2009 Comprehensive Annual Financial Report Pima County, Arizona For the Fiscal Year Ended June 30, 2009 PIMA COUNTY, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2009 BOARD OF SUPERVISORS Richard Elías Chair District #5 Ramón Valadez Vice Chair District #2 Ann Day District #1 Sharon Bronson District #3 Ray Carroll District #4 COUNTY ADMINISTRATOR C. H. Huckelberry Prepared by the Department of Finance and Risk Management Ellen Moulton, Deputy Director Tom Burke, Director Paul Guerrero, CPA, Division Manager Financial Control & Reporting Supervisors Claire Bice Toni Dunn Eric House Marilyn Hutzler Patrick McGee, CPA Accountants Willie Ames Brenda DeBoo-Nicely Dana Dmitroff Emilia Eveningred Chuo Holliday Linda House Janet Meinhausen Janys Neill Lorraine Nuñez Grace Ochotorena Janet Peete Rosemarie Perry Pete Rodriguez Blanca Rossetti Phil Schroeck PIMA COUNTY, ARIZONA Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2009 TABLE OF CONTENTS Exhibit I. INTRODUCTORY SECTION Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting Organizational Chart 1-6 7 8 II. FINANCIAL SECTION Independent Auditors' Report A. B. Page 9 - 10 MANAGEMENT'S DISCUSSION AND ANALYSIS (required supplementary information) 11 - 28 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Assets Statement of Activities Governmental Fund Financial Statements (Major and Other) Balance Sheet - Governmental Funds Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities A-1 A-2 29 30 - 31 A-3 32 A-4 33 A-5 34 A-6 35 Proprietary Fund Financial Statements (Major and Other) Statement of Net Assets - Proprietary Funds Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds Statement of Cash Flows - Proprietary Funds A-7 36 A-8 A-9 37 38 - 39 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets - Fiduciary Funds Statement of Changes in Fiduciary Net Assets - Fiduciary Funds A-10 A-11 40 41 Table of Contents (continued) Exhibit Notes to Financial Statements Note 1: Summary of significant accounting policies Note 2: Cash and investments Note 3: Due from other governments Note 4: Capital assets Note 5: Claims, judgments and risk management Note 6: Long-term liabilities Note 7: Short-term debt Note 8: Landfill liabilities Note 9: Pensions and other postemployment benefits Note 10: Interfund transactions Note 11: Construction and other significant commitments Note 12: Stewardship, compliance, and accountability (deficit fund balances) Note 13: Subsequent events C. 42 - 47 48 - 51 52 53 - 54 55 - 56 57 - 65 65 65 - 66 66 - 70 70 - 71 71 - 72 72 72 - 73 REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT'S DISCUSSION AND ANALYSIS Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - General Fund B-1 Notes to Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund Schedule of Retirement Plans' Funding Progress D. Page 75 76 B-2 77 COMBINING STATEMENTS AND OTHER SCHEDULES Other (Nonmajor) Governmental Funds Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds C-1 80 - 81 C-2 82 - 83 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Other Governmental Funds Capital Projects Fund Debt Service Fund Transportation - Special Revenue Fund Health and Animal Care - Special Revenue Fund Regional Flood Control - Special Revenue Fund Employment and Training - Special Revenue Fund Other - Special Revenue Fund Other Grants - Special Revenue Fund School Reserve - Special Revenue Fund Environmental Quality - Special Revenue Fund Special Districts - Special Revenue Fund Solid Waste - Special Revenue Fund Library District - Special Revenue Fund Stadium District - Special Revenue Fund C-3 C-4 C-5 C-6 C-7 C-8 C-9 C-10 C-11 C-12 C-13 C-14 C-15 C-16 85 86 87 88 89 90 91 92 93 94 95 96 97 98 Table of Contents (continued) Other (Nonmajor) Enterprise Funds Combining Statement of Net Assets - Nonmajor Enterprise Funds Combining Statement of Revenues, Expenses and Changes in Fund Net Assets - Nonmajor Enterprise Funds Combining Statement of Cash Flows - Nonmajor Enterprise Funds Internal Service Funds Combining Statement of Net Assets - Internal Service Funds Combining Statement of Revenues, Expenses and Changes in Fund Net Assets - Internal Service Funds Combining Statement of Cash Flows - Internal Service Funds Fiduciary Funds Combining Statement of Fiduciary Net Assets - Investment Trust Funds Combining Statement of Changes in Fiduciary Net Assets Investment Trust Funds Combining Statement of Fiduciary Net Assets - Agency Funds Combining Statement of Changes in Fiduciary Net Assets - Agency Funds III. STATISTICAL SECTION Financial Trends Information Net assets by component Changes in net assets Fund balances - governmental funds Changes in fund balances - governmental funds Revenue Capacity Information Taxable assessed value and estimated actual value of property Direct and overlapping property tax rates Direct and overlapping property tax rates - school districts Principal property taxpayers Real property tax levies and collections Assessed, limited and full cash (secondary) value of taxable property Comparative net valuations and tax rates Historical collections - hotel excise tax, car rental surcharges and recreational vehicle tax Streets and highways revenues Exhibit Page C-17 99 C-18 C-19 100 101 - 102 C-20 103 C-21 C-22 104 105 - 106 C-23 107 C-24 C-25 108 109 C-26 110 D-1 through 4 111 - 115 D-5 through 12 117 - 128 Table of Contents (continued) Exhibit Page Debt Capacity Information Ratios of outstanding debt by type to personal income and per capita Ratio of net general bonded debt to assessed value and net bonded debt per capita Ratio of direct and overlapping debt to property values and per capita Computation of direct and overlapping governmental activities debt outstanding Legal debt margin Regional Wastewater Reclamation pledged sewer revenue debt coverage Transportation revenue bonds - pledged revenue bond coverage Pledged revenue bond coverage - lease revenue bonds Lease, lease-purchase and purchase agreements Ratio of annual debt service expenditures for general bonded debt to total general expenditures D-13 through 19 129 - 138 Demographic and Economic Information Demographic and economic statistics Principal employers Population and employment Transportation and real estate Economic indicators by calendar year Population statistics Average annual jail population D-20 through 26 139 - 146 Operating Information Employees by function Operating indicators by program Capital assets and infrastructure by program D-27 through 29 147 - 149 PIMA COUNTY Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2009 INTRODUCTORY SECTION Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting Organizational Chart FINANCIAL SECTION STATISTICAL SECTION INTRODUCTORY SECTION The purpose of the Introductory Section in a comprehensive annual financial report (CAFR) is to familiarize readers with the organizational structure of the government, the nature and scope of the services it provides and the specifics of its legal operating environment. COUNTY ADMINISTRATOR’S OFFICE PIMA COUNTY GOVERNMENTAL CENTER 130 W. CONGRESS, TUCSON, AZ 85701-1317 (520) 740-8661 FAX (520) 740-8171 C.H. HUCKELBERRY County Administrator PIMA COUNTY ORGANIZATIONAL CHART RESIDENTS OF PIMA COUNTY Elected Officials Elected Officials _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ SUPERVISORS __ ASSESSOR __ COUNTY ATTORNEY _ _ CONSTABLES _ _ SUPERIOR COURT JUDGES _ _ JUSTICE COURTS _ _ CLERK OF THE BOARD __ __ __ __ CLERK OF THE SUPERIOR COURT COUNTY ADMINISTRATOR RECORDER SCHOOL SUPERINTENDENT TREASURER ADMINISTRATION COMMUNITY & ECONOMIC DEVELOPMENT JUSTICE & LAW ENFORCEMENT MEDICAL SERVICES PUBLIC WORKS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ SHERIFF _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ 8 _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ BOARD OF PIMA COUNTY Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2009 INTRODUCTORY SECTION FINANCIAL SECTION Independent Auditors' Report Management’s Discussion and Analysis Basic Financial Statements Required Supplementary Information Other than Management’s Discussion and Analysis Combining Statements and Other Schedules STATISTICAL SECTION FINANCIAL SECTION The Financial Section contains government-wide, combined, combining, and individual fund financial statements and schedules, which present a financial “overview” of Pima County. STATE OF ARIZONA OFFICE OF THE DEBRA K. DAVENPORT, CPA AUDITOR GENERAL WILLIAM THOMSON DEPUTY AUDITOR GENERAL AUDITOR GENERAL Independent Auditors’ Report Members of the Arizona State Legislature The Board of Supervisors of Pima County, Arizona We have audited the accompanying financial statements of the governmental activities, business-type activities, the discretely presented component unit, each major fund, and aggregate remaining fund information of Pima County as of and for the year ended June 30, 2009, which collectively comprise the County’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the County’s management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of certain departments, one major fund, and the component unit, which account for the following percentages of the assets, liabilities, revenues, and expenses or expenditures of the opinion units affected: Opinion Unit/Department Government-Wide Statements Governmental Activities: Stadium District School Reserve Fund Self Insurance Trust Business-Type Activities: Regional Wastewater Reclamation Department Development Services Self Insurance Trust Component Unit—Southwestern Fair Commission Fund Statements Major Fund: Regional Wastewater Reclamation Department Aggregate Remaining Fund Information: Stadium District School Reserve Fund Development Services Self Insurance Trust Assets Expenses/ Liabilities Revenues Expenditures 0.26% 0.11% 2.40% 0.05% 0.03% 4.88% 0.93% 0.48% 0.07% 0.47% 0.59% 0.27% 94.91% 0.43% 0.00% 100.00% 91.44% 0.25% 0.00% 100.00% 30.17% 1.70% 0.00% 100.00% 30.90% 2.95% 0.18% 100.00% 100.00% 100.00% 100.00% 100.00% 0.93% 0.40% 0.70% 8.55% 0.28% 0.15% 0.57% 27.95% 2.63% 1.36% 2.09% 6.37% 1.36% 1.74% 4.04% 8.26% Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinions, insofar as they relate to the amounts included for those entities, are based solely on the reports of the other auditors. 2910 NORTH 44 th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553 -0333 • FAX (602) 553-0051 We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of the other auditors provide a reasonable basis for our opinions. In our opinion, based on our audit and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, the discretely presented component unit, each major fund, and aggregate remaining fund information of Pima County as of June 30, 2009, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity with U.S. generally accepted accounting principles. The Management’s Discussion and Analysis on pages 11 through 28, the Budgetary Comparison Schedule on pages 75 and 76, and the Schedule of Retirement Plans’ Funding Progress on page 77 are not required parts of the basic financial statements, but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County’s basic financial statements. The introductory section, combining and individual fund statements and schedules, and statistical section listed in the table of contents are presented for purposes of additional analysis and are not required parts of the basic financial statements. The combining and individual fund statements and schedules have been subjected to the auditing procedures applied by us and the other auditors in the audit of the basic financial statements and, in our opinion, based on our audit and the reports of the other auditors, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. In accordance with Government Auditing Standards, we will also issue our report on our consideration of the County’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters at a future date. 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Debbie D bbi Davenport D Auditor General December 21, 2009 Management’s Discussion and Analysis Management's Discussion & Analysis This section of Pima County’s comprehensive annual financial report presents a discussion and analysis of the County’s financial performance during the year ended June 30, 2009, and should be read in conjunction with the County’s basic financial statements in the following sections. All dollar amounts are expressed in thousands (000’s) unless otherwise noted. FINANCIAL HIGHLIGHTS • At June 30, 2009, the assets of the County exceeded its liabilities (net assets) by $1,815,529, an increase of 5.7% from the prior year. Of this amount, $69,327 is available for general government expenditures (unrestricted net assets), $234,138 is restricted for specific purposes (restricted net assets), and $1,512,064 is invested in capital assets, net of related debt and accumulated depreciation. The chart below presents the composition of net assets for the current and prior years: Comparative Composition of Pima County Net Assets $1,512,064 $1,365,246 6/30/2009 $234,138 $241,946 $69,327 Invested in capital assets, net of related debt 6/30/2008 Restricted net assets $110,175 Unrestricted net assets • Unrestricted net assets for the County dropped $40,848 (or 37.1%), from $110,175 to $69,327 this fiscal year. Of this amount, $35,803 is unreserved and undesignated in the General Fund. This balance represents approximately 7.7% of the County’s General Fund expenditures and 3.9% of total governmental funds expenditures. • County revenues dropped 7.7% (or $97,224), from $1,266,195 last year to $1,168,971 in fiscal year 2008-09. The loss of the Ambulatory contract with the Arizona Health Care Cost Containment System (AHCCCS) comprised 78% of the lost revenue. In addition, the state-shared sales taxes have dropped 14% this fiscal year because of the continuing downturn in the economy. • To offset the shortfalls in the revenues and ensure that the budget remains balanced at the close of the fiscal year, the County initiated several cost cutting measures during the year including mid-year budget expenditure reductions. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the County's basic financial statements. The County's basic financial statements consist of four components: (1) Government-wide financial statements, (2) Fund financial statements, and (3) Notes to the basic financial statements. Required supplementary information (4) is included in addition to the basic financial statements. Government-wide Financial Statements are designed to provide readers with a broad overview of County finances, in a manner similar to a private-sector business. 11 The statement of net assets presents information on all County assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the County is improving or deteriorating. The statement of activities presents information showing how net assets changed during the most recent fiscal year. All changes in net assets 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 result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation or sick leave). Both of these government-wide financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or in part a portion of their costs through user fees and charges (business-type activities). The governmental activities of the County include general government, public safety, highways and streets, sanitation, health, welfare, culture and recreation, and education and economic opportunity. The business-type activities of the County include Pima Health System & Services, Regional Wastewater Reclamation Department, Development Services and the County’s downtown parking garages. A discretely presented component unit is included in the basic financial statements and consists of a legally separate entity for which the County is financially accountable. The County reports the Southwestern Fair Commission, which operates the County Fairgrounds and the annual Pima County Fair, as a discretely presented component unit. The government-wide financial statements can be found on pages 29-31 of this report. Fund Financial Statements are groupings of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate finance-related legal compliance with applicable State statutes and federal Office of Management and Budget budgeting guidelines. All of the funds can be divided into three categories: (1) governmental funds, (2) proprietary funds, and (3) fiduciary 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 funds financial statements focus on near-term inflows and outflows of expendable resources, as well as on balances of expendable resources available at the end of the fiscal year. Such information may be useful in evaluating the County’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 funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The County maintains fifteen individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General, Capital Projects and Debt Service funds. Data from the other 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 governmental fund financial statements can be found on pages 32-35 of this report. Proprietary funds are maintained in two ways. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The County uses enterprise funds to account for certain health care services, including medical and long-term health care, sewer systems maintenance and operation, real estate-related development services, and parking garage operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the County’s various functions. The County uses internal service funds to account for risk management, automotive fleet maintenance and operations, printing services, telecommunications, wireless and IT network infrastructure. Because these services predominantly benefit governmental rather than business-type functions, most of the assets and liabilities of these services have been included within governmental activities in the government-wide financial statements. 12 Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. Regional Wastewater Reclamation Department and Pima Health System & Services operations are considered to be major funds of the County. Data from the other enterprise funds are combined into a single, aggregated presentation. Similarly, the County’s internal service funds are combined into a single, aggregated presentation in the proprietary funds financial statements. Individual fund data for the other enterprise and internal service funds are provided in the form of combining statements elsewhere in this report. The proprietary fund financial statements can be found on pages 36-39 of this report. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the County’s programs. The fiduciary fund financial statements can be found on pages 40-41 of this report. Notes to the Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes can be found on pages 42-73 of this report. Required Supplementary Information (RSI) is presented concerning the County’s General fund budgetary schedule and the schedule of retirement plans’ funding progress. Required supplementary information can be found on pages 75-77 of this report. Combining Statements and Other Schedules referred to earlier provide information for non-major governmental, enterprise, internal service and fiduciary funds and are presented immediately following the required supplementary information. Combining and individual fund statements and schedules can be found on pages 80-110 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net assets may serve as a useful indicator of a government’s financial position over time. County assets exceeded liabilities by $1,815,529 at June 30, 2009. The following table shows condensed information for the Schedule of Assets, Liabilities, and Net Assets: Table 1 Schedule of Assets, Liabilities, and Net Assets At June 30, 2009 and 2008 Governmental Activities 2009 2008 Current and other assets Capital assets (net): Land, buildings, equipment, infrastructure & other assets Total assets $452,751 $460,995 Business-type Activities 2009 2008 $133,963 $189,217 Total 2009 2008 $586,714 $650,212 1,526,774 1,979,525 1,413,881 1,874,876 773,117 907,080 714,548 903,765 2,299,891 2,886,605 2,128,429 2,778,641 Current and other liabilities Long-term liabilities Total liabilities 86,278 682,111 768,389 87,975 667,157 755,132 48,328 254,359 302,687 63,919 242,223 306,142 134,606 936,470 1,071,076 151,894 909,380 1,061,274 Net assets : Invested in capital assets, net of related debt 972,346 882,424 539,718 482,822 1,512,064 1,365,246 203,940 34,850 $1,211,136 183,542 53,778 $1,119,744 30,198 34,477 $604,393 58,404 56,397 $597,623 234,138 69,327 $1,815,529 241,946 110,175 $1,717,367 Restricted Unrestricted Total net assets 13 The largest portion of the County’s net assets reflects its investment in capital assets (i.e. land, buildings, infrastructure and equipment), less any related outstanding debt used to acquire those assets. As of June 30, 2009, investment in capital assets totaled $1,512,064, comprising approximately 83.3% of total net assets. The County uses a portion of these capital assets to provide services to its citizens, with the other portion available to its citizens for use; consequently, these assets are not available for future spending. The $146,818 increase in capital assets, net of related debt, is primarily due to the significant amount of capital project activity. Although the County’s investments in capital assets are 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. Composition of Net Assets Invested in capital assets, net of related debt - 83% Restricted net assets - 13% Unrestricted net assets - 4% Restricted net assets represent resources that are subject to external restrictions on how they may be used. As of June 30, 2009, restricted net assets totaled $234,138 and comprised approximately 12.9% of total net assets. This represents a $7,808 decrease in restricted net assets from the $241,946 balance of the prior fiscal year. The remaining balance of the County’s net assets represents unrestricted net assets, which may be used to meet the County’s ongoing obligations to citizens and creditors. As of June 30, 2009, unrestricted net assets totaled $69,327 and comprised approximately 3.8% of total net assets. Governmental activities The change in net assets for governmental activities was $91,392, an increase of $47,681 from the prior year. The following table shows details of the changes in net assets for governmental activities: 14 Table 2 Governmental Activities Schedule of Changes in Net Assets For the Years Ended June 30, 2009 and 2008 2009 Program revenues: Charges for services Operating grants and contributions Capital grants and contributions Total program revenues General revenues: Property taxes State-shared taxes Investment earnings Other general revenues Total general revenues $ 59,886 131,361 68,535 259,782 Variance Amount Percent 2008 $ 64,010 144,479 48,672 257,161 $ (4,124) (13,118) 19,863 2,621 -6.4% -9.1% 40.8% 1.0% 393,255 115,046 5,875 42,452 556,628 377,809 130,337 16,326 39,657 564,129 15,446 (15,291) (10,451) 2,795 (7,501) 4.1% -11.7% -64.0% 7.0% -1.3% Total revenues 816,410 821,290 (4,880) -0.6% Expenses: General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Amortization Interest on long-term debt Total expenses 212,196 149,253 79,251 7,434 31,541 115,513 60,520 46,770 (235) 26,780 729,023 239,398 165,715 88,488 9,658 36,977 106,546 60,616 47,296 138 22,860 777,692 (27,202) (16,462) (9,237) (2,224) (5,436) 8,967 (96) (526) (373) 3,920 (48,669) -11.4% -9.9% -10.4% -23.0% -14.7% 8.4% -0.2% -1.1% -270.3% 17.1% -6.3% 87,387 43,598 43,789 100.4% Excess before contributions and transfers Transfers in Change in net assets Ending net assets $ 4,005 113 3,892 91,392 43,711 47,681 3444.2% 109.1% 91,392 8.2% 1,211,136 $ 1,119,744 $ Factors affecting the $4,880 decrease in revenues from governmental activities: • Decrease in operating grants of $13,118 is due primarily to various state revenues that were cut by the State due to its budgetary constraints. This includes $1,091 decrease in Vehicle License Taxes, $2,851 decrease in HURF, $3,800 funding cut for the County Hold Harmless program, and $1,807 in Juvenile Court state grants. A $2,000 final payment from the City of Tucson for the transfer of the City libraries and a $1,500 one time grant from the US Department of Homeland Security (USDHS) for the purchase of a Sheriff helicopter were both received last fiscal year. • Revenue from capital grants and contributions increased by $19,863 primarily due to a $10,279 increase in the Regional Transportation Authority (RTA) funding and a $2,439 state grant for the acquisition of Tumamoc Hill. Additionally, several donations were received by the County including the $4,100 library facility on Wilmot Road from the City of Tucson and other donations from developer for roadway projects. 15 • Property taxes increased $15,446 as a result of an increase in property valuations for primary and secondary taxes that was partially offset by a decrease in the primary tax rate. • Decrease in state-shared taxes is a reflection of the current downturn in the economy. State sales tax has recorded a 13.6% drop or $13,994 and the unrestricted share of the VLT decreased by $1,297 as compared to last fiscal year. • Decrease in investment income is due primarily from the 54.8% or 2 points dropped in the interest rate, from 4.2% average down to 1.9% this fiscal year, the lowest recorded average rate since fiscal year 200405. Additionally, losses from State Treasurer investments with Lehman Brothers for $2,260 were written off during the fiscal year. The charts below present the Revenue by program and Expenses by function for governmental activities: Revenue by Program - Governmental Activites Property Taxes 49% State-shared taxes Capital grants & contributions 14% 8% Investment Earnings Other general revenue 1% Operating grants Charges for Services 16% 7% 5% Total expenses of governmental activities were $729,023, down $6.3% or $48,669 compared to the previous year’s total of $777,692. Factors contributing to the decrease in expenses: • Public Safety expenses decreased $16,462, a 9.9% drop compared to last fiscal year. This is due primarily to a decrease of $8,448 in capital projects which were mainly flood control projects and another $4,119 in Flood Control District expenditures. In addition, the Counter Narcotics Alliance (CNA) antiracketeering expenditures last year for $2,623 which was previously processed by the Sheriff department have been transferred to the City of Tucson. • Highways and Streets expenses decreased 10.4%, or $9,237 due primarily to the county-wide reductions in spending implemented within the fiscal year. • Welfare expenses increased 8.4% or $8,967 primarily due to the mandated payments to AHCCCS. These include the $3,794 mandated contribution to the budget neutrality compliance fund and $1,828 for clinical teaching program. In addition there was increased spending in healthcare services for the adult detention center ($1,900) and for outside hospitals and psychiatrics clinics ($2,200). 