Other InternalEnterprise Service

Water Sewer Funds Total FundsASSETSCurrent assets Equity in pooled cash and investments - unrestricted 76,750,598$ 12,288,175$ 7,362,387$ 96,401,160$ 6,607,586$ Equity in pooled cash and investments - restricted 15,442,621 175,384 - 15,618,005 - Receivables, net Accounts 2,323,213 1,311,636 536,855 4,171,704 222,372 Interest and other 328,105 42,442 24,885 395,432 23,338 Land held for resale 142,379 - - 142,379 -

Total current assets 94,986,916 13,817,637 7,924,127 116,728,680 6,853,296

Noncurrent assets Advances receivable 3,747,456 - - 3,747,456 - Loan receivable, net of current portion 318,245 - - 318,245 - Bond issuance costs, net of accumulated amortization 616,324 19,666 - 635,990 - Capital assets Land and water rights 182,969,484 55,930 80,644 183,106,058 - Source of supply 120,265,784 - - 120,265,784 - Water treatment plant 83,614,201 - - 83,614,201 - Collection, transmission, and distribution 181,639,042 71,802,644 - 253,441,686 - Transportation equipment 1,434,802 1,069,104 3,510,289 6,014,195 20,114 General equipment 6,646,332 1,018,579 516,161 8,181,072 1,560,949 Buildings and improvements 20,070,410 2,095,444 359,559 22,525,413 - Leisure areas and improvements - - 5,715,292 5,715,292 - Less accumulated depreciation (84,282,699) (33,877,966) (7,862,953) (126,023,618) (821,884) Construction in progress 3,231,306 343,577 - 3,574,883 -

Total noncurrent assets 520,270,687 42,526,978 2,318,992 565,116,657 759,179

Total assets 615,257,603$ 56,344,615$ 10,243,119$ 681,845,337$ 7,612,475$


Enterprise Funds

22



Water Sewer Funds Total FundsLIABILITIESCurrent liabilities Accounts payable 1,517,174$ 654,770$ 617,921$ 2,789,865$ 491,315$ Retainage payable 244,956 5,411 - 250,367 - Other 122,427 - - 122,427 - Deferred revenue 224,772 - - 224,772 - Payable from restricted assets Accrued bond interest payable 183,083 3,509 - 186,592 - Accrued note and other obligations interest payable 4,662 - - 4,662 - General obligation bonds payable 8,075,000 - - 8,075,000 - Revenue bonds payable - 275,000 - 275,000 - Notes/Lease payable 34,748 - - 34,748 - Compensated absences 391,909 37,521 85,838 515,268 24,861 Outstanding reserves and incurred but not reported claims - - - - 1,501,900

Total current liabilities 10,798,731 976,211 703,759 12,478,701 2,018,076

Long-term liabilities General obligation bonds payable, excluding current portion, net of other unamortized costs 13,877,143 - - 13,877,143 - Revenue bonds payable, excluding current portion, net of other unamortized costs 40,409,674 556,459 - 40,966,133 - Notes payable, excluding current portion 79,160 - - 79,160 - Compensated absences 232,976 9,447 60,788 303,211 136,375 Advances from other funds - - - - 100,000 Other obligations 3,521,102 - 3,521,102 - Outstanding reserves and incurred but not reported claims - - - - 1,533,338

Total long-term liabilities 58,120,055 565,906 60,788 58,746,749 1,769,713

Total liabilities 68,918,786 1,542,117 764,547 71,225,450 3,787,789

NET POSITIONNet investment in capital assets 453,112,937 41,675,853 2,318,992 497,107,782 759,179 Restricted for debt service 3,984,167 171,875 - 4,156,042 - Restricted pledge 11,275,371 - - 11,275,371 - Unrestricted 77,966,342 12,954,770 7,159,580 98,080,692 3,065,507

Total net position 546,338,817$ 54,802,498$ 9,478,572$ 610,619,887$ 3,824,686$

Enterprise Funds

23


Statement of Revenues, Expenses and Changes in Net PositionProprietary Funds




Water Sewer Funds Total FundsOPERATING REVENUES Charges for services pledged for debt 33,188,946$ 11,725,967$ -$ 44,914,913$ -$ Charges for services - - 5,979,375 5,979,375 - Interfund services - - - - 9,199,417

Total operating revenues 33,188,946 11,725,967 5,979,375 50,894,288 9,199,417

OPERATING EXPENSES Source of supply 4,706,593 - - 4,706,593 - Water treatment 6,136,823 - - 6,136,823 - Collection, transmission, distribution, trash removal and golf services 2,255,848 1,393,627 2,610,739 6,260,214 - Sewage treatment-Metro Wastewater - 6,603,731 - 6,603,731 - Insurance premiums - - - - 390,339 Claims and reserves for claims - - - - 2,369,050 Other operating expenses 420,982 161,469 885,866 1,468,317 3,019,567 Administration 5,765,840 1,352,829 1,797,601 8,916,270 2,791,111 Depreciation 5,816,276 1,986,011 383,655 8,185,942 246,334

Total operating expenses 25,102,362 11,497,667 5,677,861 42,277,890 8,816,401

Operating income 8,086,584 228,300 301,514 8,616,398 383,016

NONOPERATING REVENUES (EXPENSES) Gain on sale of capital assets 5,908 23,056 - 28,964 - Interest income 998,403 126,027 74,330 1,198,760 69,867 Interest and bond amortization expense (3,816,939) (47,715) - (3,864,654) (1,046) Miscellaneous, net 8,447,747 (562,375) (359,986) 7,525,386 (207,362)

Total nonoperating revenues (expenses) 5,635,119 (461,007) (285,656) 4,888,456 (138,541)

Income (loss) before capital contributions and transfers 13,721,703 (232,707) 15,858 13,504,854 244,475

Capital contributions 14,533,116 968,031 912,476 16,413,623 - Transfers in (out) (39,850) - 1,017,580 977,730 -

Change in net position 28,214,969 735,324 1,945,914 30,896,207 244,475

Net position, January 1, restated 518,123,848 54,067,174 7,532,658 579,723,680 3,580,211

Net position, December 31 546,338,817$ 54,802,498$ 9,478,572$ 610,619,887$ 3,824,686$


Enterprise Funds

24


25


Statement of Cash FlowsProprietary Funds




Water Sewer Funds Total FundsCASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 31,503,663$ 11,678,260$ 5,991,947$ 49,173,870$ -$ Receipts from interfund services - - - - 9,393,576 Payments to suppliers (15,900,529) (8,776,791) (3,092,756) (27,770,076) (5,514,860) Payments to employees (6,555,358) (957,332) (2,158,267) (9,670,957) (2,734,654) Net cash provided by operating activities 9,047,776 1,944,137 740,924 11,732,837 1,144,062

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfer (to) from governmental fund (39,850) - 1,017,580 977,730 - Advance (to) from other funds (3,747,456) - - (3,747,456) - Receipts from nonoperating leases 11,622,287 - - 11,622,287 - Net cash provided by noncapital financing activities 7,834,981 - 1,017,580 8,852,561 -

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases and construction of capital assets (6,556,743) (727,375) (411,818) (7,695,936) (452,665) Proceeds from sale of capital assets 7,164 23,056 - 30,220 440 Principal paid on bonds and other obligations (8,010,000) (260,000) - (8,270,000) (23,826) Principal paid on notes (31,879) - - (31,879) - Interest and fees paid on capital debt (2,262,721) (32,350) - (2,295,071) (1,046) Capital contributions 14,122,015 802,185 - 14,924,200 - Net cash used in capital and related financing activities (2,732,164) (194,484) (411,818) (3,338,466) (477,097)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investments 58,900,027 7,766,685 4,522,927 71,189,639 4,417,565 Purchases of investments (78,169,671) (9,760,169) (5,996,990) (93,926,830) (5,223,227) Interest on investments 996,577 130,460 75,978 1,203,015 71,072

Net cash used in investing activities (18,273,067) (1,863,024) (1,398,085) (21,534,176) (734,590)

Net decrease in cash and cash equivalents (4,122,474) (113,371) (51,399) (4,287,244) (68,065)

Cash and cash equivalents, Jan. 1 7,001,984 502,663 282,177 7,786,824 279,390

Cash and cash equivalents, Dec. 31 2,879,510$ 389,292$ 230,778$ 3,499,580$ 211,325$

Cash and cash equivalents 2,879,510$ 389,292$ 230,778$ 3,499,580$ 211,325$ Investments 89,313,709 12,074,267 7,131,609 108,519,585 6,396,261 Total cash and investments 92,193,219$ 12,463,559$ 7,362,387$ 112,019,165$ 6,607,586$

Equity in pooled cash and investments 76,750,598$ 12,288,175$ 7,362,387$ 96,401,160$ 6,607,586$ Restricted cash and investments 15,442,621 175,384 - 15,618,005 -

Total cash and investments 92,193,219$ 12,463,559$ 7,362,387$ 112,019,165$ 6,607,586$


Enterprise Funds

26



Water Sewer Funds Total FundsRECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

Operating income 8,086,584$ 228,300$ 301,514$ 8,616,398$ 383,016$

Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities:

Depreciation expense 5,816,276 1,986,011 383,655 8,185,942 246,334 Miscellaneous receipts - 4,022 29,930 33,952 129,650 Other expenses (3,051,650) (536,277) (395,217) (3,983,144) (333,148) Noncash reserves for claims - - - - 2,216,760 Cash paid for claims - - - - (1,574,121) Change in assets and liabilities: (Increase) decrease in accounts receivable, net 121,028 (51,729) (17,358) 51,941 74,135 Decrease in notes receivable 18,139 - 18,139 - Increase (decrease) in accounts payable (219,895) 315,339 438,400 533,844 1,436 Increase (decrease) in other liabilities 3,040 (1,529) - 1,511 - Decrease in deferred revenue (1,725,746) - - (1,725,746) -

Net cash provided by operating activities 9,047,776$ 1,944,137$ 740,924$ 11,732,837$ 1,144,062$

NON-CASH TRANSACTIONS: Water and sewer lines contributed by developers 411,101$ 883,746$ -$ 1,294,847$ -$ Land and leisure areas contributed by governmental activities - - 912,476 912,476 - Decrease in the fair value of investments (13,391) (4,189) (2,019) (19,599) (1,737) Loss on disposal of capital assets (173,711) (36,175) (32) (209,918) - Increase (decrease) in compensated absences 16,233 (5,260) 3,491 14,464 (20,311)

Enterprise Funds

27


NOTES TO FINANCIAL STATEMENTS December 31, 2012

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The City of Thornton, Colorado (“the City”) was incorporated May 26, 1956. The citizenry voted to become a home rule city in 1967 under the provisions of Article XX of the Constitution of the State of Colorado. The City operates under a Council-Manager form of government and provides the following services, as authorized by its charter: public safety (police, fire, and ambulance), highways and streets, public improvements, water, sewer, and sanitation, culture and recreation, debt service and general administrative services, including financial, planning and zoning, and municipal court services.

The accounting policies of the City conform to accounting principles generally accepted in the United States of America as applicable to governments in accordance with those promulgated by the Governmental Accounting Standards Board (GASB). The following is a summary of the more significant policies:

1. Reporting Entity

The accompanying financial statements present the activities of the City and its four component units;organizations for which the City is financially accountable. These component units are so intertwined with the Citythat they are, in substance, the same as the City and, therefore, are blended and reported as if they were part ofthe City. None of the component units listed below report their financial statements independent from the City.

Component units included within the reporting entity (in blended presentation):

Thornton Development Authority (TDA) - The TDA, an Urban Renewal Authority organized pursuant to Part 1,Article 25, Title 31 of the Colorado Revised Statutes, was established to finance the design and construction of theThornton Parkway highway interchange, as well as various other improvements within the TDA's boundaries. TheCity Council is the TDA's governing board. The debt of the TDA is disclosed as tax increment bonds, but is neithera general nor a limited obligation of the City. In 2004 and 2012, new urban renewal areas were created to fundnecessary improvements, and for ease of financial management, separate funds were established for theimprovements in the North Washington Area (TDA North Washington) and 144th corridor (TDA 144th Capital),respectively.

Thornton Arts, Sciences, and Humanities Council, Inc. (TASHCO) - TASHCO, a legally separate, nonprofitcorporation, was established to expand the Cultural Arts and Scientific program offerings within the City ofThornton. TASHCO is funded by a local grant, donations, ticket sales, and contribution from the General Fund. InMarch 2007, the City Council appointed an advisory board consisting of citizens to serve as liason for the CityCouncil to the community at large to ensure programming services are meeting the needs and desires of thepublic. The City Council is the governing board of the TASHCO and approves the annual budget, making allsubstantive decisions regarding the operations of the TASHCO.

136th Avenue General Improvement District (GID) – 136th Avenue GID was established to account for thecollection of assessment revenues to be used exclusively for the purpose of constructing an interchange at 136th

Avenue and Interstate 25. The City Council is the GID’s governing board.

E911 Authority Fund – E911 was established to account for E911 surcharges received from telecommunicationscompanies doing business within the City to pay for a portion of the costs authorized by State statute for the Cityto provide emergency telephone service. The City Council is the E911’s governing board.

2. Basis of Presentation

Government-wide Statements: The statement of net position and the statement of activities display informationabout the primary government (the City). These statements include the financial activities of the overallgovernment. Eliminations have been made to minimize the double-counting of internal activities. Thesestatements distinguish between the governmental and business-type activities of the City. Governmentalactivities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.Business-type activities are financed in whole or in part by fees charged to external parties.

The statement of activities presents comparisons between direct expenses and program revenues for the differentbusiness-type activities of the City and for each function of the City’s governmental activities. Direct expenses arethose that are specifically associated with a program or function and, therefore, are clearly identifiable to aparticular function. Indirect expense allocations that have been made in the funds have been reversed for thestatement of activities. Program revenues include (a) charges to customers who purchase, use, or directly benefitfrom goods, services, or privileges provided by a given program and (b) grants and contributions that arerestricted to meeting the operational or capital requirements of a particular program. Revenues that are notclassified as program revenues, including all taxes, are presented as general revenues.

28



NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2. Basis of Presentation (Continued)

Fund Financial Statements: The fund financial statements provide information about the City’s funds, including itsblended component units. Separate statements are provided for governmental and proprietary funds. Theemphasis of fund financial statements is on major governmental and enterprise funds, each displayed in aseparate column. All remaining governmental and enterprise funds are aggregated and reported as non-majorfunds.

The City reports the following major governmental funds:

General Fund. This is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

Governmental Capital Fund. This fund accounts for capital improvement projects financed by current resources (property tax, investment income, sales and use tax), as well as by restricted grant and intergovernmental revenues, developer contributions, and bond proceeds.

TDA 144th Capital Fund. This fund accounts for redevelopment projects currently financed through advances from other funds.

The City reports the following major enterprise funds:

Water Utility Fund. This fund accounts for the provision of water services to residents of the City and some residents of unincorporated Adams County.

Sewer Utility Fund. This fund accounts for the provision of sewer services to residents of the City and some residents of unincorporated Adams County.

Fund types that do not meet the criteria of major funds have been summarized and presented as other governmental funds and other enterprise funds within the fund financial statements as appropriate.

Additionally, the City reports the following fund type:

Internal Service Funds. These funds account for the costs related to providing the departments of the City with a comprehensive program to manage its property, liability, and work-related injury risk; computer support of all information technology; copying and mailing; and fuel purchased and utilized by Adams County School District 12; all on a cost-reimbursement basis.

3. Measurement Focus, Basis of Accounting

Government-wide and Proprietary Fund Financial Statements. The government-wide and proprietary fundfinancial statements are reported using the economic resources measurement focus and the accrual basis ofaccounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred,regardless of when the related cash flows take place. Nonexchange transactions, in which the City gives (orreceives) value without directly receiving (or giving) equal value in exchange, include property taxes and grants.Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items arerecognized as revenue as soon as all eligibility requirements imposed by the provider have been satisfied.

Amounts reported as program revenues include 1) charges to customers for goods, services, or privilegesprovided, 2) operating grants and contributions, and 3) capital grants and contributions, including specialassessments. Internally dedicated resources are reported as general revenues rather than as program revenues.Likewise, general revenues include all taxes.

Governmental Fund Financial Statements. Governmental funds are reported using the current financial resourcesmeasurement focus and the modified accrual basis of accounting. Under this method, revenues are recognizedwhen measurable and available. The City considers all revenues reported in the governmental funds to beavailable if the revenues are collected within ninety days after year end, with the exception of sales tax, for whichrevenues collected and held by vendors at year end on behalf of the City is recognized as revenue if collectedwithin thirty days after year end, and property taxes, for which revenues collected within thirty days after yearend are recognized.

29




3. Measurement Focus, Basis of Accounting (Continued)

Those revenues susceptible to accrual are property, franchise, cigarette, sales and some use taxes, interestrevenue, and charges for services. Fines and forfeitures, licenses and permits, and building use tax revenues arenot susceptible to accrual because generally they are not measurable until received in cash. Expenditure-drivengrants are recognized as revenue when the qualifying expenditures have been incurred and all other grantrequirements have been met. All other revenue items are considered to be measurable and available only whencash is received by the City.

Expenditures are recorded when the related fund liability is incurred. Principal and interest on long-term debt arerecorded as fund liabilities when due or when amounts have been accumulated in the debt service fund forpayments to be made early in the following year. Capital asset acquisitions are reported as expenditures ingovernmental funds. Proceeds of long-term debt and acquisitions under capital leases are reported as otherfinancing sources.

When both restricted and unrestricted resources are available for use, it is the City’s policy to use restrictedresources first, then unrestricted resources as they are needed.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues andexpenses generally result from providing services and producing and delivering goods in connection with aproprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds andinternal service funds are charges to customers for sales or services. Operating expenses for enterprise funds andinternal service funds include the cost of sales and services, administrative expenses, and depreciation on capitalassets. All revenues and expenses not meeting this definition are reported as non-operating revenues andexpenses.

As a general rule, the effect of interfund activity has been eliminated from the government-wide financialstatements. Exceptions to this rule are the charges between the City’s utility functions and various otherfunctions, as well as an administrative fee charged by the General government activity to the other activities.Elimination of these charges would distort the costs and program revenues reported for the various functions.

4. Budgets and Budgetary Accounting

The City Council follows these procedures in establishing the budgetary data reflected in the financial statements:

a. The City Manager submits to the Mayor and the City Council a proposed budget for the fiscal yearcommencing the following January 1. The budget includes proposed expenditures of all funds and the meansof financing them.

b. A public hearing is conducted to obtain taxpayer comments.

c. Prior to the end of the fiscal year, the budget for the next fiscal year is legally adopted through passage of aresolution. An appropriation ordinance, based on the adopted budget, is enacted on or before the last day ofDecember.

d. The City Manager is authorized to transfer budgeted amounts between departments within any fund;however, any revisions that alter the total appropriations of any fund must be approved by the City Council.

e. The level on which expenditures may not legally exceed appropriations is the legally adopted annualoperating budget for each fund in total. All appropriations for operating budgets lapse at year end.

f. Budgets for governmental funds are adopted on a basis consistent with accounting principles generallyaccepted in the United States of America. Annual budgets are legally adopted for most governmental funds.In any given year, an individual fund may not be budgeted if expenditures for the year are not anticipated. In2012, all governmental funds had legally adopted annual budgets. Notes 4g. and 4h. explain funds withbudgets that are on a non-GAAP basis. Note 4i explains budgetary practices for capital projectfunds/accounts.

30




4. Budgets and Budgetary Accounting (Continued)

g. Budgets for governmental capital projects funds are adopted on a basis consistent with accounting principlesgenerally accepted in the United States of America, except that the City includes the capital outlay costs forpurchases of land intended for resale and excludes subsequent gains or losses on the resale of the land. Inaddition, any balances transferred due to closure of a fund and miscellaneous non-cash adjustments are notbudgeted.

h. Budgets for proprietary funds are adopted on a basis consistent with accounting principles generally acceptedin the United States of America, except that the City excludes depreciation, amortization, gain or loss ondisposal of fixed assets, and incurred but not reported claims and includes debt service principal and interestpayments and capital outlay. In addition, any balances transferred due to closure of a fund andmiscellaneous non-cash adjustments are not budgeted. Budget to Actual schedules for each proprietary fundcan be found in the Combining & Individual Statements & Schedules section.

i. Prior to 2007, all capital projects were budgeted annually, and unspent appropriations expired at the end ofthe fiscal year. If the project was incomplete, funds had to be re-appropriated in the annual fiscal budgetprocess for the following year. Effective with the 2007 budget, the City has adopted a multi-yearappropriation for certain capital projects, identified as long term in nature, where unexpended funds will notautomatically lapse at year end, but remain appropriated until project completion. Unspent andunencumbered appropriations for those projects that remain short term in nature (annual) will continue tolapse at year end.

j. The City Council may legally amend the budget by ordinance or resolution once it has been approved.Budgeted amounts, including all amendments, are shown as adopted by the City Council.

In 2012, seven budget amendments were approved by ordinance or resolution. The effect of theseamendments was an overall increase in appropriations of $68,214,329 broken down by fund type as follows:

5. Investments

Investments in securities are carried at fair value. Unrealized gains resulting from increases in fair value betweenJanuary 1 and December 31 are recognized as a component of interest income; unrealized losses resulting fromdecreases in fair value reduce interest income. Realized gains or losses on securities included in the investmentportfolio are recognized only when the related security is sold prior to the stated maturity. Certain investmentsare restricted for debt service.

6. Receivables and Payables

Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of thefiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or“advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balancesbetween funds are reported as “due to/from other funds.” Any residual balances outstanding between thegovernmental activities and business-type activities are reported in the government-wide financial statements as“internal balances.”

7. Inventories

Inventories are valued at weighted average cost. Inventory in the General Fund consists of fuel held forconsumption. In the General Fund cost of inventory is recorded as expenditures when consumed, rather thanwhen purchased. The General Fund reserve for inventory, included in reserve for other purposes, is equal to theamount of inventory on hand to indicate that a portion of the General Fund fund balance is not available for futureexpenditures.

General Fund 644,254$

Special Revenue Funds 1,233,246

Capital Project Funds 48,612,827

Enterprise Funds 17,529,002

Internal Service Funds 195,000

68,214,329$

31




8. Construction Advances

Advances for construction represent the non-refundable deposits made by developers for specific improvements tobe made by the City. The deposits will be recognized as revenue as costs are incurred on the improvements.

9. Capital Assets

Capital assets, which include property, plant, equipment, water rights, and infrastructure assets (e.g. roads,bridges, and similar items) are reported in the applicable governmental or business-type activities columns in thegovernment-wide financial statements. The government defines capital assets as assets with an initial, individualcost of more than $5,000 and an estimated useful life in excess of one year. Property, plant and equipmentpurchased or acquired is carried at historical cost or estimated historical cost. Donated or contributed capitalassets are recorded at their estimated fair value on the date received. General infrastructure assets are valuedbased on estimated original cost. The cost of normal maintenance and repairs that do not add to the value of theasset or materially extend assets’ lives are not capitalized.

GASB 51 Accounting and Financial Reporting for Intangible Assets requires that all intangible assets be classifiedas capital assets and recognized in the statement of net position. The term depreciation includes amortization ofintangible assets.

Land, water rights, source of supply assets related to tributary water rights and permanent easements arecapitalized and not depreciated. Temporary easements are capitalized and depreciated over the appropriateperiod. All other capital assets are depreciated using the straight-line method over the following estimated usefullives:

10. Compensated Absences

Eligible City employees earn vacation leave at a variable rate, dependent on years of service and sick leave at therate of 8 hours per month. Vacation and sick leave accumulate on a monthly basis and are fully vested whenearned. Accumulated vacation leave cannot exceed 240 hours at the end of the year and any excess cannot becarried forward to the next year unless pre-authorized by the City Manager. For employees hired before January1, 1995, 50% of unused sick leave over 384 hours plus accumulated vacation leave are paid upon termination.After 20 years of service or at age 62 and 10 years of service, 100% of the unused sick leave over 384 hours plusaccumulated vacation leave are paid upon retirement or death. Although sick leave hours earned after 2002accrue, they are not compensable upon termination, retirement, or death. The liability for compensated absencesreported in the government-wide and proprietary fund statements consists of unpaid, accumulated vacation andsick leave balances, as described above.

11. Long-Term Obligations

In the government-wide financial statements and the proprietary fund financial statements, long-term debt andother long-term obligations are reported as liabilities in the applicable governmental activities, business-typeactivities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuancecosts, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payableare reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferredcharges and amortized over the term of the related debt.

In the governmental fund financial statements, funds recognize bond premiums and discounts, as well as bondissuance 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

Estimated Asset Class useful lives

Infrastructure 20-75 years

Buildings, structures and improvements 7-50 years Leisure areas and improvements 5-50 years Collection, transmission, and distribution 10-50 years

Equipment 2-20 years

32




11. Long-Term Obligations (Continued)

are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceedsreceived, are reported as debt service expenditures.

GASB 49 addresses accounting and financial reporting for pollution remediation obligations. The ThorntonDevelopment Authority, a component unit of the City, owns property which falls under voluntary remediation andhad a plan with the State to actively treat subsurface contamination. The total amount spent as of year end 2010on remediation was $1,437,056. In 2010, the City received approval from the State to stop remediation and onlymonitor these sites. The City has spent a total of $164,698 as of year end 2012 to monitor these sites.

12. Fund Equity

Beginning with fiscal year 2011, the City implemented GASB Statement No. 54, “Fund Balance Reporting andGovernmental Fund Type Definitions.” In the fund financial statements, fund equity of the City’s governmentalfunds are classified as nonspendable, restricted, committed, assigned, or unassigned. A governmental fund maynot have all five components of fund balance. The five classifications describe the relative strength of the spendingconstraints:

Nonspendable fund balances indicate amounts that cannot be spent either due to form (for example inventories orprepaids) or due to legal or contractual requirements.

Restricted fund balances indicate amounts constrained for a specific purpose by external parties, constitutionalprovision or enabling legislation.

Committed fund balances indicate amounts constrained for a specific purpose by a government using its highestlevel of decision-making authority. It would require an ordinance by the City Council to remove or change theconstraints placed on the resources.

Assigned fund balances indicate amounts of any remaining positive amounts not classified in the above categoriesfor governmental funds, other than the general fund. For the general fund, amounts constrained for the intent tobe used for a specific purpose has been delegated to the City Manager, Finance Director, and Budget Director.

Unassigned fund balances indicate amounts in the general fund that are not classified as non-spendable,restricted, committed, or assigned. The general fund is the only fund that would report a positive amount inunassigned fund balance.

When expenditures are incurred for purposes for which both restricted and unrestricted amounts are available,restricted amounts are deemed to be used first. When expenditures are incurred for purposes for which amountsin any of the unrestricted fund balance classifications could be used, committed amounts are considered to bereduced first, followed by assigned amounts and then by unassigned amounts.

City Council establishes (and modifies or rescinds) fund balance commitments by passage of an ordinance orresolution. Either action is equally binding. Assigned fund balance is established by City Council through adoptionor amendment of the budget as intended for specific purpose (such as the purchase of capital assets, construction,debt service, etc.).

13. Inter-fund Transactions

Inter-fund services provided and used are accounted for as revenues, expenditures or expenses. Transactionsthat constitute reimbursements to a fund for expenditures/expenses initially made from it that are properlyapplicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions ofexpenditures/expenses in the fund that is reimbursed. All other inter-fund transactions are reported as transfers.

14. Statement of Cash Flows

For purposes of the statement of cash flows, the City considers all highly liquid investments (including restrictedassets) with a maturity of three months or less when purchased to be cash equivalents.

33




15. Contraband Forfeitures

In accordance with the Colorado Contraband Forfeiture Act (C.R.S. 16-13-501 to 511) and the ControlledSubstances Act (21 USC 881(e)(3)), forfeitures from the seizure of contraband are used for the specific purpose oflaw enforcement activities. These funds are included in the City's General Fund.

16. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the UnitedStates of America requires management to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements andthe reported amounts of revenues and expenditures during the reporting period. Actual results could differ fromthose estimates.

17. Sales Tax

As a home rule city, Thornton collects its own sales taxes. Within the City, the ten largest retailers remitapproximately 48% of the sales tax collected.

18. Implementation of New GASB Statements

Beginning in fiscal year 2012, the City implemented the following statements issued by the GovernmentalAccounting Standards Board (GASB):

GASB Statement 60, Accounting and Financial Reporting for Service Concession Arrangements – this statementimproves financial reporting by addressing issues related to service concession arrangements (SCAs) which are atype of public-private partnership. As a result of implementing this statement, the city was not required tochange the reporting of current or past transactions.

GASB Statement 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30,1989 FASB and AICPA Pronouncements – this statement improves financial reporting by continuing to codifysources of generally accepted accounting principles for state and local governments so that they derive from asingle source. As a result of implementing this statement, the City was not required to change the reporting ofcurrent or past transactions.

GASB Statement 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, andNet Position – this statement provides guidance for the reporting of deferred outflows, deferred inflows andidentifies net position as the residual of all other elements presented in a statement of financial position. As aresult of implementing this statement, the computation of equity on the Statement of Net Position was changedand equity was retitled as “net position”.

GASB Statement 64, Derivative Instruments: Application of Hedge Accounting Termination Provisions anAmendment of GASB Statement No. 53 – this statement clarifies whether an effective hedging relationshipcontinues after the replacement of a swap counterparty or a swap counterparty’s credit support provider. It setsforth criteria that establish when the effective hedging relationship continues and hedge accounting shouldcontinue to be applied. As a result of implementing this statement, the City was not required to change thereporting of current or past transactions.

19. Prior Period Adjustment

In 2012, the sewer fund had a prior period adjustment. Prior year ending net position of $53,431,891 wasincreased by $635,283 to $54,067,174 for a capital asset contributed by a developer in 2007. The January 1beginning balance in the Statement of Activities is restated to reflect this prior period adjustment.

NOTE B – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

1. Compliance with Finance-Related Legal and Contractual Provisions

The City believes it has no material violations of finance-related legal and contractual provisions.

34



NOTE B – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (CONTINUED)

2. Excess of Expenditures Over Appropriations in Individual Funds

The City has no excess of expenditures over appropriations at the fund level within each of the individual funds.The actual to budget comparisons included may reflect immaterial excess expenditures at the program level withinan individual fund.

3. Deficit in Unassigned Fund Balance

The TDA 144th Capital Fund had a deficit in unassigned fund balance in 2012 of $16,702,735. This fund wascreated in 2012 for redevelopment in the 144th corridor. The deficit exists due to an advance from other funds forimprovements which will pave the way for retail development in the urban renewal area. It is anticipated thatrevenues from the retail development will be available to eliminate the deficit beginning in 2013 and continuingthe next several years.

NOTE C - DEPOSITS AND INVESTMENTS

1. Equity in Pooled Cash and Investments

Except when required by trust agreements, the operating cash in each fund is pooled and cash in excess ofoperating requirements is invested.

2. Deposits

The Colorado Public Deposit Protection Act (PDPA) requires that all units of local government deposit cash ineligible public depositories, with eligibility determined by state regulators. Amounts on deposit in excess offederal insurance levels must be collateralized. The eligible collateral is determined by the PDPA. PDPA allows theinstitution to create a single collateral pool for all public funds. The pool is to be maintained by another institutionor held in trust for all the uninsured public deposits as a group. The market value of the collateral must be atleast equal to 102% of the uninsured deposits.

At December 31, 2012, the City’s deposits had a carrying amount of $77,898,112 and a bank balance of$79,460,443. Of the bank balance, $2,000,000 was covered by federal depository insurance. The remainder ofthe bank balance, $77,460,443, was uninsured and collateralized with securities held by the pledging financialinstitution and covered by eligible collateral as determined by the PDPA.

3. Investments

The City’s Charter allows investment in one or more of the securities permitted by the statues of Colorado for theinvestment of state funds or municipal funds, bonds payable out of the revenues of any service or facilityfurnished by the City, or in general obligation bonds of the City. The City’s internal investment policy furtherrestricts investments to the following securities: United States Treasury, Government Sponsored Enterprises,State & Local Government taxable general or revenue obligations, Corporate Bonds and Commercial Paper, LocalGovernment Investment Pools, Money Market Mutual Funds, Repurchase Agreements, Reverse RepurchaseAgreements, Securities Lending Agreements, and Deposits in State or Nationally Chartered DepositoryInstitutions. Additional investment and deposit disclosures for credit risk, interest rate risk, and foreign currencyrisk, as required by GASB Statement No. 40, Deposit and Investment Risk Disclosures, are included in the notesbelow.

At December 31, 2012, the City had the following investments and maturities:

Unrealized gains or losses resulting from changes in the fair value of the investment portfolio are recognized as increases to or reductions from interest income in the financial statements. The only time a realized gain or loss is recognized on investment transactions is when they are sold prior to their stated maturity. Present cash flow needs of the City are being met without premature liquidation of investments. The City generally holds investments until maturity and redeem them at par.

Investment Type Fair Value < 1 Year 2-3 Years 4-5 Years

Corp Securities 29,099,328$ 24,079,208$ 5,020,120$ -$

U.S. Government Agencies 101,201,972 10,013,390 30,503,345 60,685,237

Money Market Funds 51,334 51,334 - -

Local Gov't Investment Pools 1,077,544 1,077,544 - -

Total 131,430,178$ 35,221,476$ 35,523,465$ 60,685,237$

35



NOTE C - DEPOSITS AND INVESTMENTS (CONTINUED)

3. Investments (Continued)

Interest Rate Risk – The City’s internal investment policy is designed to reduce interest rate risk. The maximumduration of the portfolio is limited to 4.0 years. At December 31, 2012, the weighted-average maturity of theCity’s portfolio was 33 months.

Credit Risk – The City minimizes credit risk, the risk of loss due to the failure of the security issuers or banker, bydiversifying the investment portfolio so that potential losses on individual securities are minimized and by limitinginvestments to specified credit ratings. No security may be purchased unless the security is rated AA-/Aa3 orbetter by Standard & Poor’s and Moody’s respectively. As of December 31, 2012, the City’s investment in U.S.Treasuries, TVA, FHLB, FFCB, Corporates, and FDIC guaranteed Corporate Securities were all rated AA- or betterby Standard & Poor’s and Aa3 by Moody’s.

Custodial Credit Risk – At December 31, 2012, no investment securities were held by a counterparty, and allinvestment securities were registered in the City’s name.

Concentration of Credit Risk – The City’s internal investment policy limits the amount the City may invest in oneissuer except for U.S. Treasuries. Allowed investment in U.S. Treasuries is unlimited because they are backed bythe full faith and credit of the U.S. Government. As of December 31, 2012, the City’s investment in U.S.Treasuries was 0.0%, FHLB was 15.4%, FFCB was 19.0%, FNMA was 23.3%, FHLMC was 19.3%, CorporateSecurities was 22.2%, and Local Government Investment Pools were 0.8%.

Local Government Investment Pools – As of December 31, 2012, the City had $100,007 invested in the ColoradoLocal Government Liquid Asset Trust (Colotrust) and $977,537 invested in the Colorado Surplus Asset Fund Trust(CSAFE). These investment vehicles were established for local government entities in Colorado to pool surplusresources; it is overseen by the Colorado Securities Commissioner and governed by CRS 24-75-701. A designatedcustodial bank provides safekeeping and depository services. The custodian’s internal records identify theinvestments owned by the participating governments. Both pools operate similarly to a money market fund andeach share is equal to $1.00 in value. Colotrust is rated AAAm by Standard & Poor’s.

NOTE D - PROPERTY TAXES AND RECEIVABLES

Property taxes are collected on behalf of the City by Adams County and then remitted to the City. The property tax is levied and certified in December of the year prior to the year the taxes are collected on all taxable property in the City. Property taxes become an enforceable lien on January 1 of each year. Secured property taxes are due in two equal installments, on the last day of February and June 16, and are delinquent after March 1 and June 17, respectively. The entire balance may be paid on April 30 without penalty. Property taxes levied are recorded as deferred revenue in the year levied, as they are not due until the following year. Property tax revenue is recognized in the subsequent tax year.

For governmental receivables, available means when due, or past due and receivable within the current period, and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period, generally within thirty days.

Receivables and revenues of the Ambulance division are reported net of uncollectible amounts. As of December 31, 2012, total accounts receivable was $2,758,796 with an allowance for bad debt of $1,628,328. Total uncollectible amounts related to revenues of the current period are $2,961,463.

NOTE E – CAPITAL ASSETS

During 2012, assets previously reported as buildings and improvements were reclassified to collection, transmission and distribution in the business-type activities. The beginning balances for collection, transmission and distribution have been increased for the transfer in of assets valued at $23,275,664 and accumulated depreciation of $5,463,765, and buildings and improvements have been decreased respectively. The beginning balances for collection, transmission and distribution were also restated for a contributed asset placed in service in a prior year that had not been previously included in the statements. The value of the contributed asset is $717,900 with accumulated depreciation of $82,617. Business-type activities additions and transfers includes the transfer of assets from the governmental activities in the following categories: transportation equipment valued at $32,932 with accumulated depreciation of $31,440, land valued at $80,644 and leisure areas and improvements valued at $5,715,292 with accumulated depreciation of $4,883,460 from the governmental activities.

36



NOTE E - CAPITAL ASSETS (CONTINUED)

Capital asset activity for the year ended December 31, 2012 was as follows:

Beginning Additions & Deletions & Ending balances transfers transfers balances

Governmental activities:Capital assets not being depreciated: Land and land rights 46,377,540$ -$ (80,644)$ 46,296,896$ Construction in progress 5,002,808 12,233,749 (429,025) 16,807,532

Total capital assets not being depreciated 51,380,348 12,233,749 (509,669) 63,104,428

Capital assets being depreciated: Streets, traffic, and engineering 351,508,548 1,763,690 (20,000) 353,252,238 Buildings and improvements 68,235,231 - (6,904) 68,228,327 Leisure areas and improvements 58,792,999 1,655,145 (5,885,882) 54,562,262 General equipment - government 30,067,163 1,527,111 (1,376,872) 30,217,402 General equipment - internal service 1,341,185 452,665 (212,787) 1,581,063

Total capital assets being depreciated 509,945,126 5,398,611 (7,502,445) 507,841,292

Less accumulated depreciation for: Streets, traffic, and engineering 157,593,358 12,347,231 (20,000) 169,920,589 Buildings and improvements 19,082,119 1,641,904 (3,723) 20,720,300 Leisure areas and improvements 26,854,199 2,267,169 (5,021,697) 24,099,671 General equipment - government 19,706,207 2,226,461 (1,346,764) 20,585,904 General equipment - internal service 788,337 246,334 (212,787) 821,884

Total accumulated depreciation 224,024,220 18,729,099 (6,604,971) 236,148,348

Total capital assets being depreciated, net 285,920,906 (13,330,488) (897,474) 271,692,944

Governmental activity capital assets, net 337,301,254$ (1,096,739)$ (1,407,143)$ 334,797,372$

Business-type activities:Capital assets not being depreciated: Land and water rights 182,413,634$ 693,680$ (1,256)$ 183,106,058$ Source of supply 116,647,155 3,679,415 (60,786) 120,265,784 Construction in progress 20,189,263 897,820 (17,512,200) 3,574,883

Total capital assets not being depreciated 319,250,052 5,270,915 (17,574,242) 306,946,725

Capital assets being depreciated: Water treatment plant 83,614,201 - - 83,614,201 Collection, transmission, and distribution 234,205,545 19,630,417 (394,276) 253,441,686 Transportation equipment 5,869,970 639,861 (495,636) 6,014,195 General equipment 7,907,944 355,974 (82,846) 8,181,072 Buildings and improvements 22,620,955 - (95,542) 22,525,413 Leisure areas and improvements - 5,715,292 - 5,715,292

Total capital assets being depreciated 354,218,615 26,341,544 (1,068,300) 379,491,859

Less accumulated depreciation for: Water treatment plant 16,183,514 1,738,152 - 17,921,666 Collection, transmission, and distribution 79,046,120 5,273,200 (281,577) 84,037,743 Transportation equipment 4,514,613 515,060 (495,635) 4,534,038 General equipment 5,588,215 303,501 (82,522) 5,809,194 Buildings and improvements 8,509,482 354,365 (59,434) 8,804,413 Leisure areas and improvements - 4,916,564 - 4,916,564

Total accumulated depreciation 113,841,944 13,100,842 (919,168) 126,023,618

Total capital assets being depreciated, net 240,376,671 13,240,702 (149,132) 253,468,241

Business-type capital assets, net 559,626,723$ 18,511,617$ (17,723,374)$ 560,414,966$

37



NOTE E – CAPITAL ASSETS (CONTINUED)

Depreciation expense was charged to functions/activities as follows:

NOTE F – INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS

The outstanding balance below is for long term capital loans between funds in the year ended December 31, 2012

Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, (3) to close an existing fund, or (4) to move funds related to a prior year expense error. The composition of transfers at December 31, 2012 is as follows:

Governmental activities:General government 1,134,571$ Police 1,308,722 Fire 501,201City development 33,292Streets, traffic & engineering 12,675,450 Community services 2,829,529 Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets. 246,334

Total governmental activities depreciation 18,729,099

Business-type activities:Water 5,816,276$ Sewer 1,986,011 Sanitation 350,316Golf Course 33,339

Total business-type activities depreciation 8,185,942$

Advances to/from other funds:

Receivable Fund Payable Fund Amount

General Consolidated Service Center 100,000$ Governmental Capital TDA 144th Capital 13,030,698 Water TDA 144th Capital 3,747,456

16,878,154$

Transfers out: General TASCHO Debt Service Golf TotalParks -$ -$ 815,985$ -$ 815,985$ Open Space - - 469,201 - 469,201 Parks and Open Space - - 518,464 - 518,464 General - 73,369 - - 73,369 Governmental Capital - - - 1,017,580 1,017,580 136th GID 7,000 - - - 7,000 E911 1,000,000 - - - 1,000,000 TDA Capital 35,495 - - - 35,495 TDA North 687,660 - - - 687,660 Water 39,850 - - - 39,850

1,770,005$ 73,369$ 1,803,650$ 1,017,580$ 4,664,604$

Transfers in:

38



NOTE G – LONG-TERM DEBT

The general obligation refunding water bonds are being serviced by water operations, and thus are carried as a liability of the Water Utility Fund and not included in the general obligations of the governmental activities. The bonds are, however, also backed by the full and credit of the City in the event that utility revenues are not sufficient to meet debt service payments.

1. Bonds Payable

There are limitations and restrictions in the various bond indentures. As of December 31, 2012, the City believes it is in compliance with all significant limitations and restrictions.

General Obligation Bonds

$58,775,000, March 14,1991 Water Refunding

Capital Appreciation due as follows:

$6,725,000 due December 1, 2013

$6,720,000 due December 1, 2014

$6,720,000 due December 1, 2015

Zero coupon bonds with interest at 6.85% 20,165,000$

$40,390,000, September 15, 2002 General Obligation Water Refunding Bonds, annual

annual installments of $1,325,000 to $1,410,000 through December 1, 2015,

interest at 5.00% 4,085,000

Less unamortized discount and deferred amount on refunding (2,630,563)

Plus unamortized premium 332,706

21,952,143$

Revenue Bonds

$40,000,000, July 15, 2004 Water Enterprise Revenue Bonds, annual installments

beginning December 1, 2016 of $1,315,000 to $3,150,000 through December 1,

2034, interest at 4.50% to 5.00%, 40,000,000$

$2,530,000, May 15, 2005 Sewer Revenue Refunding Bonds, annual installments of

$275,000 to $295,000 through May 15, 2015, interest at 3.20% to 3.40% 850,000

Less deferred amount on refunding (18,541)


41,241,133$

Tax Increment Bonds

$21,195,000, September 1, 2004 Thornton Development Authority (component unit) Tax Increment Revenue Bonds, Series 2004, annual installments of $715,000 to $1,430,000 through December 1, 2029, interest at 3.50% to 5.00% (This issue will be serviced solely by 50% of the property tax increment and 50% of the sales tax collected within the boundaries of the North Washington Urban Renewal Area. Although the obligation is reported within the governmental activities funds, it is neither a general nor a limited obligation of the City.) 17,260,000$


17,317,725$

Sales and Use Tax Bonds $12,170,000, September 1, 2010 Open Space and Parks Sales and Use Tax Revenue

Refunding Bonds, Series 2010, annual installments of $1,455,000 to $1,730,000 through September 1, 2018, interest at 3.00% to 4.00% 9,520,000


10,286,176$

39



NOTE G - LONG-TERM DEBT (CONTINUED)

2. Certificates of Participations

During 2002, the City entered into a Master Lease Purchase Agreement with the Capital Asset FinanceCorporation (CAFC), an independent Colorado nonprofit corporation. Under this agreement, the ThorntonFinance Authority (TFA) assigned all of its rights and obligations under Certificates of Participation (COPs)issued in 1998 to the CAFC and the CAFC issued 2002 COPs totaling $41,690,000, the proceeds of which wereused to purchase the City’s Civic Center and the property on which the City’s Justice Center was constructedand to provide funds to construct the Justice Center. The proceeds from the sale of City assets were used bythe City to construct an interchange. The Justice Center and Civic Center are leased back to the City by theCAFC with the lease payments matching the COP payment terms. During 2007, the City entered into anAmended and Restated Master Lease Purchase Agreement with the CAFC and the CAFC issued 2007 COPstotaling $32,820,000, the proceeds of which were used to refund the outstanding 1998 COPs maturing on andafter December 1, 2009 and the outstanding 2002 COPs maturing on and after December 1, 2013.