16 Expenses by Function - Governmental Activites Health 4% Public Safety 20% General Government 30% Sanitation 1% Highways and Streets Education & Economic Opportunity 11% 6% Interest on long-term debt Culture & Recreation 4% 8% Welfare 16% Business-type activities Business-type activities, which is composed exclusively of enterprise funds, are intended to recover all or a significant portion of their costs through user fees and charges. Change in net assets for business-type activities added $6,770, or 6.9%, to the County's $98,162 change in total net assets for the year ended June 30, 2009. The following table shows changes in net assets for business-type activities: 17 Table 3 Business-type Activities Schedule of Changes in Net Assets For the Years Ended June 30, 2009 and 2008 2009 Program revenues: Charges for services Operating grants and contributions Capital grants and contributions Total program revenues General revenues: Investment earnings Other general revenues Total general revenues 2008 Variance Amount Percent $ 328,600 4,626 14,916 348,142 $ 409,140 4,806 22,952 436,898 $ (80,540) (180) (8,036) (88,756) -19.7% -3.7% -35.0% -20.3% 2,025 2,394 4,419 6,721 1,286 8,007 (4,696) 1,108 (3,588) -69.9% 86.2% -44.8% Total revenues 352,561 444,905 (92,344) -20.8% Expenses: Regional Wastewater Reclamation Pima Health System & Services Development Services Parking Garages Total expenses 105,139 224,959 9,992 1,696 341,786 106,803 295,494 14,750 1,877 418,924 (1,664) (70,535) (4,758) (181) (77,138) -1.6% -23.9% -32.3% -9.6% -18.4% 10,775 25,981 (15,206) -58.5% (3,892) 3444.2% -73.8% Excess before contributions and transfers Transfers in (out) (4,005) (113) Change in net assets 6,770 25,868 (19,098) Beginning net assets 597,623 571,755 25,868 4.5% $ 604,393 $ 597,623 6,770 1.1% Ending net assets $ Key elements of the change in net assets from business-type activities include: • The Regional Wastewater Reclamation fund has reported a $15,160 increase in net assets, down 41% from last year's $25,700. Although the economic slowdown resulted in a 41.1% drop (or $12,753) in sewer connection service fees, this was offset by the 9% rate increase in sewer user fee for a total increase of $12,129 or 16.2%. Another revenue stream affected by the downturn in the economy is the capital grants and contribution which dropped $7,922 (or 34.7%) as compared to last year. • Pima Health Systems and Services (PHS&S) reported a $4,620 decrease in net assets, down 203.5% from last year's net asset increase of $4,465. Of the total decrease in charges for services revenues in businesstype activities, $75,665 is reported within PHS&S due to the loss of the Ambulatory contract with the AHCCCS. PHS&S retained approximately 2,700 ambulatory members under a capped agreement contract that were either dual-eligible (Medicaid and Medicare) or family members of PHS&S ALTCS members. As a result, expenses related to medical claims decreased $69,403 or 23.9% compared to fiscal year 200708. • Development Services reported a decrease in net assets of $4,101, compared to the $5,236 decrease in net assets last fiscal year. Charges for services for Development Services dropped $3,338 due to the continuing downturn in the residential construction market. 18 FINANCIAL ANALYSIS OF THE COUNTY’S FUNDS As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds The County’s general government functions are accounted for in the General, Special Revenue, Debt Service, and Capital Project funds. Included in these funds are special districts governed by the Board of Supervisors (i.e. Flood Control, Library and Stadium Districts). The focus of the County's governmental funds is to provide information on near-term inflows, outflows, and balances of expendable resources. Such information is useful in assessing the County's financing requirements. In particular, unreserved fund balances may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. Major Governmental Funds General Fund The General Fund is the chief operating fund of the County. At June 30, 2009, unreserved, undesignated fund balance of the General Fund was $35,803 while total fund balance was $40,166. As a measure of the General Fund's liquidity, it may be useful to compare both unreserved, undesignated fund balance and total fund balance to total fund expenditures. Unreserved, undesignated fund balance represents 7.7% of total General Fund expenditures, while total fund balance represents 8.7% of that same amount. Total fund balance for the General Fund decreased $30,223 compared to the prior fiscal year. Revenues decreased by $3,911 and reflect the following changes: • An increase of $13,256 for property taxes was primarily due to higher assessed property valuations that were partially offset by lower tax rates. • Intergovernmental revenue dropped 10.9% or $16,192 primarily as a result of the $13,501 decrease in State Sales Tax and a $3,818 funding cut by the State to the Proposition 204 County Hold Harmless program. A slight increase in expenditures of $1,739 was reported within the General Fund for the fiscal year as a result of the following changes: • $8,979 increase in welfare expenditures is primarily attributed to the $5,622 contribution to the AHCCCS. In addition, increases in mandated hospital care and adult detention healthcare expenditures were $2,191, and $1,950, respectively. • The above increases were offset by the $8,405 decrease in general government expenditures as a result of cost-cutting measures implemented during the year. In the prior year, expenditures included a one-time settlement of $1,822 from the state-wide tax lawsuit filed by Qwest. The excess of revenues over expenditures was $2,419, which is further decreased by net operating transfers out of $33,013. During fiscal year 2008-09, funds to be used for the repayment of the COPS Series 2008 were transferred out to the Debt Service Fund. Budget to Actual Comparison for the General Fund Overall, actual revenues were less than budgeted revenues by $16,639 and actual expenditures were less than budgeted expenditures by $39,137. No variances between the budget to actual amounts were significant enough to affect the County’s ability to provide future services. Capital Projects Fund Total fund balance for the Capital Projects Fund decreased $25,780 compared to the prior fiscal year. Revenue decreased by $3,072 and is due to the $5,187 drop in charges for services, $3,054 in investment earnings, and $2,844 in miscellaneous revenues offset by an increase of $8,013 in intergovernmental revenues. Significant factors affecting revenue changes: 19 • Intergovernmental revenue increased by $8,013 due primarily to the construction of RTA-funded roadway projects and a State grant for the acquisition of Tumamoc Hill in the Cultural Resources projects. • Charges for services revenue is predominately a reflection of developer fees collected for a number of benefit areas. Fiscal year 2008-09 revenues decreased 58.7% or $5,187. This would be the third straight year that this revenue source has declined, as home construction activity continues to be depressed. Benefit areas of Canada del Oro, San Xavier and Santa Cruz Valley have major decreases at a rate of 34%, 17%, and 14%, respectively. Capital project expenditures increased by $6,795 in fiscal year 2008-09 compared to the prior year. The 5% increase came from the acquisition of Marley ranch for $20,106 offset by the reduced spending this fiscal year as several projects reached their completion. The fund reported a $115,565 deficiency of revenues under expenditures. The issuance of bonds for $109,400 and the net transfer out amounting to $19,615 further decreased the net change in the fund balance to $25,780 for the Capital Projects Fund. Debt Service Fund The fund accounts for the accumulation of resources for and the payment of principal and interest of the general long-term debt. It is considered a major fund this year due to an increased cash balance at year end and structured financing to meet the County's current fiscal requirements. At June 30, 2009, the fund balance increased by $21,449, up 173.1% compared to last fiscal year. This increase resulted from departmental transfers for the repayment of Certificate of Participation (COPS) Series 2008 and, due to a change in business practice within the payment processor, certain general obligation and street and highway revenue bonds had debt service payments that changed from a funding date of June 30th to July 1st. The change in funding dates provided the debt service fund with a significant amount of cash on June 30th. The County will return to a June 30th funding date in fiscal year 2009-10. Revenue increased by $566, mainly from the tax levy and due to the growth in property valuations. Expenditures increased $44,549 from last year as a result of the $40,000 principal payment to the 2008 COPS. The payment is comprised of $20,000 current year's loan maturity and another $20,000 to defease next year’s payment in order to maximize collateral requirements. Overview of all governmental funds At June 30, 2009, the County's governmental funds reported combined fund balances of $292,247, a decrease of $25,330 from the prior year. Approximately 83% of the combined fund balances, or $243,820, constitutes unreserved and undesignated fund balance, which is available to meet the County's current and future needs. Fund Balances - Governmental Funds FY08/09 (in Millions) FY07/08 $244 $48 $266 $- $50 $100 $52 $150 Unreserved/undesignated $200 $250 $300 $350 Reserved/designated The remainder of fund balance is reserved to indicate that it is not available for new spending because it has been committed to the following: $33,870 for debt service on various bond and other debt instruments; $5,605 to reflect 20 inventories and prepaid amount; $2,851 for specified programs; $1,078 to reflect a loan receivable; $98 for capital repairs and refurbishments; and $4,925 for the Stadium District. Revenues for governmental functions totaled approximately $785,285 in fiscal year 2008-09, which represents a decrease of $18,817 (2.3%) from the previous year. The following table presents the amount of revenues from various sources and increases or (decreases) from the prior year. Table 4 Governmental Funds Revenues Classified by Source For the Years Ended June 30, 2009 and 2008 2009 2008 Amount Percent Amount Percent Taxes Special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeits Interest Miscellaneous Total revenues $ $ 396,241 441 6,989 292,236 55,346 6,283 5,335 22,414 785,285 50.4% 0.1% 0.9% 37.2% 7.0% 0.8% 0.7% 2.9% 100.0% $ $ 381,862 556 7,710 312,634 58,890 6,480 14,218 21,752 804,102 47.5% 0.1% 0.9% 38.9% 7.3% 0.8% 1.8% 2.7% 100.0% Variance Amount Percent $ $ 14,379 (115) (721) (20,398) (3,544) (197) (8,883) 662 (18,817) 3.8% -20.7% -9.4% -6.5% -6.0% -3.0% -62.5% 3.0% -2.3% The following provides an explanation of revenues by source that changed significantly over the prior year: • Taxes - Revenues from property taxes increased $14,379 reflecting higher primary tax revenues of $13,256 and secondary tax revenues of $1,123. Increased property tax revenue resulted from higher property valuations that were partially offset by a decrease in the primary tax rate. The County is expecting a decrease or flattening of property tax valuations in the future. • Intergovernmental - The $20,398 decrease in intergovernmental revenue was due primarily to a $13,501 decrease in the State shared sales tax attributable to the decline in consumer spending. Other intergovernmental revenue decreases include: $2,851 in Highway User Revenue; $2,387 in Vehicle License tax; $4,583 in state grant funding; $3,800 funding cut for the County Hold Harmless program; offset by a $5,947 increase in Regional Transportation Authority (RTA) funded projects and a $2,439 increase in grants funding for the Tumamoc Hill open space acquisition within the Capital Projects Fund. Additionally, the final payment from the City of Tucson for the transition of the Library System declined by $2,000 from last year's amount. • Interest – The $8,883 decrease in interest revenue is mainly due to the decline in the interest rates and losses from investments with Lehman Brothers, as discussed previously. 21 The following table presents expenditures by function compared to prior year amounts: Table 5 Governmental Funds Expenditures by Function For the Years Ended June 30, 2009 and 2008 Government Function General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Capital outlay Debt service: - Principal - Interest - Miscellaneous Total expenditures 2009 Amount Percent 2008 Amount Percent Variance Amount Percent $ 222,309 144,617 38,132 6,666 31,626 115,481 51,657 42,299 146,334 24.0% 15.6% 4.1% 0.7% 3.4% 12.5% 5.6% 4.6% 15.8% $ 237,640 149,475 43,741 8,310 34,352 106,607 50,509 42,286 139,539 26.6% 16.7% 4.9% 0.9% 3.8% 11.9% 5.6% 4.7% 15.7% $ (15,331) (4,858) (5,609) (1,644) (2,726) 8,874 1,148 13 6,795 -6.5% -3.3% -12.8% -19.8% -7.9% 8.3% 2.3% 0.0% 4.9% 100,384 26,849 24 $ 926,378 10.8% 2.9% 0.0% 100.0% 59,719 22,639 330 $ 895,147 6.7% 2.5% 0.0% 100.0% 40,665 4,210 (306) 31,231 68.1% 18.6% -92.7% 3.5% $ Total expenditures in governmental funds increased during fiscal year 2008-09 by $31,231 due primarily from the retirement and defeasance of the COPS Series 2008 in the amount of $40,000. Other major changes in the governmental funds: • General government expenditures decreased by $15,331. Of this amount, $8,405 (or 54.8%) occurred within the General Fund, which has been previously discussed. In addition, several projects have been completed within the Other Special Revenue funds contributing $4,765 and a $1,367 decline in the state funding for the Juvenile Courts' safe schools program. Lastly, there was a 2.5% budget expenditure reduction implemented in the second half of the fiscal year. • Welfare expenditures increased by $8,874 due to mandated contributions to AHCCCS and other healthcare related services as previously discussed under the General Fund section. • Capital outlay expenditures decreased by $6,795 as previously discussed under the Capital Projects Fund section. • Debt service principal and interest costs increased $40,665 and $4,210, respectively. The significant increase in principal expenditures was the result of the $40,000 repayment of the 2008 COPS; $20,000 scheduled for the current year and another $20,000 to defease next year’s payment. Accordingly, $3,214 of the increase in the interest cost was for the 2008 COPS. Proprietary funds The County’s proprietary fund functions are contained in the enterprise and internal service funds. The enterprise funds of the County are PHS&S, Regional Wastewater Reclamation, Development Services and Parking Garages. These business-type activities are accounted for in a similar fashion to private-sector businesses, and the costs for services provided are expected to be covered either fully or in part by current revenues generated, which include fees charged to external users. 22 The following table presents a comparison of this year’s enterprise fund activities with the prior year: Table 6 Enterprise Funds Schedule of Revenues, Expenses and Changes in Net Assets For the Years Ended June 30, 2009 and 2008 2009 Operating revenues: Net patient services Charges for services Other Total net operating revenues $ 2008 213,986 96,310 2,414 312,710 $ Variance Amount Percent 289,651 87,770 1,302 378,723 $ (75,665) 8,540 1,112 (66,013) -26.1% 9.7% 85.4% -17.4% Operating expenses: Employee compensation Medical claims Operating supplies & services Utilities Sludge and refuse disposal Repair and maintenance General and administrative Consultants and professional services Depreciation and amortization Total operating expenses 72,681 177,284 9,534 7,347 1,485 5,989 20,500 8,668 27,689 331,177 85,298 237,926 10,078 7,737 1,602 4,498 22,466 11,911 25,288 406,804 (12,617) (60,642) (544) (390) (117) 1,491 (1,966) (3,243) 2,401 (75,627) -14.8% -25.5% -5.4% -5.0% -7.3% 33.1% -8.8% -27.2% 9.5% -18.6% Operating loss (18,467) (28,081) 9,614 -34.2% Nonoperating revenues (expenses): Intergovernmental revenue Invesment earnings Sewer connection fees Interst expense Loss on disposal of capital assets Amortization of deferred charges Premium tax Total nonoperating revenues 4,626 2,039 18,284 (6,060) (341) (227) (4,403) 13,918 5,514 6,822 31,037 (6,653) (534) (136) (5,893) 30,157 (888) (4,783) (12,753) 593 193 (91) 1,490 (16,239) -16.1% -70.1% -41.1% -8.9% -36.1% 66.9% -25.3% -53.8% Income (loss) before contributions and transfers (4,549) 2,076 (6,625) -319.1% 14,916 25,570 (29,575) 6,362 23,510 9,545 (10,259) 24,872 (8,594) 16,025 (19,316) $ (18,510) -36.6% 167.9% 188.3% -74.4% Capital contributions Transfers in Transfers (out) Change in net assets $ $ The net operating revenues for the County's Enterprise Funds decreased 17.4% or $66,013 with a corresponding 18.6% or $75,627 decrease in operating expenses. This resulted in an operating loss of $18,467. Of this amount, $12,104 was reported in Regional Wastewater Reclamation, $2,144 in the PHS&S, $4,209 in Development Services, and $10 for Parking Garages. 23 The chart below presents the revenues and expenses for business-type activities: Expenses and Program Revenues - Business-type Activities $250,000 Revenues Expenses $200,000 $150,000 $100,000 $50,000 $0 Pima Health System & Regional Wastewater Development Services Services Reclamation Parking Garages Key activities within the enterprise funds for fiscal year 2008-09 include the following: • Net patient services revenues decreased by $75,665 from fiscal year 2007-08. The loss of the Ambulatory contract with the state, effective October 2008, resulted in an $80,127 drop in this particular revenue stream. The County retained approximately 2,700 ambulatory members under a capped enrollment contract that were dual-eligible (Medicaid and Medicare) or family members of PHS&S ALTCS members. • Employee compensation expenses decreased by $12,617 primarily as a result of these significant changes: $8,230 due to the loss of the Ambulatory contract with AHCCCS and $3,792 due to the persistent downturn in construction and permitting activities. • Medical claims expense decreased by $60,642 due to the loss of the Ambulatory contract with AHCCCS as discussed previously. • Investment earnings dropped 70.1% due to declining interest rates and decreasing cash balances which dropped 55% and 36%, respectively. In addition, losses from investments with Lehman Brothers amounting to $998 were written off this year. • Sewer connection revenues dropped 41.1%, or $12,753 as the current economic slowdown continues to affect the construction activities. In addition to fewer permits issued this year, the square footage per home being built has also decreased which resulted in a lower number of fixture units and reduced connection revenues. • Increase in transfers out represents the $3,400 equity transfer from PHS&S into the General Fund. The difference of transfers in and out reflects the movement of 2008 COPS funding for the Regional Wastewater Reclamation Fund. 24 Capital Assets and Debt Administration Capital Assets The County’s total investment in capital assets as of June 30, 2009 amounted to $2,299,891 (net of accumulated depreciation), an increase of 8.1% (or $171,462). Of this amount, $112,893 (65.8%) came from governmental activities and $58,569 (34.2%) came from business-type activities. The County’s investment in capital assets consists of land, buildings, sewage conveyance systems, infrastructure, equipment and construction in progress. Capital assets for the governmental and business-type activities are presented below to illustrate changes from the prior year: Table 7 Governmental and Business-type Activities Capital Assets For the Years Ended June 30, 2009 and 2008 Governmental Activities 2009 2008 Land Construction in progress Buildings and improvements Infrastructure Equipment Total $ Business-type Activities 2009 2008 384,368 103,106 380,798 614,951 43,551 $ 303,646 90,098 366,370 609,112 44,655 $ 13,595 43,208 228,198 399,094 89,022 $ 1,526,774 $ 1,413,881 $ 773,117 $ 10,596 72,060 234,142 369,514 28,236 $ 714,548 Total 2009 $ 2008 397,963 146,314 608,996 1,014,045 132,573 $ 314,242 162,158 600,512 978,626 72,891 $ 2,299,891 $ 2,128,429 Major capital asset events during the current fiscal year included the following: Governmental activities • Land increased by $80,722 due primarily to the purchases of open spaces under the Conservation Acquisition Program. Open spaces acquisition consisted of: $20,106 for Marley ranch; $21,024 for Clyne ranch properties; $10,295 partial purchase for Sopori ranch east of Arivaca; and $4,541 for Tumamoc Hill. In addition, several land parcels were donated to the County for $15,847 towards roadway projects, $900 for the library at Wilmot Road and $3,380 towards the Camino del Cerro Road. • Construction in progress increased $13,008 (or 14.4%) compared to last fiscal year. Current cost of major projects still in progress includes the $5,653 for Justice Court/Municipal Court building complex, the $2,820 towards the animal care center and various transportation roadways projects including the $5,178 La Cañada Drive from Ina Road to Calle Concordia projects. • Building and improvement activities increased by $14,428 mainly due to the completion of these projects: $5,090 Southern Arizona Children's Advocacy Center; the $1,333 Jackson employment center at 400 E. 26th street; the $4,250 Green Valley Multi-media Performing Arts Center; and the $4,889 improvement to the Rillito River Linear Park from Alvernon to Craycroft road. Business-type activities • Construction in progress decreased by $28,852 mainly within the Regional Wastewater Reclamation fund. The decrease is due primarily to the capitalization of the $56 million expansion project of the Avra Valley Biological Nutrient Reduction Oxidation Ditch (BNROD) which posted $26,011 in expenses last fiscal year. • Infrastructure increased by $29,580 due to the $25,616 rehabilitation and replacement of the Santa Cruz Sewer Interceptor project from Prince to Franklin and various contributions of developer-built sewer conveyance systems. • Facilities and equipment increased by $60,786 from the completion of two sewer treatment facilities; the Avra Valley BNROD expansion project ($48,258) and the new Marana BNROD expansion project ($8,532). 25 The County’s infrastructure assets are recorded at historical cost and estimated historical cost in the governmentwide financial statements. Additional information regarding the County’s capital assets can be found in Note 4 of the financial statements on pages 53-54 of this report. Long-term Debt Significant, comparative long-term debt entered into during the last two fiscal years is presented below: Table 8 Long-Term Debt For the Years Ended June 30, 2009 and 2008 Bonds issued (at face value): General obligation Street and highway revenue Sewer revenue Certificate of Participation (COPs) Capital leases Total $ 2009 2008 75,000 $ 100,000 25,000 75,000 50,000 312 $ 250,312 18,940 34,400 $ 128,340 During the fiscal year, the county received $75,000 in proceeds from the sale of general obligation bonds and $18,940 from the sale of sewer revenue bonds. As of June 30, 2009, remaining unspent bond proceeds from the general obligation (GO) bonds, transportation revenue (HURF) bond and sewer revenue bonds were $50,301, $6,173, and $7,519, respectively. The majority of the general obligation bonds were spent on projects for Facilities Management, Flood Control District, open space and parks and recreational facilities, while proceeds from transportation revenue bonds were allocated to various roadway projects. In addition, during the fiscal year, the County sold $34,400 in certificates of participation (COPS) Series 2009 to finance capital costs for public infrastructure as well as the expansion and upgrade to the County’s sewer treatment system. The most recent ratings for Pima County’s bonds and COPs are: Table 9 Credit Ratings Moody's Investors Service Rating Date Certificate of Participation (COPs) General obligation Street and highway revenue Sewer revenue A1 Aa3 A1 A2 May-2009 Mar-2009 Feb-2008 Apr-2009 Standard & Poor's Rating Date A+ AAAA A+ Oct-2009 Oct-2009 Oct-2009 Mar-2009 Fitch Ratings Rating Date A+ AAAAn/a Nov-2009 Nov-2009 Nov-2009 n/a The State constitution limits the amount of general obligation debt a governmental entity may issue to 6% of its net assessed valuation without voter approval. However, Pima County has voter approval for general obligation debt up to 15%. The current debt limitation for Pima County is $1,439,229, which is significantly in excess of Pima County’s outstanding general obligation debt. Additional information regarding the County’s debt can be found in Note 6 of the financial statements on pages 5765 of this report. 