The 2007 Amended and Restated Master Lease Purchase Agreement totaling $32,820,000, is due in annualinstallments of $2,765,000 to $3,255,000 through December 1, 2022 with interest at 3.625% to 4.0% andcurrently amounts to $30,110,000. The 2007 Amended and Restated Lease Agreement discount and deferredcharges unamortized balance at 12/31/12 was $826,195.

3. Notes and Loan Payable

The City entered into an agreement to purchase water rights. The note payable bears interest at the rate of9.0% and matures in various amounts through 2015. As of December 31, 2012, the outstanding principalbalance was $113,908.

4. Other Obligations

In 1986, the City entered into a settlement agreement with the Water Supply and Storage Company (“theCompany”), a mutual ditch company. Among the terms and conditions of the settlement, the City agreed tomake certain capital contributions to the Company in the form of direct payments in the years 1987, 1988, and1989, and committed to contribute an additional $5,000,000 toward future mutually beneficial capital projects orimprovements to the system. As of December 31, 2012 the remaining amount owed under this portion of theagreement is $3,521,102. This balance does not accrue interest and is not required to be paid before anyspecific date in accordance with the agreement.

5. Leases

Operating LeasesThe government leases motorcycles to be used in public safety operations, the Golf Fund, an enterprise fund,leases golf and beverage carts for use in operation of the golf course, and the Reprographics Fund, an internalservice fund, leases multi-function printers and copiers to provide goods and services to other City departments.Total costs for the leases were $24,000, $44,800, and $22,235 respectively for the year ended December 31,2012. The table below presents the future minimum lease payments by year for each of these leases:

Year Ended

December 31 Government Golf Fund Reprographics Fund

2013 $ 12,000 $ 67,200 $ 27,134

2014 - 67,200 27,134

2015 - 67,200 27,134

2016 - 22,400 27,134

2017 - - 4,522

$ 12,000 $ 224,000 $ 113,058

Capital Leases The Reprographics Fund opted for early termination of the capital lease obligation for equipment with a useful life of 5 years. In 2012, interest paid on this capitalized lease obligation was $190.

40



NOTE G – LONG-TERM DEBT (CONTINUED)

6. Industrial Revenue Bonds

From time to time, the City has issued Industrial Revenue Bonds to provide financial assistance to private-sectorentities for the acquisition and construction of industrial and commercial facilities deemed to be in the publicinterest. The bonds are secured by the property financed and are payable solely from payments received on theunderlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to theprivate-sector entity served by the bond issuance. Neither the City, the State nor any political subdivisionthereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported asliabilities in the accompanying financial statements. As of December 31, 2012, there were four series ofIndustrial Revenue Bonds outstanding. The aggregate principal amount payable for these bonds, all issued priorto July 1, 1995, cannot be determined; however, their original issue amounts totaled $24,025,000.

7. Long-Term Obligation Activity

Long-term liability activity for the year ended December 31, 2012 was as follows:

Beginning Balances Increases Decreases

Ending Balances

Due within one year

Governmental activities:

Sales and use tax bonds 12,315,000$ -$ 2,795,000$ 9,520,000$ 1,455,000$

Tax increment bonds 17,950,000 - 690,000 17,260,000 715,000

Add: unamortized premium 958,710 - 134,809 823,901 -

Total bonds payable 31,223,710 - 3,619,809 27,603,901 2,170,000

Certificates of participation 32,825,000 2,715,000 30,110,000 2,815,000

Less deferred amounts:

For unamortized discount (176,033) (16,003) (160,030) -

On refunding (799,398) (133,233) (666,165) -

Capitalized lease obligations 23,826 23,826 - -

Compensated absences:

Government 5,420,763 3,441,157 3,231,683 5,630,237 3,422,944

Internal service 157,372 191,102 187,238 161,236 24,861

Risk 2,392,599 2,697,037 2,054,398 3,035,238 1,501,900

OPEB Obligation 1,086,000 441,000 - 1,527,000 -

Governmental activities: Total long-term liabilities 72,153,839$ 6,770,296$ 11,682,718$ 67,241,417$ 9,934,705$

Business-type activities:

General obligation bonds 32,260,000$ - 8,010,000$ 24,250,000$ 8,075,000$



Unamortized discount (3,969,220) - (1,555,283) (2,413,937) -

Unamortized deferred charges (290,899) - (74,273) (216,626) -

Revenue bonds 41,110,000 - 260,000 40,850,000 275,000



Unamortized deferred charges (26,488) - (7,947) (18,541) -

Total bonds payable 69,963,432 - 6,770,156 63,193,276 8,350,000

Notes payable 145,787 - 31,879 113,908 34,748

Compensated absences 882,217 480,906 544,644 818,479 515,268

Other 3,521,102 - - 3,521,102 -

Business-type activities: Total long-term liabilities 74,512,538$ 480,906$ 7,346,679$ 67,646,765$ 8,900,016$

Governmental activities, claims and judgements and compensated absences are generally liquidated by the general

fund.

41



NOTE G - LONG-TERM DEBT (CONTINUED)

8. Debt Service Requirements

Debt service requirements on long-term debt at December 31, 2012 are as follows:

9. Utility Revenues Pledged for Debt Service

The City has pledged future water customer revenues, net of specified operating expenses, to repay $40 millionin water revenue bonds. Proceeds from the bonds were used for rejuvenation of the water treatment facilities,improving and expanding water storage, and various other projects. The bonds are payable solely from watercustomer net revenues and are payable through 2034. Annual principal and interest payments on the bonds areexpected to require less than 9 percent of net revenues. The total principal and interest remaining to be paid onthe bonds is $68.9 million. Principal and interest paid for the current year and total customer net revenues were$2 million and $40.5 million, respectively.

The City has pledged future sewer customer revenues, net of specified operating expenses, to repay $2.5million in sewer revenue bonds. Proceeds from the bonds were used for improving sewer lines and various otherprojects. The bonds are payable solely from sewer customer net revenues and are payable through 2015.Annual principal and interest payments on the bonds are expected to require less than 9 percent of netrevenues. The total principal and interest remaining to be paid on the bonds is $0.9 million. Principal andinterest paid for the current year and total customer net revenues were $292,100 and $3.4 million, respectively.

GOVERNMENTAL ACTIVITIESSales and use tax bonds Tax increment bonds Certificates of participation

YearendingDec 31, Principal Interest Principal Interest Principal Interest

2013 1,455,000 350,150 715,000 788,712 2,815,000 1,153,959$ 2014 1,510,000 291,950 740,000 763,688 2,910,000 1,051,915 2015 1,555,000 246,650 765,000 736,863 3,025,000 946,428 2016 1,605,000 200,000 795,000 708,175 3,140,000 832,990 2017 1,665,000 135,800 825,000 678,363 3,255,000 715,240 2018-2022 1,730,000 69,200 4,710,000 2,812,662 14,965,000 1,831,556 2023-2027 - - 5,915,000 1,605,687 - -2028-2029 - - 2,795,000 211,250 - -

9,520,000$ 1,293,750$ 17,260,000$ 8,305,400$ 30,110,000$ 6,532,088$

BUSINESS-TYPE ACTIVITIESGeneral obligation bonds Revenue bonds Notes payable

YearendingDec 31, Principal Interest Principal Interest Principal Interest

2013 8,075,000$ 204,250$ 275,000$ 2,016,420$ 34,748$ 10,252$ 2014 8,130,000 136,750 280,000 2,007,400 37,876 7,124 2015 8,045,000 66,250 295,000 1,997,765 41,284 3,716 2016 - - 1,315,000 1,992,750 - -2017 - - 1,380,000 1,927,000 - -2018-2022 - - 7,980,000 8,559,250 - -2023-2027 - - 10,185,000 6,362,250 - -2028-2032 - - 12,990,000 3,549,500 - -2033-2034 - - 6,150,000 465,000 - -

24,250,000$ 407,250$ 40,850,000$ 28,877,335$ 113,908$ 21,092$

$ $ $ $ $

42



NOTE H - DEFERRED REVENUE

The deferred revenue in the General Fund and Thornton Development Authority North Washington Fund represents property taxes levied in 2012 but not due until 2013 (see Note D). In addition to property taxes, the General Fund includes deferred revenue of $300,657 which is related to funds received for the future dissolution of a metropolitan district. The Water Fund has $224,772 for water and farm lease agreements. The Governmental Capital Fund has deferred revenue of $68,628 for the improvements of a school pedestrian crossing.

NOTE I - PENSION PLANS

City employees are covered under one or two of five different pension plans, depending on occupation and date of hire. The various plans are the Employee Pension Plan, the Police Pension Plan, and three Fire Pension Plans. Additionally, the City Manager, the City Attorney, and the presiding Municipal Judge are covered under their own separate pension plans. All plans and plan amendments are approved by City Council as single-employer, defined contribution plans, qualified under IRS guidelines, except two of the fire pension plans, an agent multiple-employer defined benefit plan and a cost sharing multiple-employer defined benefit plan. All plans are administered by outside trustees and do not meet the standards of accounting principles generally accepted in the United States of America for inclusion as part of the reporting entity. A description of each plan and selected financial information follows.

1. Employee Pension Plan

A defined contribution pension plan is maintained for regular employees. Police officers and firefighters areexcluded from the plan and are covered by separate plans, as described in I2. and I3. below. The plan requiresmandatory employee pre-tax contributions to the plan of 5% of base pay. The City also contributes 5.85% ofemployees’ base pay to the plan. Voluntary employee contributions for regular employees are made to thedeferred compensation plan described in Note J. The City’s match for voluntary contributions is made to theEmployee Pension Plan.

The plan requires employee participation in the plan immediately upon date of hire. Vesting of employercontributions is as follows: 0% in employer contributions for the first 2 years, 30% at three years, 40% at 4years, and 100% at 5 years of service.

Employer contributions are funded by the governmental and proprietary funds. The City's contributions for 2012were $2,257,349 or 7.3% (which includes the City’s 1.45% match for voluntary contributions) of the base salaryamount of $30,805,120. City employees’ mandatory contributions for 2012 were $1,540,256 or 5% of the basesalary amount of $30,805,120. The City's total payroll was $56,279,810. The fair value of assets held by theICMA Retirement Corporation, the trustee for the Employee Pension Plan, was $59,679,188 as of December 31,2012.

2. Police Pension Plan

A defined contribution pension plan is maintained for all full-time, sworn police officers. The plan requiresmandatory employee contributions of 9% of base pay. The City’s contribution is also 9% of base pay.Vesting of employer contributions is as follows: 0% in employer contributions for the first 2 years, 30% at threeyears, 40% at 4 years, and 100% at 5 years of service.

Voluntary contributions for police officers are made to the deferred compensation plan, described in Note J below.Matching of voluntary contributions by the City is made to the Police Pension Plan.

Employer contributions are funded every pay period from the General Fund. The City's contributions for 2012were $1,216,506 or 10.6% (which includes the City’s 1.6% match for voluntary contributions) calculated usingthe base salary amount of $11,476,472. The City police employees' mandatory contributions for 2012 were$1,028,543 or 9% calculated using the base salary amount of $11,472,371. The City's total payroll was$56,279,810. The fair value of assets held by ICMA Retirement Corporation, the trustee for the Police PensionPlan, was $47,033,807 as of December 31, 2012.

43



NOTE I - PENSION PLANS (CONTINUED)

3. Fire Pension Plans

a. City Fire Pension Plan

Plan Description. The City Fire Pension Plan (the Old Hire Plan), a defined benefit pension plan, establishedin accordance with Colorado law, covers all full-time firefighters hired prior to April 8, 1978. All plan assetsheld by the City were transferred in January 1986 to the Fire and Police Pension Association of Colorado, anagent multiple-employer defined benefit pension plan. The City’s fire department transferred out of the City,into a joint venture fire district in 1994. The fire district dissolved on December 31, 1999, and the firedepartment rejoined the City on January 1, 2000. The maintenance of total plan assets sufficient to pay thebenefits relating to contributions prior to January 1, 1994 was the responsibility of the City while thefirefighters were members of the fire district.

Participants are eligible for plan benefits at the age of 50 and after completing twenty years of active service.Plan benefits consist of a monthly pension of up to 70.0% of monthly salary as of the date of retirement.Additional surviving spouse benefits of lesser amounts are also available. In accordance with a 1976 decisionby the Colorado Supreme Court, the City must return all individual employee contributions upon termination.

The Fire and Police Pension Association of Colorado issues a publicly available financial report that includesfinancial statements for the Old Hire Plan. That report may be obtained by writing to the Fire and PolicePension Association, 5290 DTC Parkway, Suite 100, Greenwood Village, Colorado 80111, or by calling 1-800-332-3772.

Funding Policy. The Old Hire Plan funding policy provides for periodic City and participant contributions. Asrequired by the plan, Old Hire Plan participants are currently required to contribute 5.0% of covered payrolland the City is also required to contribute 5.0%. This contribution requirement was not actuariallydetermined. Firefighters covered under this plan may elect an optional account known as the “deferredretirement option plan” or “DROP” within five years prior to retirement. The purpose of DROP is to allow aneligible participant to elect, in lieu of immediate termination of employment and receipt of a serviceretirement benefit, to continue employment for a specified period of time not to exceed five years, coupledwith the deferral of actual receipt of retirement benefits until the end of such specified period, at which timeemployment shall cease. Once a participant elects a DROP, the City is no longer required to match thatparticipant’s contribution. As of December 31, 2012, there is one active participant.

Annual Pension Cost and Net Pension Asset. For 2012, the City made contributions of $4,770 and participantsmade contributions of $4,770. The annual required contribution for the current year was determined as partof the January 1, 2012 actuarial valuation using the Entry Age Actuarial Cost Method. Actuarial value ofassets is based on the Asset Valuation Method, which utilizes a three year moving average of expected andactual market values. Under the current statutes, the unfunded actuarial accrued liability must be amortizedunder a level dollar, open method in the maximum of 10 years or the number of years remaining until 2022,but not more than the average remaining life expectancy of the group. The actuarial assumptions included(a) inflation at 3.0%, (b) a rate of return of 7.5% per year, compounded annually, (c) projected salaryincreases of 4.0% annually, attributable to inflation and merit increases, and (d) no post-retirement benefitincreases.

The City’s annual pension cost and the net pension asset for the year ended December 31, 2012 based on estimates from the January 1, 2012 (latest) actuarial are as follows:

Annual required contribution 92,839$ Interest on net pension asset (7,188) Adjustment to annual required contribution 9,847

Annual pension cost 95,498 Contributions made 92,839

Increase in net pension asset (2,659) Net pension asset, beginning of year 95,834

Net pension asset, end of year 93,175$

44




3. Fire Pension Plans (Continued)

a. City Fire Pension Plan (Continued)

Funded Status and Funding Progress. As of January 1, 2012, the most recent actuarial valuation date, the plan was 76.7% funded. The actuarial accrued liability for benefits was $8,282,176 and the actuarial value of assets was $6,354,083, resulting in a shortage of assets over the actuarial accrued liability (AAL) of $1,934,093. The covered payroll (annual payroll of active employees covered by the plan) was $99,019 and the ratio of the shortage of assets over the actuarial accrued liability to the covered payroll was (1953%).

The schedule of funding progress, presented as RSI following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets are increasing over time relative to the actuarial accrued liability for benefits.

b. Fire and Police Pension Association Statewide Defined Benefit Plan

Plan Description. The Fire and Police Pension Association Statewide Defined Benefit Plan (the New Hire Plan),a cost sharing multiple-employer public employee retirement system administered by the Fire and PolicePension Association of Colorado (FPPA), covers all full-time firefighters of the City who were hired on or afterApril 8, 1978, and before January 1, 1994. Death and disability coverage is provided for members throughthe Statewide Death and Disability Plan, which is also administered by FPPA. Firefighters hired before April 8,1978 may voluntarily associate with the New Hire Plan under certain circumstances, while those hired on orafter April 8, 1978, and before January 1, 1994 are automatically associated with it. The New Hire Planprovides retirement and death benefits to its members.

The City’s fire department transferred out of the City, into a joint venture fire district in 1994. The fire districtdissolved on December 31, 1999, and the fire department rejoined the City on January 1, 2000. The NewHire Plan was not the responsibility of the City while the firefighters were members of the fire district.

The Normal Retirement Date (NRD) of firefighters hired before April 8, 1978, who voluntarily participate in theNew Hire Plan, is the date on which they have attained the age of 50 and completed 25 years of service. TheNRD of all other firefighters is the date on which they have attained the age of 55 and completed at least 25years of active service. The retirement benefit of firefighters hired before April 8, 1978 who retire on theirNRD is equal to one half of their monthly salary at the date of retirement. Each year of service beyond themember’s NRD increases his or her pension by 2% of salary up to a maximum monthly pension of 60% of themonthly salary at retirement. There are no early retirement benefits for this class of firefighters.

The retirement benefit of all other firefighters who retire at or after their NRD is 2% of the average of themember’s highest three years base salary multiplied by the member’s years of service prior to age 65, not toexceed 25 years. A member shall be eligible for early retirement after completion of 30 years of service or theattainment of age 50. The benefit for early retirement is the normal benefit reduced by one-half of onepercent for each month that the benefit commences prior to age 55.

The monthly Post-Retirement Death Benefit available for spouses of retired employees, hired before April 8,1978, who voluntarily participate in the New Hire Plan, is two-thirds of the monthly benefit of the member atthe time of death. This benefit is paid until the spouse dies or remarries.

Net Pension Asset History and Future Estimates

Annual Percentage NetFiscal year pension cost of APC pension

ending (APC) contributed asset

12/31/12 95,498$ 93,17597% $ 12/31/11 96,545 10% 95,834 12/31/10 8,713 106% 182,839

45




3. Fire Pension Plans (Continued)

b. Fire and Police Pension Association Statewide Defined Benefit Plan (Continued)

The FPPA issues a publicly available financial report that includes financial statements and requiredsupplementary information for the New Hire Plan. That report may be obtained by writing to Fire and PolicePension Association, 5290 DTC Parkway, Suite 100, Greenwood Village, Colorado 80111, or by calling 1-800-332-3772.

Funding Policy. New Hire Plan members are required to contribute 8.0% of their base salary and the City isrequired to contribute at an actuarially determined rate. The current rate is 8.0% of base salary. Thecontribution requirements of New Hire Plan members and the City are established and may be amended bythe FPPA. Firefighters covered under this plan may elect an optional account known as the “deferredretirement option plan” or “DROP” within five years prior to retirement. The purpose of DROP is to allow aneligible participant to elect, in lieu of immediate termination of employment and receipt of a serviceretirement benefit, to continue employment for a specified period of time not to exceed five years, coupledwith the deferral of actual receipt of retirement benefits until the end of such specified period, at which timeemployment shall cease. Once a participant elects a DROP, the City is no longer required to match thatparticipant’s contribution. As of December 31, 2012, two out of fifteen participants in this plan had elected aDROP.

The City’s contributions to the New Hire Plan for the years ending December 31, 2012, 2011, and 2010 were$90,336, $91,270, and $97,357 respectively, equal to the required contribution for each year.

c. City of Thornton Firefighters Pension Plan – 401(a) Plan

A defined contribution pension plan is maintained for all full-time firefighters hired on or after January 1,1994. The plan requires mandatory employee contributions of 8.0% of base pay. The City’s contribution isalso 8.0% of base pay. Vesting of employees is as follows: 0% in employer contributions for the first 3 years,30% at three years, 40% at 4 years, and 100% at 5 years of service. Voluntary, after-tax contributions areallowed to be made to this plan by the firefighters.

Employer contributions are funded every pay period from the General Fund. The City’s contributions for 2012were $466,077 or 8.0% calculated using the base salary amount of $5,881,317. The Cityfirefighters’ mandatory contributions for 2012 were $466,077 or 8.0% calculated using the basesalary amount of $5,881,317. The City’s total payroll was $56,279,810. Fair value of assets held byICMA Retirement Corporation, the trustee for the City of Thornton Firefighters Pension Plan, was$8,531,641 as of December 31, 2012.

d. City of Thornton Firefighters Pension Plan – 457(b) Employer Contribution

Voluntary contributions for all fire employees are made to the deferred compensation plan, described in NoteJ. Matching of voluntary contributions by the City is made to the Fire Pension Plan.

Employer contributions are funded every pay period from the General Fund. The City’s contributions for 2012were $109,303 or 1.869% calculated using the base salary amount of $5,881,317.

4. City Manager/City Attorney/Municipal Judge Pension Plans

The City Manager, City Attorney, and presiding Municipal Judge are covered under individual pension plans. Theterms of each plan are negotiated every year as a part of their employment contract. The City’s contributions for2012 were $76,000. The employees’ contributions for 2012 were $42,284. As of December 31, 2012, fair valueof assets for the combined plans was $2,008,394.

46



NOTE J - DEFERRED COMPENSATION

The City offers all regular City employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan permits participants to defer a portion of their salary until future years.

The general employees’, police and fire voluntary contributions are made to the 457 plan. Employees can contribute a maximum of $17,000 per year ($22,500 if age 50 or more). The City matches 50% of employee contributions up to a maximum of 2% of base pay. The contributions for the City's match are made to either the Employee Pension Plan, the Police Pension Plan or the Fire Pension Plan described in Notes I1., I2., or I3., respectively. For 2012, the general employees’ voluntary contributions were $1,601,520, the police employees’ voluntary contributions were $571,841 and the fire employees’ voluntary contributions were $354,387 for a total of $2,527,748 or 4.5% of base salary amount of $56,279,810. Fair value of assets held by the trustee as of December 31, 2012 was $39,985,882. Deferred compensation is available for withdrawal any time after the participant reaches age 59-1/2, and must begin at age 70½. Withdrawals can also be made upon termination of employment, death, or unforeseeable emergency. Such withdrawals may be subject to IRS penalties for early withdrawal. Withdrawals can also be made upon termination of the plan.

Additionally, the City offers employees a retirement health savings plan. Participation in the plan is mandatory and the City’s annual contribution is determined each year by city council, for 2012 the annual amount was $350 per eligible employee. As of December 31, 2012, fair value of assets held by the trustee was $3,413,617.