26 Economic Factors and Next Year’s Budget The State of Arizona had anticipated a budget deficit for fiscal year 2009-10 estimated at $2 to $3 billion because of lower than expected revenues. Although the State has not yet adopted specific proposals to address the entire deficit for fiscal year 2009-10, in past years when the State was facing budget difficulties, the State has shifted some of its costs to local jurisdictions either by charging cities, towns and counties additional mandatory payments or by reducing the share of state-shared revenues distributed to the cities, towns and counties. The County’s revenues for fiscal year 2009-10 are expected to be less than the budgeted or forecasted amounts largely due to lower revenues from residential building permits and state-shared tax revenues. The County is required by statute to adopt a balanced budget each year and has implemented cost-cutting measures to address the anticipated reduction in state-shared revenues and any potential increased cost shifting from the State. General Fund General government revenues, excluding property tax revenues, are budgeted in fiscal year 2009-10 at $140.6 million, approximately $21.4 million less than the amounted budgeted for fiscal year 2008-09. The General Fund property tax revenues for fiscal year 2009-10 are projected to be $286,321 based upon the adopted tax levy of $297,724 and a collection rate of 96.17%. The primary tax rate dropped from $3.3913 to $3.3133 per $100 of assessed valuation. Another $14.7 million is projected to be collected from delinquent property taxes and associated interest and penalties. Total state-shared sales tax and vehicle license tax revenues were budgeted at $113.7 million. The most current projections of state-shared and vehicle license taxes for fiscal year 2009-10 indicate $8.5 million less is expected to be received. The adopted budget for fiscal year 2009-10 has expenditures for the General Fund decreasing by approximately $6.6 million primarily due to: the $5.3 million decrease from a 2.5% across-the-board base budget reduction; $0.7 million net reduction for cost of fuel for estimated motor pool charges; and $1.1 million decrease in state mandated contributions to the various state retirement systems. In 2004, the County closed the County-operated Kino Community Hospital and leased the hospital ground and buildings to University Physicians Healthcare (UPH), a private nonprofit corporation, which opened a privately owned and operated hospital on the site. The original lease agreement between the County and UPH required $127 million of fees to be paid to UPH by the County over the first 10 years of the lease, in decreasing amounts, for the transition to a new hospital. At the request of UPH, the County amended its contract with UPH to accelerate, but not increase, the payments required by the lease. UPH is continuing efforts to make the hospital financially self sufficient. To date, the County has paid UPH $120.5 million of the total $127 million pledged and is scheduled to pay $6.5 million in fiscal year 2010-11. UPH has requested the County to provide additional long-term funding for its operations and has requested an additional $30 million in funding per year. In the County’s fiscal year 2009-10 budget, the County has set aside $15 million, in addition to the $10 million already paid for this fiscal year, for a total of $25 million should the County Board decide to increase funding. The County Board has not taken action on this matter. Any future decision by the County to alter the agreement with UPH would be made with full consideration of the impact it would have on other operations of the County and the need for the County to continue to maintain a balanced budget. Transportation By the end of October 2009, the County is projecting that the Vehicle License Tax (VLT) revenues received for fiscal year 2009-10 will decrease by $2.4 million below the adopted amount. In an effort to reduce expenditures to deal with the revenue shortfall, the County has initiated cost saving measures within the Transportation department. Additionally, revenues from impact fees are substantially lower than budgeted for fiscal year 2009-10. Development Services Consistent with the slowdown in the housing industry for the last two fiscal years, the fiscal year 2009-10 budget for the Development Services department has been reduced to $6,074 from last year’s budget of $10,934. By the end of October 2009, the County is projecting about $1,900 decrease in actual revenues. Part of the decrease is the 27 slowdown in commercial activity. The economic situation is not expected to improve in the near future. The County has therefore initiated cost saving measures within the Development Services department to reduce expenses. Debt Management In November 2009, the County issued $23.5 million in Series 2009 General Obligations (G.O.) Refunding Bonds to advance refund various G.O. bond obligations. The refunding component saved the County $1.3 million on a net present value basis or 5.6% when expressed as a percentage of the bonds that were refunded. American Recovery and Reinvestment Act (ARRA) Since signing of the American Recovery and Reinvestment Act on February 17, 2009, the County has been awarded 28 ARRA grants. Significant grants awarded to the County include $8.64 million towards transportation, $5.97 million towards workforce training, $4.47 million for criminal justice and public safety, and $3.37 million for emergency food and shelter/community services. Several County departments are still awaiting a final decision on another $52 million in outstanding ARRA grant requests. Request for Information This financial report is designed to provide a general overview of the County’s finances. Any questions concerning the information provided in this report or requests for additional financial information should be addressed to the Finance and Risk Management Department, 130 W. Congress, 6th Floor, Tucson, AZ, 85701. 28 Basic Financial Statements PIMA COUNTY, ARIZONA Statement of Net Assets June 30, 2009 (in thousands) Governmental Activities Assets Cash and cash equivalents Property taxes receivable (net) Interest receivable Internal balances Due from other governments Accounts receivable (net) Inventories Prepaids Special assessments receivable Other assets Restricted assets: Cash and cash equivalents Loans receivable Capital assets not being depreciated: Land Construction in progress Capital assets being depreciated (net): Buildings and improvements Sewage conveyance system Equipment Infrastructure $ 375,479 14,605 1,344 829 44,822 3,074 1,952 4,999 995 2,797 Primary Government Business-type Activities $ Liabilities Accounts payable Accrued medical and healthcare claims Interest payable Contract retentions Employee compensation Due to other governments Deposits and rebates Deferred revenues Noncurrent liabilities: Due within one year Due in more than one year Total liabilities 478,358 14,605 1,727 $ 1,898 24 65 777 1,078 2,291 3,068 1,078 384,368 103,106 13,595 43,208 397,963 146,314 380,798 228,198 399,094 89,022 608,996 399,094 132,573 614,951 1,778 1,979,525 907,080 2,886,605 4,435 39,280 13,361 18,078 4,862 214 1,241 52,641 18,078 6,384 362 48,005 3,745 812 4,579 99,210 582,901 768,389 14,187 240,172 302,687 113,397 823,073 1,071,076 289 972,346 539,718 1,512,064 2,448 819 14,479 5,883 9,017 34,477 604,393 78,080 21,349 45,385 74,424 5,883 9,017 69,327 1,815,529 7,072 3,714 78,080 21,349 44,566 59,945 $ Total Component Unit Southwestern Fair Commission 45,862 24,517 5,676 5,352 995 5,476 2,679 1,522 362 40,933 31 812 3,338 Net Assets Invested in capital assets, net of related debt Restricted for: Facilities, justice, library, tax stabilization and community development Highways and streets Debt service Capital projects Regional wastewater Healthcare Unrestricted Total net assets $ 383 (829) 1,040 21,443 3,724 353 43,551 614,951 Total assets 102,879 Exhibit A - 1 34,850 1,211,136 $ $ See accompanying notes to financial statements 29 670 24 51 $ 1,698 4,146 PIMA COUNTY, ARIZONA Statement of Activities For the Year Ended June 30, 2009 (in thousands) Program Revenues Functions/Programs Primary government: Governmental activities: General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Amortization - unallocated Interest on long-term debt Total governmental activities Business-type activities: Regional Wastewater Reclamation Pima Health System & Services Development Services Parking Garages Total business-type activities Total primary government Component unit: Southwestern Fair Commission Total component units Expenses $ Operating Grants and Contributions Charges for Services 212,196 $ 149,253 79,251 7,434 31,541 115,513 60,520 46,770 (235) 26,780 729,023 26,283 10,386 4,616 4,668 10,488 2,754 691 27,643 10,303 56,266 1,047 9,567 1,828 2,856 21,851 59,886 131,361 68,535 12 4,614 14,916 $ 4,626 135,987 $ $ 120 120 $ 105,139 224,959 9,992 1,696 341,786 1,070,809 $ 105,162 216,108 5,654 1,676 328,600 388,486 $ $ 4,609 4,609 $ $ 4,757 4,757 General revenues: Property taxes, levied for general purposes Property taxes, levied for regional flood control district Property taxes, levied for library district Property taxes, levied for debt service Hotel/motel taxes, levied for sports facility and tourism Other taxes, levied for stadium district Unrestricted share of state sales tax Unrestricted share of state vehicle license tax Grants and contributions not restricted to specific programs Interest and penalties on delinquent taxes Investment earnings Miscellaneous Gain on sale of capital assets Transfers Total general revenues and transfers Change in net assets Net assets at beginning of year Net assets at end of year See accompanying notes to financial statements 30 $ Capital Grants and Contributions $ 14 1,016 56,985 10,207 313 $ 14,916 83,451 Exhibit A - 2 Net (Expense) Revenue and Changes in Net Assets Governmental Activities $ Primary Government Business-type Activities (158,256) (127,548) 38,616 (1,719) (11,486) (113,685) (44,703) (23,915) 235 (26,780) (469,241) Total $ $ (469,241) 14,951 (4,237) (4,338) (20) 6,356 6,356 Component Unit Southwestern Fair Commission (158,256) (127,548) 38,616 (1,719) (11,486) (113,685) (44,703) (23,915) 235 (26,780) (469,241) Functions/Programs Primary government: Governmental activities: General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Amortization - unallocated Interest on long-term debt Total governmental activities 14,951 (4,237) (4,338) (20) 6,356 (462,885) Business-type activities: Regional Wastewater Reclamation Pima Health System & Services Development Services Parking Garages Total business-type activities Total primary government $ $ $ 277,777 25,337 32,353 57,788 6,591 1,534 89,177 25,869 5,741 6,123 5,875 21,323 1,140 4,005 560,633 91,392 1,119,744 1,211,136 2,025 2,394 $ (4,005) 414 6,770 597,623 604,393 $ 277,777 25,337 32,353 57,788 6,591 1,534 89,177 25,869 5,741 6,123 7,900 23,717 1,140 561,047 98,162 1,717,367 1,815,529 268 268 132 $ 132 400 3,746 4,146 Component unit: Southwestern Fair Commission Total component units General revenues: Property taxes, levied for general purposes Property taxes, levied for regional flood control district Property taxes, levied for library district Property taxes, levied for debt service Hotel/motel taxes, levied for sports facility and tourism Other taxes, levied for stadium district Unrestricted share of state sales tax Unrestricted share of state vehicle license tax Grants and contributions not restricted to specific programs Interest and penalties on delinquent taxes Investment earnings Miscellaneous Gain on sale of capital assets Transfers Total general revenues and transfers Change in net assets Net assets at beginning of year Net assets at end of year See accompanying notes to financial statements 31 PIMA COUNTY, ARIZONA Balance Sheet - Governmental Funds June 30, 2009 (in thousands) General Capital Projects Exhibit A - 3 Other Governmental Funds Debt Service Total Governmental Funds Assets Cash and cash equivalents Property taxes receivable (net) Interest receivable Due from other funds Due from other governments Accounts receivable Inventory Prepaid expenditures Special assessments receivable Loan receivable Other assets Restricted cash equivalents Total assets $ 36,317 9,888 296 2,481 19,284 1,341 $ 143,323 $ 469 118 5,704 5 3,237 42 1,078 160 107 815 670 41,028 2,377 129 3,099 8 $ 90,251 2,340 283 851 19,660 1,722 1,551 775 995 $ 310,919 14,605 1,177 6,549 44,656 3,068 1,551 4,054 995 1,078 1,057 777 82 $ 74,189 $ 151,146 $ 46,641 $ 7,706 8 $ 19,019 5 $ 1,508 9,170 $ 118,510 $ 390,486 $ 10,917 1 $ Liabilities and fund balances Liabilities: Accounts payable Interest payable Bonds payable Contract retentions Employee compensation Due to other funds Due to other governments Deposits and rebates Deferred revenues Total liabilities Fund balances: Reserved for: Inventory Prepaid expenditures Debt service Capital repairs and refurbishments Specified programs Loan receivable Unreserved, designated for: Special revenue Unreserved, undesignated: General fund Capital projects Special revenue 362 26 3,098 17 670 1,086 2,121 10,312 34,023 24,283 12,799 27,134 98,239 3,237 42 33,842 1,551 775 28 98 2,803 1,551 4,054 33,870 98 2,851 1,078 4,925 4,925 81,196 35,803 126,821 81,196 91,376 292,247 3,405 2,486 13 48 1,078 35,803 126,821 Total fund balances Total liabilities and fund balances 8,847 257 1 142 17,062 37,642 1,522 9,170 362 12,278 5,841 31 812 30,581 40,166 $ 74,189 126,863 $ 151,146 33,842 $ 46,641 See accompanying notes to financial statements 32 $ 118,510 $ 390,486 PIMA COUNTY, ARIZONA Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2009 (in thousands) Fund balances - total governmental funds Exhibit A - 4 $ 292,247 Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds Governmental capital assets Less accumulated depreciation Some long term debt liabilities and their associated issuance costs are not due and payable in the current period and therefore are not reported in the governmental funds Bonds payable Certificates of participation payable Loans and leases payable Unamortized deferred issuance costs reported as other assets $ 2,197,709 (690,498) (519,270) (74,554) (21,327) 1,740 Some compensated absences are not due and payable shortly after June 30, 2009, and therefore are not reported in the governmental funds Employee compensation Some liabilities are not due and payable shortly after June 30, 2009, and therefore are not reported in the governmental funds Landfill liability Pollution remediation liability 1,507,211 (613,411) (27,938) (19,329) (1,467) (20,796) Deferred revenue in governmental funds is susceptible to full accrual on the government-wide statements 27,243 Internal service funds are used by management to charge the costs of certain activities to individual funds. Most assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets 46,580 Net assets of governmental activities $ 1,211,136 See accompanying notes to financial statements 33 Exhibit A - 5 PIMA COUNTY, ARIZONA Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2009 (in thousands) General Revenues: Taxes Special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous $ 281,749 2,747 131,966 35,330 4,720 1,084 7,099 Total revenues Capital Projects $ $ 464,695 Expenditures: Current: General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Capital outlay Debt service - principal - interest - miscellaneous Debt Service 57,223 25,036 3,652 17 1,758 323 946 30,769 58,186 Other Governmental Funds $ 184,434 121,704 2,767 115,481 15,580 16,368 57,269 441 4,242 135,217 16,364 1,563 1,547 14,992 Total Governmental Funds $ 231,635 785,285 37,875 22,913 38,132 6,666 28,859 222,309 144,617 38,132 6,666 31,626 115,481 51,657 42,299 146,334 100,384 26,849 24 36,077 25,931 146,334 3,510 2,426 6 Total expenditures 462,276 Excess (deficiency) of revenues over (under) expenditures 2,419 396,241 441 6,989 292,236 55,346 6,283 5,335 22,414 96,751 24,322 18 123 101 146,334 121,091 196,677 926,378 (115,565) (62,905) 34,958 (141,093) Other financing sources (uses): Premium on bonds Face amount of long-term debt Proceeds from sale of capital assets Transfers in Transfers (out) 371 50,517 (83,530) 15,751 (35,366) 83,679 505 21,239 (47,423) 675 109,400 876 171,186 (166,319) Total other financing sources (uses) (32,642) 89,785 84,354 (25,679) 115,818 Net change in fund balances (30,223) (25,780) 21,449 9,279 (25,275) 70,389 152,643 12,393 82,152 317,577 675 109,400 Fund balances at beginning of year Change in reserve for inventory Fund balances at end of year (55) $ 40,166 $ 126,863 $ 33,842 See accompanying notes to financial statements 34 $ 91,376 (55) $ 292,247 PIMA COUNTY, ARIZONA Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2009 (in thousands) Net change in fund balances - total governmental funds $ Exhibit A - 6 (25,275) 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 depreciated over their estimated useful lives and reported as depreciation expense Expenditures for capital assets Less current year depreciation $ 125,341 (54,596) 70,745 Transfers of capital assets between governmental activities and proprietary funds are not reported in the governmental funds but are recognized in the statement of activities 93 The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds but increases long-term liabilities in the statement of net assets. Repayment of the principal of debt is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. 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 Face amount of long-term debt Premium on bonds Debt service - principal payments Deferred issuance costs Amortization expense (109,400) (675) 100,384 251 235 (9,205) Some revenues reported in the statement of activities do not represent the collection of current financial resources and therefore are not reported as revenues in the governmental funds. Likewise, some revenues reported in the governmental funds are collections of current financial resources that related to other periods and therefore are not reported as revenues in the statement of activities. Donations of capital assets Property tax revenues Other 42,396 3,137 (2,024) 43,509 7,799 (910) 317 (303) (55) 6,848 Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds. Likewise, some expenditures and changes in fund balances reported in the governmental funds are uses of current financial resources that related to other periods and therefore are not reported as expenses in the statement of activities. Changes in payroll liabilities Change in landfill liability Change in pollution remediation liability Net book value of capital asset disposals Change in reservation of fund balances Internal service funds are used by management to charge the costs of certain activities to individual funds. A portion of the net activity of the internal service funds is reported with governmental activities Change in net assets of governmental activities See accompanying notes to financial statements 35 4,677 $ 91,392 PIMA COUNTY, ARIZONA Statement of Net Assets - Proprietary Fund June 30, 2009 (in thousands) Exhibit A - 7 Business-type Activities Enterprise Funds Pima Health System & Services Assets Current assets: Cash and cash equivalents Restricted cash and cash equivalents Interest receivable Due from other funds Due from other governments Accounts receivable (net) Inventory Prepaid expense Total current assets Noncurrent assets: Restricted cash and cash equivalents Capital assets: Land and other improvements Buildings and improvements Sewage conveyance system Equipment Less accumulated depreciation Construction in progress Total capital assets (net of accumulated depreciation) Deferred financing costs Total noncurrent assets $ $ 117 1,040 7,755 89 11 34,246 30,163 41,487 241 3,098 Other Enterprise Funds $ Total Enterprise Funds 5,995 $ 25 1 13,668 3,635 276 92,568 20 66 6,107 2,291 2,291 35,000 863,177 12,831 911,008 86,236 677 18,078 2,346 3 1,003 3,643 1 12,328 356 1,638 3,980 4,859 3,230 746 13,361 18,078 7,072 4,862 4,234 3,714 1,241 7,870 6,317 1,634 (9,605) 6,724 1 71 1,240 7,870 6,317 25,751 39,824 1,174 592 614 32,841 (15,097) 613 19,563 19,563 717 1 4,446 2,218 9,020 66,749 6,481 175,519 58,172 6,481 175,519 58,172 240,172 240,172 20,089 10,241 30,330 25,751 279,996 1,174 306,921 39,350 754 532,240 6,724 539,718 19,563 4,933 819 14,479 5,883 9,017 34,171 27,323 11,657 604,087 819 14,479 5,883 9,017 (522) $ 167 428 166 6 401 945 66,673 6,724 754 Net assets Invested in capital assets, net of related debt Restricted for: Debt service Capital projects Wastewater management Healthcare Unrestricted 64,560 13,595 367,275 621,077 102,699 (374,737) 43,208 773,117 2,679 778,087 754 Total liabilities $ 1,768 12,927 1,435 (1,375) Liabilities Current liabilities: Accounts payable Accrued medical and health care claims Employee compensation Interest payable Due to other funds Due to other governments Deferred revenues Current portion of sewer revenue bonds Current portion of wastewater loans payable Current portion of reported but unpaid losses Current portion of incurred but not reported losses Total current liabilities Noncurrent liabilities: Contracts and notes Sewer revenue bonds Wastewater loans payable Reported but unpaid losses Incurred but not reported losses Total noncurrent liabilities 61,392 41,487 383 3,099 1,040 21,443 3,724 353 132,921 Governmental ActivitiesInternal Service Funds 11,827 353,654 621,077 99,630 (363,757) 43,208 765,639 2,679 770,609 694 Total assets Total net assets 25,234 Regional Wastewater Reclamation 9,249 29,760 $ 583,181 $ Some amounts reported for business-type activities in the Statement of Net Assets are different because certain internal service fund assets and liabilities are included with business-type activities. Net assets of business-type activities See accompanying notes to financial statements 36 306 $ 604,393 $ 46,886 PIMA COUNTY, ARIZONA Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds For the Year Ended June 30, 2009 (in thousands) Exhibit A - 8 Business-type Activities Enterprise Funds Pima Health System & Services Operating revenues: Net patient services Charges for services Other $ Total net operating revenues Operating expenses: Employee compensation Medical claims Operating supplies and services Utilities Sludge and refuse disposal Repair and maintenance Incurred losses Insurance premiums General and administrative Consultants and professional services Depreciation Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Intergovernmental revenue Investment earnings Sewer connection fees Interest expense Loss on disposal of capital assets Amortization of deferred charges Premium tax 213,986 2,122 2,136 Regional Wastewater Reclamation Other Enterprise Funds $ $ 86,858 56 $ 7,330 222 213,986 96,310 2,414 7,552 312,710 46,609 30,866 177,284 973 423 33,947 7,868 6,649 201 323 347 8,360 6,601 1,485 5,478 164 72,681 177,284 9,534 7,347 1,485 5,989 8,613 1,648 234 220,388 9,291 6,944 26,912 99,018 2,596 76 543 11,771 20,500 8,668 27,689 331,177 3,567 12,600 4,627 3,143 574 2,840 40,727 (2,144) (12,104) (4,219) (18,467) 5,882 4,614 728 12 1,164 18,284 (6,046) (327) (227) 924 (13) 12,860 (1,220) 134 756 6,042 (93) 14,916 25,570 (29,575) 1,029 (1,986) 6,362 5,085 41,801 (4,620) 15,160 (4,178) Net assets at beginning of year 13,869 568,021 15,835 597,725 11,657 604,087 583,181 $ Some amounts reported for business-type activities in the Statement of Activities are different because a portion of the net activity of certain internal service funds is reported with business-type activities. Change in net assets of business-type activities See accompanying notes to financial statements 37 160 (4,549) Change in net assets $ (329) (4,085) (3,400) 9,249 489 13,918 14,916 25,570 (26,082) $ 5,656 1,071 4,626 2,039 18,284 (6,060) (341) (227) (4,403) 147 Capital contributions Transfers in Transfers (out) Net assets at end of year 44,440 2,169 86,914 (4,403) Income (loss) before contributions and transfers $ 218,244 (14) (1) Total nonoperating revenues Governmental ActivitiesInternal Service Funds Total Enterprise Funds 408 $ 6,770 $ 46,886 PIMA COUNTY, ARIZONA Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2009 (in thousands) Pima Health System & Services Cash flows from operating activities: Cash received from other funds for goods and services Cash received from customers for goods and services Cash received from miscellaneous operations Cash payments to suppliers for goods and services Cash payments to other funds for goods and services Cash payments for incurred losses Cash payments to employees for services $ Net cash provided by (used for) operating activities 358 221,650 1,778 (199,686) (5,262) Exhibit A - 9 Regional Wastewater Reclamation Other Enterprise Funds Total Enterprise Funds $ $ 83,078 56 (29,696) (8,357) $ 7,329 216 (1,352) (3,244) 358 312,057 2,050 (230,734) (16,863) 44,440 (33,054) (34,665) (7,393) (75,112) (14,216) 10,416 (4,444) (8,244) 14,226 (3,400) (83) (4,403) 4,360 Net cash provided by (used for) noncapital financing activities (3,542) (16) Net cash used for capital and related financing activities $ 2,324 (15,689) (3,979) (6,667) (6,203) Cash flows from noncapital financing activities: Interest paid on short-term credit Cash transfers in from other funds Cash transfers out to other funds Loans with other funds Premium tax Intergovernmental revenues Cash flows from capital and related financing activities: Proceeds from issuance of bonds and loans Principal paid on bonds and loans Interest paid on bonds and loans Sewer connection fees Proceeds from sale or transfer of capital assets Proceeds from intergovernmental contract Purchase of capital assets Governmental ActivitiesInternal Service Funds 25,570 (26,082) (1,823) (16) 25,570 (29,482) 727 (4,403) 3,664 2,633 (696) (3,031) 2,633 1,028 (1,983) 147 (3,940) 18,940 (5,975) (2,172) 18,009 (808) (387) 352 (74,224) (65) 18,940 (5,975) (2,172) 18,009 16 352 (74,676) (387) (45,070) (49) (45,506) Cash flows from investing activities: Interest received on cash and investments 755 1,210 139 2,104 494 Net cash provided by investing activities 755 1,210 139 2,104 494 16 Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ 294 (3,427) (3,133) (17,390) (36,475) (1,721) (55,586) 10,779 42,624 110,416 7,716 160,756 53,781 25,234 $ 73,941 $ (continued) See accompanying notes to financial statements 38 5,995 $ 105,170 $ 64,560 PIMA COUNTY, ARIZONA Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2009 (in thousands) Exhibit A - 9.1 (continued) Reconciliation of operating income (loss) to net cash provided by (used for) operating activities Pima Health System & Services $ (2,144) Operating income (loss) Regional Wastewater Reclamation $ (12,104) Other Enterprise Funds $ (4,219) Total Enterprise Funds $ (18,467) Governmental ActivitiesInternal Service Funds $ 5,882 Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization Changes in assets and liabilities: Decrease (increase) in assets: Accounts receivable Due from other governments Inventory and other assets Prepaid expenses Increase (decrease) in liabilities: Accounts payable Due to other governments Reported but unpaid losses Incurred but not reported losses Other current liabilities Net cash provided by (used for) operating activities $ 234 26,912 3,635 144 (8) 3 (3,808) 28 (15) (98) (16,484) 1,763 (1,359) (14,216) $ 543 27,689 (59) (180) 172 (23) (154) 141 14 157 (248) 307 (88) 1 (33) (16,176) 1,642 (718) (670) (2,747) (109) (5) 5,113 676 (235) 10,416 (7) 2,840 $ (4,444) $ (8,244) $ Noncash investing, capital and noncapital financing activities during the year ended June 30, 2009: Pima Health System & Services retired equipment with a net book value of $1. Regional Wastewater Reclamation disposed of capital assets with a net book value of $327. Regional Wastewater Reclamation received contributed developer-built conveyance systems with estimated fair values totaling $15,381. These contributions were recorded as an increase in capital assets and capital contributions. Regional Wastewater Reclamation recorded a Board of Supervisor approved connection fee credit agreement of $466. This credit was recorded as an increase to deferred revenue