An independent trustee administers funds in both of these plans. The City maintains accounting records. The trustee provides participants with quarterly statements of contributions, withdrawals and earnings.

NOTE K – HEALTH CARE PLAN

Plan Description. The Retiree Health Care Plan (Plan) is a single employer defined benefit OPEB plan administered by the City of Thornton. The Plan provides healthcare benefits for eligible employees, eligible retirees, and employees designated as permanently disabled. Employees must be a minimum of age 62 with 10 or more years of continuous service or have at least 20 years of continuous service at any age to be eligible for retiree benefits. The City provides a direct contribution subsidy to disabled retirees only.

There are five fully-insured medical plans, including prescription drugs, used by the City: Cigna Open Access Plus In- Network, Cigna High Deductible Health Plan with an Health Reimbursement Arrangement (HRA), Kaiser HMO, Kaiser High Deductible Health Plan with an Health Reimbursement Arrangement (HRA) and Kaiser Senior Advantage. Retirees over 65 may participate in either the Senior Advantage or either of the Cigna plans without the HRA benefit. The medical providers do not issue a publicly available financial report for the City of Thornton.

Funding Policy. The City negotiates its rates annually with each of the healthcare providers (Kaiser and Cigna). In addition to the premium, other factors, such as co-payments, deductibles, etc. are reviewed and may be changed. Premiums vary depending on the number of family members covered and the healthcare provider chosen but are identical for all three classes of employees.

The City Council approves the healthcare providers and plans annually. City Council established benefits to the permanently disabled through a personnel code ordinance adopted June 25, 1990.

In 2012, eligible employees who were enrolled in single coverage paid 10% and eligible retirees paid 100% of the individual premium. Disabled retirees receive a contribution subsidy equal to 90% of the retiree individual premium.

The healthcare plans are funded on a pay as you go basis with the City paying premiums monthly. Expected premiums for permanently disabled and retired employees for all medical plans totaled $363,549 in 2012. Retired and permanently disabled employees paid $184,549 in actual premiums. The City’s pay as you go funding totaled $179,000 during the year.

Annual OPEB Cost and Net OPEB Obligation. The City’s annual OPEB cost is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions (GASB 45).

The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover current year costs plus amortization for a portion of the unfunded accrued actuarial liability for health benefits. The City implemented GASB 45, prospectively on January 1, 2008, and reports the net OPEB obligation at transition as zero in accordance with

47



NOTE K – HEALTH CARE PLAN (CONTINUED)

the provisions of the statement. The following table shows the components of the City’s annual OPEB cost for the year, the amount actually contributed, and changes in the City’s net OPEB obligation.

The City’s annual OPEB cost, the percentage of annual OPEB cost contributed, and the net OPEB obligation for 2012 and the two preceding years were as follows:

Funded Status and Funding Progress. As of January 1, 2012, the most recent actuarial valuation date, the Plan was not funded. The unfunded actuarial accrued liability (UAAL) was $5,761,000. The covered payroll in 2012 (annual payroll of eligible employees covered by the Plan) was $54,283,735. The ratio of the UAAL to covered payroll was 10.6 percent.

Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future, such as future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the Plan and the annual required contributions of the City are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents information about the actuarial accrued liability or benefits relative to the covered payroll of employees covered by the Plan.

Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the City and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefits costs between the City and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities, consistent with the long term perspective of the calculations.

In the January 1, 2012, actuarial valuation, the projected unit credit attribution method was used. The actuarial assumptions included a 4.5 percent discount rate to calculate the ARC on a pay-as-you-go basis. The Unfunded Actuarial Accrued Liability is amortized over the maximum acceptable period of 30 years. It is calculated assuming a level percentage of projected payroll on an open basis. Payroll is assumed to increase 3.5% per year. The annual trend rates for health care costs applied on a select and ultimate basis are 10% and 5%, respectively. Select trends are reduced 0.5% each year until reaching the ultimate trend.

2012

Annual Required Contribution 612,000$

Interest on net OPEB obligation 49,000

Adj to annual required contirbution (41,000)

Annual OPEB cost (expense) 620,000

Contributions Made (179,000)

Increase in net OPEB obilgation 441,000

Net OPEB obligation - beginning of year 1,086,000

Net OPEB obligation - end of year 1,527,000$

Fiscal Percentage of Net OPEB

Year Annual Annual OPEB OPEB

Ended OPEB Cost Cost Contribution Obligation

12/31/2012 620,000$ 28.87% 1,527,000$

12/31/2011 678,000 40.56% 1,086,000

12/31/2010 542,000 40.59% 683,000

48



NOTE L - RISK MANAGEMENT

1. General Liability Insurance Pool

The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errorsand omissions; and natural disasters for which the government carries insurance with the ColoradoIntergovernmental Risk Sharing Agency (CIRSA). CIRSA is a separate and independent governmental and legalentity. The purposes of CIRSA are to provide members defined liability, property and workers' compensationcoverages through joint self-insurance, insurance, reinsurance, or any combination thereof, and to assist membersto prevent and reduce losses and injuries to municipal property and to persons or property which might result inclaims being made against members of CIRSA, or their employees or officers.

All operating funds of the City participate in the program and make payments to the Risk Management Fund basedon actuarial estimates of the amounts needed to pay current-year claims and to establish a reserve forcatastrophe losses. The City pays claims up to the self-insured retention. In 2012, the self-insured retention(deductible amount) set by the City was $250,000 per claim. The City purchases commercial insurance for claimsin excess of $250,000. Every third year the City hires an independent actuary to calculate incurred but notreported claims (IBNR). The City reserves a liability for property/casualty claims of $1,416,238. There has beenno significant reduction in insurance coverage from the prior year.

2012 2011

Reserve for unpaid claims, January 1, 1,251,417$ 774,739$

Incurred claims (including IBNRs) 549,432 863,994

Claim payments (384,611) (387,316)

Reserve for unpaid claims, December 31, 1,416,238$ 1,251,417$

Unpaid claims to be paid in 1 year 612,920$ 718,300$

Summary financial information for CIRSA as of December 31, 2012 is as follows:

Assets 51,745,775$

Liabilities, including incurred but not reported claims 22,505,166$

Members' fund balance

Accumulated members' equity 29,240,609

Total liabilities and fund balance 51,745,775$

Revenues 16,534,381$

Expenses 12,546,527

Net increase in members' fund balance 3,987,854$

49



NOTE L - RISK MANAGEMENT (CONTINUED)

1. General Liability Insurance Pool (Continued)

The City’s respective share of CIRSA’s member’ fund balances are as follows:

2. Workers' Compensation

In 1991, an insurance risk management consultant conducted a feasibility study to determine if a limited riskprogram was a viable option for workers' compensation coverage. The study indicated that the City would benefitfrom such a program. City Council voted to proceed with the new program based on this information. The Cityestablished a limited risk management program for workers' compensation on January 1, 1992. Prior to that date,workers' compensation coverage was through the Colorado Intergovernmental Risk Sharing Agency (CIRSA). Allpast deductible plans with CIRSA are now complete and closed, with no further exposure to the City.

Year* Fund

PC Pool surplus (deficit)

December 31, 2012 **

City of Thornton's

contribution ratio

City of Thornton's share of surplus as of December 31, 2012

1990 Loss Fund 47,812 0.000% -

1991 Loss Fund - 0.000% -

1992 Loss Fund 91,375 0.000% -

1993 Loss Fund 191,349 0.000% -

1994 Loss Fund 193,039 0.000% -

1995 Loss Fund 465,526 0.000% -

1996 Loss Fund 45,433 0.000% -

1997 Loss Fund 143,475 0.000% -

1998 Loss Fund - 0.000% -

1999 Loss Fund - 0.000% -

2000 Loss Fund - 0.000% -

2001 Loss Fund 77,548 0.000% -

2002 Loss Fund - 0.000% -

2003 Loss Fund 413,718 0.000% -

2004 Loss Fund 1,303,934 0.768% 10,009

2005 Loss Fund 3,038,972 0.357% 10,855

2006 Loss Fund 2,414,735 0.349% 8,429

2007 Loss Fund 3,330,510 0.000% 15

2008 Loss Fund 2,184,229 0.000% -

2009 Loss Fund 1,565,229 0.000% -

2010 Loss Fund 635,724 0.000% -

2011 Loss Fund (2,033,311) 0.000% -

2012 Loss Fund (2,134,011) 0.000% -

ALL Operating fund 4,755,197 3.726% 177,166

ALL Excess fund 3,937,409 2.519% 99,192

ALL Reserve fund 8,572,717 0.821% 70,370

29,240,609$ 376,036$

* Years 1982 through 1989 no longer have balances remaining

** Surpluses or deficits for any year are subject to change for reasons which include: interest

earnings or invested amounts for those years and funds, reestimation of losses for those

years and funds, and credits or distributions from surplus for those years and funds.

50




2. Workers' Compensation (Continued)

The City's program was tailored to meet an annual exposure predicted from ten years of claims history. A riskretention of $400,000 per accident is maintained and funded through the Risk Management Fund, based on anannual estimated claims cost. The City purchases commercial insurance for claims in excess of $400,000. Claimsadministration and medical services are provided through contract and the City's Risk Management Administratoris responsible for overall program management. The State of Colorado has a strict application and annual renewalprocess that includes funding verification, excess insurance coverage verification, claims data review and provisionof a comprehensive loss prevention and control program. The application includes a required surety bond of$801,000 to cover the City's risk retention portion.

All operating funds of the City participate in the program and make payments to the Risk Management Fund basedon actuarial estimates of the amounts needed to pay current year claims and to establish a reserve forcatastrophe losses. Every third year the City hires an independent actuary to calculate incurred but not reportedclaims (IBNR). The City reserves a liability for workers' compensation of $1,500,000. There have been nosignificant reductions in insurance coverage from the prior year. There have been no settlements of claimsexceeding the ceiling of the City’s insurance coverage for the last ten years.

3. Self-Funded Dental Insurance

The City established two self-funded dental programs effective January 1, 2007: Delta EPO and Delta Premier. Thepurpose of these programs is to pay the dental claims of eligible City employees and their covered dependents. Asof January 1, 2007 the City entered into an administrative services only arrangement with Delta Dental ofColorado, whereby the City pays Delta Dental a separate amount for administrative costs and claim servicing fees.The City agrees to provide monthly funding for the payment of claims. At the end of the year, the City retains anymoney not spent on claims. The City has recorded a liability in this fund totaling $101,000 for open and estimatedclaims not yet reported at December 31, 2012.

4. Self-Funded Vision Insurance

The City established a self-funded vision program effective January 1, 2009: Vision Service Plan. The purpose ofthis program is to pay the vision claims of eligible City employees and their covered dependents. As of January 1,2009 the City entered into an administrative services only arrangement with Vision Service Plan, whereby the Citypays Vision Service Plan a separate amount for administrative costs and claim servicing fees. The City agrees toprovide monthly funding for the payment of claims. At the end of the year, the City retains any money not spenton claims. The City has a recorded liability in this fund totaling $18,000 for open and estimated claims not yetreported at December 31, 2012.

2012 2011

Reserve for unpaid claims, January 1, 1,021,763$ 808,850$

Incurred claims (including IBNRs) 1,324,156 1,235,829

Claim payments (845,919) (1,022,916)

Reserve for unpaid claims, December 31, 1,500,000$ 1,021,763$


2012 2011

Reserve for unpaid claims, January 1, 96,426$ 22,986$


Claim payments (709,735) (651,066)

Reserve for unpaid claims, December 31, 101,000$ 96,426$


51




4. Self-Funded Vision Insurance (Continued)

NOTE M - LEGAL RESTRICTION

At the November 3, 1992 general election, Colorado voters approved an amendment to the Colorado Constitution commonly known as the Taxpayer's Bill of Rights (TABOR). TABOR was effective December 31, 1992, and its provisions limit government taxes, spending revenues and debt without electoral approval. On November 6, 2001, the City’s voters chose to permit the City to collect, retain and spend the full amount of the City’s past and future taxes and other revenue above the TABOR amendment limitations.

TABOR by its terms applies to local governments such as the City but excludes "enterprises," which are defined as (1) a government owned business, (2) authorized to issue its own debt and (3) receives less than 10% of its annual revenue in grants from all state and local governments. The City considers its Water, Sewer, Sanitation and Golf funds to be "enterprise" funds, and therefore considers them excluded from the terms of TABOR. All other government activities are presumably covered under the limitations of TABOR.

TABOR also requires the City to set aside a portion of its spending for an emergency reserve. In 2012, the required reserve of 3% of current year spending, excluding voter approved amounts, federal revenues, bond proceeds, and other restrictions under TABOR, totaled $3,475,696. The City is not allowed to use the emergency reserve to compensate for economic conditions, revenue shortfalls, or salary or benefit increases.

NOTE N - COMMITMENTS AND CONTINGENT LIABILITIES

1. Litigation

The City is a defendant in several lawsuits, including various claims related to activities or employees of the City.The City maintains a self-funded reserve in the Risk Management of $1,416,238 for general liability and$1,500,000 for worker's compensation claims. The City believes that final disposition of matters not covered byinsurance will not have a material adverse effect on the City's financial condition.

2. Contracts

The City has $15,505,381 in outstanding contracts with various contractors. Enterprise fund type contractscomprise $1,809,065 and Governmental fund type contracts comprise $13,696,316 of the total.

The City has a collective bargaining agreement between the City of Thornton and the Thornton Firefighters LocalNumber 2376, International Association of Firefighters for the line firefighters. The current agreement is for 1 yearand expires December 31, 2013.

Certain City employees have contracts through the fiscal year 2013. Some contracts include severance packages,not exceeding nine months, if the employee is involuntarily terminated.

3. Arbitrage

As a result of significant revenue from private oil companies related to mineral extraction on lands owned by theCity’s Water Utility, an arbitrage liability may exist. The City has engaged outside legal counsel and expectsresolution in 2013.

NOTE O – SUBSEQUENT EVENTS

On May 6, 2013, the City issued $39,380,000 Water Enterprise Revenue Refunding Bonds, Series 2013. The bonds refunded the 2004 Series. The bonds have an interest rate of 2.82% and payments of principal ranging from $200,000 to $2,765,000.

2012 2011

Reserve for unpaid claims, January 1, 22,993$ 4,971$


C laim payments (114,133) (108,481)

Reserve for unpaid claims, December 31, 18,000$ 22,993$


52

REQUIRED SUPPLEMENTARYINFORMATION

53

Positive(negative)

Budgeted Amounts variance -Actual actual from

Original Final Amounts finalREVENUES Taxes Sales and use 48,880,000$ 48,880,000$ 48,677,623$ (202,377)$ Property 9,032,000 9,032,000 8,980,988 (51,012) Franchise 4,957,000 4,957,000 4,818,327 (138,673) Other 1,414,000 1,414,000 1,606,794 192,794 Licenses and permits 1,416,000 1,416,000 2,139,568 723,568 Intergovernmental 5,079,000 5,079,000 5,152,212 73,212 Governmental grants 1,024,000 1,024,000 788,415 (235,585) Charges for services 10,924,260 10,924,260 10,504,227 (420,033) Fines and forfeitures 2,475,000 2,475,000 2,915,446 440,446 Interest 448,000 448,000 280,156 (167,844) Miscellaneous 538,000 538,000 740,888 202,888

Total revenues 86,187,260 86,187,260 86,604,644 417,384

EXPENDITURES Current General government Legislative 1,436,109 1,509,758 1,512,406 (2,648) City manager 1,903,152 1,903,152 1,843,939 59,213 Management services 10,907,266 10,907,266 11,465,040 (557,774) Miscellaneous 3,136,945 3,580,040 2,242,369 1,337,671 Police 24,880,393 24,880,393 24,485,840 394,553 Fire and ambulance 11,703,519 11,831,029 11,565,208 265,821 City development 7,060,035 7,060,035 6,641,311 418,724 Infrastructure 11,312,669 11,312,669 10,819,711 492,958 Community services 15,221,362 15,221,362 15,532,286 (310,924) Capital outlay 1,781,318 1,781,318 1,983,799 (202,481)

Total expenditures 89,342,768 89,987,022 88,091,909 1,895,113

Excess (deficiency) of revenues over (under) expenditures (3,155,508) (3,799,762) (1,487,265) 2,312,497

OTHER FINANCING SOURCES Transfers in 1,730,155 1,730,155 1,770,005 39,850 Transfers out (73,369) (73,369) (73,369) -

Total other financing sources 1,656,786 1,656,786 1,696,636 39,850

Excess (deficiency) of revenues and other sources over (under) expenditures and other uses before reconciling items (1,498,722)$ (2,142,976)$ 209,371 2,352,347$

RECONCILIATION TO US GAAP BASIS RHS & sick payout (159,071)

Total reconciling items (159,071)

Net change in fund balances 50,300

Fund balances, January 1 27,443,606

Fund balances, December 31 27,493,906$


General Fund


Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Non US GAAP Basis

54


Schedule of Funding Progress for the City Fire Pension Plan

Excess/Actuarial Excess/ (shortage) as

Actuarial Actuarial accrued (shortage) a percentagevaluation value of liability (AAL) of assets Funded Covered of covered

date assets -entry age over AAL ratio payroll payroll

1/1/2012 6,354,083$ 8,288,176$ (1,934,093)$ 76.7% 99,019$ -1953.3%1/1/2010 7,378,054 8,235,354 (857,300) 89.6% 80,991 -1058.5%1/1/2008 9,122,277 8,284,835 837,442 110.1% 74,856 1118.7%

55


Schedule of Funding Progress for the City Retiree Health Care Plan

ActuarialAccrued UAAL as

Actuarial Actuarial Liability Unfunded a % ofValuation Value of (AAL)- AAL Funded Covered Covered

Date Assets Unit Credit (UAAL) Ratio Payroll Payroll

1/1/2012 -$ 5,761,000$ 5,761,000$ 0.0% 54,283,735$ 10.6%1/1/2010 - 4,935,000 4,935,000 0.0% 53,247,989 9.3%1/1/2008 - 3,151,000 3,151,000 0.0% 53,930,807 5.8%

56

COMBINING AND INDIVIDUALSTATEMENTS AND SCHEDULES

57


Combining and Individual Fund Statements and Schedules Fund Descriptions

Non-Major Governmental Funds

Special Revenue Funds

Special Revenue funds are used to account for specific revenues that are legally restricted to expend for particular purposes.

Thornton Arts, Sciences and Humanities Council (TASHCO) Fund (Component Unit) – to account for monies received from grants and program revenues for purposes of cultural enhancements.

Cash in Lieu Fund – to account for monies contributed by land developers in lieu of providing an improvement such as parks or drainage.

Conservation Trust Fund – to account for monies received from the State government for purposes of developing new parks and park improvements.

Parks Fund – to account for one-third of the .25% open space tax to be used exclusively for the purchase and development of parks in the City.

Open Space Fund – to account for one-third of the .25% open space tax to be used exclusively for the purchase and development of open space in the City.

Parks and Open Space Fund – to account for one-third of the .25% open space tax to be used exclusively for the purchase and development of parks and open space in the City, based on the recommendations of the Parks and Open Space Advisory Committee (POSAC).

Adams County Open Space Sales Tax Fund – to account for open space monies from Adams county to be used exclusively for the purchase and development of open space in the City.

Adams County Road and Bridge Sales Tax Fund – to account for road and bridge monies from Adams County to be used exclusively for transportation related projects in the City.

136th Avenue GID Fund – to account for the collection of assessment revenues to be used exclusively for payment of the construction of the interchange at 136th Avenue and Interstate 25.

E911 Authority Fund – to account for E911 surcharges received from telecommunication companies doing business within the City. The Authority was established by City Council in 2004, and funds collected are used to pay for a portion of costs authorized by State statute for the City to provide emergency telephone services.

Debt Service Funds

Debt Service funds are used to account for the accumulation of resources and payment of debt principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment.

Debt Service Fund – to accumulate monies for payment of the following bond issues:

$5,760,000 Sales and Use Tax Revenue Refunding Bonds, Series 1998 – financed solely by sales and use tax revenues. The bonds are due in annual payments until maturity in 2012.

$5,575,000 Sales and Use Tax Revenue Refunding Bonds, Series 2002 – financed solely by sales and use tax revenues. The bonds are due in annual payments until maturity in 2012.

$12,170,000 Open Space and Parks Sales and Use Tax Revenue Refunding Bonds, Series 2010 – financed solely by the 0.25% open space sales and use tax. The bonds are due in annual payments until maturity in 2018.

58


Combining and Individual Fund Statements and Schedules Fund Descriptions (Continued) Non-Major Governmental Funds

Capital Projects Funds

Capital Projects Funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds.

Thornton Development Authority Capital Fund (Component Unit) – to account for capital improvement projects within the Authority boundaries financed by existing resources.

Thornton Development Authority North Washington Fund (TDA North) (Component Unit) – to account for debt services and capital improvement projects within the Authority boundaries financed by current resources (property tax, sales tax, investment income) and by bond proceeds. The debt services payments are for the following bond issue:

$21,195,000 Thornton Development Authority Tax Increment Revenue Bonds (North Washington Street Urban Renewal Project), Series 2004 – financed by sales tax and property tax incremental increases within the boundaries of the North Washington Urban Renewal Area. The bonds are due in semi-annual payments until maturity in 2029.

59


Combining Balance Sheet


December 31, 2012


Cash in Conservation Open Parks &TASHCO Lieu Trust Parks Space Open Space

ASSETS Equity in pooled cash and investments Unrestricted 348,520$ 852,447$ 2,492,824$ 3,006,128$ 3,158,933$ 2,337,882$ Restricted - - - - - - Receivables, net Taxes - - - 158,895 158,895 158,897 Accounts - - 101,848 - 9,600 2,600 Interest 1,222 3,073 8,269 10,707 10,614 19,856 Prepaid items and other asse 1,366 - - - - - Land held for resale - - - - - -

Total assets 351,108$ 855,520$ 2,602,941$ 3,175,730$ 3,338,042$ 2,519,235$

LIABILITIES Accounts payable 1,999$ -$ 21,133$ 31,406$ -$ 217,649$ Retainage payable - - - 52,562 - - Third party advances - 538,961 - - - - Deferred revenue - - - - - - Other - - - - - -

Total liabilities 1,999 538,961 21,133 83,968 - 217,649

FUND BALANCES Nonspendable Land held for resale - - - - - - Prepaids 1,366 - - - - - Restricted Capital projects - - - - - - Debt service - - - - - - Other purposes 48,091 - - - - - Assigned Capital projects - - - - - - Debt service - - - - - - Parks and open space - 316,559 2,581,808 3,091,762 3,338,042 2,301,586 Public safety - - - - - - Other purposes 299,652 - - - - -

Total fund balances 349,109 316,559 2,581,808 3,091,762 3,338,042 2,301,586

Total liabilities andfund balances 351,108$ 855,520$ 2,602,941$ 3,175,730$ 3,338,042$ 2,519,235$

60

Special Revenue FundsAdams County Adams County Total

Open Space Road & Bridge 136th SpecialSales Tax Sales Tax Avenue GID E911 Revenue

247,831$ 3,442,089$ 1,404$ 127,090$ 16,015,148$ - - - - -

- 194,346 - 113,714 784,747 100,000 - - - 214,048

1,558 12,215 9 1,143 68,666 - - - - 1,366 - - - - -

349,389$ 3,648,650$ 1,413$ 241,947$ 17,083,975$

5,182$ 29,342$ -$ -$ 306,711$ 269,282 - - - 321,844

- - - - 538,961 - - - - - - - - - -

274,464 29,342 - - 1,167,516

- - - - - - - - - 1,366

- - - - - - - - - - - - - - 48,091

- 3,619,308 1,413 - 3,620,721 - - - - -

74,925 - - - 11,704,682 - - - 241,947 241,947 - - - - 299,652

74,925 3,619,308 1,413 241,947 15,916,459

349,389$ 3,648,650$ 1,413$ 241,947$ 17,083,975$

61


Combining Balance Sheet (Continued)


December 31, 2012

Debt Service Funds Capital Funds TotalTotal Total Non-major

Debt Debt TDA TDA North Capital GovernmentalService Service Capital Washington Projects Funds

ASSETS Equity in pooled cash and investments Unrestricted 76,031$ 76,031$ 4,319,428$ 21,041,836$ 25,361,264$ 41,452,443$ Restricted 116,717 116,717 - 3,192,050 3,192,050 3,308,767 Receivables, net Taxes - - - 3,697,678 3,697,678 4,482,425 Accounts - - - 4,304 4,304 218,352 Interest 2,225 2,225 17,529 79,259 96,788 167,679 Prepaid items and other asse - - - - - 1,366 Land held for resale - - 10,635,873 - 10,635,873 10,635,873

Total assets 194,973$ 194,973$ 14,972,830$ 28,015,127$ 42,987,957$ 60,266,905$

LIABILITIES Accounts payable -$ -$ 53,655$ 95,919$ 149,574$ 456,285$ Retainage payable - - 20,836 - 20,836 342,680 Third party advances - - 13,500 - 13,500 552,461 Deferred revenue - - - 2,785,529 2,785,529 2,785,529 Other - - - 1,358,245 1,358,245 1,358,245

Total liabilities - - 87,991 4,239,693 4,327,684 5,495,200

FUND BALANCES Nonspendable Land held for resale - - 10,635,873 - 10,635,873 10,635,873 Prepaids - - - - - 1,366 Restricted Capital projects - - - 1,685,748 1,685,748 1,685,748 Debt service 116,717 116,717 - 1,506,302 1,506,302 1,623,019 Other purposes - - - - - 48,091 Assigned Capital projects - - 4,248,966 20,583,384 24,832,350 28,453,071 Debt service 78,256 78,256 - - - 78,256 Parks and open space - - - - - 11,704,682 Public safety - - - - - 241,947 Other purposes - - - - - 299,652

Total fund balances 194,973 194,973 14,884,839 23,775,434 38,660,273 54,771,705

Total liabilities andfund balances 194,973$ 194,973$ 14,972,830$ 28,015,127$ 42,987,957$ 60,266,905$

62


63


Combining Statement of Revenues, Expenditures, and Changes in Fund BalancesNon-Major Governmental Funds



Cash in Conservation Open Parks &TASHCO Lieu Trust Parks Space Open Space

REVENUES Taxes

Sales and use -$ -$ -$ 1,636,551$ 1,636,551$ 1,636,551$ Property - - - - - - E911 - - - - - - Intergovernmental - - 1,131,519 - - - Governmental grants 74,091 - 101,849 - - - Interest 3,681 8,933 24,485 31,371 31,314 52,449 Miscellaneous

Other 9,879 - 298 - 9,600 5,200

Total revenues 87,651 8,933 1,258,151 1,667,922 1,677,465 1,694,200

EXPENDITURES Current Community services 83,233 - - - - - Capital outlay 57,200 38,675 777,070 868,221 758,275 6,867,787 Debt service

Principal retirement - - - - - - Interest - - - - - - Bond fees - - - - - -

Total expenditures 140,433 38,675 777,070 868,221 758,275 6,867,787

Excess (deficiency) of revenues over(under) expenditures before other sources (uses) (52,782) (29,742) 481,081 799,701 919,190 (5,173,587)

OTHER FINANCING SOURCES (USES) Transfers in 73,369 - - - - - Transfers out - - - (815,985) (469,201) (518,464)

Total other financingsources (uses) 73,369 - - (815,985) (469,201) (518,464)

Net change in fund balances 20,587 (29,742) 481,081 (16,284) 449,989 (5,692,051)

Fund balances, January 1 328,522 346,301 2,100,727 3,108,046 2,888,053 7,993,637

Fund balances, December 31 349,109$ 316,559$ 2,581,808$ 3,091,762$ 3,338,042$ 2,301,586$

64

Special Revenue FundsAdams County Adams County

Open Space Road & Bridge 136th TotalSales Tax Sales Tax Avenue GID E911 Special Revenue

-$ -$ -$ -$ 4,909,653$- - 5,535 - 5,535- - - 1,080,585 1,080,585

391,771 2,019,232 - - 3,542,522 475,168 - - - 651,108

2,015 32,360 24 3,064 189,696

- 426,246 - - 451,223

868,954 2,477,838 5,559 1,083,649 10,830,322

- - - - 83,233 875,255 3,316,808 - - 13,559,291

- - - - -- - - - -- - - - -

875,255 3,316,808 - - 13,642,524

(6,301) (838,970) 5,559 1,083,649 (2,812,202)

- - - - 73,369 - - (7,000) (1,000,000) (2,810,650)

- - (7,000) (1,000,000) (2,737,281)

(6,301) (838,970) (1,441) 83,649 (5,549,483)

81,226 4,458,278 2,854 158,298 21,465,942

74,925$ 3,619,308$ 1,413$ 241,947$ 15,916,459$

65


Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued)Non-Major Governmental Funds


Debt Service Funds Capital Funds TotalTotal Total Non-major

Debt Debt TDA TDA North Capital GovernmentalService Service Capital Washington Projects Funds

REVENUES Taxes Sales and use 1,383,754$ 1,383,754$ -$ 8,309,477$ 8,309,477$ 14,602,884$ Property - - - 2,733,036 2,733,036 2,738,571 E911 - - - - - 1,080,585 Intergovernmental - - - - - 3,542,522 Governmental grants - - - - - 651,108 Interest 6,253 6,253 49,555 234,768 284,323 480,272 Miscellaneous Other - - 600 - 600 451,823

Total revenues 1,390,007 1,390,007 50,155 11,277,281 11,327,436 23,547,765

EXPENDITURES Current Community services - - - - - 83,233 Capital outlay - - 961,113 6,029,057 6,990,170 20,549,461 Debt service Principal retirement 2,795,000 2,795,000 - 690,000 690,000 3,485,000 Interest 426,435 426,435 - 812,863 812,863 1,239,298 Bond fees 500 500 - 1,450 1,450 1,950

Total expenditures 3,221,935 3,221,935 961,113 7,533,370 8,494,483 25,358,942

Excess (deficiency) of revenues over(under) expenditures before other sources (uses) (1,831,928) (1,831,928) (910,958) 3,743,911 2,832,953 (1,811,177)

OTHER FINANCING SOURCES (USES) Transfers in 1,803,650 1,803,650 - - - 1,877,019 Transfers out - - (35,495) (687,660) (723,155) (3,533,805)

Total other financingsources (uses) 1,803,650 1,803,650 (35,495) (687,660) (723,155) (1,656,786)

Net change in fund balances (28,278) (28,278) (946,453) 3,056,251 2,109,798 (3,467,963)

Fund balances, January 1 223,251 223,251 15,831,292 20,719,183 36,550,475 58,239,668

Fund balances, December 31 194,973$ 194,973$ 14,884,839$ 23,775,434$ 38,660,273$ 54,771,705$

66


Thornton Arts, Sciences, and Humanities Council Fund (TASHCO)Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual


Positive(negative)variance

Budget Actual from actualREVENUES Governmental grants 81,006$ 74,091$ (6,915)$ Interest 3,000 3,681 681 Miscellaneous Other 15,656 9,879 (5,777)

Total revenues 99,662 87,651 (12,011)

EXPENDITURES Current Community services 136,870 83,233 53,637 Capital outlay 57,200 57,200 -

Total expenditures 194,070 140,433 53,637

Excess (deficiency) of revenues over (under) expenditures (94,408) (52,782) 41,626

OTHER FINANCING SOURCES Transfer in 73,369 73,369 -

Total other financing sources 73,369 73,369 -

Net change in fund balance (21,039)$ 20,587 41,626$

Fund balance, January 1 328,522

Fund balance, December 31 349,109$

67


Cash in Lieu FundSchedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual



Budget Actual from actualREVENUES Interest -$ 8,933$ 8,933$

Total revenues - 8,933 8,933

EXPENDITURES Capital outlay 63,207 38,675 24,532

Total expenditures 63,207 38,675 24,532

Net change in fund balance (63,207)$ (29,742) 33,465$



68


Conservation Trust FundSchedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual



Budget Actual from actualREVENUES Intergovernmental - State lottery 1,002,000$ 1,131,519$ 129,519$ Governmental grants - 101,849 101,849 Interest 2,000 24,485 22,485 Miscellaneous Other - 298 298

Total revenues 1,004,000 1,258,151 254,151

EXPENDITURES Capital outlay 3,178,325 777,070 2,401,255

Total expenditures 3,178,325 777,070 2,401,255

Net change in fund balance (2,174,325)$ 481,081 2,655,406$

Fund balance, January 1 2,100,727

Fund balance, December 31 2,581,808$

69


Parks FundSchedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual



Budget Actual from actualREVENUES Taxes - sales and use 1,472,000$ 1,636,551$ 164,551$ Interest 36,000 31,371 (4,629)

Total revenues 1,508,000 1,667,922 159,922

EXPENDITURES Capital outlay 1,508,228 868,221 640,007

Total expenditures 1,508,228 868,221 640,007

Excess (deficiency) of revenues over (under) expenditures (228) 799,701 799,929

OTHER FINANCING USES Transfers out (815,985) (815,985) -

Total other financing uses (815,985) (815,985) -

Net change in fund balance (816,213)$ (16,284) 799,929$



70


Open Space FundSchedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual



Budget Actual from actualREVENUES Taxes - sales and use 1,472,000$ 1,636,551$ 164,551$ Interest 35,000 31,314 (3,686) Miscellaneous Other - 9,600 9,600

Total revenues 1,507,000 1,677,465 170,465



Excess (deficiency) of revenues over (under) expenditures (2,122,700) 919,190 3,041,890



Net change in fund balance (2,591,901)$ 449,989 3,041,890$



71


Parks and Open Space FundSchedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual



Budget Actual from actualREVENUES Taxes - sales and use 1,472,000$ 1,636,551$ 164,551$ Governmental grants 1,500,000 - (1,500,000) Interest 104,000 52,449 (51,551) Miscellaneous Other - 5,200 5,200

Total revenues 3,076,000 1,694,200 (1,381,800)

EXPENDITURES Capital outlay 7,575,788 6,867,787 708,001

Total expenditures 7,575,788 6,867,787 708,001

Deficiency of revenues under expenditures (4,499,788) (5,173,587) (673,799)



Net change in fund balance (5,018,252)$ (5,692,051) (673,799)$



72


Adams County Open Space Sales Tax FundSchedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual



Budget Actual from actualREVENUES Intergovernmental 381,000$ 391,771$ 10,771$ Governmental grants 576,000 475,168 (100,832) Interest 3,000 2,015 (985)

Total revenues 960,000 868,954 (91,046)



Net change in fund balance (1,451,756)$ (6,301) 1,445,455$



73


Adams County Road and Bridge Sales Tax FundSchedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual



Budget Actual from actualREVENUES Intergovernmental 2,024,000$ 2,019,232$ (4,768)$ Interest 1,000 32,360 31,360 Miscellaneous Other - 426,246 426,246

Total revenues 2,025,000 2,477,838 452,838

EXPENDITURES Capital outlay 6,235,779 3,316,808 2,918,971

Total expenditures 6,235,779 3,316,808 2,918,971




74


136th Avenue General Improvement District Tax FundSchedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual



Budget Actual from actualREVENUES Taxes Property 5,500$ 5,535$ 35$ Interest - 24 24

Total revenues 5,500 5,559 59



Net change in fund balance (1,500)$ (1,441) 59$



75


E911 Authority FundSchedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual



Budget Actual from actualREVENUES Taxes - E911 1,046,894$ 1,080,585$ 33,691$ Interest - 3,064 3,064

Total revenues 1,046,894 1,083,649 36,755

OTHER FINANCING USES Transfers out (1,000,000) (1,000,000) -

Total other financing uses (1,000,000) (1,000,000) -

Net change in fund balance 46,894$ 83,649 36,755$



76


Debt Service FundSchedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual



Budget Actual from actualREVENUES Taxes - sales and use 1,420,000$ 1,383,754$ (36,246)$ Interest 10,000 6,253 (3,747)

Total revenues 1,430,000 1,390,007 (39,993)

EXPENDITURES Debt service Principal retirement 2,795,000 2,795,000 - Interest 443,860 426,435 17,425 Bond fees 3,000 500 2,500

Total expenditures 3,241,860 3,221,935 19,925

Deficiency of revenues under expenditures (1,811,860) (1,831,928) (20,068)

OTHER FINANCING SOURCES Transfers in 1,803,650 1,803,650 -

Total other financing sources 1,803,650 1,803,650 -

Net change in fund balance (8,210)$ (28,278) (20,068)$



77


Governmental Capital FundSchedule of Revenues, Expenditures, and Changes in Fund Balance



Budget Actual from actualREVENUES Taxes - sales and use 4,184,000$ 10,325,899$ 6,141,899$ Intergovernmental 2,453,000 2,384,778 (68,222) Governmental grants - 845,994 845,994 Lease - 98,787 98,787 Interest 253,000 202,593 (50,407) Miscellaneous Developers' contributions 275,000 27,775 (247,225) Other 574,000 58,880 (515,120)

Total revenues 7,739,000 13,944,706 6,205,706

EXPENDITURES Capital outlay 26,798,969 3,804,185 22,994,784 Debt service Principal retirement 2,715,000 2,715,000 - Interest 1,253,997 1,253,996 1 Bond fees 5,000 3,094 1,906


Excess of revenues over expenditures (23,033,966) 6,168,431 29,202,397

OTHER FINANCING SOURCES (USES) Transfers in 15,000,000 - (15,000,000) Transfers out (1,017,580) (1,017,580) -

Total other financing sources 13,982,420 (1,017,580) (15,000,000)

Net change in fund balance (9,051,546) 5,150,851



Budget and Actual

78


Thornton Development Authority South Capital FundSchedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual



Budget Actual from actualREVENUES Interest 10,000$ 49,555$ 39,555$ Miscellaneous Other - 600 600

Total revenues 10,000 50,155 40,155

EXPENDITURES Current Capital outlay 5,200,684 961,113 4,239,571


Excess (deficiency) of revenues over (under) expenditures (5,190,684) (910,958) 4,279,726






79


Thornton Development Authority North Capital Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual



Budget Actual from actualREVENUES Taxes - sales 7,172,643$ 8,309,477$ $ 1,136,834 Taxes - property 2,380,000 2,733,036 353,036 Interest 54,893 234,768 179,875

Total revenues 9,607,536 11,277,281 1,669,745

EXPENDITURES Capital outlay 23,336,280 6,029,057 17,307,223 Debt service Principal retirement 690,000 690,000 - Interest 812,863 812,863 - Bond fees 5,000 1,450 3,550


Excess (deficiency) of revenues over (under) expenditures (15,236,607) 3,743,911 18,980,518


Total other financing sources (687,660) (687,660) -

Net change in fund balance (15,924,267)$ 3,056,251 18,980,518$



80


Thornton Development Authority 144th Capital Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual



Budget Actual from actualREVENUES Interest -$ 419$ 419

Total revenues - 419 419

EXPENDITURES General government 12,075,247 12,075,247 - Capital outlay 16,200,000 4,593,828 11,606,172 Debt service Interest 50,000 34,079 15,921


Excess (deficiency) of revenues over (under) expenditures (28,325,247) (16,702,735) 11,622,512

Net change in fund balance (28,325,247)$ (16,702,735) 11,622,512$

Fund balance, January 1 -

Fund balance, December 31 (16,702,735)$

$

81



Major Enterprise Funds

Enterprise Funds

Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises – where the intent of the City Council is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or where the City Council has decided that periodic determination of net income is appropriate for accountability purposes.

Water Utility Fund – to account for the provision of water services to residents of the City and some residents of Adams County.

Sewer Utility Fund – to account for the provision of sewer services to residents of the City and some residents of Adams County.

82


Water Fund

Schedule of Revenues, Expenses, and Changes in Fund Net Position -

Budget and Actual - Non US GAAP Basis



Budget Actual from actualOPERATING REVENUES Charges for services 31,317,000$ 33,188,946$ $ 1,871,946

Total operating revenues 31,317,000 33,188,946 1,871,946

OPERATING EXPENSES Source of supply 4,751,996 4,706,593 45,403 Water treatment 6,077,584 6,136,823 (59,239) Collection, transmission, and distribution 2,216,518 2,255,848 (39,330) Other operating expenses 532,288 420,982 111,306 Administration 5,829,701 5,765,840 63,861

Total operating expenses 19,408,087 19,286,086 122,001

Operating income 11,908,913 13,902,860 1,993,947

NONOPERATING REVENUES (EXPENSES) Interest income 913,000 998,403 85,403 Capital outlay (38,758,654) (9,473,599) 29,285,055 Debt service

Principal payment (8,041,879) (8,041,879) - Advance payment (15,000,000) (3,724,629) 11,275,371 Interest (2,261,721) (2,261,721) - Bond fees (3,000) (1,000) 2,000

Miscellaneous revenue 1,790,000 11,523,583 9,733,583

Total nonoperating revenues (expenses) (61,362,254) (10,980,842) 50,381,412

Income (loss) before capital contributions and transfers (49,453,341) 2,922,018 52,375,359

Capital contributions 7,750,000 14,122,015 6,372,015 Transfers out - (39,850) (39,850)

Excess (deficiency) of revenues over (under) expenditures before reconciling items (41,703,341)$ 17,004,183 58,707,524$

RECONCILIATION TO US GAAP BASIS Miscellaneous non-cash adjustments (157,488) Add back principal payment 8,041,879 Add back advance payment 3,724,629 Change in accrued interest payable 5,589 Gain on sale of capital assets 5,908

Depreciation (5,816,276) Capital asset additions (from the City's capital projects) 6,555,251 Capital assets from developers 411,101 Bond deferred charges and bond issuance costs amortized (1,559,807)

Total reconciling items 11,210,786

Change in net position 28,214,969

Net position, January 1 518,123,848

Net position, December 31 546,338,817$

83


Sewer Fund

Schedule of Revenues, Expenses, and Changes in Fund Net Position -




Budget Actual from actualOPERATING REVENUES Charges for services 11,429,000$ 11,725,967$ $ 296,967

Total operating revenues 11,429,000 11,725,967 296,967

OPERATING EXPENSES Collection, transmission, and distribution 1,427,920 1,393,627 34,293 Sewage treatment-Metro Wastewater 7,016,708 6,603,731 412,977 Other operating expenses 187,499 161,469 26,030 Administration 1,352,829 1,352,829 -


Operating income 1,444,044 2,214,311 770,267

NONOPERATING REVENUES (EXPENSES) Interest income 187,000 126,027 (60,973) Capital outlay (1,806,209) (1,263,652) 542,557 Debt service

Principal payment (260,000) (260,000) - Interest payment (32,100) (32,100) - Bond fees (3,000) (250) 2,750

Miscellaneous revenue 18,000 4,817 (13,183)

Total nonoperating revenues (expenses) (1,896,309) (1,425,158) 471,151

Income (loss) before contributions (452,265) 789,153 1,241,418

Capital contributions 741,000 802,185 61,185

Excess of revenues over expenditures before reconciling items 288,735$ 1,591,338 1,302,603$

RECONCILIATION TO US GAAP BASIS Miscellaneous non-cash adjustments (30,915) Add back principal payment 260,000 Change in accrued interest payable 1,007 Gain on sale of capital assets 23,056

Depreciation (1,986,011) Capital asset additions (from the City's capital projects) 727,375 Capital assets from developers 165,846 Bond deferred charges and bond issuance costs amortized (16,372)


Change in net position 735,324

Net position, January 1, restated 54,067,174


84



Non-Major Enterprise Funds

Enterprise Funds

Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises – where the intent of the City Council is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or where the City Council has decided that periodic determination of net income is appropriate for accountability purposes.

Sanitation Fund – to account for rubbish removal and recycling services provided to City residents.

Golf Course Fund – to account for the activities of the City’s golf course.