and a decrease to capital contributions. Regional Wastewater Reclamation retired expired Sewer Credit Agreements totaling $1. This transaction was recorded as a decrease to deferred revenue and an increase in capital contributions. Other Enterprise Funds disposed of capital assets with an original cost of $54 and accumulated depreciation of $43, resulting in a loss on disposal of $11. Other Enterprise Funds transferred land with a book value of $93 to the County's general government. Other Enterprise Funds retired capital assets with a book value of $18. Internal Service Funds retired assets with a net book value of $6. Internal Service Funds transferred in capital assets with a net book value of $1 from the County's general government. Internal Service Funds transferred out capital assets with a net book value of $3 to the County's general government. See accompanying notes to financial statements 39 14,226 PIMA COUNTY, ARIZONA Statement of Fiduciary Net Assets - Fiduciary Funds June 30, 2009 (in thousands) Investment Trust Funds Assets Cash and cash equivalents Interest receivable $ Total assets $ 66,626 272,185 $ 66,626 $ 3,931 38,506 24,189 $ 66,626 Total liabilities $ Agency Funds 271,397 788 Liabilities Employee compensation Due to other governments Deposits and rebates Net assets Held in trust for pool participants Exhibit A - 10 272,185 See accompanying notes to financial statements 40 PIMA COUNTY, ARIZONA Statement of Changes in Fiduciary Net Assets Fiduciary Funds For the Year Ended June 30, 2009 (in thousands) Exhibit A - 11 Investment Trust Funds Additions Contributions from participants Total contributions $ Investment earnings Total investment earnings 5,832 5,832 Total additions 2,524,394 Deductions Distributions to participants 2,567,538 Total deductions 2,567,538 Change in net assets (43,144) Net assets held in trust July 1, 2008 Net assets held in trust June 30, 2009 See accompanying notes to financial statements 41 2,518,562 2,518,562 315,329 $ 272,185 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 1: Summary of Significant Accounting Policies The accounting policies of Pima County (County) conform to U.S. generally accepted accounting principles (GAAP) applicable to governmental units as promulgated by the Governmental Accounting Standards Board (GASB) and the regulatory requirements of the State of Arizona. A summary of the County’s significant accounting policies follows. During the year ended June 30, 2009, the County adopted early implementation of GASB Statement No. 51. The provisions for GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets, require that all intangible assets not specifically excluded by its scope provisions be classified as capital assets. Historically, Pima County has reported intangible assets, primarily consisting of rights of way, easements and software. The County’s implementation of GASB 51 generated a change of the policy for capitalization to specifically include intangible assets. The County’s policy is to prospectively capitalize all intangible assets costing $100,000 or more. No restatement was necessary for intangible assets that were reported using a different capitalization threshold. A. Reporting Entity The County is a general-purpose local government that is governed by a separately elected board of supervisors. The accompanying financial statements present the activities of the County (the primary government) and its component units. Component units are legally separate entities for which the County is considered financially accountable. Blended component units, although legally separate entities, are in substance, part of the County’s operations. Therefore, data from these units are combined with data of the primary government. Discretely presented component units, on the other hand, are reported in a separate column in the government-wide financial statements to emphasize they are legally separate from the County. Each blended and discretely presented component unit discussed below has a June 30 year-end. The Pima County Stadium District, a legally separate entity, was formed to promote and establish major league baseball spring training in Pima County. The County Board of Supervisors is the Board of Directors of the District. Acting in the capacity of the Board of Directors, the Pima County Board of Supervisors is able to impose its will on the District. The Board of Directors levies the car rental surcharge rates and the recreation vehicle (RV) park tax for the District. The District is reported as a special revenue fund (blended component unit) in these financial statements. Complete financial statements for the District can be obtained from the Pima County Department of Finance and Risk Management located at 130 West Congress Street, Tucson, Arizona 85701. The Pima County Library District was established in 1986 when legislation allowed full taxing authority and the ability to enter into agreements with other jurisdictions for the provision of library services. The Pima County Board of Supervisors is the Board of Directors of the District. The Library District is reported as a special revenue fund (blended component unit) in these financial statements. Separate financial statements for the District are not available. The Pima County Regional Flood Control District was established in 1978. The District is responsible for floodplain management activities for the unincorporated areas of Pima County (except national forests, parks, monuments and Native American Nations), the City of South Tucson, and the Town of Sahuarita. The Pima County Board of Supervisors is the Board of Directors for the Regional Flood Control District. The Regional Flood Control District is reported as a special revenue fund (blended component unit) in these financial statements. Separate financial statements for the District are not available. 42 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) The Southwestern Fair Commission, Inc. (SFC) is a nonprofit corporation, which manages and maintains the fairgrounds owned by the County and conducts an annual fair and other events at the fairgrounds. The Commission’s members are appointed and can be removed at any time by the Pima County Board of Supervisors. Based on these factors, and because SFC does not provide services entirely, or almost entirely to the County, but rather to the general citizenry, SFC is reported as a separate component unit (discrete presentation) in these financial statements. Complete financial statements for SFC can be obtained from the Pima County Department of Finance and Risk Management located at 130 West Congress Street, Tucson, Arizona 85701. Related Organization: The Industrial Authority of Pima County (Authority) is a legally separate entity that was created to promote economic development and the development of affordable housing. The Authority fulfills its function through the issuance of tax-exempt bonds. The County Board of Supervisors appoints the Authority’s Board of Directors. The Authority’s operations are completely separate from the County and the County is not financially accountable for the Authority. Therefore, the financial activities of the Authority have not been included in the accompanying financial statements. B. Basis of Accounting Primary government: The government-wide, proprietary funds and fiduciary funds financial statements are presented using the economic resources measurement focus and the accrual basis of accounting with the exception of agency funds, which have no measurement focus. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Property taxes are recognized as revenue in the year for which they are levied. Grants and donations are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental funds in the fund-based financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The County considers all revenues reported in the government funds to be available if the revenues are collected within 30 days after year-end. Revenues that are collected after 30 days are reported as deferred revenues. The County’s major revenue sources that are susceptible to accrual are property taxes, intergovernmental and charges for services. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they are due and payable. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital lease agreements are reported as other financing sources. Under the terms of grant agreements, the County funds certain programs by a combination of grants and general revenues. Therefore, when program expenses are incurred, there are both restricted and unrestricted net assets available to finance the program. The County applies grant resources to such programs before using general revenues. The County’s business-type activities and enterprise funds follow FASB Statements and Interpretations issued on or before November 30, 1989; Accounting Principles Board Opinions; and Accounting 43 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) Research Bulletins, unless those pronouncements conflict with GASB pronouncements. The County has chosen the option not to follow FASB statements and interpretations issued after November 30, 1989. Discretely presented component unit: SFC’s financial statements are presented using the economic resources measurement focus and the accrual basis of accounting. The Commission’s policy is to apply all FASB pronouncements issued after November 30, 1989. C. Basis of Presentation The basic financial statements include both government-wide statements and fund-based financial statements. The government-wide statements focus on the County as a whole, while the fund-based financial statements focus on major funds. Each presentation provides valuable information that can be analyzed and compared between years and between governments to enhance the usefulness of the information. Government-wide statements provide information about the primary government and its component units. The statements include a statement of net assets and a statement of activities. These statements report the financial activities of the overall government, except for fiduciary activities. They also distinguish between the governmental and business-type activities of the County and between the County and its discretely presented component unit. Governmental activities are financed primarily through taxes and intergovernmental revenues. Business-type activities are financed in whole or in part by fees charged to external parties. A statement of activities presents a comparison between direct expenses and program revenues for each function of the County’s governmental activities and segment of its business-type activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. The County does not allocate indirect expenses to programs or functions. Program revenues include: ƒ ƒ ƒ Charges for services (fines and forfeitures, licenses and permits, and special assessments) Operating grants and contributions Capital grants and contributions Revenues that are not classified as program revenues, including internally dedicated resources and all taxes, are reported as general revenues. The net effect of interfund activity has been eliminated from the government-wide financial statements to minimize the double counting of internal activities. Fund-based financial statements provide information about the County’s funds, including fiduciary funds and blended component units. Separate statements are presented for the governmental, proprietary, and fiduciary fund categories. The emphasis of fund-based financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as non-major funds. Fiduciary funds are aggregated and reported by fund type. Proprietary funds are financed mainly by fees and charges received from users of the services provided by the funds’ operations. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. 44 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) . The County reports the following major governmental funds: The General Fund is the County’s primary operating fund. It accounts for all financial resources of the general government, except for those required to be accounted for in another fund. The Capital Projects Fund accounts for financial resources to be used for the acquisition or construction of major capital facilities, other than those financed by proprietary funds. The Debt Service Fund accounts for the accumulation of resources for, and the payment of, general long-term debt principal and interest. The County reports the following major enterprise funds: Pima Health System and Services (PHS&S) provides payment for health care services including inpatient hospital care and outpatient clinical care for medical and psychiatric problems, indigent health care under the Arizona Health Care Cost Containment System (AHCCCS), an alternative to Medicaid, home health services and long-term nursing care. Regional Wastewater Reclamation (RWR) accounts for the management and operation of wastewater treatment and water pollution control programs. The County reports the following fund types: Internal Service Funds account for the financing of goods or services provided by one department or agency to other departments or agencies of the County, or to other governmental units, on a costreimbursement basis. These funds account for fleet maintenance and operation, insurance, graphic services and telecommunications services. Investment Trust Funds account for assets held by the County Treasurer in an external investment pool and individual investment accounts for the benefit of outside jurisdictions. Agency Funds account for the assets, held by the County as an agent, for individuals, private organizations or other governmental units. The agency fund is custodial in nature and does not present results of operations. D. Cash and Investments Primary government: For purposes of its statements of cash flows, the County considers only those highly liquid investments, with a maturity period of 3 months or less when purchased, to be cash equivalents. All investments are stated at fair value. If an individual fund has a deficit balance in the amount on deposit with the County Treasurer at year-end, that balance is reclassified as an amount due to other funds. Discretely presented component unit: 45 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) SFC’s cash and cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less. E. Inventories and Prepaids The County accounts for its inventories in the Health and Animal Care Fund using the purchase method. Inventories of the Health and Animal Care Fund consist of expendable supplies held for consumption and are recorded as expenditures at the time of purchase. Amounts on hand at year-end are shown on the balance sheet as an asset for informational purposes only and are offset by a fund balance reserve to indicate that they do not constitute “available spendable resources.” These inventories are stated at cost using the first-in, first-out method or average cost method. Inventories of the Transportation Department are recorded as assets when purchased and expensed when used. Amounts on hand at year-end are shown on the balance sheet as an asset and are offset by a fund balance reserve to indicate that they do not constitute “available spendable resources”. Inventories in Transportation are valued at lower of cost or market, cost being determined using the moving average method. Inventories in the government-wide and proprietary funds’ financial statements are recorded as assets when purchased and expensed when consumed. Inventories of Pima Health System and Services, an enterprise fund, are valued at the lower of cost or market, cost being determined on the first-in, first-out method. Inventories of RWR, an enterprise fund, are valued at lower of cost or market, cost being determined using the moving average method. Inventories of the Internal Service Funds, are valued at lower of cost or market, cost being determined using the moving average method. Prepaid expenses/expenditures are accounted for using the consumption method, except for the School Reserve Fund reported as an Other Governmental Fund, which uses the purchase method. F. Property Tax Calendar The County levies real and personal property taxes on or before the third Monday in August that become due and payable in two equal installments. The first installment is due on the first day of October and becomes delinquent after the first business day of November. The second installment is due on the first day of March of the next year and becomes delinquent after the first business day of May. A lien assessed against real and personal property attaches on the first day of January preceding assessment and levy. G. Capital Assets Capital assets are reported at actual cost, or estimated historical cost if historical records are not available. Donated assets are reported at estimated fair value at the time received. 46 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) Capitalization thresholds, depreciation methods, and estimated useful lives of capital assets reported in the government-wide statements and proprietary funds are as follows (excluding component units): Capitalization Threshold Depreciation Method Estimated Useful Life Land All N/A N/A Land improvements (Reported in buildings and building improvements) All Straight Line 20 - 30 Years $100 Straight Line 10 - 50 Years Equipment $5 Straight Line 4 - 25 Years Fleet service vehicles (Reported in equipment) $5 Units of Production based on number of hours or miles 5 - 15 Years Infrastructure/Sewer conveyance systems $100 Straight Line 10 - 50 Years Intangible (Reported in land, equipment and infrastructure) $100 Straight Line Varies Buildings and building improvements Discretely presented component unit: SFC capital assets are reported at actual cost. Depreciation is provided by the straight-line method over the assets’ estimated useful life, which range from 3 to 40 years. H. Investment Earnings Investment earnings are composed of interest, dividends, and net changes in the fair value of applicable investments. I. Compensated Absences Compensated absences consist of vacation leave and a calculated amount of sick leave earned by employees based on services already rendered. Employees may accumulate up to 240 hours of vacation depending upon years of service, but any vacation hours in excess of the maximum amount that are unused at their year-end are forfeited. Upon termination of employment, all unused and unforfeited vacation benefits are paid to employees. Accordingly, vacation benefits are accrued as a liability in the financial statements in Employee Compensation. Employees may accumulate up to 1920 hours of sick leave. Generally, sick leave benefits provide for ordinary sick pay and are cumulative but are forfeited upon termination of employment. Sick leave benefits do not vest with employees; however employees who are eligible to retire from County service into the Arizona State Retirement System, Public Safety Personnel Retirement System, or Corrections Officer Retirement Plan may request sick leave be converted to annual leave, on a predetermined conversion basis. An estimate of those retirement payouts is accrued as a liability in the government-wide and proprietary financial statements in Employee Compensation. 47 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 2: Cash and Investments Primary Government The County’s cash and investment policies are governed by State statutes and by bond covenants. The County Treasurer is authorized to invest public monies in the State Treasurer’s Investment Pool; interest bearing savings accounts, certificates of deposit and repurchase agreements in eligible depositories; bonds or other obligations issued or guaranteed by the United States government or any of the senior debt of its agencies, sponsored agencies, corporations, sponsored corporations, or instrumentalities; specified state and local government bonds; specified commercial paper, bonds, debentures, and notes issued by corporations organized and doing business in the United States; and bonds or other evidences of indebtedness of the State of Arizona or any of its counties, cities, towns, or school districts as specified by statute. In addition, the County Treasurer may invest trust funds in fixed income securities of corporations doing business in the United States. Credit risk—The State statutes have the following requirements for credit risk: 1. Commercial paper must be rated P1 by Moody’s Investors Service or A1 or better by Standard and Poor’s rating service. 2. Corporate bonds, debentures and notes must be rated A or better by Moody’s Investors Service or Standard and Poor’s rating service. 3. Fixed income securities must carry one of the two highest ratings by Moody’s Investors Service and Standard and Poor’s rating service. If only one of the above-mentioned services rates the security, it must carry the highest rating of that service. Custodial credit risk—Statutes require collateral for demand deposits, certificates of deposit and repurchase agreements at 101 percent of all deposits not covered by federal depository insurance. Concentration of credit risk—Statutes do not include any requirements for concentration of credit risk. Interest rate risk—Statutes require that public monies invested in securities and deposits have a maximum maturity of 5 years and that public operating fund monies invested in securities and deposits have a maximum duration of 3 years. Investments in repurchase agreements must have a maximum maturity of 180 days. Foreign currency risk—Statutes do not allow foreign investments. Deposits—At June 30, 2009, the carrying amount of the County’s deposits was $77,499 and the bank balance was $77,784. Custodial credit risk—Custodial credit risk is the risk that the County will not be able to recover its deposits if a financial institution fails. The County does not have a formal policy with respect to custodial credit risk. As of June 30, 2009, $2,446 of the County’s bank balance was exposed to custodial credit risk because it was uninsured and uncollateralized. 48 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 2: Cash and Investments (continued) Investments—At June 30, 2009, the County’s investments consisted of $268,901 invested in marketable securities and $472,996 invested in the State Treasurer’s Investment Pool. Cash from the County and from external legally separate governments are pooled to purchase the investments in marketable securities and the State Treasurer’s Pool. The State Board of Investment provides oversight for the State Treasurer’s pools. The fair value of a participant’s position in the pool approximates the value of that participant’s pool shares and the participant’s shares are not identified with specific investments. Credit risk—Credit risk is the risk that an issuer or counterparty to an investment will not fulfill its obligations. The County does not have a formal investment policy with respect to credit risk. At June 30, 2009, credit risk for the County’s investments was as follows: Investment Type Commercial paper Corporate bonds Federal Farm Credit Bank Federal Home Loan Bank Fannie Mae (Federal National Mortgage Association Freddie Mac (Federal Home Loan Mortgage Corp) Money market mutual fund State Treasurer Investment Pool 5 State Treasurer Investment Pool 7 Total Rating A1/P1 A/A1 AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa AAAf/S1+ Unrated Rating Agency S&P / Moody's S&P / Moody's S&P / Moody's S&P / Moody's S&P / Moody's S&P / Moody's S&P / Moody's S&P Amount $ 39,037 77,727 18,936 21,024 27,901 20,195 1,959 343,284 129,712 $ 679,775 Custodial credit risk—For an investment, custodial risk is the risk that, in the event of the counterparty’s failure, the County will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The County has no formal policy with respect to custodial credit risk. Of the County’s $741,897 of investments, $266,942, consisting of the commercial paper, corporate bonds, Federal Farm Credit Bank, Federal Home Loan Bank, Fannie Mae and Freddie Mac discount notes and U.S. Treasury notes, are uninsured and held by a counterparty in the County’s name in book form. Concentration of credit risk—The County has no formal policy with respect to limiting the amount the Treasurer may invest in any one issuer. The County’s exposure as of June 30, 2009 is less than 5% per issuer. Interest rate risk—Interest rate risk is the risk that changes in interest rates will adversely affect an investment’s fair value. The County does not have a formal investment policy with respect to interest rate risk. 49 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 2: Cash and Investments (continued) As of June 30, 2009, the County had the following investments: Investment Type Amount State Treasurer Investment Pool 5 State Treasurer Investment Pool 7 Commercial paper Corporate bonds Federal Farm Credit Bank Federal Home Loan Bank Fannie Mae (Federal National Mortgage Association) Freddie Mac (Federal Home Loan Mortgage Corp) U.S. Treasury Money market mutual fund Total $ 343,284 129,712 39,037 77,727 18,936 21,024 27,901 20,195 62,122 1,959 $ 741,897 Weighted Average Maturity (Years) 0.12 0.03 0.13 2.11 1.61 1.05 1.05 1.41 2.52 0.13 A reconciliation of cash, deposits, and investments to amounts shown on the Statements of Net Assets follows: Cash, deposits and investments: Cash on Hand $ 53 Amount of Deposits $ 77,499 Amount of Investments $ 741,897 Governmental Business-type Investment Activities Activities Trust Funds Statement of Net Assets: Cash and cash equivalents Restricted cash and cash equivalents Total $ $ 375,479 777 376,256 $ $ 102,879 2,291 105,170 Total $ 819,449 Agency Funds $ 271,397 $ 66,626 $ 271,397 $ 66,626 Totals $ 816,381 3,068 $ 819,449 County Treasurer’s Investment Pool (Pool)—Arizona Revised Statutes require community colleges, school districts, and other local governments to deposit certain public monies with the County Treasurer. The County Treasurer has a fiduciary responsibility to administer those and the County monies under her stewardship. The County Treasurer invests, on a pool basis, all idle monies not specifically invested for a fund or program. In addition, the County Treasurer determines the fair value of those pooled investments annually at June 30. The County Treasurer’s Investment Pool is not registered with the Securities and Exchange Commission as an investment company and there is no regulatory oversight of its operations. The structure of the Pool does not provide for shares and the County has not provided or obtained any legally binding guarantees to support the value of the participants’ investments. The County Treasurer allocates interest earnings to each of the Pool’s participants. 50 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 2: Cash and Investments (continued) The Pool’s assets are substantially the same as the risks discussed above and consist of the following: Principal Interest Rates Commercial paper $38,900 0.1-1.3% 76,103 2.1-6.8% Corporate bonds Federal Farm Credit Bank 17,500 5.0-5.4% Federal Home Loan Bank 20,000 4.1-5.3% 3.4-4.6% Fannie Mae (Federal National Mortgage Association) 27,000 19,200 3.3-4.1% Freddie Mac (Federal Home Loan Mortgage Corp) 60,200 0.9-4.8% U.S. Treasury State Treasurer Investment Pool 5 205,378 N/A 55,288 N/A Deposits Interest Receivable 786 N/A Total assets Maturities Fair Value 07/09-09/09 $ 39,037 08/09-05/14 77,727 09/10-07/11 18,936 06/10-08/10 21,024 08/09-05/11 27,901 10/10-02/11 20,195 01/10-05/14 62,122 N/A 205,378 N/A 55,288 N/A 786 $528,394 A condensed statement of the investment pool’s net assets and changes in net assets follows: Statement of Net Assets Assets held in trust for: Internal participants External participants Total assets Total liabilities Total net assets held in trust Statement of Changes in Net Assets Total additions Total deductions Net decrease Net assets held in trust: July 1, 2008 June 30, 2009 $ 385,923 142,471 528,394 0 $ 528,394 $ 7,040,430 (7,132,253) (91,823) 620,217 $ 528,394 Discretely Presented Component Units Southwestern Fair Commission—At June 30, 2009, the commission’s cash and cash equivalents of $1,898 consisted of deposits with financial institutions. Of the total balance, $265 was exposed to custodial credit risk because it was uninsured and uncollateralized. 51 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 3: Due from Other Governments Governmental activities: Federal government: Grants and contributions State of Arizona: Taxes and shared revenues Grants and contributions City of Tucson: Reimbursement for services Other governments: Reimbursement for services Total due from other governments fund based statements General Fund Capital Projects Fund $ $ 235 17,512 Debt Other Internal Total Service Governmental Service Governmental Fund Funds Funds Activities 342 $ 1,523 1,392 8,495 1,085 $ 145 3,839 $19,284 $ 5,704 $ 8 8 $ Total Business-type Activities Pima Health System & Services $ 143 State of Arizona: Grants and contributions Total due from other governments fund based statements 897 $ 1,040 52 $ $ 9,471 27,530 1,095 10 830 Business-type activities: Federal government: Reimbursement for services 8,894 2,230 356 156 19,660 $ 166 4,496 $ 44,822 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 4: Capital Assets Capital asset activity for the year ended June 30, 2009, was as follows: Balance July 1, 2008 Governmental activities: Capital assets not being depreciated: Land Construction in progress Total capital assets not being depreciated $ Capital assets being depreciated: Buildings and improvements Infrastructure Equipment Total capital assets being depreciated 303,646 90,098 393,744 $ 499,224 1,067,881 107,243 1,674,348 Less accumulated depreciation for: Buildings and improvements Infrastructure Equipment Total accumulated depreciation (132,854) (458,769) (62,588) (654,211) Total capital assets being depreciated, net Governmental activities capital assets, net Increases 1,020,137 $ 1,413,881 $ 10,596 72,060 82,656 $ $ (128) (501) (6,346) (6,975) (12,339) (35,052) (10,045) (57,436) 77 457 5,518 6,052 159,918 3,092 34,598 37,690 $ (47,025) $ (93) (63,450) (63,543) 361,468 580,096 38,459 980,023 6,132 40,997 65,339 112,468 (325) (16) (1,099) (1,440) Less accumulated depreciation for: Buildings and improvements Sewage conveyance system Equipment Total accumulated depreciation (127,326) (210,582) (10,223) (348,131) (11,994) (11,417) (4,278) (27,689) 243 16 824 1,083 631,892 714,548 $ 53 $ 84,779 122,469 $ (357) (63,900) 384,368 103,106 487,474 525,914 1,108,315 110,666 1,744,895 (145,116) (493,364) (67,115) (705,595) 1,039,300 $ 1,526,774 Balance June 30, 2009 Decreases Capital assets being depreciated: Buildings and improvements Sewage conveyance system Equipment Total capital assets being depreciated Total capital assets being depreciated, net Business-type activities capital assets, net $ (923) Increases $ (4) (46,098) (46,102) 26,818 40,935 9,769 77,522 20,086 Balance July 1, 2008 Business-type activities: Capital assets not being depreciated: Land Construction in progress Total capital assets not being depreciated 80,726 59,106 139,832 Balance June 30, 2009 Decreases $ 13,595 43,208 56,803 367,275 621,077 102,699 1,091,051 (139,077) (221,983) (13,677) (374,737) $ 716,314 773,117 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 4: Capital Assets (continued) Depreciation expense was charged to functions as follows: Governmental activities: General government Public safety Highway and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Internal service funds Total governmental activities depreciation expense $ $ Business-type activities: Pima Health System & Services Parking Garages Regional Wastewater Reclamation Development Services Total business-type activities depreciation expense $ $ Balance July 1, 2008 Discretely presented component units: Southwestern Fair Commission (SFC): Capital assets not being depreciated: Construction in progress Total capital assets not being depreciated $ 234 298 26,912 245 27,689 Increases 38 38 Capital assets being depreciated: Buildings and improvements Equipment Total capital assets being depreciated 4,019 1,997 6,016 Less accumulated depreciation for: Buildings and improvements Equipment Total accumulated depreciation Total capital assets being depreciated, net SFC capital assets, net 7,099 10,197 30,381 318 596 17 5,281 707 2,840 57,436 $ (38) (38) 318 208 526 (7) (15) (22) (2,429) (1,403) (3,832) (130) (132) (262) 7 15 22 2,184 264 2,222 54 $ $ Balance June 30, 2009 Decreases $ 264 $ 4,330 2,190 6,520 (2,552) (1,520) (4,072) 2,448 $ (38) $ 2,448 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 5: Claims, Judgments and Risk Management Risk Management and Claims Liability The County is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; medical malpractice; environmental claims; and natural disasters. Claims against the County are accounted for in the Self Insurance Trust Fund (the Fund), an internal service fund. Annually, an actuarial evaluation is performed to determine the County’s anticipated losses except for environmental, unemployment and dental losses. Environmental losses are based on reported claims and the County risk manager’s knowledge and experience. Unemployment and dental losses are based on claims that have been submitted but not yet paid by the Fund. Losses accounted for include reported and paid, reported but unpaid, and incurred but not reported. All liabilities of the Fund except for environmental, unemployment and dental losses are reported at their present value using an expected future investment yield assumption of four percent. The Fund is liable for any single general or automobile liability claim up to $2,000,000 per occurrence, any workers’ compensation claim up to $750,000 per occurrence or any medical malpractice claims in aggregate up to $5,000,000 in any policy year. The County purchases commercial insurance for claims in excess of coverage provided by the Fund and for some other risks of loss. Settled claims have not exceeded insurance coverage in any of the last three fiscal years. Payment of unemployment and dental claims is fully self-funded. Payment of environmental claims is generally self-funded, although some claims filed could result in past insurers being liable for such losses. All of the County’s departments participate in the Fund. With the exception of environmental, dental and unemployment losses, charges are based on actuarial estimates of the amounts needed to pay prior- and current-year claims. Charges for environmental losses are based on historical experience. Charges for dental and unemployment losses are based on actual claims paid. The claims liability of $36,994 reported in the Fund at June 30, 2009, is based on estimates of the ultimate cost of claims that have been reported but not settled, and of claims that have been incurred but not reported. The ultimate cost of claims includes incremental claim adjustment expenses that have been allocated to specific claims, as well as salvage and subrogation. No other claim adjustment expenses have been included. Claims liability - beginning Current-year claims and changes in estimates Claims payment 2009 $ 31,205 12,600 (6,811) 2008 $ 32,857 10,227 (11,879) Claims liability - ending $ 36,994 $ 31,205 Litigation Pima County is a defendant in a number of court actions. In the opinion of County management, the final disposition of these actions, if unfavorable, will not have a material effect upon the County's financial statements. 55 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 5: Claims, Judgments and Risk Management (continued) Pollution Remediation - El Camino del Cerro Site The County has estimated and reported an environmental liability of $1,467 in the government-wide financial statements for governmental activities (in noncurrent liabilities). Remediation efforts are currently underway at the El Camino del Cerro site which is approximately bordered by the Santa Cruz River on the west, Interstate 10 on the east and north of El Camino del Cerro Road. The groundwater contamination is suggested to resonate from the municipal and solid waste landfill operated on the site from 1973 to 1977. In communication with the Arizona Department of Environmental Quality, the County has begun remediation efforts that will include a groundwater pump-and-treat system. The estimated liability was calculated based upon the expected future outlays associated with the estimate of one pump-and-treat system for one year. There is potential for changes due to increased costs associated with sewage disposal costs, construction costs for extraction wells, and/or changes in the estimated extent of contamination. There are no estimated recoveries at this time. 56 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 6: Long-Term Liabilities The following schedule details the County’s long-term liability and obligation activity for the year ended June 30, 2009. Balance July 1, 2008 Balance June 30, 2009 Due within 1 year $ 386,845 1,187 388,032 $ 51,750 104 51,854 725 725 10,090 28 10,118 139,565 118 139,683 15,145 28 15,173 41,546 508 42,054 71,930 2,624 74,554 21,610 699 22,309 Additions Reductions Governmental activities: General obligation bonds Plus unamortized deferred amount Total general obligation bonds $ 348,335 1,208 349,543 $ 75,000 79 75,079 $ 36,490 100 36,590 725 Flood control bonds 149,655 146 149,801 Transportation revenue bonds Plus unamortized deferred amount Total transportation revenue bonds 79,076 2,536 81,612 Certificates of participation Plus unamortized deferred amount Total certificates of participation Loans and Leases: Transportation loans payable Capital leases payable: Jail capital lease Less unamortized deferred amount Other capital leases Total capital leases Total loans and leases 34,400 596 34,996 1,000 1,000 24,680 (1,723) 266 23,223 1,965 (192) 123 1,896 22,715 (1,531) 143 21,327 2,025 (191) 107 1,941 24,223 2,896 21,327 1,941 6,811 24,535 12,459 4,446 2,218 Reported but unpaid losses (Note 5) Incurred but not reported losses (Note 5) 19,422 11,783 11,924 676 Landfill closure and post-closure care costs (Note 8) 18,419 910 19,329 Pollution remediation (Note 5) 1,784 317 Payroll-related liabilities 9,845 9,845 Total governmental activities long-term liabilities $ 667,157 $123,585 57 $ 108,631 1,467 $ 682,111 544 $ 99,210 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 6: Long-Term Liabilities (continued) Balance July 1, 2008 Additions Reductions Balance June 30, 2009 Due within 1 year $ $ Business-type activities: Sewer revenue bonds Less unamortized deferred amount Total revenue bonds payable $ Regional Wastewater Reclamation (RWR) loans payable Less unamortized deferred amount Total loans payable 164,940 (1,239) 163,701 18,940 413 19,353 70,572 (146) 70,426 Contracts and notes 5,842 Payroll-related liabilities 2,254 Total business-type activities long-term liabilities $ $ 242,223 3,181 (335) (335) 183,880 (491) 183,389 5,975 (38) 5,937 64,597 (108) 64,489 2,542 6,481 7,870 7,870 6,317 6,317 2,254 $ 22,534 $ 10,398 $ 254,359 $ 14,187 GENERAL OBLIGATION BONDS OUTSTANDING Governmental Activities (Payments made from property tax revenues of the Debt Service Fund) General obligation bonds payable at June 30, 2009, consisted of the outstanding general obligation bonds presented below. Of the total amounts originally authorized, $20,090 from the May 20, 1997, $232,061 from the May 18, 2004, and $51,655 from the May 16, 2006 bond election remain unissued. The following table presents amounts outstanding by issue. Issue Amount Issue *Series of 1998 $ 42,420 Series of 1999 50,000 Series of 2000 50,000 *Series of 2001 Refunding 17,835 Series of 2002 20,000 *Series of 2003 50,000 Series of 2004 65,000 Series of 2005 65,000 Series of 2007 95,000 Series of 2008 100,000 Series of 2009 75,000 G.O. bonds outstanding Plus unamortized deferred amount: Interest Rates 4.50 - 4.60% 5.00% 4.00 - 5.00% 5.00% 4.25 - 4.50% 3.50 - 4.25% 3.00 - 5.00% 3.50 - 5.00% 3.00 - 4.50% 3.00 - 4.00% 3.00 - 4.13% Maturities 2010-13 2010 2010-14 2010 2010-16 2010-17 2010-19 2010-20 2010-21 2010-22 2010-23 Total G.O. bonds outstanding 58 Outstanding June 30, 2009 $ 11,720 3,115 15,000 375 6,000 33,850 43,740 46,080 78,965 82,000 66,000 386,845 1,187 $ 388,032 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 6: Long-Term Liabilities (continued) * The U.S. Government has launched various economic stabilization programs, one of which was the Transaction Account Guarantee Program (TAGP). As a result of this initiative, the FDIC is assessing a 10 basis point surcharge to participating banks that carry a quarterly ending balance for noninterest-bearing transaction accounts. These charges will be passed down to customers with such accounts at these institutions. In order to avoid these surcharges, Pima County has chosen to submit debt service payments on the day they are due and not the day before, as has been customary. These debt issuances were paid on July 1, 2009 and not June 30th. The amount outstanding, therefore, has not changed for fiscal year 2008-09. The following schedule details general obligation bond debt service requirements to maturity at June 30, 2009. Year Ending June 30, 2010 2011 2012 2013 2014 2015 - 2019 2020 - 2023 Total Principal $ 51,750 35,240 29,105 29,030 27,400 134,755 79,565 $ 386,845 Interest 16,454 13,602 12,118 10,883 9,645 31,162 6,868 $ 100,732 $ FLOOD CONTROL REFUNDING BONDS OUTSTANDING Governmental Activities (Payments made from property tax revenues of the Debt Service Fund of the District) The Pima County Regional Flood Control District outstanding bonds payable at June 30, 2009 is presented below. Issue *Series of 2001 Refunding Issue Amount $ 4,585 Interest Rates Maturities 4.20% 2010 Outstanding June 30, 2009 $ 725 * The U.S. Government has launched various economic stabilization programs, one of which was the Transaction Account Guarantee Program (TAGP). As a result of this initiative, the FDIC is assessing a 10 basis point surcharge to participating banks that carry a quarterly ending balance for noninterest-bearing transaction accounts. These charges will be passed down to customers with such accounts at these institutions. In order to avoid these surcharges, Pima County has chosen to submit debt service payments on the day they are due and not the day before, as has been customary. These debt issuances were paid on July 1, 2009 and not June 30th. The amount outstanding, therefore, has not changed for fiscal year 2008-09. The following schedule details flood control bond debt service requirements to maturity at June 30, 2009. Year Ending June 30, 2010 Total 59 Principal $ 725 Interest $ 15 $ $ 725 15 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 6: Long-Term Liabilities (continued) TRANSPORTATION BONDS PAYABLE Governmental Activities (Payments made from street and highway revenues) Pima County transportation revenue bonds were issued to provide monies to construct improvements to the County’s streets and highways. Of the total amount originally authorized, $122,800 from the November 4, 1997 bond election remains unissued. Issue Series of 2002 *Series of 2003 Series of 2005 Series of 2007 Series of 2008 Issue Interest Amount Rates Maturities $55,000 4.25 - 4.38% 2010-12 35,000 3.38 - 4.38% 2010-18 51,200 3.50 - 5.00% 2010-20 21,000 3.25 - 4.75% 2010-22 25,000 3.00 - 4.50% 2010-22 Transportation bonds outstanding Plus unamortized deferred amount: Total transportation bonds outstanding Outstanding June 30, 2009 $ 19,055 27,600 47,810 20,250 24,850 139,565 118 $ 139,683 * The U.S. Government has launched various economic stabilization programs, one of which was the Transaction Account Guarantee Program (TAGP). As a result of this initiative, the FDIC is assessing a 10 basis point surcharge to participating banks that carry a quarterly ending balance for noninterest-bearing transaction accounts. These charges will be passed down to customers with such accounts at these institutions. In order to avoid these surcharges, Pima County has chosen to submit debt service payments on the day they are due and not the day before, as has been customary. These debt issuances were paid on July 1, 2009 and not June 30th. The amount outstanding, therefore, has not changed for fiscal year 2008-09. The following schedule details transportation bond debt service requirements to maturity at June 30, 2009. Year Ending June 30, 2010 2011 2012 2013 2014 2015 - 2019 2020 - 2022 Total Principal 15,145 13,430 14,015 9,970 10,415 56,360 20,230 $ 139,565 $ Interest 6,203 5,091 4,503 3,912 3,517 10,703 1,330 $ 35,259 $ Pima County has pledged future highway user revenues, net of specified operating expenses, to repay $139,565 in transportation revenue bonds issued between 2002 and 2008. Proceeds from the bonds provide financing for construction of various highways and streets within Pima County. The bonds are payable from net highway user revenues and are payable through 2022. Annual principal and interest payments on the bonds are expected to require approximately 93 percent of net revenues. Total principal and interest remaining to be paid on the bonds is $174,824. Principal and interest paid for bonds and loans in the current year and total highway user revenues were $15,686, $1,061 and $20,808, respectively. 60 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 6: Long-Term Liabilities (continued) CERTIFICATES OF PARTICIPATION Governmental Activities (Payments made from General Fund revenues) Certificates of Participation represent proportionate interests in semiannual lease payments. The County’s obligation to make lease payments is subject to annual appropriations being made by the County for that purpose. On May 1, 2007, the County issued Certificates of Participation Series 2007-A for $28,765 to finance the acquisition of and improvements to a 22-story office tower located in downtown Tucson. On June 26, 2008, the County issued Certificates of Participation Series 2008 for $50,000 to finance capital costs for public infrastructure of the County, including expansion and upgrades to the County’s sewer treatment system and major road corridors. On June 10, 2009, the County issued Certificates of Participation Series 2009 for $34,400 to finance capital costs for public infrastructure of the County, including expansion and upgrades to the County’s sewer treatment system. The following schedule details outstanding Certificates of Participation payable at June 30, 2009. Issue Series of 2007A Series of 2008 Series of 2009 Issue Interest Amount Rates Maturities $ 28,765 4.00 - 5.00% 2010-22 50,000 5.00% 2011 34,400 3.00 - 4.00% 2010-12 Certificates of participation outstanding Plus unamortized deferred amount: Total certificates of participation outstanding Outstanding June 30, 2009 $ 27,530 10,000 34,400 71,930 2,624 $ 74,554 The following schedule details debt service requirements to maturity for the County’s Certificates of Participation payable at June 30, 2009. Year Ending June 30, 2010 2011 2012 2013 2014 2015 - 2019 2020 - 2022 Principal $ 21,610 21,675 6,140 1,810 1,890 10,880 7,925 $ 71,930 Interest 2,445 2,310 1,343 1,097 1,021 3,667 805 $ 12,688 $ CAPITAL LEASES Governmental Activities On February 1, 1997, the County entered into an agreement to sell certain jail facilities and then lease them back for a 15-year term. The jail facilities were sold for $34,500, and the proceeds were used to finance the construction of the baseball stadium. On September 1, 1999 and October 1, 2003, Pima County amended the capital lease agreement between U.S. Bank Trust National Association and Pima 61 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 6: Long-Term Liabilities (continued) County. The amendments extended the lease term to 2014 and 2018 respectively, increased the range of interest rates and increased the County’s obligation under the lease agreement. The County has also entered into capital leases for computer equipment. The outstanding balance as of June 30, 2009, for these leases totaled $143. The net book value of assets acquired through capital leases consists of $18,000 of buildings and $63 of equipment. The following schedule details capital lease debt service requirements to maturity at June 30, 2009. Governmental Activities: Year Ending June 30, 2010 2011 2012 2013 2014 2015 - 2018 Buildings Principal Interest $ 2,025 $ 982 2,125 878 2,230 775 2,780 648 2,485 511 11,070 935 $ 22,715 $ 4,729 Equipment Principal Interest $ 107 $ 4 36 1 $ 143 $ 5 SEWER REVENUE BONDS AND LOANS Business-type Activities (Payments made from user charges received in the Regional Wastewater Reclamation Enterprise Fund) Pima County sewer revenue bonds, as presented below, were issued to provide monies to construct improvements to the County’s Regional Wastewater Reclamation system. Of the total amount originally authorized, $10,003 from the May 18, 2004 bond election remain unissued. Issue *Series of 1998 *Series of 2001 Refunding *Series of 2004 Refunding *Series of 2007 *Series of 2008 Series of 2009 Issue Interest Amount Rates Maturities $ 29,185 4.00 - 4.50% 2009-15 19,440 4.25 - 5.38% 2009-15 25,770 3.50 - 5.50% 2009-15 50,000 3.75 - 5.00% 2009-26 75,000 4.00 - 5.00% 2009-23 18,940 3.25 - 4.25% 2009-24 Sewer revenue bonds outstanding Less unamortized deferred amount: Total sewer revenue bonds outstanding Outstanding June 30, 2009 $ 13,355 12,655 18,145 45,785 75,000 18,940 183,880 (491) $ 183,389 * The U.S. Government has launched various economic stabilization programs, one of which was the Transaction Account Guarantee Program (TAGP). As a result of this initiative, the FDIC is assessing a 10 basis point surcharge to participating banks that carry a quarterly ending balance for noninterest-bearing transaction accounts. These charges will be passed down to customers with such accounts at these institutions. In order to avoid these surcharges, Pima County has chosen to submit debt service payments on the day they are due and not the day before, as has been customary. These debt issuances were paid on July 1, 2009 and not June 30th. The amount outstanding, therefore, has not changed for fiscal year 2008-09. 62 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 6: Long-Term Liabilities (continued) The following schedule details sewer revenue bond debt service requirements to maturity at June 30, 2009. Year Ending June 30, 2010 2011 2012 2013 2014 2015 - 2019 2020 - 2024 2025 - 2027 Principal $ 7,870 8,900 8,425 8,795 10,405 58,400 68,595 12,490 $ 183,880 Interest 7,457 7,334 6,961 6,579 6,148 23,080 10,061 693 $ 68,313 $ The Regional Wastewater Reclamation Enterprise Fund entered into loan agreements (1996, 1997, 2000 and 2004 loans payable) to provide funds for the defeasance of prior sewer revenue bonds and the construction and improvement of wastewater treatment facilities. Interest is payable semiannually and is calculated based on the principal amount of the loan outstanding during such period. Issue Interest Issue Amount Rate 1996 Loans payable $ 11,313 3.19% 1997 Loans payable 7,500 2.95% 2000 Loans payable 61,180 2.20% 2004 Loans payable 19,967 1.81% Loans payable Less unamortized deferred amount Total loans payable Maturities 2009-12 2009-11 2009-16 2009-24 Outstanding June 30, 2009 $ 4,775 1,915 39,645 18,262 64,597 (108) $ 64,489 The following schedule details loans payable debt service requirements to maturity at June 30, 2009. Year Ending June 30, 2010 2011 2012 2013 2014 2015 - 2019 2020 - 2024 2025 - 2029 Principal $ 6,317 7,605 7,891 6,937 6,032 21,845 6,547 1,423 $ 64,597 Interest $ 2,200 1,948 1,667 1,397 1,160 2,710 791 23 $ 11,896 Pima County has pledged future user charges, net of specified operating expenses, to repay $183,880 in sewer revenue bonds issued between 1998 and 2009 and $64,597 in sewer revenue loans issued 63 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 6: Long-Term Liabilities (continued) between 1996 and 2004. Proceeds from the bonds and loans provided financing for construction of various treatment facilities and sewer infrastructure within Pima County. The bonds and loans are payable from net sewer revenues and are payable through fiscal year 2026-27. Annual principal and interest payments on the bonds are expected to require approximately 28 percent of net revenues. The annual principal and interest payments on the loans are expected to require approximately 19 percent of net revenues. Total principal and interest remaining to be paid on the bonds is $252,193. Total principal and interest remaining to be paid on the loans is $76,493. Principal and interest paid for bonds and loans in the current year and total customer net revenues were $3,588, $8,377 and $34,445, respectively. CONTRACTS AND NOTES Business-type Activities (Payments made from restricted assets in the Regional Wastewater Reclamation Department Enterprise Fund) Contracts and notes consist of contract retentions for several construction projects. Generally, interest is not accrued and the timing of payments is based on completion of the related construction projects. LEGAL DEBT MARGIN County General Obligation Bonds General obligation debt may not exceed 6 percent of the value of the County’s taxable property as of the latest assessment. However, with voter approval, debt may be incurred up to 15 percent of the value of taxable property. Pima County has received voter approval for all general obligation debt. The legal debt margin at June 30, 2009, is as follows: Net assessed valuation $ 9,594,862 1,439,229 Debt Limit (15% of net assessed valuation): Less amount of debt applicable to debt limit: General obligation bonds outstanding $ Less net assets in debt service fund available for payment of general obligation bond principal 386,845 (10,523) Legal debt margin available 376,322 $ 1,062,907 64 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 6: Long-Term Liabilities (continued) Flood Control General Obligation Bonds Flood Control general obligation debt may not exceed 5 percent of the value of the Flood Control District’s taxable property as of the latest assessment. Legal debt margin at June 30, 2009, is as follows: Net assessed valuation $ 8,684,572 434,229 Debt Limit (5% of net assessed valuation): Less amount of debt applicable to debt limit: Flood Control obligation bonds outstanding $ Less net assets in debt service fund available for payment of flood control bond principal 725 (49) Legal debt margin available 676 $ 433,553 Note 7: Short-term Debt Line of Credit The County maintains a revolving line of credit with Bank of America National Trust and Savings Association to meet its short-term cash needs. At June 30, 2009, the County had an outstanding balance of $0. Advances on the line of credit are payable on demand. The credit line is secured by the County’s general taxing authority. Line of credit July 1, 2008 Balance $0 Draws $ 18,300 Repayments $ 18,300 June 30, 2009 Balance $0 Note 8: Landfill Liabilities SOLID WASTE LANDFILL CLOSURE AND POST-CLOSURE CARE COSTS: State and federal laws and regulations require the County to place a final cover on its solid waste landfill sites when these sites stop accepting waste and to perform certain maintenance and monitoring functions at the sites for thirty years after their closure. Although closure and post-closure care costs will not be paid until near or after the date the landfills stop accepting waste, the County records a portion of these closure and post-closure care costs as a long-term liability in each period, based on landfill capacity used as of each balance sheet date. The $19,329 reported as landfill closure and post-closure care long-term liability within the governmental activities represents the cumulative amount reported to date, based on the percentage used of each landfill's total estimated capacity. The County will recognize the remaining estimated cost of closure and post-closure care of $5,437 as the remaining estimated capacities are used. These amounts are based on what it would cost to perform all closure and post-closure care in the fiscal year ended June 30, 2009; actual costs may change due to inflation, changes in technology, or changes in regulations. 