85


Combining Statement of Net PositionNon-Major Enterprise Funds

December 31, 2012

Total Non-majorEnterprise

Sanitation Golf Course FundsASSETS

Current assets Equity in pooled cash and investments - unrestricted 6,510,265$ 852,122$ 7,362,387$ Receivables, net Accounts 524,030 12,825 536,855 Interest and other 22,280 2,605 24,885

Total current assets 7,056,575 867,552 7,924,127

Noncurrent assets Capital assets Land and water rights - 80,644 80,644 Transportation equipment 3,510,289 - 3,510,289 General equipment 510,571 5,590 516,161 Buildings and improvements 359,559 - 359,559 Leisure areas and improvements - 5,715,292 5,715,292 Less accumulated depreciation (2,946,154) (4,916,799) (7,862,953)

Total noncurrent assets 1,434,265 884,727 2,318,992

Total assets 8,490,840 1,752,279 10,243,119

LIABILITIESCurrent liabilities Accounts payable 559,807 58,114 617,921 Compensated absences 85,838 - 85,838

Total current liabilities 645,645 58,114 703,759

Long-term liabilities Compensated absences 60,788 - 60,788

Total liabilities 706,433 58,114 764,547

NET POSITIONNet investment in capital assets 1,434,265 884,727 2,318,992 Unrestricted 6,350,142 809,438 7,159,580

Total net position 7,784,407$ 1,694,165$ 9,478,572$

86

Total Non-majorEnterprise

Sanitation Golf Course FundsOPERATING REVENUES Charges for services 4,848,664$ 1,130,711$ 5,979,375$

Total operating revenues 4,848,664 1,130,711 5,979,375

OPERATING EXPENSES Trash removal and golf services 1,630,340 980,399 2,610,739 Other operating expenses 885,866 - 885,866 Administration 1,797,601 - 1,797,601 Depreciation 350,316 33,339 383,655

Total operating expenses 4,664,123 1,013,738 5,677,861

Operating income 184,541 116,973 301,514

NONOPERATING REVENUES (EXPENSES) Interest income 65,275 9,055 74,330 Miscellaneous, net 1,933 (361,919) (359,986)

Total nonoperating revenues(expenses) 67,208 (352,864) (285,656)

Income (loss) before capital contributions and transfers 251,749 (235,891) 15,858

Capital contributions - 912,476 912,476 Transfers in - 1,017,580 1,017,580

Change in net position 251,749 1,694,165 1,945,914

Net position, January 1 7,532,658 - 7,532,658

Net position, December 31 7,784,407$ 1,694,165$ 9,478,572$


Combining Statement of Revenues, Expenses, and Changes in Fund Net Position

Non-Major Enterprise Funds


87

TotalNon-majorEnterprise

Sanitation Golf Course FundsCASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 4,874,061$ 1,117,886$ 5,991,947$ Payments to suppliers (2,283,966) (808,790) (3,092,756) Payments to employees (1,682,853) (475,414) (2,158,267) Net cash provided by (used in) operating activities 907,242 (166,318) 740,924

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfer from governmental fund - 1,017,580 1,017,580

Net cash used in noncapital financing activities - 1,017,580 1,017,580

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases and construction of capital assets (406,228) (5,590) (411,818) Net cash used in capital and related financing activities (406,228) (5,590) (411,818)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investments 4,185,721 337,206 4,522,927 Purchases of investments (4,835,142) (1,161,848) (5,996,990) Interest on investments 69,528 6,450 75,978

Net cash used in investing activities (579,893) (818,192) (1,398,085)

Net increase (decrease) in cash and cash equivalents (78,879) 27,480 (51,399)

Cash and cash equivalents, Jan. 1 282,177 - 282,177

Cash and cash equivalents, Dec. 31 203,298$ 27,480$ 230,778$

Cash and cash equivalents 203,298$ 27,480$ 230,778$ Investments 6,306,967 824,642 7,131,609 Total cash and investments 6,510,265$ 852,122$ 7,362,387$


Combining Statement of Cash FlowsNon-Major Enterprise Funds


88

TotalNon-majorEnterprise

Sanitation Golf FundsRECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES

Operating income 184,541$ 116,973$ 301,514$

Adjustments to reconcile operating income to net cash provided by (used in) operating activities:

Depreciation expense 350,316 33,339 383,655 Miscellaneous receipts 29,930 - 29,930 Other expenses (33,298) (361,919) (395,217) Change in assets and liabilities: Increase in accounts receivable, net (4,533) (12,825) (17,358) Increase in accounts payable 380,286 58,114 438,400

Net cash provided by (used in) operating activities 907,242$ (166,318)$ 740,924$

NON-CASH TRANSACTIONS: Land and leisure areas contributed by governmental activities $ - $ 912,476 Increase (decrease) in the fair value of investments (3,082) 1,063 (2,019) Loss on disposal of capital assets (32) - (32) Increase in compensated absences 3,491 - 3,491

$ 912,476

89


Budget Actual from actualOPERATING REVENUES Charges for services 4,723,000$ 4,848,664$ 125,664


OPERATING EXPENSES Trash removal 1,629,458 1,630,340 (882) Other operating expenses 879,836 885,866 (6,030) Administration 1,793,916 1,797,601 (3,685)

Total operating expenses 4,303,210 4,313,807 (10,597)


NONOPERATING REVENUES (EXPENSES) Interest income 103,000 65,275 (37,725) Capital outlay (568,985) (430,702) 138,283 Miscellaneous 17,000 29,930 12,930

Total nonoperating expenses (448,985) (335,497) 113,488

Excess (deficiency) of revenues over (under) expenditures before reconciling items (29,195)$ 199,360 228,555$

RECONCILIATION TO US GAAP BASIS Miscellaneous non-cash adjustments (3,491) Loss on sale of capital assets (32)

Depreciation (350,316) Capital asset additions 406,228

Total reconciling items 52,389






Sanitation FundSchedule of Revenues, Expenses, and Changes in Fund Net Position


$$

90


Budget Actual from actualOPERATING REVENUES Charges for services 1,009,109$ 1,130,711$ 121,602


OPERATING EXPENSES Golf Services 1,229,002 980,399 248,603

Total operating expenses 1,229,002 980,399 248,603

Operating income (loss) (219,893) 150,312 370,205

NONOPERATING REVENUES (EXPENSES) Interest income - 9,055 9,055 Capital outlay (400,000) (367,576) 32,424 Miscellaneous 67 67


Loss before transfers (619,893) (208,142) 411,751

Transfers in 1,017,580 1,017,580 -

Excess of revenues over expenditures before reconciling items 397,687$ 809,438 411,751$

RECONCILIATION TO US GAAP BASIS Depreciation (33,339) Capital asset additions (from the City's capital projects) 5,590 Capital asset additions (contributed from governmental activities) 912,476


Change in net position 1,694,165

Net position, January 1 -



Golf CourseSchedule of Revenues, Expenses, and Changes in Fund Net Position

Budget and Actual - Non US GAAP BasisFor the year ended December 31, 2012

$$

91



Internal Service Funds


Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City and to other government units, on a cost reimbursement basis.

Risk Management Fund – to account for the costs related to providing the City with a comprehensive program to manage the City’s property, liability and work related injury risk, and to manage the City’s self-funded dental and vision insurance programs.

Information Technology Fund – to account for computer support and maintenance of all information technology for the City.

Reprographics Fund – to account for copying, printing and mailing costs for all City departments.

Consolidated Service Center Fund – to account for fuel purchased and utilized by Adams County School District 12.

92


Combining Statement of Net PositionInternal Service Funds

December 31, 2012

Consolidated Internal Risk Information Service Service Funds

Management Technology Reprographics Center TotalASSETSCurrent assets Equity in pooled cash and investments - unrestricted 4,495,334$ 1,371,177$ 602,276$ 138,799$ 6,607,586$ Receivables, net

Accounts 167,896 - - 54,476 222,372 Interest and other 15,125 5,485 2,275 453 23,338

Total current assets 4,678,355 1,376,662 604,551 193,728 6,853,296

Noncurrent assets Capital assets

Transportation equipment - 20,114 - - 20,114 General equipment - 1,494,586 66,363 - 1,560,949

Less accumulated depreciation - (772,078) (49,806) - (821,884)

Total noncurrent assets - 742,622 16,557 - 759,179

Total assets 4,678,355 2,119,284 621,108 193,728 7,612,475

LIABILITIESCurrent liabilities Accounts payable 47,002 303,413 49,029 91,871 491,315 Compensated absences 5,926 18,935 - - 24,861 Outstanding reserves and incurred

but not reported claims 1,501,900 - - - 1,501,900

Total current liabilities 1,554,828 322,348 49,029 91,871 2,018,076

Long-term liabilities Compensated absences, excluding current portion - 136,375 - - 136,375 Advances from other funds 100,000 100,000 Outstanding reserves and incurred

but not reported claims 1,533,338 - - - 1,533,338

Total long-term liabilities 1,533,338 136,375 - 100,000 1,769,713

Total liabilities 3,088,166 458,723 49,029 191,871 3,787,789

NET POSITIONNet investment in capital assets - 742,622 16,557 - 759,179 Unrestricted 1,590,189 917,939 555,522 1,857 3,065,507

Total net position 1,590,189$ 1,660,561$ 572,079$ 1,857$ 3,824,686$


93


Combining Statement of Revenues, Expenses, and Changes in Fund Net PositionInternal Service Funds



Management Technology Reprographics Center TotalOPERATING REVENUES Interfund services 2,764,578$ 5,047,481$ 633,074$ 754,284$ 9,199,417$

Total operating revenues 2,764,578 5,047,481 633,074 754,284 9,199,417

OPERATING EXPENSES Insurance premiums 390,339 - - - 390,339 Claims and reserves for claims 2,369,050 - - - 2,369,050 Other operating expenses - 1,699,071 566,212 754,284 3,019,567 Administration 189,390 2,575,028 26,693 - 2,791,111 Depreciation - 212,074 34,260 - 246,334

Total operating expenses 2,948,779 4,486,173 627,165 754,284 8,816,401

Operating income (loss) (184,201) 561,308 5,909 - 383,016

NONOPERATING REVENUES (EXPENSES) Interest income 44,525 16,942 6,871 1,529 69,867 Interest expense - - (1,046) - (1,046) Miscellaneous, net 119,168 (326,970) 440 - (207,362)

Total nonoperating revenues(expenses) 163,693 (310,028) 6,265 1,529 (138,541)

Change in net position (20,508) 251,280 12,174 1,529 244,475

Net position, January 1 1,610,697 1,409,281 559,905 328 3,580,211

Net position, December 31 1,590,189$ 1,660,561$ 572,079$ 1,857$ 3,824,686$


94


95


Combining Statement of Cash FlowsInternal Service Funds



Management Technology Reprographics Center TotalCASH FLOWS FROM OPERATING ACTIVITIES Receipts from interfund services 2,884,453$ 5,050,791$ 633,074$ 824,818$ 9,393,136$ Payments to suppliers (2,179,776) (1,996,772) (584,028) (754,284) (5,514,860) Payments to employees (174,095) (2,560,559) - - (2,734,654) Net cash provided by (used in) operating activities 530,582 493,460 49,046 70,534 1,143,622

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Advances from other funds - - - - - Net cash provided by noncapital financing activities - - - - -

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases and construction of capital assets - (452,665) - - (452,665) Proceeds from sale of capital assets - - 440 - 440 Principal paid on bonds and other obligations - - (23,826) - (23,826) Interest paid on capital debt - - (1,046) - (1,046) Net cash used in capital and related financing activities - (452,665) (24,432) - (477,097)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investments 2,825,715 1,073,075 439,367 79,408 4,417,565 Purchases of investments (3,444,005) (1,149,703) (479,317) (150,202) (5,223,227) Interest on investments 46,950 16,088 6,859 1,175 71,072

Net cash used in investing activities (571,340) (60,540) (33,091) (69,619) (734,590)

Net increase (decrease) in cash and cash equivalents (40,758) (19,745) (8,477) 915 (68,065)

Cash and cash equivalents, Jan. 1 186,073 62,571 27,290 3,456 279,390

Cash and cash equivalents, Dec. 31 145,315$ 42,826$ 18,813$ 4,371$ 211,325$

Cash and cash equivalents 145,315$ 42,826$ 18,813$ 4,371$ 211,325$ Investments 4,350,019 1,328,351 583,463 134,428 6,396,261 Total cash and investments 4,495,334$ 1,371,177$ 602,276$ 138,799$ 6,607,586$


96


Management Technology Reprographics Center TotalRECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES

Operating income (loss) (184,201)$ 561,308$ 5,909$ -$ 383,016$

Adjustments to reconcile operating income to net cash provided by (used in) operating activities:

Depreciation expense - 212,074 34,260 - 246,334 Miscellaneous receipts 119,584 9,626 440 - 129,650 Other expenses - (333,148) - - (333,148) Noncash reserves for claims 2,216,760 - - - 2,216,760 Cash paid for claims (1,574,121) - - - (1,574,121)

Change in assets and liabilities:

Decrease in accounts receivable, net 291 3,310 - 70,534 74,135

Increase (decrease) in accounts payable (47,731) 40,290 8,877 - 1,436

Net cash provided by (used in) operating activities 530,582$ 493,460$ 49,486$ 70,534$ 1,144,062$

NON-CASH TRANSACTIONS: Increase (decrease) in the fair value of investments (1,881)$ 114$ (110)$ 140$ (1,737)$ Increase (decrease) in compensated absences (416) (19,895) - - (20,311)


97


Risk Management FundSchedule of Revenues, Expenses, and Changes in Fund Net Position



Budget Actual from actualOPERATING REVENUES Interfund services 2,869,747$ 2,764,578$ (105,169)$

Total operating revenues 2,869,747 2,764,578 (105,169)

OPERATING EXPENSES Insurance premiums 571,231 390,339 180,892 Claims and reserves for claims 2,193,569 2,102,487 91,082 Administration 187,155 189,390 (2,235)


Operating income (loss) (82,208) 82,362 164,570

NONOPERATING REVENUES Interest income 40,000 44,525 4,525 Miscellaneous - 119,584 119,584

Total nonoperating revenues 40,000 164,109 124,109


RECONCILIATION TO US GAAP BASIS Incurred but not reported adjustment - worker's compensation (192,737) Incurred but not reported adjustment - dental (85,755) Incurred but not reported adjustment - vision 11,929 Miscellaneous non-cash adjustments (416)


Change in net position (20,508)



98


Information TechnologySchedule of Revenues, Expenses, and Changes in Fund Net Position



Budget Actual from actualOPERATING REVENUES Interfund services 5,047,482$ 5,047,481$ (1)$

Total operating revenues 5,047,482 5,047,481 (1)

OPERATING EXPENSES Other operating expenses 1,673,265 1,699,071 (25,806) Administration 2,998,408 2,747,177 251,231



NONOPERATING REVENUES (EXPENSES) Interest income 5,000 16,942 11,942 Miscellaneous revenue - 9,626 9,626 Capital outlay (629,974) (597,217) 32,757



RECONCILIATION TO US GAAP BASIS Depreciation (212,074) Capital asset additions 280,516 Internally generated intangible asset additions 172,149 Miscellaneous non-cash adjustments (19,895)





99


Reprographics FundSchedule of Revenues, Expenses, and Changes in Fund Net Position



Budget Actual from actualOPERATING REVENUES Interfund services 633,074$ 633,074$ -$

Total operating revenues 633,074 633,074 -

OPERATING EXPENSES Printing/postage services 581,677 566,212 15,465 Administration 26,524 26,693 (169)

Total operating expenses 608,201 592,905 15,296


NONOPERATING REVENUES (EXPENSES) Interest income 2,000 6,871 4,871 Debt service Principal payment (23,826) (23,826) - Interest payment (1,047) (1,046) 1 Miscellaneous Revenue - 440 440


Excess of revenues over expenditures before reconciling items 2,000$ 22,608 20,608$

RECONCILIATION TO US GAAP BASIS Add back principal payment 23,826 Depreciation (34,260)



Net position, January 1 559,905

Net position, December 31 572,079$

100


Consolidated Service Center FundSchedule of Revenues, Expenses, and Changes in Fund Net Position

Budget and ActualFor the year ended December 31, 2012


Budget Actual from actualOPERATING REVENUES Interfund services 761,180$ 754,284$ (6,896)$

Total operating revenues 761,180 754,284 (6,896)

OPERATING EXPENSES Contractual services 761,180 754,284 6,896

Total operating expenses 761,180 754,284 6,896

- - - Operating income

NONOPERATING REVENUES Interest income - 1,529 1,529

Total nonoperating expenses - 1,529 1,529

Excess of revenues over expenditures before reconciling items -$ 1,529$ 1,529$

Net position, January 1 328

Net position, December 31 1,857$

101


102

OTHER SCHEDULES

103


104

City of Thornton, ColoradoSchedule of Investments

December 31, 2012

Coupon Maturity Original Fair ParDescription Rate Date Cost Value Value

Federal Farm Credit 0.430% 04/25/14 4,997,500$ 5,000,135$ 5,000,000$ 0.590% 01/30/15 10,000,000 10,003,870 10,000,000 0.980% 08/15/17 4,995,000 5,018,520 5,000,000 0.980% 09/18/17 5,000,000 5,007,830 5,000,000

Federal Home 2.375% 03/14/14 5,181,150 5,129,790 5,000,000 Loan Bank 1.150% 06/06/17 4,996,200 5,030,970 5,000,000

0.875% 06/16/17 4,994,100 5,057,835 5,000,000 1.000% 06/09/17 5,033,438 5,030,025 5,000,000

Federal Home Loan 5.000% 07/15/14 5,616,800 5,363,605 5,000,000 Mortgage Corp. 1.200% 05/24/17 4,995,000 5,016,170 5,000,000

1.000% 08/07/17 5,000,000 4,982,530 5,000,000 1.000% 08/08/17 4,997,500 5,004,640 5,000,000 0.900% 12/28/17 4,988,750 4,998,680 5,000,000

Federal National 1.150% 07/26/13 5,007,400 5,018,145 5,000,000 Mortgage Assoc. 0.650% 12/27/13 5,000,000 4,995,245 5,000,000

0.600% 05/29/15 5,000,000 5,005,945 5,000,000 1.000% 08/24/16 5,000,000 5,014,880 5,000,000 1.250% 03/14/17 2,996,970 3,005,397 3,000,000 0.900% 10/03/17 2,500,000 2,507,995 2,500,000 0.875% 12/20/17 5,034,550 5,009,765 5,000,000

Corp Coupon DISC 01/18/13 4,977,583 4,998,583 5,000,000 5.450% 01/15/13 5,454,850 5,008,605 5,000,000 0.356% 03/20/13 3,933,560 4,000,284 4,000,000 5.125% 04/10/13 5,244,000 5,062,615 5,000,000 4.650% 05/09/13 5,249,364 5,009,121 4,940,000 1.000% 12/11/15 5,016,250 5,020,120 5,000,000

Overnight Funds 1,128,878 1,128,878 1,128,878

132,338,843$ 131,430,178$ 130,568,878$

105

Financial Planning 02/01The public report burden for this information collection is estimated to average 380 hours annually. Form # 350-050-36

City or County:City of Thornton, ColoradoYEAR ENDING :December 2012

This Information From The Records Of (example - City of _ or County of Prepared By: Jamie Miller, AccountantCity of Thornton, Colorado Phone: (303) 538-7377

A. Local B. Local C. Receipts from D. Receipts from Motor-Fuel Motor-Vehicle State Highway- Federal Highway

Taxes Taxes User Taxes Administration1. Total receipts available2. Minus amount used for collection expenses3. Minus amount used for nonhighway purposes4. Minus amount used for mass transit5. Remainder used for highway purposes

AMOUNT AMOUNTA. Receipts from local sources: A. Local highway disbursements:

1. Local highway-user taxes 1. Capital outlay (from page 2) 5,908,414a. Motor Fuel (from Item I.A.5.) 2. Maintenance: 4,058,870b. Motor Vehicle (from Item I.B.5.) 3. Road and street services:c. Total (a.+b.) a. Traffic control operations 1,449,110

2. General fund appropriations b. Snow and ice removal 990,8523. Other local imposts (from page 2) 12,938,887 c. Other 2,141,0784. Miscellaneous local receipts (from page 2) 4,902,039 d. Total (a. through c.) 4,581,0405. Transfers from toll facilities 4. General administration & miscellaneous 916,2746. Proceeds of sale of bonds and notes: 5. Highway law enforcement and safety 5,350,413

a. Bonds - Original Issues 6. Total (1 through 5) 20,815,011b. Bonds - Refunding Issues B. Debt service on local obligations:c. Notes 1. Bonds:d. Total (a. + b. + c.) 0 a. Interest 405,104

7. Total (1 through 6) 17,840,926 b. Redemption 1,212,924B. Private Contributions c. Total (a. + b.) 1,618,028C. Receipts from State government 2. Notes: (from page 2) 3,995,243 a. InterestD. Receipts from Federal Government b. Redemption (from page 2) 596,870 c. Total (a. + b.) 0E. Total receipts (A.7 + B + C + D) 22,433,039 3. Total (1.c + 2.c) 1,618,028

C. Payments to State for highwaysD. Payments to toll facilitiesE. Total disbursements (A.6 + B.3 + C + D) 22,433,039

Opening Debt Amount Issued Redemptions Closing DebtA. Bonds (Total) 9,273,251 1,212,924 8,060,327

1. Bonds (Refunding Portion)B. Notes (Total) 0

A. Beginning Balance B. Total Receipts C. Total Disbursements D. Ending Balance E. Reconciliation0 22,433,039 22,433,039 0

Notes and Comments:

FORM FHWA-536 (Rev. 1-05) PREVIOUS EDITIONS OBSOLETE (Next Page)

AND STREET PURPOSES

LOCAL HIGHWAY FINANCE REPORT

I. DISPOSITION OF HIGHWAY-USER REVENUES AVAILABLE FOR LOCAL GOVERNMENT EXPENDITURE

ITEM

III. DISBURSEMENTS FOR ROAD

V. LOCAL ROAD AND STREET FUND BALANCE

ITEM

II. RECEIPTS FOR ROAD AND STREET PURPOSES

IV. LOCAL HIGHWAY DEBT STATUS(Show all entries at par)

ITEM

106

STATE:ColoradoYEAR ENDING (mm/yy):December 2012

AMOUNT AMOUNTA.3. Other local imposts: A.4. Miscellaneous local receipts:

a. Property Taxes and Assessments 8,980,988 a. Interest on investments 32,360b. Other local imposts: b. Traffic Fines & Penalities 2,511,753

1. Sales Taxes 717,703 c. Parking Garage Fees2. Infrastructure & Impact Fees d. Parking Meter Fees3. Liens e. Sale of Surplus Property4. Licenses f. Charges for Services5. Specific Ownership &/or Other 3,240,196 g. Other Misc. Receipts6. Total (1. through 5.) 3,957,899 h. Other 2,357,926

c. Total (a. + b.) 12,938,887 i. Total (a. through h.) 4,902,039(Carry forward to page 1) (Carry forward to page 1)

AMOUNT AMOUNTC. Receipts from State Government D. Receipts from Federal Government

1. Highway-user taxes 3,318,451 1. FHWA (from Item I.D.5.)2. State general funds 2. Other Federal agencies:3. Other State funds: a. Forest Service

a. State bond proceeds b. FEMAb. Project Match c. HUD 3,287c. Motor Vehicle Registrations 369,783 d. Federal Transit Admind. Other (Specify) - DOLA Grant e. U.S. Corps of Engineerse. Other (Specify) 307,009 f. Other Federal 593,583f. Total (a. through e.) 676,792 g. Total (a. through f.) 596,870

4. Total (1. + 2. + 3.f) 3,995,243 3. Total (1. + 2.g)(Carry forward to page 1)

ON NATIONAL OFF NATIONALHIGHWAY HIGHWAY TOTALSYSTEM SYSTEM

(a) (b) (c)A.1. Capital outlay:

a. Right-Of-Way Costs 16,069 16,069b. Engineering Costs 104,435 1,078,588 1,183,023c. Construction:

(1). New Facilities 1,941,298 1,941,298 (2). Capacity Improvements 512,166 512,166 (3). System Preservation 1,926,666 1,926,666 (4). System Enhancement & Operation 329,192 329,192 (5). Total Construction (1) + (2) + (3) + (4) 512,166 4,197,156 4,709,322

d. Total Capital Outlay (Lines 1.a. + 1.b. + 1.c.5) 616,601 5,291,813 5,908,414(Carry forward to page 1)

Notes and Comments:

FORM FHWA-536 (Rev.1-05) PREVIOUS EDITIONS OBSOLETE

III. DISBURSEMENTS FOR ROAD AND STREET PURPOSES - DETAIL

II. RECEIPTS FOR ROAD AND STREET PURPOSES - DETAIL

LOCAL HIGHWAY FINANCE REPORT

ITEM ITEM

ITEM ITEM

107


108

STATISTICAL SECTION

Contents Page

Financial Trends 111

Revenue Capacity 116

Debt Capacity 122

Demographic and Economic Information 128

Schedule of Principal Employers 129The number of employees per business is confidential therefore the City is providingemployee totals by sector.