65 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 8: Landfill Liabilities (continued) Landfill Site Capacity Used June 30, 2009 Estimated Remaining Service Life Ajo * Sahuarita ** Tangerine *** 100% 45% 91% 0 Year 41 Years 12 Years *Life extending facility development options are presently being considered for the Ajo Landfill, including vertical and/or horizontal expansion. A Type IV Modification application has been submitted to Arizona Department of Environmental Quality to increase capacity. ** Sahuarita’s facility has incurred a decrease in annual solid waste tipping. This decrease has resulted in an increase in the expected life of the landfill. *** Tangerine’s facility has increased expected life due to decreased disposal activity and revised annual airspace consumption. The County plans to fund the estimated closure and post-closure care costs with proceeds of general obligation bonds and with solid waste tipping fees. According to state and federal laws and regulations, the County must comply with the local government financial test requirements that ensure the County can meet the costs of landfill closure, post-closure, and corrective action when needed. The County is in compliance with these requirements. The Ina Road Landfill facility is closed to municipal solid waste and only receives green waste and construction debris. It is not subject to the closure and post-closure cost requirements referred to above. Pima County estimates that it will cost approximately $9,727 when closure occurs and plans to fund the costs with proceeds of general obligation bonds and with solid waste tipping fees. At this time, there is no closure date available. Note 9: Retirement Plans Pension Plan Descriptions The County contributes to the Arizona State Retirement System (ASRS), the Corrections Officer Retirement Plan (CORP), the Public Safety Personnel Retirement System (PSPRS), consisting of Pima County Sheriffs and Pima County - County Attorney Investigators, and the Elected Officials Retirement Plan (EORP). The EORP and the PSPRS - Pima County, County Attorney Investigators, are not described due to their relative insignificance to the County’s financial statements. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor, and health insurance premium benefits. The retirement benefits are generally paid at a percentage, based on years of service, of the retirees’ average compensation. Long-term disability benefits vary by circumstance, but generally pay a percentage of the employee’s monthly compensation. Health insurance premium benefits are generally paid as a fixed dollar amount per month towards the retiree’s healthcare insurance premiums, in amounts based on whether the benefit is for the retiree or for the retiree and his or her dependents. The ASRS administers a cost-sharing multiple-employer defined benefit pension plan; a cost-sharing, multiple-employer defined benefit health insurance premium plan; and a cost-sharing multiple-employer defined benefit long-term disability plan that covers employees of the State of Arizona and employees of participating political subdivisions, including general employees of the County, and school districts. The ASRS is governed by the Arizona State Retirement System Board according to the provisions of A.R.S. 66 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 9: Retirement Plans (continued) Title 38, Chapter 5, Article 2. The PSPRS administers an agent multiple-employer defined benefit pension plan and an agent multipleemployer defined benefit health insurance premium plan that covers Pima County Sheriff’s public safety personnel who are regularly assigned hazardous duty as employees of the State of Arizona or one of its political subdivisions. The PSPRS, acting as a common investment and administrative agent, is governed by a five-member board, known as The Fund Manager, and the participating local boards according to the provisions of A.R.S. Title 38, Chapter 5, Article 4. The CORP administers an agent multiple-employer defined benefit pension plan and an agent multipleemployer defined benefit health insurance premium plan that covers certain employees of the State of Arizona’s Departments of Corrections and Juvenile Corrections, and County employees whose primary duties require direct inmate contact. The CORP is governed by the Fund Manager of PSPRS and the participating local boards according to the provisions of A.R.S. Title 38, Chapter 5, Article 6. Each plan issues a publicly available financial report that includes its financial statements and required supplementary information. A report may be obtained by contacting the applicable plan. ASRS PSPRS and CORP 3300 N. Central Ave Phoenix, AZ 85012 (602) 240-2000 or (800) 621-3778 3010 East Camelback Road Suite 200 Phoenix, AZ 85016-4416 (602) 255-5575 Funding Policy The Arizona State Legislature establishes and may amend active plan members’ and the County’s contribution rates for ASRS, PSPRS and CORP. Cost-sharing plans For the year ended June 30, 2009, active ASRS members were required by statute to contribute at the actuarially determined rate of 9.45 percent (8.95 percent for retirement and 0.50 percent for long-term disability) of the members’ annual covered payroll. The County was required by statute to contribute at the actuarially determined rate of 9.45 percent (7.99 percent for retirement, .96 percent for health insurance premium, and 0.50 percent for long-term disability) of the members’ annual covered payroll. ASRS Retirement Fund Health Benefit Supplement Fund Long-term Disability Fund Year ended June 30, 2009 2008 2007 $ 20,127 20,981 19,169 $ 67 2,418 2,737 2,666 $ 1,259 1,303 1,270 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 9: Retirement Plans (continued) Agent plans For the year ended June 30, 2009, active PSPRS members were required by statute to contribute 7.65 percent of the members’ annual covered payroll, and the County was required to contribute at the actuarially determined rate of 23.89 percent, the aggregate of which is the actuarially required amount. As allowed by statute, the County contributed 3.65 percent of the members’ required contribution, with the members contributing 4.00 percent. The health insurance premium portion of the contribution was set at 1.93 percent of covered payroll. Active CORP members were required by statute to contribute 7.96 percent of the members’ annual covered payroll, except that, beginning in October 2008, all non-dispatcher members were required to contribute 8.41 percent, and the County was required to contribute at the actuarially determined rate of 9.42 percent, the aggregate of which is the actuarially required amount. The health insurance premium portion of the contribution rate was actuarially set at 1.10 percent of covered payroll. Actuarial methods and assumptions The contribution requirements for the year ended June 30, 2009 were established by the June 30, 2007 actuarial valuations, and those actuarial valuations were based on the following actuarial methods and assumptions. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the funded status of the plans and the annual required contributions are subject to continual revision as actual results are compared to past expectations and new estimates are made. The required schedule of funding progress presented as required supplementary information provides multiyear trend information that shows whether the actuarial value of the plans’ assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. Projections of benefits are based on 1) the plans as understood by the County and plans’ members and include the types of benefits in force at the valuation date, and 2) the pattern of sharing benefit costs between the County and plans’ members to that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The significant actuarial methods and assumptions used are the same for all plans and related benefits (unless noted), and the actuarial methods and assumptions used to establish the fiscal year 2009 contribution requirements, are as follows: Actuarial valuation date Actuarial cost method Actuarial Assumptions: Investment rate of return Projected salary increases includes inflation at Amortization method Remaining amortization period Asset valuation method PSPRS June 30, 2007 Projected unit credit CORP June 30, 2007 Projected unit credit 8.50% 5.50% - 8.50% 5.00% Level percent closed for unfunded actuarial accrued liability, open for excess 29 Years for unfunded actuarial accrued liability, 20 years for excess 8.50% 5.50% - 8.50% 5.00% Level percent closed for unfunded actuarial accrued liability, open for excess 29 Years for unfunded actuarial accrued liability, 20 years for excess Smoothed market value Smoothed market value 68 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 9: Retirement Plans (continued) Annual Pension and OPEB Cost The County’s pension/OPEB cost for the PSPRS and CORP agent plans for the year ended June 30, 2009, and related information follows: PSPRS CORP Health Insurance Pension Health Insurance Pension Annual pension/OPEB cost $ 8,268 $ 627 $ 2,162 $ 236 Contibutions made $ 8,268 $ 463 $ 2,162 $ 182 Trend Information Annual pension cost information for the current and 2 preceding years follows for the PSPRS and CORP agent plans. Annual OPEB cost information for fiscal year 2009 and 2008 are as follows. Information about the other preceding year will be added in next year. Plan PSPRS Pension Year Ended June 30 Percentage of Annual Pension/ Annual Cost OPEB Cost Contributed 2009 $ 8,268 100% Health insurance 2009 $ 627 73.8% Pension 2008 $ 6,923 100% Health insurance 2008 $ 565 Pension & health insurance 2007 $ 5,422 100% 2009 $ 2,162 100% Health insurance 2009 $ 236 77.1% Pension 2008 $ 1,513 100% Health insurance 2008 $ 247 Pension & health insurance 2007 $ 1,224 CORP Pension 79% 66% $ 164 $ 121 $ 54 $ 84 100% Funded Status The funded status of the plans, as of the most recent valuation date June 30, 2009, along with the actuarial assumptions and methods used in those valuations follow. Additionally, the required schedule of funding progress, presented as Exhibit B-2 following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. 69 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 9: Retirement Plans (continued) Actuarial accrued liability Actuarial value of assets Unfunded actuarial accrued liability (funding excess) PSPRS Pension Health Insurance Insurance $ 212,291 $ 7,088 $ 142,164 0 CORP Pension Health Insurance Insurance $ 60,217 $ 3,095 $ 48,740 0 $ 70,127 $ 11,477 Funded ratio Covered payroll Unfunded actuarial accrued liability (funding excess) as a percentage of covered payroll 67.0 % $ 33,557 $ 7,088 $ 3,095 0 % 80.90 % 33,557 $ 20,411 $ 209.0 % 21.1 % 0 % 20,411 56.2 % 15.1 % PSPRS June 30, 2009 Projected unit credit CORP June 30, 2009 Projected unit credit 8.50% 5.50% - 8.50% 5.50% Level percent-of-pay closed 8.50% 5.50% - 8.50% 5.50% Level percent-of-pay closed 27 Years for unfunded actuarial accrued liability, 20 years for excess 27 Years for unfunded actuarial accrued liability, 20 years for excess 7-year Smoothed market value 7-year Smoothed market value Actuarial valuation date Actuarial cost method Actuarial Assumptions: Investment rate of return Projected salary increases includes inflation at Amortization method Remaining amortization period $ Asset valuation method Note 10: Interfund Transactions A. Interfund Assets/ Liabilities Due from / Due to Other Funds are used to record loans or unpaid operating transfers between funds. Amounts recorded as due from: General $ 1,463 Capital Projects $ 1,003 $ - Debt Service Other Governmental $ 256 RWR 595 $ Other Enterprise $ 1 $ 1 $ 118 3,099 - 851 3,098 1 428 257 2,481 3,099 1 $ To ta l In te rn al Se rv ic e O th er En te rp ris e R 13 118 3,098 Internal Service Total RW O G the ov r er nm en ta l PH S & Se rv ic es G en er al Ca pi ta lP ro je ct s Amounts recorded as due to: $ 3,098 $ 2,486 70 428 $ 1,003 $ 3,230 $ 1 $ 1 $ 10,076 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 10: Interfund Transactions (continued) B. Transfers Transfers are used to record transactions between individual funds to subsidize their operations and fund debt service payments and capital construction projects. General $ Capital Projects $ $ 12,778 $ 3,400 s Se rv ic e 12,892 $ 853 ta l RW $ 14,180 To R In te rn al Se rv & PH S O th 20,594 571 ic es m en ta l er G ov er n Pr oj ec ts Ca p ita l G en er al Amounts recorded as transfers in: Amounts recorded as transfers out: $ 50,517 1,000 15,751 130 83,679 Debt Service 49,091 937 20,331 Other Governmental 19,553 1,552 134 RWR 13,462 12,108 25,570 853 175 1,028 Internal Service Total $ 83,530 $ 35,366 $ 47,423 13,190 21,239 $ 3,400 $ 26,082 $ 1,983 $ The table above does not include transfers of capital assets from the proprietary funds to the governmental activities because these are not reported in the governmental funds. The following proprietary funds transferred capital assets with Governmental Activities: Transfer from Government activities Transfer to $ $ $ Subtotal Internal Services Total $ Transfer from 93 Other enterprise funds 3 Internal Services 96 (1) 95 Transfer to Government activities Government activities Note 11: Construction and Other Significant Commitments At June 30, 2009, Pima County had the following major contractual commitments related to Facilities Management, General Government, Natural Resources, Parks & Recreation, Pima Health Systems & Services, Regional Flood Control District, Regional Wastewater Reclamation and Transportation. Facilities Management At June 30, 2009, the Pima County Facilities Management Department had contractual commitments related to service contracts of $7,876. Funding for these expenditures will be provided from general fund revenues. General Government At June 30, 2009, Pima County had contractual commitments related to service contracts for Fleet Services of $3,733, Human Resources of $39,062, Institutional Health of $28,718 and Sheriff of $815. Funding for these expenditures will be provided from General Fund revenues. Real Property had contractual 71 197,784 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 11: Construction and Other Significant Commitments (continued) commitments related to land acquisitions of $23,511, for which the funding of these expenditures will be provided by general obligation bonds. Natural Resources, Parks and Recreation At June 30, 2009, Pima County had contractual commitments related to construction contracts for Natural Resources, Parks and Recreation of $11,141. Funding for these expenditures will be provided from general obligation bonds. Pima Health Systems & Services At June 30, 2009, Pima County had contractual commitments related to service contracts for Pima Health Systems & Services of $58,407. Funding for these expenditures will be primarily provided from federal and state funding sources. Regional Flood Control District At June 30, 2009, the Pima County Regional Flood Control District had construction contractual commitments of $3,719. Funding for these expenditures will be provided from tax levy revenues. Regional Wastewater Reclamation At June 30, 2009, the Regional Wastewater Reclamation Enterprise Fund had construction contractual commitments of $44,508 and other contractual commitments related to service contracts of $7,245. Funding for these expenditures will be primarily from Sewer Revenue Bonds and related fees. Transportation At June 30, 2009, the Pima County Transportation Department had construction contractual commitments of $33,639 and other contractual commitments related to service contracts of $1,420. Funding for these expenditures will be primarily provided from Transportation Revenue Bonds and Highway User Tax Revenue, the primary source of revenue for the Transportation Department. Note 12: Stewardship, Compliance, and Accountability (Deficit Fund Balances) The Special Districts Fund (non-major governmental fund) had a deficit fund balance at June 30, 2009, of $952. This deficit can be eliminated in the future through normal operations. Note 13: Subsequent Events On October 9, 2009 the Regional Wastewater Reclamation Enterprise Fund entered into a loan agreement with the Water Infrastructure Financing Authority (WIFA) in the amount of $10,002 to provide funds for the construction of approximately 5 miles of system improvements to interconnect the Roger Road and the Ina Road treatment facilities to one another, as approved by Pima County Board of Supervisors’ Resolution No 2009-58 on April 14, 2009. Interest is payable semiannually beginning January 1, 2010 and is calculated based on the principal amount of the loan outstanding during such period. Principal payments to maturity are subject to change based upon total amounts drawn down. Payments will be made from user charges received in the Regional Wastewater Reclamation Enterprise Fund. 72 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2009 (in thousands) Note 13: Subsequent Events (continued) On November 17, 2009, the County issued $23,535 in Series 2009 Refunding Bonds. The net proceeds of the refunding bonds issuance were placed in an irrevocable trust account with U. S. Bank to advance refund various General Obligation bonds as follows: Series 1998 $ 7,120 Series 2000 12,000 Series 2002 4,000 $ 23,120 The interest rate on the bonds range from 2.00% to 3.50%, and the maturity dates range from July 1, 2010 to 2016. Interest is payable semiannually beginning July 1, 2010. On November 17, 2009, the County issued $90,000, Series 2009A G. O. Bonds, to fund various County capital projects. Interest rates on the bonds range from 2.00% to 4.00%, and the maturity date ranges from July 1, 2010 to 2024. Interest is payable semiannually beginning July 1, 2010. On November 17, 2009, the County issued $8,400, Series 2009 Transportation Refunding Bonds to advance refund $8,300 of Series 2002 Transportation Bonds. The net proceeds were placed in an irrevocable trust with U. S. Bank. Interest rates on the bonds range from 3.00% to 4.00%, and maturity date ranges from July 1, 2013 to 2024. Interest is payable semiannually beginning July 1, 2010. Payments will be made from the revenues received by the County from highway user taxes. On November 17, 2009, the County issued $15,020 in Series 2009 Transportation Bonds to provide funds for road construction. Interest rates on the bonds range from 3.00% to 4.00% and maturity dates range from July 1, 2013 to 2024. Interest is payable semiannually beginning on July 1, 2010. Payments will be made from the revenues received from highway user taxes. On December 3, 2009, the County defeased $20,000 in Series 2009 Certificates of Participation, payable June 1, 2010, with an interest rate of 3.00%. These funds will be placed in irrevocable trust with U.S. Bank. 73 (This page is intentionally left blank) 74 Required Supplementary Information Other Than Management’s Discussion & Analysis PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund For the Year Ended June 30, 2009 (in thousands) Budgeted Amounts Original Final Revenues: Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Total revenues $ 282,377 2,956 148,442 33,096 5,237 1,864 7,362 481,334 $ 282,377 2,956 148,442 33,096 5,237 1,864 7,362 481,334 Exhibit B - 1 Variance Over/Under Actual $ 281,749 2,747 131,966 35,330 4,720 1,084 7,099 464,695 $ (628) (209) (16,476) 2,234 (517) (780) (263) (16,639) Expenditures: Assessor Board of Supervisors Clerk of Superior Court Community & Economic Development Constables County Administration County Attorney Department of Institutional Health Forensic Science Center Graphics Justice Courts Juvenile Court Justice & Law Enforcement Public Works Recorder Sheriff Superior Court Superior Court Mandated Services School Superintendent Treasurer Debt Service - principal - interest - miscellaneous Total expenditures 8,651 1,913 10,323 15,862 1,010 74,031 19,870 112,187 2,782 753 7,770 22,747 28,850 32,050 4,191 118,066 27,729 1,824 2,348 2,514 3,510 2,426 6 501,413 8,651 1,913 10,323 15,862 1,010 73,794 20,077 112,187 2,782 753 7,770 22,747 28,850 32,050 4,191 118,066 27,759 1,824 2,348 2,514 3,510 2,426 6 501,413 Excess (deficiency) of revenues over (under) expenditures (20,079) (20,079) 2,419 22,498 Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers (out) Total other financing sources (uses) 11,914 (19,584) (7,670) 11,914 (19,584) (7,670) 371 50,517 (83,530) (32,642) 371 38,603 (63,946) (24,972) Net change in fund balance (27,749) (27,749) (30,223) (2,474) Fund balance at beginning of year Fund balance at end of year $ 27,749 - $ 27,749 - See notes to budgetary comparison schedule 75 8,352 1,729 9,929 14,955 978 33,036 19,487 115,481 2,767 618 7,575 22,454 30,585 30,184 3,743 121,704 27,158 1,997 1,413 2,189 3,510 2,426 6 462,276 $ 70,389 40,166 299 184 394 907 32 40,758 590 (3,294) 15 135 195 293 (1,735) 1,866 448 (3,638) 601 (173) 935 325 39,137 $ 42,640 40,166 PIMA COUNTY, ARIZONA Notes to Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund June 30, 2009 (in thousands) Note 1: Budgetary Basis of Accounting Arizona Revised Statutes (ARS § 42-17101) requires that on or before the third Monday in July of each year, the Board of Supervisors adopt a tentative budget for the fiscal year. A public hearing and special board meeting is scheduled at which time the final budget is adopted. The County adopts, on a modified accrual basis, budgets for all governmental fund types (General, Special Revenue, Debt Service and Capital Projects Fund). Operating plans for all Enterprise Funds are also adopted as part of the budget document. Per ARS § 42-17106, expenditures may not be in excess of the amounts specified for each purpose in the budget, except as provided by law. Each Special Revenue Fund maintains budgetary control at the fund or sub-fund level where applicable. Budgetary control for the Capital Projects Fund and the Debt Service Fund are at the fund level. Adopted budgets provide that the beginning unreserved fund balance plus revenues and other financing sources equal expenditures and other uses. ARS § 42-17106 requires that amendments to the budget, including transfers of appropriations between departments or funds are not permissible unless the Board of Supervisors determines that it is in the public interest and it is based on a demonstrated need. Note 2: Excess of Expenditures Over Appropriations For the year ended June 30, 2009, expenditures exceeded appropriations in the following General Fund departments (the legal level of budgetary control) by the following amounts: Sheriff, $3,638; Institutional Health, $3,294; Justice & Law Enforcement, $1,735; and Superior Court Mandated Services, $173. These expenditures were funded by unspent appropriations by the County Administrator. 