Operating Information 130

additional debt in the future.

These schedules offer demographic and economic indicators to help the reader

These schedules contain trend information to help the reader understand how thegovernment's financial performance and well-being have changed over time.

These schedules contain information to help the reader assess the government's mostmost significant local revenue source, the sales tax.

These schedules contain service and infrastructure data to help the reader under-stand how the information in the government's financial report relates to the ser-vices the government provides and the activities it performs.

This part of the City of Thornton's comprehensive annual financial report presents detailed informationas a context for understanding what the information in the financial statements, note disclosures, andrequired supplementary information says about the government's overall financial health.

understand the environment within which the government's financial activities takeplace.

These schedules present information to help the reader assess the affordability of thegovernment's current levels of outstanding debt and the government's ability to issue

109


110

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Governmental activitiesInvested in capital assets net of related debt 216,598,018$ 231,045,605$ 237,785,930$ 248,109,994$ 270,139,347$ 282,364,410$ 287,512,026$ 281,917,836$ 277,075,485$ 278,811,411$

Restricted 38,960,146 34,191,807 8,627,411 8,854,775 6,946,474 7,222,855 6,577,027 5,028,764 5,064,308 5,098,730

Unrestricted 30,633,931 31,593,960 70,619,762 85,987,729 97,574,698 92,990,211 87,328,944 94,786,038 97,068,106 83,910,787

Total governmentalactivitiesnet position 286,192,095$ 296,831,372$ 317,033,103$ 342,952,498$ 374,660,519$ 382,577,476$ 381,417,997$ 381,732,638$ 379,207,899$ 367,820,928$

Business-type activitiesInvested in capital assets net of related debt 241,968,747$ 267,365,014$ 363,841,500$ 408,959,737$ 427,831,200$ 440,509,204$ 454,984,571$ 476,417,765$ 489,517,504$ 496,228,410$

Restricted 1,503,791 752,241 4,439,904 4,330,383 4,335,385 4,325,730 4,329,370 4,130,833 4,141,250 15,431,413

Unrestricted 123,338,410 92,459,894 101,118,562 92,052,223 92,970,331 98,895,981 91,058,269 83,943,415 86,064,926 98,080,692

Total business-typeactivitiesnet position 366,810,948$ 360,577,149$ 469,399,966$ 505,342,343$ 525,136,916$ 543,730,915$ 550,372,210$ 564,492,013$ 579,723,680$ 609,740,515$

Primary governmentInvested in capital assets net of related debt 458,566,765$ 498,410,619$ 601,627,430$ 657,069,731$ 697,970,547$ 722,873,614$ 742,496,597$ 758,335,601$ 766,592,989$ 775,039,821$

Restricted 40,463,937 34,944,048 13,067,315 13,185,158 11,281,859 11,548,585 10,906,397 9,159,597 9,205,558 20,530,143

Unrestricted 153,972,341 124,053,854 171,738,324 178,039,952 190,545,029 191,886,192 178,387,213 178,729,453 183,133,032 181,991,479

Total primarygovernmentnet position 653,003,043$ 657,408,521$ 786,433,069$ 848,294,841$ 899,797,435$ 926,308,391$ 931,790,207$ 946,224,651$ 958,931,579$ 977,561,443$

Notes: The City of Thornton implemented GASB 34 as of December 31, 2003. 2011 Includes prior period adjustment in the Sewer Fund for capital assets.

Source: Current and prior year's financial statements.

City of ThorntonSchedule 1

Net Position by Component(accrual basis of accounting)

Fiscal Year

111


Changes in Net Position(accrual basis of accounting)

Fiscal Year

Expenses 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


General government 23,786,349$ 20,865,858$ 24,368,928$ 19,430,649$ 24,532,302$ 17,919,618$ 18,688,529$ 17,616,971$ 19,275,165$ 31,840,827$

Police 15,644,353 17,770,086 18,368,441 21,001,214 21,207,033 23,444,248 24,401,274 25,286,720 25,877,812 26,295,237

Fire 6,385,925 6,935,165 7,002,975 8,451,251 8,443,303 8,650,645 10,946,487 11,353,650 11,960,138 12,188,210

City development 9,447,588 10,145,954 13,497,836 11,333,827 12,733,949 16,194,462 13,279,400 10,052,292 12,261,174 13,467,929

Streets, traffic & eng. 16,271,576 19,873,811 20,810,182 29,530,971 25,137,882 27,210,924 28,077,809 30,775,017 28,491,153 26,533,674

Community services 11,434,613 13,654,213 15,191,296 16,261,813 16,193,015 17,824,868 18,765,036 19,440,054 21,346,877 22,506,252

Interest of long-term debt 4,199,148 4,742,066 4,909,674 4,595,201 4,300,103 3,781,252 3,590,627 4,310,715 2,863,483 2,592,918

Total government activities

expenses 87,169,552 93,987,153 104,149,332 110,604,926 112,547,587 115,026,017 117,749,162 118,835,419 122,075,802 135,425,047

Business-type activities

Water 23,829,112 23,557,413 30,165,940 30,128,609 30,826,790 29,778,670 30,386,259 30,620,839 31,980,077 31,995,137

Sewer 8,631,272 9,151,152 10,128,266 9,613,186 10,652,174 11,762,778 11,039,822 11,177,035 11,960,169 12,112,574

Sanitation 3,306,567 3,469,921 3,625,966 3,963,962 3,962,888 4,233,909 4,554,390 4,692,145 4,685,426 6,034,740

Golf - - - - - - - - -

Ambulance - 1,189,572 1,919,164 2,170,603 2,464,775 2,950,581 - - - -

Total business-type

activities expenses 35,766,951 37,368,058 45,839,336 45,876,360 47,906,627 48,725,938 45,980,471 46,490,019 48,625,672 50,142,451

Total primary government

expenses 122,936,503$ 131,355,211$ 149,988,668$ 156,481,286$ 160,454,214$ 163,751,955$ 163,729,633$ 165,325,438$ 170,701,474$ 185,567,498$

Program Revenues


Charges for services:

General government 4,558,134$ 4,995,231$ 5,365,181$ 4,594,416$ 4,786,798$ 4,884,922$ 6,002,294$ 6,009,873$ 6,337,953$ 6,143,674$

Police 1,669,022 1,582,929 2,160,028 2,067,638 2,592,966 2,315,213 2,581,214 2,922,506 3,021,716 3,014,682

Fire 108,917 59,366 11,134 6,236 7,629 10,125 2,297,046 2,108,174 2,127,107 1,753,060

City Development 4,027,413 3,941,027 4,372,452 3,460,037 2,678,851 1,899,072 1,499,013 1,608,848 1,769,755 2,172,200

Community Services 2,043,839 2,096,795 2,206,403 2,352,193 2,481,097 2,619,443 2,593,670 2,697,686 2,545,724 2,769,660

Operating grants/contrib. 1,546,484 1,284,870 1,276,278 1,183,074 928,274 808,008 4,178,361 4,662,823 4,989,148 5,572,187

Capital grants/contrib. 28,625,145 20,155,888 24,154,532 32,600,240 33,431,560 22,245,220 12,784,216 12,721,678 10,080,966 7,899,630

Total government activities

program revenues 42,578,954 34,116,106 39,546,008 46,263,834 46,907,175 34,782,003 31,935,814 32,731,588 30,872,369 29,325,093

Business-type activities:

Charges for services:

Water 24,358,701 24,181,449 27,628,862 29,189,016 29,162,009 30,380,457 28,647,511 30,901,291 30,315,557 33,188,946

Sewer 7,491,128 7,807,706 8,155,092 8,203,339 8,779,398 9,138,130 10,044,383 10,412,362 11,161,882 11,725,967

Sanitation 3,882,149 4,360,208 4,364,120 4,430,449 4,523,773 4,556,491 4,537,670 4,723,152 4,738,448 4,848,664

Golf - - - - - - - - - 1,130,711

Ambulance - 503,711 2,474,754 2,401,990 2,060,649 2,395,679 - - - -

Operating grants/contrib. 51,312 - 17,374 - 28,755 - - - - -

Capital grants/contrib. 35,915,492 21,570,935 27,103,005 30,803,890 17,582,792 16,935,269 7,520,520 12,963,221 6,788,327 15,501,147

112

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Total business-type activities

program revenues 71,698,782 58,424,009 69,743,207 75,028,684 62,137,376 63,406,026 50,750,084 59,000,026 53,004,214 66,395,435


program revenues 114,277,736$ 92,540,115$ 109,289,215$ 121,292,518$ 109,044,551$ 98,188,029$ 82,685,898$ 91,731,614$ 83,876,583$ 95,720,528$

Net (expense)/revenue

Governmental activities (44,590,598)$ (59,871,047)$ (64,603,324)$ (64,341,092)$ (65,640,412)$ (80,244,014)$ (85,813,348)$ (86,103,831)$ (91,203,433)$ (106,099,954)$

Business-type activities 35,931,831 21,055,951 23,903,871 29,152,324 14,230,749 14,680,088 4,769,613 12,510,007 4,378,542 16,252,984


net expense (8,658,767)$ (38,815,096)$ (40,699,453)$ (35,188,768)$ (51,409,663)$ (65,563,926)$ (81,043,735)$ (73,593,824)$ (86,824,891)$ (89,846,970)$

General Revenues and Other

Changes in Assets

Governmental activities

Taxes

Sales and use taxes 49,736,407$ 49,348,026$ 56,898,236$ 59,897,183$ 63,024,197$ 62,290,537$ 62,119,298$ 65,001,120$ 67,476,006$ 73,606,406$

Property taxes 13,236,523 13,938,881 14,841,034 16,524,030 18,845,065 11,566,814 12,060,852 11,853,225 11,778,013 11,719,559

Other taxes 4,659,226 5,146,804 6,440,848 6,773,531 6,996,945 7,385,961 7,085,194 7,224,095 7,247,598 7,505,706

Earnings on investments 1,537,751 1,607,339 2,339,275 4,495,777 5,907,726 4,715,727 1,690,251 1,074,775 904,954 963,440

Gain on sale of assets - - - - - - 10,151 - 42,245 24,402

Miscellaneous 1,727,996 1,550,707 1,677,766 2,569,966 2,574,500 1,702,893 1,688,123 1,265,257 1,229,878 1,871,200

Transfers - (1,081,433) (210,000) - - 499,039 - - - (977,730)

Total governmental activities 70,897,903 70,510,324 81,987,159 90,260,487 97,348,433 88,160,971 84,653,869 86,418,472 88,678,694 94,712,983

Business-type activities

Investment earnings 1,270,423 1,785,896 2,977,126 4,932,054 5,108,857 4,027,346 1,686,174 1,447,609 892,446 1,198,760

Gain on sale of assets 28,181,758 13,773 3,309 314,507 35,215 5,192 2,062 - 7,307 28,964

Miscellaneous 400,389 238,997 2,763,662 1,543,492 419,752 380,412 183,446 162,187 9,318,089 11,558,397

Transfers - 1,081,433 210,000 - - (499,039) - - - 977,730

Total business-type activities 29,852,570 3,120,099 5,954,097 6,790,053 5,563,824 3,913,911 1,871,682 1,609,796 10,217,842 13,763,851

Total primary government 100,750,473$ 73,630,423$ 87,941,256$ 97,050,540$ 102,912,257$ 92,074,882$ 86,525,551$ 88,028,268$ 98,896,536$ 108,476,834$

Change in Net Position

Governmental activities 26,307,305$ 10,639,277$ 17,383,835$ 25,919,395$ 31,708,021$ 7,916,957$ (1,159,479)$ 314,641$ (2,524,739)$ (11,386,971)$

Business-type activities 65,784,401 24,176,050 29,857,968 35,942,377 19,794,573 18,593,999 6,641,295 14,119,803 14,596,384 30,016,835

Total primary government 92,091,706$ 34,815,327$ 47,241,803$ 61,861,772$ 51,502,594$ 26,510,956$ 5,481,816$ 14,434,444$ 12,071,645$ 18,629,864$

Note: The City of Thornton implemented GASB 34 as of December 31, 2003.


113


Fund Balances of Governmental Funds(modified accrual basis accounting)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

General FundNonspendable 410,484$ 578,051$ 576,024$ 54,076$ 153,589$ 139,486$ 69,884$ 74,270$ 161,867$ 219,622$ Restricted 3,247,349 5,128,617 4,638,501 4,820,179 3,474,583 3,636,053 3,433,640 3,598,873 3,779,906 3,866,729 Committed - - - - - 365,692 365,692 365,692 15,566,436 15,939,956 Assigned 506,624 382,378 646,941 5,162 3,210 681,628 57,193 291,480 - - Unassigned 10,546,723 9,220,014 10,163,110 11,449,178 15,782,660 18,131,570 22,383,855 24,767,643 7,935,397 7,467,599

Total general fund 14,711,180$ 15,309,060$ 16,024,576$ 16,328,595$ 19,414,042$ 22,954,429$ 26,310,264$ 29,097,958$ 27,443,606$ 27,493,906$

All other governmental fundsNonspendable 7,097,514$ 8,695,797$ 9,298,581$ 10,056,015$ 2,770,247$ 10,635,873$ 10,635,873$ 12,137,961$ 22,711,120$ 23,667,937$ Restricted 3,052,985 16,114,758 9,437,144 11,626,526 10,470,423 9,986,656 8,673,028 5,942,335 4,723,410 3,356,873 Committed - - - - - - - - 2,417,785 1,255,801 Assigned 75,440,929 51,921,424 54,829,946 65,451,638 78,861,929 65,136,598 55,396,455 56,522,946 48,856,038 52,110,630 Unassigned - - - - - - - - (16,702,735)

Total all other governmental funds 85,591,428$ 76,731,979$ 73,565,671$ 87,134,179$ 92,102,599$ 85,759,127$ 74,705,356$ 74,603,242$ 78,708,353$ 63,688,506$

Note: The City of Thornton implemented GASB 34 as of December 31, 2003. The City of Thornton implemented GASB 54 as of December 31, 2011.


Fiscal Year

114

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012RevenuesTaxes 67,632,156$ 68,433,711$ 78,180,118$ 83,194,744$ 88,866,207$ 81,243,312$ 81,265,344$ 84,078,440$ 86,501,617$ 92,831,671$ Licenses and permits 4,049,586 3,890,285 4,318,402 3,404,072 2,546,233 1,779,845 1,437,400 1,518,201 1,703,236 2,139,568 Intergovernmental 12,417,355 13,200,884 12,865,207 10,800,787 11,796,323 12,538,500 10,047,887 10,877,954 10,986,448 11,079,512 Governmental Grants 3,627,874 1,732,841 1,802,967 2,371,883 2,309,409 3,038,387 5,007,808 5,337,732 3,826,164 2,285,517 Charges for services 6,451,753 6,940,748 7,419,593 6,758,396 7,081,436 7,299,787 10,665,173 10,592,215 10,867,399 10,504,227 Fines and forfeitures 1,667,269 1,470,105 2,021,586 1,934,531 2,525,313 2,153,324 2,509,218 2,878,298 2,921,491 2,915,446 Special assessments 434,701 - - - - - - - - -Lease 607,713 222,711 223,493 223,811 188,414 207,831 99,049 98,914 99,004 98,787 Interest 1,537,751 1,607,339 2,339,275 4,495,777 5,907,726 4,715,727 1,690,251 1,074,775 904,954 963,440 Miscellaneous 1,148,709 1,610,654 1,290,158 2,987,675 2,292,572 1,515,165 2,380,588 1,032,564 1,031,616 1,279,366 Total revenues 99,574,867 99,109,278 110,460,799 116,171,676 123,513,633 114,491,878 115,102,718 117,489,093 118,841,929 124,097,534

ExpendituresGeneral government 16,364,974 17,115,408 18,280,263 15,084,604 14,963,678 15,728,156 15,812,704 15,866,341 15,975,991 29,176,040 Police 15,139,946 16,091,589 16,623,259 19,759,996 20,019,953 21,275,665 22,926,111 23,351,480 24,040,493 24,537,205 Fire and Ambulance 6,157,583 6,541,134 6,628,000 7,522,389 7,846,944 8,212,836 10,350,459 10,779,604 11,363,156 11,572,631 City development 5,235,698 5,361,364 5,657,558 6,999,655 6,867,840 6,603,991 6,710,701 6,695,016 6,712,679 6,652,180 Infrastructure 7,782,682 7,837,148 8,376,353 10,476,869 10,439,811 9,856,343 10,490,438 10,280,489 10,156,803 10,838,187 Community services 8,820,792 10,008,197 11,023,089 13,437,977 12,967,765 13,737,436 14,068,607 14,501,194 14,916,314 15,649,418 Capital outlay 45,883,730 52,202,642 33,460,358 16,382,133 21,888,359 33,781,788 33,569,119 24,319,275 24,658,593 30,931,273 Debt service

Principal retirement 5,446,480 7,234,467 7,513,443 7,995,000 8,835,000 4,990,000 5,445,000 5,675,000 5,810,000 6,200,000 Interest 4,377,411 4,297,828 5,128,502 4,631,322 3,986,558 3,600,362 3,414,367 3,652,206 2,746,415 2,527,873 Bond fees 12,719 8,676 10,766 9,204 7,800 7,425 7,225 4,900 5,292 4,544 Bond issuance costs - 660,603 - - 559,271 - - 165,801 5,434 -

Miscellaneous 642 - - - - - 5,923 - - -Total Expenditures 115,222,657 127,359,056 112,701,591 102,299,149 108,382,979 117,794,002 122,800,654 115,291,306 116,391,170 138,089,351 Excess (deficiency) of revenues

over (under) expenditures (15,647,790) (28,249,778) (2,240,792) 13,872,527 15,130,654 (3,302,124) (7,697,936) 2,197,787 2,450,759 (13,991,817)

Other financing sourcesTransfers in 4,332,906 2,765,020 2,463,240 2,479,516 2,989,823 4,016,799 4,771,225 4,995,191 8,966,617 3,647,024 Transfers out (4,332,906) (3,846,453) (2,673,240) (2,479,516) (2,989,823) (3,517,760) (4,771,225) (4,995,191) (8,966,617) (4,624,754) Bonds issued - 21,195,000 - - 32,820,000 - - 13,220,757 - -Premium on bonds issued - 86,592 - - - - - - - -Payments to underwriter on bonds issue - (211,950) - - (31,992,994) - - (13,365,636) - -Discount on certificates

of participation - - - - (256,047) - - - - -Sales of capital assets - - - - - - - 612,672 - -Loss on Land held for resale (4,476,343) - - - (7,647,746) - - - - -Total other financing

sources (uses) (4,476,343) 19,988,209 (210,000) - (7,076,787) 499,039 - 467,793 - (977,730)

Net change in fund balances (20,124,133)$ (8,261,569)$ (2,450,792)$ 13,872,527$ 8,053,867$ (2,803,085)$ (7,697,936)$ 2,665,580$ 2,450,759$ (14,969,547)$

Debt service as a percentageof noncapital expenditures 9.2% 9.9% 12.7% 13.8% 13.2% 8.5% 8.2% 9.2% 8.5% 7.1%

Note: The City of Thornton implemented GASB 34 as of December 31, 2003.Source: Current and prior year's financial statements.

Fiscal Year


Changes in Fund Balances of Governmental Funds(modified accrual basis of accounting)

115

City of Thornton

Schedule 5General Government Tax and Assessment Revenues by Source¹

Last ten fiscal years

Specific

Fiscal Sales Motel Use Property ownership Franchise Cigarette

Year tax tax tax tax tax tax tax Assessments Total

2003 34,460,228$ 381,128$ 15,276,181$ 6,083,838$ 757,168$ 3,334,986$ 185,945$ 434,701$ 60,914,175$

2004 36,142,372 420,347 12,922,183 6,639,330 796,584 3,560,921 266,291 - 60,748,028

2005 42,290,074 459,907 13,338,473 6,970,941 793,425 3,983,184 213,572 - 68,049,576

2006 43,036,772 524,197 13,430,950 7,507,785 846,057 4,173,778 233,905 - 69,753,444

2007 43,565,427 641,442 12,554,321 7,889,392 835,119 4,271,030 230,326 - 69,987,057

2008 44,831,429 596,768 10,097,584 9,197,477 799,486 4,727,180 218,466 - 70,468,390

2009 43,386,230 436,317 10,407,990 9,257,334 700,531 4,602,825 205,396 - 68,996,623

2010 46,180,135 376,764 10,687,720 9,042,583 621,315 4,903,292 209,225 - 72,021,034

2011 47,529,083 442,503 10,910,856 9,139,134 608,036 4,893,344 209,615 - 73,732,571

2012 51,074,263 662,007 12,897,094 8,986,074 643,241 4,818,327 192,567 - 79,273,573

¹ General tax and assessment revenues from the General, Special Revenue,

Debt Service and Capital Project Funds, excluding Thornton Development Authority.