76 PIMA COUNTY, ARIZONA Schedule of Retirement Plans' Funding Progres June 30, 2009 (in thousands) Plan Year Ended June 30 Actuarial Value of Plan Assets Actuarial Accrued Liability $ $ Funding Liability (Excess) Exhibit B - 2 Annual Covered Payroll Funded Ratio Unfunded Liability as Percentage of Covered Payroll PSPRS Pension 2009 142,164 Health Insurance 2009 Pension 2008 Health Insurance 2008 Pension 2007 Health Insurance 2007 CORP Pension 2009 Health Insurance 2009 0 Pension 2008 45,957 Health Insurance 2008 0 Pension 2007 44,196 Health Insurance 2007 0 0 0 128,524 0 48,740 $ 7,088 133,286 $ 212,291 $ 70,127 67.0% 7,088 0% $ 33,557 209.0% 33,557 21.1% 198,116 64,830 67.3% 32,495 199.5% 8,056 8,056 0% 32,495 24.8% 197,365 68,841 65.1% 29,428 233.9% 7,930 7,930 0% 29,428 27.0% 11,477 80.9% 20,411 56.2% 3,095 3,095 0% 20,411 15.1% 55,365 9,408 83.0% 21,455 43.8% 2,958 2,958 0% 21,455 13.8% 54,488 10,292 81.1% 20,190 51.0% 2,735 2,735 0% 20,190 13.6% 60,217 $ 77 $ (This page is intentionally blank) 78 Combining Statements and Other Schedules Other (Nonmajor) Governmental Funds OTHER GOVERNMENTAL FUNDS (Nonmajor) Transportation Fund - to account for administrative and operating costs, as well as resources transferred to the Capital Projects Fund for construction of highways and streets. Financing is provided primarily from the County share of gasoline and vehicle license taxes collected by the State. Health and Animal Care Fund - to account for resources used to finance activities involved in the conservation and improvement of public health. Major sources of funding include Federal and State grants, charges for services provided and operating transfers from the General Fund. Regional Flood Control District Fund - to account for amounts expended to protect persons and property from floodwaters. Revenues are provided by secondary taxes on real property and government grants. The Regional Flood Control District is a blended component unit of Pima County. Employment and Training Fund - to account for resources controlled by the County as a prime sponsor under the Workforce Investment Act. Financing is provided by the Federal Government. Other Special Revenue Fund - to account for resources specifically identified to be expended for the various other programs of the County. These include various probation programs, consumer protection programs, family support, antiracketeering programs, law library, etc. Revenues are provided by fines, intergovernmental revenues, fees and forfeitures and charges for services. Other Special Revenue Grants Fund - to account for Federal and State grants received by the County not required to be accounted for in a separate fund. Each grant has a specific project objective and the grant funds must be used for a stated purpose. School Reserve Fund - to account for Federal and State grants received by the Superintendent of Schools. Each grant has a specific project objective and the grant funds must be used for a stated purpose. Environmental Quality Fund - to account for resources specifically identified to be expended for protection of water, air and land from pollutants. Revenues are provided by fines, fees and forfeitures, licenses, permits and Federal and State grants. Special Districts Fund - to account for financial activity related to Improvement Districts, which are legally separate districts not accounted for elsewhere. Solid Waste Fund – to account for the resources used to finance the operations of the County’s landfills and transfer stations and to account for the state shared revenue tax for the tire recycling program. Library District Fund – to account for the resources used for management and operation of the Library District. Revenues are provided primarily by secondary taxes on real property. The Library District is a blended component unit of Pima County. Stadium District Fund - to account for resources specifically identified to be expended for the Stadium District. Revenues are provided by the car rental, hotel/motel bed and recreation vehicle park taxes and charges for services provided. The Stadium District is a blended component unit of Pima County. (This page intentionally left blank) 79 PIMA COUNTY, ARIZONA Combining Balance Sheet - Nonmajor Governmental Funds June 30, 2009 (in thousands) Special Revenue Funds Regional Flood Control Employment District and Training Health and Animal Care Transportation Other Grants Other Assets Cash and cash equivalents Property taxes receivable (net of allowances for uncollectables) Interest receivable Due from other funds Due from other governments Accounts receivable Inventory Prepaid expenditures Other assets Special assessments receivable Total assets $ 14,387 $ 35 599 8,460 22 1,479 32 2,236 $ 6,469 $ 1,050 30 6 $ 2,111 112 72 16 2 10 6 4,653 58 6 8 33,996 $ 587 109 72 184 941 1 22 3,148 32 94 82 38 $ 25,014 $ 4,553 $ 7,567 $ 4,725 $ 35,478 $ 3,828 $ 3,111 $ 546 $ 506 $ 1,874 $ 1,206 $ 1,004 Liabilities and fund balances Liabilities: Accounts payable Interest payable Employee compensation Due to other funds Due to other governments Deferred revenues Total liabilities Fund balances: Reserved for inventory Reserved for prepaid expenditures Reserved for debt service Reserved for capital repairs and refurbishments Reserved for specified programs Unreserved Designated for sports promotion Total fund balances Total liabilities and fund balances $ 740 27 631 1 187 944 116 1,405 1 608 3,501 1,084 7,379 1,324 654 23 6 466 2,262 1,637 4,004 2,746 2,153 1,479 32 72 16 6 8 94 38 16,124 2,203 5,924 713 32,638 1,637 17,635 2,291 5,930 721 32,732 1,675 25,014 $ 4,553 $ 80 7,567 $ 4,725 209 7 $ 35,478 $ 3,828 Exhibit C - 1 Total Other Governmental Funds Special Revenue Funds School Reserve $ Environmental Quality 1,745 $ 421 71 1,009 Special Districts $ Solid Waste 71 $ Library District 2,870 $ Stadium District 22,422 $ 4,459 2 8 1,290 78 195 41 244 161 21 14 152 242 253 496 76 9 $ 2,340 283 851 19,660 1,722 1,551 775 82 995 995 $ 2,246 $ 1,247 $ 103 $ 30 86 $ 1,066 $ 3,283 $ 24,307 $ 5,196 $ 118,510 $ 268 $ 2,073 $ $ 595 196 1 6 1,147 168 10,917 1 3,405 2,486 13 10,312 3,815 371 27,134 496 76 1,551 775 28 109 72 $ 1,023 6 8 67 995 197 206 2,018 346 9 28 98 $ 2,040 1,022 19 2,049 1,041 2,246 $ 1,247 $ (980) 1,679 1,258 102 19,894 (952) 2,937 20,492 1,066 90,251 $ 3,283 81 $ 24,307 $ (274) 4,925 98 2,803 81,196 4,925 4,825 91,376 5,196 $ 118,510 PIMA COUNTY, ARIZONA Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds For the Year Ended June 30, 2009 (in thousands) Health and Animal Care Transportation Revenues: Taxes Special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Special Revenue Funds Regional Flood Control Employment District and Training $ $ Total revenues Expenditures: Current: General government Public safety Highways and streets Sanitation Health Culture and recreation Education and economic opportunity Debt service - principal - interest 186 57,987 222 $ 250 246 2,267 10,673 2,894 158 8 471 58,891 16,471 Other Grants Other 25,145 762 77 $ 14,499 $ 101 371 203 5,119 7,737 588 671 7,838 26,456 14,702 21,953 36,254 15,807 3,371 50 22,068 8,684 10,858 38,082 $ 19 285 25,108 40 48 5,139 632 1,770 123 8 14,686 35,950 Total expenditures 38,082 25,108 10,858 14,686 21,761 35,979 Excess (deficiency) of revenues over (under) expenditures 20,809 (8,637) 15,598 16 192 275 Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers (out) 325 4,863 (21,093) 9,447 (58) (10,787) Total other financing sources (uses) (15,905) 9,389 Net change in fund balances Fund balances at beginning of year 97 83 2,486 (12,015) 477 (265) (10,690) 289 (9,446) 212 487 4,904 752 4,908 305 (9,254) 12,731 1,594 1,022 416 41,986 Change in reserve for inventory Fund balances at end of year 289 1,188 (55) $ 17,635 $ 2,291 $ 82 5,930 $ 721 $ 32,732 $ 1,675 Exhibit C - 2 Special Revenue Funds School Reserve Environmental Quality Special Districts Solid Waste Library District $ 77 16 12 2 44 198 740 373 367 63 5,001 57,269 441 4,242 135,217 16,364 1,563 1,547 14,992 3,196 443 5,777 36,026 7,558 231,635 $ $ $ 3,908 3,908 Stadium District 32,124 Total Other Governmental Funds $ 441 1,789 1,302 $ 1,048 4,487 2,422 $ 1,547 947 37,875 22,913 38,132 6,666 28,859 36,077 25,931 123 101 6,666 3,711 31,995 3,402 31,995 3,402 196,677 4,031 4,156 34,958 (172) 2,278 (3,033) 505 21,239 (47,423) (172) (755) (25,679) 4,336 93 4,336 3,711 (428) 93 (515) 6,666 350 (889) 399 1,000 399 (428) 1,000 (116) 2,477 350 1,157 (1,302) 111 3,859 3,401 9,279 2,826 16,633 1,424 82,152 (55) $ 2,049 $ 1,041 $ (952) $ 2,937 83 $ 20,492 $ 4,825 $ 91,376 (This page intentionally left blank) 84 Combining Statements and Other Schedules Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual – Other Governmental Funds PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Capital Projects Fund For the Year Ended June 30, 2009 (in thousands) Budget Revenues: Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ 25,849 9,425 1,118 94 36,486 Exhibit C - 3 Variance Over/Under Actual $ 25,036 3,652 1,758 323 30,769 $ (813) (5,773) 640 229 (5,717) Expenditures: Capital outlay 166,449 146,334 20,115 Total expenditures 166,449 146,334 20,115 (129,963) (115,565) 14,398 Other financing sources (uses): Face amount of long-term debt Transfers in Transfers (out) Total other financing sources 100,000 15,122 (15,096) 100,026 109,400 15,751 (35,366) 89,785 9,400 629 (20,270) (10,241) Net change in fund balance (29,937) (25,780) 4,157 Deficiency of revenues under expenditures Fund balance at beginning of year Fund balance at end of year $ 137,921 107,984 85 $ 152,643 126,863 $ 14,722 18,879 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Debt Service Fund For the Year Ended June 30, 2009 (in thousands) Budget Revenues: Taxes Intergovernmental Investment earnings Total revenues $ Exhibit C - 4 Variance Over/Under Actual 57,164 8 1,000 58,172 $ 57,223 17 946 58,186 $ 59 9 (54) 14 Expenditures: Debt service - principal - interest - miscellaneous Total expenditures 72,395 28,090 37 100,522 96,751 24,322 18 121,091 (24,356) 3,768 19 (20,569) Deficiency of revenues under expenditures (42,350) (62,905) (20,555) 44,581 44,581 675 83,679 84,354 675 39,098 39,773 2,231 21,449 19,218 Other financing sources: Premium on bonds Transfers in Total other financing sources Net change in fund balance Fund balance at beginning of year Fund balance at end of year $ 10,504 12,735 86 $ 12,393 33,842 $ 1,889 21,107 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Transportation - Special Revenue Fund For the Year Ended June 30, 2009 (in thousands) Budget Revenues: Licenses and permits Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ Exhibit C - 5 Variance Over/Under Actual 211 63,903 375 606 137 65,232 $ 186 57,987 222 250 246 58,891 $ (25) (5,916) (153) (356) 109 (6,341) Expenditures: Highways and streets Total expenditures 48,330 48,330 38,082 38,082 10,248 10,248 Excess of revenues over expenditures 16,902 20,809 3,907 Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers (out) Total other financing (uses) 3,943 (21,093) (17,150) 325 4,863 (21,093) (15,905) 1,245 4,904 5,152 Net change in fund balance Fund balance at beginning of year Fund balance at end of year (248) $ 9,019 8,771 87 $ 12,731 17,635 325 920 $ 3,712 8,864 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Health and Animal Care - Special Revenue Fund For the Year Ended June 30, 2009 (in thousands) Budget Revenues: Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Total revenues $ Exhibit C - 6 Variance Over/Under Actual 2,452 11,643 2,645 207 348 17,295 2,267 10,673 2,894 158 8 471 16,471 Expenditures: Health Health grants Total expenditures 17,145 10,143 27,288 16,193 8,915 25,108 952 1,228 2,180 Deficiency of revenues under expenditures (9,993) (8,637) 1,356 9,689 9,447 (58) 9,389 Other financing sources (uses): Transfers in Transfers (out) Total other financing sources 9,689 Net change in fund balance (304) $ 762 88 $ 1,056 1,594 (55) $ 2,291 (185) (970) 249 (49) 8 123 (824) (242) (58) (300) 752 1,066 Fund balance at beginning of year Change in reserve for inventory Fund balance at end of year $ 528 (55) $ 1,529 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Regional Flood Control - Special Revenue Fund For the Year Ended June 30, 2009 (in thousands) Budget Revenues: Taxes Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ Exhibit C - 7 Variance Over/Under Actual 25,333 217 175 100 181 26,006 $ 25,145 762 77 101 371 26,456 $ (188) 545 (98) 1 190 450 Expenditures: Flood control Total expenditures 12,545 12,545 10,858 10,858 1,687 1,687 Excess of revenues over expenditures 13,461 15,598 2,137 Other financing (uses): Proceeds from sale of capital assets Transfers (out) Total other financing (uses) (10,788) (10,788) 97 (10,787) (10,690) 2,673 4,908 Net change in fund balance Fund balance at beginning of year Fund balance at end of year 2,097 4,770 $ 89 $ 1,022 5,930 97 1 98 2,235 $ (1,075) 1,160 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Employment and Training - Special Revenue Fund For the Year Ended June 30, 2009 (in thousands) Budget Revenues: Intergovernmental Miscellaneous Total revenues $ $ 15,179 15,179 Excess (deficiency) of revenues over (under) expenditures Other financing sources: Transfers in Total other financing sources 14,499 203 14,702 $ 493 493 (289) 16 305 289 289 289 289 305 748 748 $ 90 (89) (99) (188) 14,686 14,686 Net change in fund balance Fund balance at beginning of year Fund balance at end of year Variance Over/Under Actual 14,588 302 14,890 Expenditures: Employment and training Total expenditures Exhibit C - 8 $ 416 721 305 $ (332) (27) PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Other - Special Revenue Fund For the Year Ended June 30, 2009 (in thousands) Budget Revenues: Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Total revenues $ 4,565 6,737 604 1,606 7,300 20,812 Expenditures: General government Public safety Highways and streets Culture and recreation Education and economic opportunity Debt service - principal - interest Total expenditures Variance Over/Under Actual $ 25,262 5,547 50 2,199 2,023 174 11 35,266 Excess (deficiency) of revenues over (under) expenditures Exhibit C - 9 (14,454) 5,119 7,737 588 671 7,838 21,953 $ 554 1,000 (16) (935) 538 1,141 15,807 3,371 50 632 1,770 123 8 21,761 9,455 2,176 1,567 253 51 3 13,505 192 14,646 Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers (out) Total other financing (uses) 2,840 (11,349) (8,509) 83 2,486 (12,015) (9,446) Net change in fund balance (22,963) (9,254) 13,709 34,990 41,986 6,996 Fund balance at beginning of year Fund balance at end of year $ 12,027 91 $ 32,732 83 (354) (666) (937) $ 20,705 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Other Grants - Special Revenue Fund For the Year Ended June 30, 2009 (in thousands) Budget Revenues: Intergovernmental Investment earnings Miscellaneous Total revenues $ Expenditures: Community Services County Attorney Justice Court Juvenile Court Legal Defender Parks and Recreation Public Defender Adult Probation Sheriff Superior Court Medical Assistance County Administrator Total expenditures $ 7,791 3,540 120 11,536 20 103 62 9,912 6,007 131 110 (240) Other financing sources (uses): Transfers in Transfers (out) Total other financing sources Fund balance at beginning of year Fund balance at end of year (240) 794 554 $ 92 35,950 19 285 36,254 $ 5,139 3,010 88 9,745 30 48 70 8,955 8,684 186 40 (16) 35,979 39,332 Net change in fund balance Variance Over/Under Actual 38,125 47 920 39,092 Excess (deficiency) of revenues over (under) expenditures Exhibit C - 10 $ (2,175) (28) (635) (2,838) 2,652 530 32 1,791 (10) 55 (8) 957 (2,677) (55) 70 16 3,353 275 515 477 (265) 212 477 (265) 212 487 727 1,188 1,675 $ 394 1,121 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual School Reserve - Special Revenue Fund For the Year Ended June 30, 2009 (in thousands) Budget Revenues: Intergovernmental Total revenues $ Expenditures: School Reserve grants Total expenditures Exhibit C - 11 Variance Over/Under Actual 3,816 3,816 $ 3,910 3,910 3,908 3,908 $ 4,336 4,336 92 92 (426) (426) Deficiency of revenues under expenditures (94) (428) (334) Net change in fund balance (94) (428) (334) 2,126 2,477 351 Fund balance at beginning of year Fund balance at end of year $ 93 2,032 $ 2,049 $ 17 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Environmental Quality - Special Revenue Fund For the Year Ended June 30, 2009 (in thousands) Budget Revenues: Licenses and permits Intergovernmental Fines and forfeits Investment earnings Miscellaneous Total revenues $ Expenditures: Environmental quality Environmental quality grants Total expenditures Variance Over/Under Actual 2,142 1,331 35 36 3,544 1,789 1,302 77 16 12 3,196 3,043 1,123 4,166 2,612 1,099 3,711 Deficiency of revenues under expenditures Other financing sources: Transfers in Total other financing sources Net change in fund balance Fund balance at beginning of year Fund balance at end of year Exhibit C - 12 94 $ (353) (29) 77 (19) (24) (348) 431 24 455 (622) (515) 107 409 409 399 399 (10) (10) (213) (116) 97 995 782 $ $ $ 1,157 1,041 $ 162 259 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Special Districts - Special Revenue Fund For the Year Ended June 30, 2009 (in thousands) Budget Revenues: Special assessments Investment earnings Total revenues $ Exhibit C - 13 Variance Over/Under Actual 449 441 2 443 91 91 93 93 (2) (2) Excess of revenues over expenditures 358 350 (8) Net change in fund balance 358 350 (8) Expenditures: Debt service - principal - interest Total expenditures Fund balance at beginning of year Fund balance at end of year $ 449 (889) (531) 95 $ $ (1,302) (952) $ $ (8) 2 (6) (413) (421) PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Solid Waste - Special Revenue Fund For the Year Ended June 30, 2009 (in thousands) Budget Revenues: Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ Expenditures: Sanitation Total expenditures $ 1,569 (389) 96 $ $ (152) 524 (41) 144 475 1,594 1,594 (889) (1,958) $ 1,048 4,487 44 198 5,777 6,666 6,666 1,000 1,000 Net change in fund balance Fund balance at beginning of year Fund balance at end of year 1,200 3,963 85 54 5,302 (2,958) Other financing sources: Transfers in Total other financing sources Variance Over/Under Actual 8,260 8,260 Deficiency of revenues under expenditures Exhibit C - 14 2,069 1,000 1,000 - 111 2,069 2,826 2,937 $ 1,257 3,326 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Library District - Special Revenue Fund For the Year Ended June 30, 2009 (in thousands) Budget Revenues: Taxes Intergovernmental Fines and forfeits Investment earnings Miscellaneous Total revenues $ Expenditures: Culture and recreation Total expenditures $ 36,108 36,108 (623) Other financing (uses): Transfers (out) Total other financing (uses) (172) (172) Net change in fund balance (795) Fund balance at beginning of year Fund balance at end of year 9,735 8,940 $ 97 Variance Over/Under Actual 31,927 2,100 600 503 355 35,485 Excess (deficiency) of revenues over (under) expenditures Exhibit C - 15 32,124 2,422 740 373 367 36,026 $ 197 322 140 (130) 12 541 31,995 31,995 4,113 4,113 4,031 4,654 (172) (172) 3,859 $ 16,633 20,492 4,654 $ 6,898 11,552 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Stadium District - Special Revenue Fund For the Year Ended June 30, 2009 (in thousands) Budget Revenues: Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ Expenditures: Culture and recreation Total expenditures 2,034 1,276 15 3,325 1,547 947 63 5,001 7,558 3,413 3,413 3,402 3,402 11 11 $ 4,156 4,244 (88) 2,975 (3,033) (58) Net change in fund balance Fund balance at beginning of year Fund balance at end of year 1,635 1,489 98 $ 2,278 (3,033) (755) (146) $ Variance Over/Under Actual Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers (out) Total other financing sources (uses) Exhibit C - 16 (697) (697) 3,401 $ 1,424 4,825 (487) (329) 48 5,001 4,233 3,547 $ (211) 3,336 Combining Statements and Other Schedules Other (Nonmajor) Enterprise Funds Other (Nonmajor) Enterprise Funds Development Services – to account for the operations of providing zoning permits, enforcing ordinances in compliance with state statutes and administering uniform building codes. Parking Garages – to account for the management and operation of six public parking garages located in downtown Tucson. PIMA COUNTY, ARIZONA Combining Statement of Net Assets Nonmajor Enterprise Funds June 30, 2009 (in thousands) Development Services Assets Current assets: Cash and cash equivalents Interest receivable Due from other funds Accounts receivable Prepaid expense Total current assets Noncurrent assets: Capital assets: Land and other improvements Buildings and improvements Equipment Less accumulated depreciation Total capital assets (net of accumulated depreciation) Total noncurrent assets $ 3,503 17 Exhibit C - 17 Total Other Enterprise Funds Parking Garages 16 62 3,598 2,492 8 1 4 4 2,509 1,403 (1,112) 1,768 12,927 231 (8,493) 1,768 12,927 1,634 (9,605) 291 291 6,433 6,433 6,724 6,724 3,889 8,942 12,831 Liabilities Current liabilities: Accounts payable Employee compensation Due to other funds Due to other governments Total current liabilities 30 729 1 326 17 760 71 414 356 746 1 71 1,174 Total liabilities 760 414 1,174 291 2,838 6,433 2,095 6,724 4,933 Total assets Net assets Invested in capital assets Unrestricted Total net assets $ 3,129 99 $ $ 8,528 $ $ 5,995 25 1 20 66 6,107 11,657 PIMA COUNTY, ARIZONA Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Nonmajor Enterprise Funds June 30, 2009 (in thousands) Development Services Operating revenues: Charges for services Other $ 5,654 222 Total net operating revenues Exhibit C - 18 Total Other Enterprise Funds Parking Garages $ 1,676 $ 7,330 222 5,876 1,676 7,552 Operating expenses: Employee compensation Operating supplies and services Utilities Repair and maintenance General and administrative Consultants and professional services Depreciation Total operating expenses 7,588 190 131 74 1,782 75 245 10,085 280 11 192 90 814 1 298 1,686 7,868 201 323 164 2,596 76 543 11,771 Operating loss (4,209) (10) (4,219) 103 5 44 (18) 147 (13) 108 26 134 Nonoperating revenues: Investment earnings Gain/(loss) on disposal of capital assets Total nonoperating revenues: Income/(loss) before contributions and transfers (4,101) 16 Transfers (out) Change in net assets (4,101) Net assets at beginning of year Net assets at end of year 7,230 $ 3,129 100 (4,085) (93) (93) (77) (4,178) 8,605 $ 8,528 15,835 $ 11,657 PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Nonmajor Enterprise Funds For the Year Ended June 30, 2009 (in thousands) Exhibit C - 19 Development Services Cash flows from operating activities: Cash received from customers for goods and services provided Cash received from miscellaneous operations Cash payments to suppliers for goods and services Cash payments to other funds for goods and services Cash payments to employees for services $ Net cash provided by (used for) operating activities 5,654 216 (344) (3,147) (7,104) Total Other Enterprise Funds Parking Garages $ 1,675 $ (1,008) (97) (289) (4,725) 281 7,329 216 (1,352) (3,244) (7,393) (4,444) Cash flows from noncapital financing activities: Loans with other funds 2,634 (1) 2,633 Net cash provided by (used for) noncapital financing activities 2,634 (1) 2,633 Cash flows from capital and related financing activities: Proceeds on sale of capital assets Purchase of capital assets 16 Net cash provided by (used for) capital and related financing activities (65) 16 (65) 16 (65) (49) Cash flows from investing activities: Interest on cash and investments 98 41 139 Net cash provided by investing activities 98 41 139 Net increase (decrease) in cash and cash equivalents (1,977) Cash and cash equivalents at beginning of year 256 5,480 Cash and cash equivalents at end of year $ (continued) 101 3,503 (1,721) 2,236 $ 2,492 7,716 $ 5,995 PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Nonmajor Enterprise Funds For the Year Ended June 30, 2009 (in thousands) Exhibit C - 19.1 (continued) Reconciliation of operating loss to net cash (used for) operating activities Development Services $ (4,209) Operating loss Adjustments to reconcile operating loss to net cash provided by (used for) operating activities: Depreciation and amortization Changes in assets and liabilities: Decrease (increase) in assets: Accounts receivable Prepaid expenses Increase (decrease) in liabilities: Accounts payable Due to other governments Other current liabilities Parking Garages $ 245 298 $ 543 (6) (55) (1) (4) (7) (59) (39) 40 (33) (9) 1 (33) (670) (661) Net cash provided by (used for) operating activities (10) Total Other Enterprise Funds $ (4,219) (4,725) $ 281 $ (4,444) Noncash investing, capital and financing activities during the year ended June 30, 2009: Development Services Enterprise Fund disposed of capital assets with an original cost of $54 and accumulated depreciation of $43, resulting in a loss on disposal of $11. Parking Garages Enterprise Fund transferred land with a book value of $93 to the County's general government. Parking Garages Enterprise Fund retired assets with a net book value of $18. 