Source: City of Thornton Finance Department

116


117

Schedule 6Sales Tax Revenue by Type of Industry

ProfessionalFiscal General Bars & & Personal ManufacturingYear Merchandise Grocery Restaurants Automotive Services Construction & Wholesale

2003 14,371,258$ 6,885,034$ 3,448,668$ 2,976,775$ 436,164$ 40,617$ 799,708$ 2004 14,928,344 7,103,721 3,922,877 2,835,222 506,374 62,119 995,037 2005 20,471,047 6,886,779 4,236,619 2,844,010 546,702 52,524 999,501 2006 20,354,808 6,950,039 4,369,921 2,874,875 761,930 74,149 918,524 2007 19,643,640 7,436,819 4,632,056 2,590,800 520,535 353,549 1,243,172 2008 19,735,051 8,271,863 4,928,995 2,399,478 555,007 122,922 1,272,196 2009 17,544,820 9,191,634 5,011,846 2,688,420 519,747 140,768 894,891 2010 19,336,378 8,430,141 5,284,623 2,881,760 622,623 147,359 472,755 2011 20,643,576 8,638,413 5,396,944 3,066,193 691,225 176,703 513,323 2012 21,327,673 9,056,261 5,902,883 3,358,422 719,185 404,447 1,480,297


Source: City of Thornton Sales and Use Tax Reports

City of Thornton

118

TotalDirect

Total TaxAccomodations Education Entertainment Utilities Sales Tax Rate

67,052$ 35,404$ 650,951$ 4,748,597$ 34,460,228$ 3.7570,390 37,192 724,082 4,957,014 36,142,372 3.7560,144 43,530 797,314 5,351,904 42,290,074 3.7554,331 31,835 911,311 5,735,049 43,036,772 3.7559,892 40,737 1,021,572 6,022,655 43,565,427 3.7569,222 38,848 1,113,720 6,324,127 44,831,429 3.7557,111 54,910 1,234,067 6,048,016 43,386,230 3.7546,559 45,052 1,471,506 7,441,379 46,180,135 3.7558,147 27,272 1,391,060 6,926,227 47,529,083 3.7566,694 25,753 1,790,926 6,941,722 51,074,263 3.75

119


Direct and Overlapping Sales Tax Rates

Rapid TotalTotal Direct Transit Cultural Football Overlapping

Fiscal City of Sales Tax State of Adams District Facilities Stadium Sales TaxYear Thornton Rate Colorado County RTD District District Rate

2003 3.75% 3.75% 2.90% 0.70% 0.60% 0.10% 0.10% 8.15%2004 3.75% 3.75% 2.90% 0.70% 0.60% 0.10% 0.10% 8.15%2005 3.75% 3.75% 2.90% 0.70% 1.00% 0.10% 0.10% 8.55%2006 3.75% 3.75% 2.90% 0.75% 1.00% 0.10% 0.10% 8.60%2007 3.75% 3.75% 2.90% 0.75% 1.00% 0.10% 0.10% 8.60%2008 3.75% 3.75% 2.90% 0.75% 1.00% 0.10% 0.10% 8.60%2009 3.75% 3.75% 2.90% 0.75% 1.00% 0.10% 0.10% 8.60%2010 3.75% 3.75% 2.90% 0.75% 1.00% 0.10% 0.10% 8.60%2011 3.75% 3.75% 2.90% 0.75% 1.00% 0.10% 0.10% 8.60%2012 3.75% 3.75% 2.90% 0.75% 1.00% 0.10% 0.00% 8.50%



Overlapping Rates

120


Principal Sales Tax Payers

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Aggregate top ten filers1, 2 18,094,079$ 19,018,816$ 21,195,836$ 21,195,442$ 19,850,777$ 20,273,782$ 19,333,867$ 19,823,390$ $ 22,693,871 $ 23,418,920

Aggregate all other filers2 15,414,067 16,549,142 20,509,017 21,154,041 22,669,031 23,243,067 22,640,094 24,749,897 23,738,081 25,234,128

Total sales tax2 33,508,146$ 35,567,958$ 41,704,853$ 42,349,483$ 42,519,808$ 43,516,849$ 41,973,961$ 44,573,287$ 46,431,952$ 48,653,048$

Top ten filers as a percentage of total sales tax 54.00% 53.47% 50.82% 50.05% 46.69% 46.59% 46.06% 44.47% 48.88% 48.13%

1 Colorado State Statues and City of Thornton Ordinances prohibit disclosure of individual sales tax returns.

2 Excludes use tax, audit revenue, penalties and interest.



Fiscal Year

121


Ratios of Outstanding Debt by Type

Governmental Activities Business-Type ActivitiesSales and Tax Certificates General

Fiscal Use Tax Increment of Capital Obligation RevenueYear Bonds Bonds Participation Leases Bonds Bonds

2003 38,710,000$ 6,925,000$ 47,695,000$ 272,897$ 92,920,000$ 2,785,000$ 2004 34,940,000 26,575,000 45,840,000 208,430 86,080,000 42,615,000 2005 31,000,000 24,965,000 43,945,000 139,987 78,975,000 42,530,000 2006 26,890,000 23,035,000 41,990,000 - 71,605,000 42,310,000 2007 22,590,000 20,505,000 42,480,000 108,280 63,880,000 42,085,000 2008 20,300,000 19,895,000 40,390,000 89,822 56,025,000 41,850,000 2009 17,905,000 19,270,000 37,965,000 69,696 48,140,000 41,610,000 2010 14,835,000 18,620,000 35,445,000 47,752 40,220,000 41,360,000 2011 12,315,000 17,950,000 32,825,000 23,826 32,260,000 41,110,000 2012 9,520,000 17,260,000 30,110,000 - 24,250,000 40,850,000

1 See Schedule 14 for personal income and population data.

Note: The City of Thornton implemented GASB 34 as of December 31, 2003. Details regarding the City's outstanding debt can be found in the notes to the financial statements.


122

Business-Type Activities (Cont'd)Notes and Total Percentage

Loan Capital Primary of Personal PerPayable Leases Government Income1 Capita1

808,446$ -$ 190,116,343$ 8.3% 1,787$ 778,030 389,626 237,426,086 10.0% 2,150 452,585 296,007 222,303,579 9.1% 1,945

1,069,786 199,907 207,099,693 8.2% 1,767 893,067 101,261 192,642,608 7.6% 1,634 714,483 - 179,264,305 7.0% 1,498 533,866 - 165,493,562 6.4% 1,369 331,035 - 150,858,787 4.9% 1,270 145,787 - 136,629,613 4.4% 1,137 113,908 - 122,103,908 3.8% 1,007

123


Ratios of General Bonded Debt Outstanding

Percentage of Estimated

General Less: Amounts Actual TaxableFiscal Obligation Available in Debt Value of PerYear Bonds Service Fund Total Property Capita1

2003 92,920,000$ -$ 92,920,000$ 14.14% 873$ 2004 86,080,000 - 86,080,000 12.44% 779 2005 78,975,000 - 78,975,000 10.48% 691 2006 71,605,000 - 71,605,000 9.15% 611 2007 63,880,000 - 63,880,000 7.02% 542 2008 56,025,000 - 56,025,000 6.10% 468 2009 48,140,000 - 48,140,000 5.36% 398 2010 40,220,000 - 40,220,000 4.45% 339 2011 32,260,000 - 32,260,000 3.61% 269 2012 24,250,000 - 24,250,000 2.70% 200

1 See Schedule 14 for population data.



124

2012 PercentageAssessed Debt Applicable Estimated Share

Entity (1) Valuation (2) Outstanding (3) to the City (4) of Overlapping DebtCity of Thornton direct debt 56,890,000

Overlapping DebtAdams 12 Five Star School District 1,444,623,530 306,312,707 49.66 152,102,659 Adams County School District 1 452,371,640 38,821,271 18.69 7,257,585 Adams County School District 14 565,354,990 82,680,000 2.71 2,240,698 Amber Creek Metropolitan District 4,670 500,000 100.00 500,000 Big Dry Creek Metropolitan District 182,090 550,800 100.00 550,800 Brighton School District 27J 775,126,010 148,825,000 13.95 20,765,191 Fallbrook Metropolitan District 7,879,270 7,077,646 100.00 7,077,646 Fire District 3 North Washington 455,875,400 4,241,523 0.01 329 Heritage Todd Creek Metropolitan District 11,665,170 27,717,000 100.00 27,717,000 Highpointe Park Metropolitan District 699,080 1,485,000 100.00 1,485,000 Hyland Hills Metro Park & Rec. District 815,655,900 11,350,000 6.06 687,350 Lakeview Estates Water District 1,107,510 920,136 100.00 920,136 Lambertson Lakes Metro District 11,134,150 6,385,000 100.00 6,385,000 Larkridge Metropolitan District No. 1 1,550,190 25,930,000 100.00 25,930,000 Larkridge Metropolitan District No. 2 556,550 3,023,944 100.00 3,023,944 Marshall Lake Metropolitan District 8,794,940 2,840,000 100.00 2,840,000 North Metro Fire Rescue FKA Fire Dist. 1 298,540,970 22,670,000 0.70 158,707 Northern Metropolitan Bond 48,474,810 1,570,000 100.00 1,570,000 PLA Metropolitan District 2,727,700 1,280,000 100.00 1,280,000 Talon Pointe Metropolitan District 499,860 8,000,000 100.00 8,000,000 Thornton 136th Avenue General

Improvement District (5) 344,460 2,420,000 100.00 2,420,000 Subtotal, overlapping debt 272,912,045$

Total direct and overlapping debt 337,975,837$

(1)Adams County North Washington Water and Sanitation DistrictBramming Farm Metro Districts Parterre Metropolitan DistrictsBrittany Place Metropolitan District Rangeview Library DistrictCentral Colorado Water Conservancy Regional Transportation DistrictCreekside Village Metropolitan District South Adams Water and Sanitation DistrictCreekside Village Subdistrict A Talon Pointe Metro BondCundall Farms Metropolitan District Timberleaf Metropolitan DistrictFire District 4 South Adams County Todd Creek Village Park and Recreation DistrictFire District 6 Greater Brighton Urban Drainage and Flood Control DistrictFire District 6 IGA Urban Drainage and Flood Control District - S. PlatteLewis Pointe Metropolitan District Village at North Creek Metropolitan DistrictMayfield Metropolitan District Village at Thorncreek Metropolitan DistrictNorth End Metropolitan Districts Villas at Eastlake Reservoir Metropolitan DistrictNorth Metro Fire Bond (FKA FD1B) Welby Metropolitan DistrictNorth Metro Fire Pen (FKA FD1P) Wright Farms Metropolitan District

(2)(3)(4)

(5)

Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City.


Direct and Overlapping Governmental Activities DebtAs of December 31, 2012

extent the City's assessed valuation changes disproportionately with the assessed valuation of overlappingentities, the percentage of debt for which property owners within the City are responsible will also change.

Does not include self-supporting general obligation debt.The percentage of each entity's outstanding debt chargeable to the City is calculated by comparing the assessed

Sources: Adams County Assessor's office and individual taxing entities.

The following entities also overlap the City but have no reported general obligation debt outstanding:

valuation of the portion overlapping the City to the total assessed valuation of the overlapping entity. To the

The City of Thornton 136th Avenue General Improvement District (the "GID") and the City entered into an

Assessed values certified in 2012 are for collection of ad valorem property taxes in 2013.

intergovernmental agreement pursuant to which the City loaned the GID $2,420,000.

125


Legal Debt Margin Information

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Debt Limit1 65,736,420$ 69,217,190$ 75,335,362$ 78,224,255$ 91,022,856$ 91,846,877$ 89,744,142$ 90,447,542$ 89,466,614$ 89,773,098$

Total net debt applicable to limit - - - - - - - - - -

Legal debt margin 65,736,420$ 69,217,190$ 75,335,362$ 78,224,255$ 91,022,856$ 91,846,877$ 89,744,142$ 90,447,542$ 89,466,614$ 89,773,098$

Total net debt applicable as a percentage of debt - - - - - - - - - - limit

Legal Debt Margin Calculation for Fiscal Year 2012

Assessed Value 897,730,980$

Debt limit (10% of total assessed value)1 89,773,098 Debt applicable to limit General obligation bonds Less: Amount set aside for repayment of general obligation debt -

Total net debt applicable to limit -

Legal debt margin 89,773,098$

1 Per the City of Thornton Charter, the City's general obligation debt should not exceed 10 percent of the total assessed property value. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds.


Source: Current and prior year's financial statements and the Adams County Assessor's Office.

Fiscal Year

126


Pledged-Revenue Coverage

Water Revenue BondsWater Less: Net

Fiscal Charges Operating AvailableYear and Other Expenses Revenue Principal Interest Coverage

2004 42,431,571$ 11,936,411$ 30,495,160$ -$ 752,817$ 40.51 2005 53,198,768 13,765,252 39,433,516 - 1,992,750 19.79 2006 51,795,110 14,825,931 36,969,179 - 1,992,750 18.55 2007 48,709,657 15,545,743 33,163,914 - 1,992,750 16.64 2008 47,037,364 16,066,692 30,970,672 - 1,992,750 15.54 2009 36,482,700 17,368,712 19,113,988 - 1,992,750 9.59 2010 43,626,770 18,053,279 25,573,491 - 1,992,750 12.83 2011 45,324,785 18,260,090 27,064,695 - 1,992,750 13.58 2012 59,832,946 19,286,086 40,546,860 1,992,750 20.35

Sewer Revenue BondsSewer Less: Net

Fiscal Charges Operating AvailableYear and Other Expenses Revenue Principal Interest Coverage

2003 9,389,076$ 6,258,505$ 3,130,571$ 160,000$ 162,312$ 9.71 2004 9,027,665 6,710,406 2,317,259 170,000 153,772 7.16 2005 10,049,076 7,640,427 2,408,649 175,000 131,503 7.86 2006 10,284,828 7,050,538 3,234,290 220,000 77,242 10.88 2007 10,430,853 7,968,132 2,462,721 225,000 70,568 8.33 2008 10,714,702 8,028,546 2,686,156 235,000 63,374 9.00 2009 10,757,630 8,597,631 2,159,999 240,000 55,655 7.31 2010 11,106,207 8,882,780 2,223,427 250,000 47,693 7.47 2011 11,748,793 9,199,268 2,549,525 250,000 39,880 8.80 2012 12,658,996 9,247,656 3,411,340 260,000 32,100 11.68

Tax Increment BondsSales and

Fiscal PropertyYear Taxes Principal Interest Coverage

2003 7,152,684$ 1,480,000$ 406,078$ 3.79 2004 7,299,551 1,545,000 342,585 3.87 2005 8,282,037 1,610,000 1,382,397 2.77 2006 10,365,517 1,930,000 1,119,883 3.40 2007 13,055,355 2,530,000 1,011,658 3.69 2008 4,434,674 610,000 895,988 2.94 2009 4,652,191 625,000 877,688 3.10 2010 4,748,160 650,000 855,813 3.15 2011 5,190,658 670,000 836,313 3.45 2012 5,521,257 690,000 812,863 3.67

Sales and Use Tax BondsFiscal SalesYear Taxes Principal Interest Coverage

2003 52,315,122$ 3,605,758$ 1,919,242$ 9.47 2004 52,720,280 3,770,000 1,768,426 9.52 2005 57,436,985 3,940,000 1,607,494 10.35 2006 58,114,548 4,110,000 1,436,859 10.48 2007 57,163,873 4,300,000 1,256,620 10.29 2008 55,784,531 2,290,000 1,080,455 16.55 2009 55,618,056 2,395,000 985,495 16.45 2010 58,314,748 2,505,000 884,925 17.20 2011 59,733,571 2,520,000 465,534 20.01 2012 65,296,929 2,795,000 426,435 20.27

Notes: Water revenue bonds were issued in 2004.Water and Sewer charges and other includes investment earnings and tap fees.Operating expenses do not include depreciation or amortization expenses.

127


Demographic and Economic Statistics

Personal PerIncome Capita

Fiscal (thousands of Personal Unemployment Year Population of dollars) Income Rate

2003 106,398 2,284,471 21,471 5.8%

2004 110,433 2,371,107 21,471 5.2%

2005 114,278 2,453,663 21,471 4.7%

2006 117,213 2,516,680 21,471 3.9%

2007 117,873 2,530,851 21,471 3.4%

2008 119,688 2,569,821 21,471 4.3%

2009 120,843 2,594,620 21,471 7.6%

2010 118,772 3,099,949 26,100 8.3%

2011 120,147 3,135,837 26,100 8.9%

2012 121,211 3,241,909 26,746 8.4%

Note: The City of Thornton implemented GASB 34 as of December 31, 2003. Unemployment rate is the City's average for the year then ended and is based on preliminary data then updated in subsequent year.

Sources: US Census Bureau (personal income)City of Thornton Planning Division (population)United States Department of Labor (unemployment)

128


Principal Employers

Percentageof Total City

Employer Type Employees Rank Employment

Educational Services (21 Units) 5,498 1 28%

Retail Trade (175 units) 3,400 2 17%

Health Care and Social Assistance (165 Units) 2,356 3 12%

Accommodation and Food Services (141 Units) 2,287 4 11%

Administrative and support (112 Units) 1,862 5 9%

Construction (200 Units) 855 6 4%

Professional Services (235 Units) 745 8 4%

Other Services (122 Units) 658 7 3%

Information (23 Units) 497 9 2%

Wholesale trade (119 Units) 419 10 2%

Total 18,577 93%

Total number of persons employed by Thornton establishments: 19,932

Percentageof Total City

Employer Type Employees Rank Employment

Retail Trade (192 units) 5,251 1 20%

Educational Services (16 Units) 5,245 2 20%

Accommodation and Food Services (147 Units) 3,325 3 13%

Health Care and Social Assistance (163 Units) 3,302 4 13%

Administrative and support (79 Units) 2,188 5 8%

Construction (181 Units) 1,302 6 5%

Information (21 Units) 965 7 4%

Other Services (115 Units) 812 8 3%

Professional Services (165 Units) 695 9 3%

Real Estate (81 Units) 544 10 2%

Total 23,629 92%

Total number of persons employed by Thornton establishments: 25,759

Note: The number of employees per business is confidential therefore the City is providing employee totals by sector. The City did not request or collect this information prior to 2008.

Source: State of Colorado's Department of Labor and Employment's Quarterly Census of Employment and Wages (QCEW) 2nd Quarter of 2008 and 2012 data set.

2008

2012

129


Full-time Equivalent City Government Employees by Function

Full-time Equivalent Employees as of December 312003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Function

General government 141 150 154 154 154 155 157 158 157 156

PoliceOfficers 153 156 158 163 161 154 158 158 161 159 Civilians 26 44 44 46 52 63 67 67 64 66

FireFirefighters and officers 70 70 71 70 70 70 70 70 70 75 Ambulance - 22 22 22 22 22 22 22 22 25 Civilians 3 2 2 3 3 3 3 3 3 3

City development 74 73 73 75 77 76 73 70 68 65

Streets, traffic, & engineeringEngineering 40 41 41 43 42 42 42 42 40 40 Maintenance 33 33 34 34 33 33 32 32 31 30

Community services 65 66 78 79 82 82 85 85 85 85

Water & Sewer 69 69 69 69 74 74 76 76 75 78

Sanitation 20 21 21 22 21 21 22 22 22 21

Total 694 747 766 780 791 795 807 805 798 801


Source: City of Thornton budget office.

130


Operating Indicators by Function

2004 2005 2006 2007 2008 2009 2010 2011 2012Function

Police (priority 1-2-3)

Patrol calls for service 43,489 44,535 44,683 42,283 41,133 57,872 101,642 105,509 100,969

Physical arrests 6,218 6,718 4,218 5,669 3,874 3,554 3,280 3,248 2,692

Traffic violations 11,520 16,296 14,539 17,461 15,639 19,057 20,229 22,771 20,796

Fire

Calls for service 7,208 7,672 7,643 7,826 7,803 7,689 7,826 8,107 8,180

Fire incidents 277 344 340 280 298 236 240 218 245

EMS and other incidents 6,931 7,328 7,303 7,546 7,505 7,453 7,586 7,889 7,935

Inspections 1,210 1,747 1,619 1,641 1,348 2,327 1,684 1,700 1,798

City development

Single-family permits issued 1,109 1,256 1,000 484 229 186 185 245 297

Commercial permits issued 21 26 21 22 21 10 7 5 10

Building inspections 71,336 72,449 57,719 36,004 34,671 24,450 25,677 25,083 26,212

Code violations & inspections 11,805 14,658 10,427 13,038 14,716 14,088 14,031 14,028 16,161

Graffiti incidents removed - - - - 880 1,039 1,102 1,016 1,798

Streets, traffic, & engineering

Lane miles of streets maintained 1,179 1,220 1,258 1,300 1,318 1,302 1,310 1,313 1,222

Community services

Recreation center admissions 291,497 277,499 274,728 277,405 279,380 280,337 281,154 283,251 294,413

Water

New connections 1,209 1,117 1,014 627 372 264 273 267 321

Average daily

consumption (in gallons)(excludes Westminster) 13,809,340 15,539,150 16,993,184 16,396,893 17,058,504 15,429,112 16,347,926 16,590,032 17,919,403

Sanitation

Solid waste customers 23,612 23,965 24,340 24,831 25,006 25,185 25,678 25,919 26,623

Tons of refuse collected 35,612 36,015 34,686 35,432 33,284 33,106 33,173 32,359 32,729

Tons of recyclables collected 1,829 1,869 1,791 2,934 4,292 4,777 5,114 5,120 5,089

Ambulance

Number of transports 1,412 4,059 3,906 4,186 4,286 4,643 4,466 4,481 4,517

Note: Indicators are not available for the general government function.The City did not begin tracking this information until 2004.

Sources: Various city departments.

131


Capital Asset Statistics by Function

Fiscal Year2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Function

Police

Stations 1 1 1 1 1 1 1 1 1 1Patrol Units 87 61 62 68 70 69 79 77 77 75

Fire

Fire Stations 5 5 5 5 5 5 5 5 5 5

Streets, traffic, & engineering

Streets (miles) 317 325 338 350 360 366 360 360 361 403

Streetlights 6,744 6,629 7,216 8,038 8,102 8,276 8,357 8,473 8,483 8,514

Community services

Parks acreage 421 527 540 540 540 541 632 642 645 645

Parks 68 73 75 75 75 76 80 81 81 81

Swimming Pools 3 3 3 3 3 3 3 3 3 3

Tennis Courts 15 14 13 13 13 13 13 13 13 13

Community Centers 3 3 3 3 3 3 3 3 3 3

Water

Water mains (miles) 410 414 428 509 521 526 530 532 558 559

Fire Hydrants 3,540 3,668 3,798 3,990 4,132 4,233 4,244 4,262 4,663 4,686

Maximum daily capacity

(thousands of gallons) 50,000 50,000 68,000 68,000 70,000 70,000 70,000 70,000 70,000 70,000

Sewer

Storm sewers (miles) 124 128 132 139 141 145 143 146 148 158

Sanitary sewer (miles) 357 363 373 401 412 420 420 430 436 426

Sanitation

Collection Trucks 17 17 17 18 19 18 19 19 19 19

Ambulance

Ambulances 4 4 4 4 4 4 4 5 5 6


Note: No capital asset indicators are available for the general government function.

Sources: Various city departments.

132

omrehene nna fnanca eort - city of thornton · omrehene nna fnanca eort for the year ended december...

Documents