102 Combining Statements and Other Schedules Internal Service Funds Internal Service Funds Self Insurance Trust Fund – to account for the risk management function of the County. The Fund provides self insurance coverage to the County for medical malpractice, workers’ compensation, unemployment, dental, general liability, environmental liability and property damage as well as acquiring coverage for other risks. Other Internal Service – to account for the acquisition, operation and maintenance of fleet services equipment provided to County departments, as well as to account for the provision of printing, infrastructure and telecommunication services to County departments. PIMA COUNTY, ARIZONA Combining Statement of Net Assets Internal Service Funds June 30, 2009 (in thousands) Assets Current assets: Cash and cash equivalents Interest receivable Due from other funds Due from other governments Accounts receivable Inventory Prepaid expense Total current assets Exhibit C - 20 Self Insurance Trust Other Internal Service Total Internal Service Funds $ $ $ 45,444 124 428 166 3 401 192 19,921 64,560 167 428 166 6 401 945 66,673 248 (138) 124 614 32,593 (14,959) 489 592 614 32,841 (15,097) 613 826 826 18,737 18,737 19,563 19,563 47,578 38,658 86,236 431 104 1,207 613 1 1,638 717 1 4,446 2,218 9,020 3 753 46,752 Noncurrent assets: Capital assets: Land and other improvements Buildings and improvements Equipment Less accumulated depreciation Construction in progress Total capital assets (net of accumulated depreciation) Total noncurrent assets 19,116 43 592 Total assets Liabilities Current liabilities: Accounts payable Employee compensation Due to other funds Current portion reported but unpaid losses Current portion incurred but not reported losses Total current liabilities Noncurrent liabilities: Reported but unpaid losses Incurred but not reported losses Total noncurrent liabilities 20,089 10,241 30,330 Total liabilities 37,529 1,821 39,350 826 9,223 18,737 18,100 19,563 27,323 4,446 2,218 7,199 Net assets Invested in capital assets Unrestricted Total net assets $ 10,049 103 1,821 20,089 10,241 30,330 $ 36,837 $ 46,886 PIMA COUNTY, ARIZONA Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Internal Service Funds For the Year Ended June 30, 2009 (in thousands) Self Insurance Trust Operating revenues: Charges for services Other $ 17,718 299 Exhibit C - 21 Total Internal Service Funds Other Internal Service $ 26,722 1,870 $ 44,440 2,169 Total operating revenues 18,017 28,592 46,609 Operating expenses: Employee compensation Operating supplies and services Utilities Incurred losses Insurance premiums General and administrative Repair and maintenance Consultants and professional services Depreciation Total operating expenses 1,921 171 26 12,600 3,615 1,551 139 548 35 20,606 4,728 5,485 1,045 1,012 1,592 3,428 26 2,805 20,121 6,649 5,656 1,071 12,600 4,627 3,143 3,567 574 2,840 40,727 Operating income (loss) (2,589) 8,471 5,882 Nonoperating revenues (expenses): Investment earnings Loss on disposal of capital assets Total nonoperating revenues (expenses): 252 237 (329) 489 (329) 252 (92) 160 Income (loss) before capital contributions and transfers: (2,337) Transfers in Transfers (out) 176 (1,003) Change in net assets (3,164) 8,249 5,085 Net assets at beginning of year 13,213 28,588 41,801 Net assets at end of year $ 10,049 104 8,379 6,042 853 (983) $ 36,837 1,029 (1,986) $ 46,886 PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2009 (in thousands) Cash flows from operating activities: Cash received from other funds for goods and services Cash received from miscellaneous operations Cash payments to suppliers for goods and services Cash payments to other funds for goods and services Cash payments for incurred losses Cash payments to employees for services Exhibit C - 22 Self Insurance Trust Other Internal Service Total Internal Service Funds $ $ $ Net cash provided by operating activities 17,718 322 (4,792) (2,053) (6,667) (1,296) 3,232 26,722 2,002 (10,897) (1,926) (4,907) 44,440 2,324 (15,689) (3,979) (6,667) (6,203) 10,994 14,226 Cash flows from noncapital financing activities: Cash transfers in from other funds Cash transfers out to other funds Loans with other funds 175 (1,000) 160 853 (983) (13) 1,028 (1,983) 147 Net cash used for noncapital financing activities (665) (143) (808) Cash flows from capital and related financing activities: Proceeds from sale of equipment Purchase of capital assets (124) 294 (3,303) 294 (3,427) Net cash used for capital and related financing activities (124) (3,009) (3,133) Cash flows from investing activities: Interest on cash and investments 280 214 494 Net cash provided by investing activities 280 214 494 Net increase in cash and cash equivalents 2,723 8,056 10,779 42,721 11,060 53,781 Cash and cash equivalents at beginning of year $ Cash and cash equivalents at end of year (continued) 105 45,444 $ 19,116 $ 64,560 PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2009 (in thousands) Exhibit C - 22.1 (continued) Reconciliation of operating income to net cash provided by operating activities Self Insurance Trust $ (2,589) Operating income (loss) Other Internal Service $ 8,471 Total Internal Service Funds $ 5,882 2,805 2,840 Adjustments to reconcile operating income to net cash provided by (used for) operating activities: Depreciation and amortization Changes in assets and liabilities: Decrease (increase) in assets: Accounts receivable Due from other governments Inventory Prepaid expenses Increase (decrease) in liabilities: Accounts payable Due to other governments Reported but unpaid losses Incurred but not reported losses Other current liabilities Net cash provided by operating activities 35 23 (100) 130 5,113 676 (56) $ 3,232 118 14 157 (148) 141 14 157 (248) (239) (5) (109) (5) 5,113 676 (235) (179) $ 10,994 $ 14,226 Noncash investing, capital and financing activities during the year ended June 30, 2009: Self Insurance Trust Fund transferred out capital assets with a net book value of $3 to the County's general government. Self Insurance Trust Fund transferred in capital assets with a net book value of $1 from the County's general government. Other Internal Service Funds (Graphics Production) retired assets with a net book value of $6. 106 Combining Statements and Other Schedules Fiduciary Funds PIMA COUNTY, ARIZONA Combing Statement of Fiduciary Net Assets Investment Trust Funds June 30, 2009 (in thousands) Treasurer's Investment Pool Assets Cash and cash equivalents Interest receivable $ 141,685 786 Total assets Exhibit C - 23 Total Investment Trust Funds Individual Investment Accounts $ 142,471 129,712 2 $ 129,714 271,397 788 272,185 Liabilities Total liabilities Net assets Held in trust for pool participants $ 142,471 107 $ 129,714 $ 272,185 PIMA COUNTY, ARIZONA Combining Statement of Changes in Fiduciary Net Assets Investment Trust Funds For the Year Ended June 30, 2009 (in thousands) Treasurer's Investment Pool Additions Contributions: Participants Total contributions $ Investment earnings: Total investment earnings Total additions Deductions Distributions to participants Total deductions Net increase (decrease) Net assets held in trust July 1, 2008 Net assets held in trust June 30, 2009 $ 108 2,324,759 2,324,759 Exhibit C - 24 Total Investment Trust Funds Individual Investment Accounts $ 193,803 193,803 $ 2,518,562 2,518,562 3,531 3,531 2,301 2,301 5,832 5,832 2,328,290 196,104 2,524,394 2,391,785 175,753 2,567,538 2,391,785 175,753 2,567,538 (63,495) 20,351 (43,144) 205,966 109,363 315,329 142,471 $ 129,714 $ 272,185 PIMA COUNTY, ARIZONA Combining Statement of Fiduciary Net Assets Agency Funds June 30, 2009 (in thousands) Treasurer's Clearing Payroll Assets Cash and cash equivalents $ Total assets $ 3,931 Liabilities Employee compensation Due to other governments Deposits and rebates Total liabilities 3,931 3,255 Exhibit C - 25 Other $ 59,440 Total $ 3,255 59,440 66,626 25 3,230 38,481 20,959 3,931 38,506 24,189 3,931 $ 3,931 109 $ 66,626 3,255 $ 59,440 $ 66,626 PIMA COUNTY, ARIZONA Combining Statement of Changes in Fiduciary Net Assets Agency Funds For the Year Ended June 30, 2009 (in thousands) Payroll Clearing Assets Cash and cash equivalents Total assets Balance 06/30/08 $ Liabilities Employee compensation Total liabilities Additions 4,751 4,751 $ 647,267 647,267 Exhibit C - 26 Balance 06/30/09 Deductions $ 648,087 648,087 $ 3,931 3,931 4,751 4,751 647,267 647,267 648,087 648,087 3,931 3,931 Treasurer's Clearing Assets Cash and cash equivalents Due from other governments Total assets 778 1,809 2,587 1,921,178 3,255 1,921,178 1,918,701 1,809 1,920,510 Liabilities Due to other governments Deposits and rebates Total liabilities 2,587 2,587 1,048,293 872,885 1,921,178 1,048,268 872,242 1,920,510 25 3,230 3,255 Other Assets Cash and cash equivalents Total assets 69,475 69,475 461,785 461,785 471,820 471,820 59,440 59,440 Liabilities Due to other governments Deposits and rebates Total liabilities 46,048 23,427 69,475 165,443 296,342 461,785 173,010 298,810 471,820 38,481 20,959 59,440 Totals - All Agency Funds Assets Cash and cash equivalents Due from other governments Total assets 75,004 1,809 76,813 3,030,230 66,626 3,030,230 3,038,608 1,809 3,040,417 Liabilities Employee compensation Due to other governments Deposits and rebates Total liabilities 4,751 46,048 26,014 76,813 647,267 1,213,736 1,169,227 3,030,230 648,087 1,221,278 1,171,052 3,040,417 3,931 38,506 24,189 66,626 $ 110 $ $ 3,255 66,626 $ PIMA COUNTY Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2009 INTRODUCTORY SECTION FINANCIAL SECTION STATISTICAL SECTION Financial Trends Information Revenue Capacity Information Debt Capacity Information Demographic and Economic Information Operating Information STATISTICAL SECTION FINANCIAL TRENDS: The financial trends schedules are intended to provide users with information to assist them in understanding and assessing how a government’s financial position has changed over time. Financial trends information is considered to be a primary source of the historical perspective that helps users comprehend the direction in which a government’s economic condition is heading. It also serves the purpose of giving users a form of information that is among their most highly valued, comparative information over time. Exhibit D - 1 PIMA COUNTY, ARIZONA Net Assets by Component Last Eight Fiscal Years (in thousands) (accrual basis of accounting) 2002 Governmental activities Invested in capital assets, net of related debt Restricted for: Special revenue Highways and streets Debt service Capital projects Worker's compensation Unrestricted Total governmental activities net assets $ 111 Business-type activities Invested in capital assets, net of related debt Restricted for: Debt service Capital projects Regional Wastewater Reclamation Healthcare Unrestricted (deficit) Total business-type activities net assets Primary government Invested in capital assets, net of related debt Restricted for: (2) Facilities, justice, library, tax stabilization and community development (2) Special revenue (2) Highways and streets Debt service Capital projects Workers' compensation Regional Wastewater Reclamation Healthcare Unrestricted Total primary government net assets $ 215,646 2003 $ 272,130 Fiscal Year 2005 2004 $ 391,514 $ 741,453 $ 2006 2007 2008 2009 761,130 $ 774,000 $ 882,424 53,384 21,353 7,934 77,088 63,014 16,734 8,980 90,467 71,618 17,390 13,612 80,922 78,080 21,349 44,566 59,945 $ 972,346 43,339 29,322 52,363 59,789 5,450 33,752 2,926 35,686 5,686 17,368 60,050 358,237 66,015 406,079 41,020 507,951 11,439 27,027 9,042 33,451 882,201 38,464 959,353 46,256 999,451 53,778 1,119,744 34,850 1,211,136 380,916 444,590 451,162 457,600 466,257 476,950 482,822 539,718 1,216 18,982 15,748 19,684 (4,109) 432,437 1,245 3,008 3,669 13,217 (24,744) 440,985 499 88 3,696 4,011 (4,766) 454,690 468 438 3,511 6,319 20,851 488,749 48,379 5,464 15,284 535,822 574 35,480 38,628 9,985 10,845 572,462 791 37,925 5,956 13,732 56,397 597,623 819 14,479 5,883 9,017 34,477 604,393 596,562 716,720 842,676 1,199,053 1,227,387 1,250,950 1,365,246 1,512,064 71,618 78,080 43,339 29,322 52,363 59,789 6,666 52,734 4,171 38,694 6,185 17,456 63,014 16,734 9,554 125,947 17,390 14,403 118,847 21,349 45,385 74,424 15,748 19,684 55,941 790,674 3,669 13,217 41,271 847,064 3,696 4,011 36,254 962,641 11,907 27,027 9,042 3,511 6,319 54,302 1,370,950 53,384 21,353 8,372 77,088 48,379 5,464 53,748 1,495,175 38,628 9,985 57,101 $ 1,571,913 5,956 13,732 110,175 $ 1,717,367 5,883 9,017 69,327 $ 1,815,529 $ $ (2) Beginniing in fiscal year 2005-06 and in 2008-09, all special revenue funds were reclassified and reported from a functional perspective. $ $ Exhibit D - 2 PIMA COUNTY, ARIZONA Changes in Net Assets Last Eight Fiscal Years (in thousands) (accrual basis of accounting) Fiscal Year 2002 Expenses Governmental activities: General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Depreciation-unallocated * Amortization-unallocated Interest on long-term debt Total governmental activities expenses $ 112 Business-type activities: Regional Wastewater Reclamation Pima Health System & Services Development Services Parking Garages Total business-type activities expenses Total primary government expenses Program revenues Governmental activities: Charges for services General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Operating grants and contributions Capital grants and contributions Subtotal governmental activities program revenues $ 137,296 123,513 42,515 2003 $ 131,925 132,939 39,492 2004 $ 140,827 151,860 42,133 2005 $ 194,873 118,412 65,414 2006 $ 208,293 132,583 70,392 7,258 32,043 103,085 34,510 39,517 2007 $ 2008 223,266 148,831 92,985 9,623 33,800 97,154 55,482 42,483 $ 239,399 165,715 88,488 9,658 36,977 106,546 60,616 47,296 2009 $ 212,196 149,253 79,251 7,434 31,541 115,513 60,520 46,770 23,120 73,243 27,081 37,565 727 649 14,391 480,100 23,917 84,457 31,326 35,033 820 654 15,779 496,342 30,165 76,894 32,727 33,093 805 967 15,012 524,483 31,798 96,199 29,663 39,714 849 161 16,152 593,235 165 19,463 647,309 168 18,924 722,716 138 22,860 777,693 65,494 195,445 7,917 1,254 270,110 750,210 74,816 221,970 8,373 1,346 306,505 802,847 71,804 268,869 9,617 1,377 351,667 876,150 76,079 249,809 10,857 1,494 338,239 931,474 82,701 256,583 14,422 1,479 355,185 1,002,494 98,222 261,859 15,400 1,579 377,060 1,099,776 106,803 295,494 14,750 1,877 418,924 1,196,617 105,139 224,959 9,992 1,696 341,786 1,070,809 21,542 8,498 4,916 18,667 10,804 5,339 21,422 10,289 11,728 22,881 6,985 20,549 6,971 1,379 1,787 214 121,934 18,207 185,448 7,822 1,037 1,662 196 121,587 5,665 172,779 8,772 918 1,709 101 135,119 17,413 207,471 9,526 26,033 8,136 21,617 4,531 9,693 26,663 9,797 11,732 4,747 10,270 25,502 9,550 9,316 5,930 9,965 26,283 10,386 4,616 4,668 10,488 1,643 298 125,121 23,663 210,666 1,797 314 133,113 12,188 217,422 2,991 698 139,324 15,085 221,307 3,031 716 144,479 48,672 $ 257,161 2,754 691 131,361 68,535 259,782 $ $ $ $ $ (235) 26,780 729,023 $ (continued) * Due to the changes in the County's asset management system in fiscal year 2005-2006, depreciation - unallocated is included in the general government activities. Exhibit D - 2 PIMA COUNTY, ARIZONA Changes in Net Assets Last Eight Fiscal Years (in thousands) (accrual basis of accounting) (continued) Fiscal Year 2002 Program revenues Business-type activities: Charges for services Regional Wastewater Reclamation Pima Health System & Services Development Services Parking Garages Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues $ Net (expense) revenue Governmental activities Business-type activities Total governmental activities net expense 113 General revenues and other changes in net assets Governmental activities: Taxes Property taxes Hotel/motel taxes Other taxes levied for stadium district Shared sales tax Shared vehicle licenses Unrestricted grants and contributions Interest and penalties on delinquent taxes Investment earnings Miscellaneous Capital contributions Gain on sale of capital assets Extraordinary item Transfers Total governmental activities 63,601 179,322 7,754 1,454 6,505 2003 $ Business-type activities: State shared tax Investment earnings Miscellaneous Capital contributions Extraordinary item Transfers Total business-type activities 92,379 244,932 14,730 1,507 4,238 $ $ 106,266 257,142 11,239 1,548 5,174 803 382,172 603,479 2008 $ 106,448 291,980 8,992 1,720 4,806 22,952 436,898 694,059 2009 325,319 532,790 357,786 568,452 (294,652) (294,652) (323,563) (24,221) (347,784) (317,012) (26,348) (343,360) (382,569) 19,547 (363,022) (429,887) 27,135 (402,752) (501,409) 5,112 (496,297) (520,532) 17,974 (502,558) (469,241) 6,356 (462,885) 237,049 2,495 1,600 76,752 21,093 9,550 5,479 8,157 10,340 251,844 2,557 1,597 78,504 21,904 9,216 7,052 5,064 12,774 2,789 272,507 2,745 1,709 83,202 23,413 3,201 6,321 3,102 14,063 5,441 294,643 2,822 1,819 91,510 23,630 7,571 6,771 6,140 16,254 185 316,170 6,856 1,808 103,158 25,894 7,975 5,683 12,942 12,828 247 323 343,525 8,715 1,884 106,985 26,967 9,468 5,149 16,439 16,309 5,051 377,810 8,176 1,952 103,171 27,166 7,748 6,365 16,326 15,416 393,255 6,591 1,534 89,177 25,869 5,741 6,123 5,875 21,323 (7,447) (17,980) 367,874 (13,196) 402,508 1,935 453,280 (134) 493,750 721 541,213 113 564,243 4,005 560,633 1,146 747 2,750 22,214 1,163 1,609 2,865 20,722 3,849 1,348 14,607 5,510 1,522 25,217 6,721 1,286 2,025 2,394 13,196 40,053 (1,935) 24,424 134 19,938 (721) 31,528 (113) 7,894 (4,005) 414 13,954 32,317 $ 2007 282,284 455,063 959 1,727 5,828 12,479 (2,673) 17,980 36,300 82,432 224,820 11,830 1,460 4,777 2006 258,636 444,084 905 2,888 3,309 11,261 $ 2005 104,501 253,748 17,140 1,485 4,997 449 382,320 599,742 (13,954) 358,561 71,626 195,872 8,464 1,413 4,909 2004 $ 105,162 216,108 5,654 1,676 4,626 14,916 348,142 607,924 1,140 Total primary government 390,878 404,174 442,561 477,704 513,688 572,741 572,137 561,047 Change in net assets Governmental activities Business-type activities Total primary government 63,909 32,317 96,226 44,311 12,079 56,390 85,496 13,705 99,201 70,711 43,971 114,682 63,863 47,073 110,936 39,804 36,640 76,444 43,711 25,868 69,579 91,392 6,770 98,162 $ $ $ $ $ $ $ $ PIMA COUNTY, ARIZONA Fund Balances - Governmental Funds Last Ten Fiscal Years (amounts in thousands) (modified accrual basis of accounting) 2000 General Fund Reserved Unreserved Total general fund $ All other governmental funds Reserved Unreserved, reported in: Special revenue funds Capital projects funds 1,846 24,721 26,567 2001 $ 2,233 19,653 21,886 2002 $ 2,486 28,656 31,142 Fiscal Year 2003 $ 2,549 30,999 33,548 2004 $ 7,068 25,628 32,696 Exhibit D - 3 2005 $ 4,056 33,171 37,227 2006 $ 5,152 46,423 51,575 2007 $ 8,889 48,671 57,560 2008 $ 5,415 64,974 70,389 2009 $ 4,363 35,803 40,166 10,412 9,176 8,542 6,742 7,603 12,746 11,784 13,999 17,094 39,139 40,785 27,790 48,616 30,986 61,134 46,985 42,312 82,793 45,325 97,270 54,384 147,650 66,167 84,472 69,773 89,328 77,451 152,643 86,121 126,821 114 Total other governmental funds $ 78,987 $ 88,778 $ 116,661 $ 131,847 $ 150,198 $ 214,780 $ 162,423 $ 173,100 $ 247,188 $ 252,081 Exhibit D - 4 PIMA COUNTY, ARIZONA Changes in Fund Balances - Governmental Funds Last Ten Fiscal Years (amounts in thousands) (modified accrual basis of accounting) Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Revenues Taxes Special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous $ Total revenues 214,332 703 4,541 241,225 27,308 4,245 11,384 9,452 $ 227,542 845 4,882 253,863 26,613 4,365 15,468 8,131 $ 244,807 598 6,077 260,218 31,112 4,882 6,952 8,143 $ 258,375 1,023 6,087 245,378 35,721 5,047 4,152 10,356 $ 279,527 505 6,566 273,225 43,505 5,010 2,656 11,918 $ 300,972 244 7,265 278,414 53,568 5,967 5,181 14,806 $ 321,474 215 7,452 291,059 63,582 6,014 11,382 13,165 $ 348,700 521 7,132 303,392 63,508 6,550 13,988 17,544 $ 381,862 556 7,710 312,634 58,890 6,480 14,218 21,752 $ 396,241 441 6,989 292,236 55,346 6,283 5,335 22,414 115 513,190 541,709 562,789 566,139 622,912 666,417 714,343 761,335 804,102 785,285 110,022 109,815 25,689 122,023 117,058 24,977 125,416 123,021 27,835 132,416 127,155 26,741 140,319 146,275 29,170 193,308 109,798 38,363 22,579 69,368 20,263 33,135 89,215 37,480 13,981 83 22,584 71,260 22,242 32,458 87,673 39,823 15,003 186 23,102 73,136 25,581 37,524 109,670 37,342 14,128 391 24,029 84,238 25,214 35,057 97,147 45,544 15,695 24 30,322 76,725 27,141 32,146 103,167 49,025 14,851 161 30,802 96,996 23,172 38,098 127,632 42,891 16,127 25 203,881 121,229 39,394 6,271 30,038 103,034 28,561 37,918 121,007 50,547 19,448 15 222,434 132,930 42,683 6,766 32,311 97,168 45,197 38,474 202,659 53,733 18,965 12 237,640 149,475 43,741 8,310 34,352 106,607 50,509 42,286 139,539 59,719 22,639 330 222,309 144,617 38,132 6,666 31,626 115,481 51,657 42,299 146,334 100,384 26,849 24 Total expenditures 531,630 555,287 597,146 613,260 649,302 717,212 761,343 893,332 895,147 926,378 Excess (deficiency) of revenues over (under) expenditures (18,440) (13,578) (34,357) (47,121) (26,390) (50,795) (47,000) (131,997) (91,045) (141,093) Expenditures General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Capital outlay Debt service - principal - interest - miscellaneous Other financing sources (uses): Refunding bonds Issuance cost on bonds Premium on bonds Payments to refund escrow agents Capital leases Proceeds from sale of capital assets Face amount of long-term debt Transfers in Transfers (out) 22,420 796 (22,551) 590 Total other financing sources (uses) Extraordinary item Residual equity - net Change in reserves - net Net change in fund balances Debt service as a percentage of noncapital expenditures 6,880 (163) 410 54,129 33,084 (46,218) 50,358 34,335 (72,276) 81,921 52,753 (65,658) 177 37 85,000 78,457 (93,597) 40,995 12,417 70,271 70,321 148 (6,846) 250 1,429 1,964 675 406 65,000 68,583 (89,916) 27 116,200 50,008 (46,962) 231 416 4,836 59,948 (56,263) 1,426 146,320 86,089 (86,688) 312 27 175,000 128,406 (127,692) 876 109,400 171,186 (166,319) 44,255 119,523 9,168 148,576 178,017 115,818 (6,237) 348 160 $ 23,063 11.65% 4,315 (107) $ 3,047 11.76% 50 $ 35,964 10.26% 629 $ 17,592 11.56% (366) $ 17,499 11.53% 385 $ 69,113 9.87% (177) $ (38,009) 10.90% (211) $ 16,368 9.88% (55) $ 86,917 10.48% (55) $ (25,330) 15.89% (This page intentionally left blank) 116 STATISTICAL SECTION REVENUE CAPACITY: The revenue capacity information is intended to assist users to understand and assess the factors affecting a government’s ability to generate its own-source revenues. The presentation here is not limited to property tax revenues, but certain other revenues are presented to comply with debt disclosure requirements, e.g., hotel taxes, car rental and RV taxes and street and highway revenues. Exhibit D - 5 PIMA COUNTY, ARIZONA Taxable Assessed Value and Estimated Actual Value of Property Last Ten Tax Years (amounts in thousands) Commercial Property Tax Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 $ 1,532,186 1,601,929 1,678,649 1,764,657 1,823,592 1,882,879 2,001,137 2,204,072 2,358,259 2,568,203 Residential Property $ 2,324,927 2,494,934 2,709,068 2,955,066 3,265,040 3,615,603 4,076,600 4,689,972 5,352,916 5,853,947 Vacant Land $ 239,298 246,938 263,270 281,243 302,323 323,147 359,662 428,486 493,055 525,779 Other $ Taxable Assessed Value 15,253 $ 4,111,664 17,692 4,361,493 18,348 4,669,335 21,508 5,022,474 21,595 5,412,550 27,920 5,849,549 29,803 6,467,202 30,802 7,353,331 35,442 8,239,672 37,783 8,985,712 Total Direct Tax Rate 5.5635 $ 5.5828 5.4998 5.4981 5.4967 5.4611 5.3406 5.0674 4.6702 4.5917 Estimated Limited Value 34,898,941 37,257,921 39,908,791 42,927,737 46,754,009 50,631,267 56,437,790 64,347,659 73,122,499 80,593,121 Assessed Value as a Percentage of Limited Value 11.78% 11.71% 11.70% 11.70% 11.58% 11.55% 11.46% 11.43% 11.27% 11.15% 117 Source: Pima County Assessor's Office. Notes: Property in Pima County is assessed annually with values being set by either the County Assessor or the Arizona Department of Revenue. The values are the basis for Primary Taxes and annual changes therein are restricted by the State Constitution. Assessment ratios are set by the legislature for individual property types. The taxable assessed value is arrived at by multiplying an assessment ratio that has varied from ten percent for residential property, to twenty-five percent for commercial property. Tax rates are per $100 of assessed value. Exhibit D - 6 PIMA COUNTY, ARIZONA Direct and Overlapping Property Tax Rates Last Ten Tax Years (per $100 of assessed value) County Direct Rates Tax Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 County Secondary Flood Control District (1) 4.0720 4.0720 4.0720 4.0720 4.0720 4.0720 3.8420 3.6020 3.3913 3.3133 0.9350 0.8950 0.8150 0.8150 0.8150 0.7150 0.7150 0.6850 0.6050 0.7100 0.3046 0.3546 0.3546 0.3546 0.3546 0.3746 0.3746 0.3446 0.2935 0.2635 Flowing Wells Irrigation District (2) Silverbell Irrigation District (2) 6.9300 10.4000 10.4000 10.4000 12.9000 12.9000 12.9000 12.9000 19.3500 19.3500 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 County Primary County Library District 0.2024 0.2124 0.2124 0.2124 0.2124 0.2575 0.3675 0.3975 0.3393 0.2643 Fire District Assistance Total 0.0495 0.0488 0.0458 0.0441 0.0427 0.0420 0.0415 0.0383 0.0411 0.0406 5.5635 5.5828 5.4998 5.4981 5.4967 5.4611 5.3406 5.0674 4.6702 4.5917 CortaroMarana Irrigation District (2) Mobile Home Relocation District (3) Town of Casas Adobes Incorporation Costs Town of Tortolita Incorporation Costs 1.0000 24.7500 24.7500 50.0000 60.0000 60.0000 60.0000 65.0000 66.0000 66.0000 0.5000 0.5000 0.1438 0.2313 Overlapping Rates 118 Tax Year State of Arizona Education Assistance 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.5123 0.4974 0.4889 0.4717 0.4560 0.4358 0.0000 0.0000 0.0000 0.3306 Community College District 1.5574 1.5470 1.5333 1.4884 1.3428 1.3114 1.2515 1.1845 1.1355 1.0770 City of Tucson City of South Tucson Central AZ Water Conserv District 1.1270 1.1202 1.1202 1.1569 1.1847 1.2364 1.2257 1.1321 0.9601 0.9344 0.2918 0.2828 0.2706 0.2513 0.2383 0.2383 0.2383 0.2258 0.2143 0.2035 0.1300 0.1300 0.1300 0.1200 0.1200 0.1200 0.1200 0.1000 0.1000 0.1000 (1) The Pima County Flood Control District tax levy applies only to real property. (2) Irrigation Districts' tax rates shown are levied on a per acre basis. (3) Mobile Home Relocation levy applies only to unsecured mobile homes (not presented after 2001-02). Notes: Primary and secondary tax rates (per $100 of net assessed value) are set by the County Board of Supervisors or the governing boards of other taxing jurisdictions. (A) The Towns of Marana, Oro Valley and Sahuarita do not currently levy a property tax. (B) The Tucson Business Improvement District levy (on a per-business basis) is not shown. Gladden Farms Community Facilities District Vanderbilt Farms Community Facilities District 2.8000 2.8000 2.8000 2.8000 2.8000 2.8000 0.3000 0.3000 0.3000 0.3000 Quail Creek Community Facilities District 3.3000 3.3000 3.3000 PIMA COUNTY, ARIZONA Direct and Overlapping Property Tax Rates Last Ten Tax Years (per $100 of assessed value) School District 2000 2001 2002 2003 2004 2005 Exhibit D - 6a 2006 2007 2008 2009 Tucson Unified (#1) 9.0494 9.8088 9.2780 8.7610 8.3286 7.8829 7.3857 7.0500 6.5659 6.0701 Marana Unified (#6) 7.5418 7.7028 7.3623 6.7979 6.5034 6.0991 5.9117 5.7887 5.4815 4.9286 Flowing Wells Unified (#8) 8.4928 8.0490 7.2175 6.6568 6.5883 7.1232 6.8677 6.5674 6.2665 6.1239 Amphitheater Unified (#10) 6.8816 7.4427 7.0207 6.7601 6.3375 6.4258 6.1193 5.4964 4.8589 4.6112 10.3609 10.3706 9.6945 9.1041 8.4846 8.6482 9.1529 8.1490 7.8009 7.0899 Tanque Verde Unified (#13) 6.9434 6.8484 6.6818 7.1785 5.6661 5.7985 5.4806 5.1033 4.3682 3.1837 Ajo Unified (#15) 6.0973 7.0508 4.1555 5.3016 4.4316 4.4994 4.4929 4.8627 4.5964 4.3158 Catalina Foothills Unified (#16) 7.7258 7.5344 7.0956 7.0256 6.6459 6.8422 6.7428 6.3942 6.1053 4.9970 Vail Elementary (#20) 7.2604 7.2314 7.2295 7.1748 7.0008 6.7510 6.7032 6.0327 5.5360 5.2016 Sahuarita Unified (#30) 8.7007 8.7860 9.1329 9.0113 8.3095 8.1495 7.7345 6.1807 5.9176 5.4230 3.7121 3.7481 3.7900 3.7920 4.5954 Sunnyside Unified (#12) 119 San Fernando Elementary (#35) Empire Elementary (#37) 8.5371 7.6596 6.6965 6.4699 6.1171 8.0930 8.4864 7.5703 4.9021 2.9383 Continental Elementary (#39) 2.4983 2.4346 2.4398 2.3198 2.2216 2.1532 2.0682 1.8970 1.7343 1.6122 Indian Oasis Unified (#40) 9.1002 Redington Elementary (#44) 5.0186 6.3661 6.4230 5.6853 3.9915 4.8856 4.8853 4.8952 7.4720 7.6340 Altar Valley Elementary (#51) 6.5620 6.3052 6.3035 6.3615 6.2759 6.2607 5.7696 5.8086 5.7451 6.0506 Unorganized* 2.1265 2.0647 2.0296 1.9583 1.8931 1.8090 1.7394 1.6020 1.4622 1.3726 *County Education District; applies only to those geographical areas within Pima County not part of formal school districting. PIMA COUNTY, ARIZONA Principal Property Taxpayers Current Year and Nine Years Ago (amounts in thousands) 2000 Taxpayer Phelps Dodge Unisource/Tucson Electric Power Co. 2001 Estimated Assessed Value (1) Rank 0 Percent of Total Assessed Value Exhibit D - 7 2003 2002 Estimated Assessed Value (1) 0.0% 0 Rank Percent of Total Assessed Value 0.0% Estimated Assessed Value (1) $ Rank Percent of Total Assessed Value 18,250 6 0.3% Estimated Assessed Value (1) $ Rank 2004 Percent of Total Assessed Value 14,375 8 0.3% Estimated Assessed Value (1) $ Rank Percent of Total Assessed Value 15,250 7 0.4% $ 166,949 1 3.7% $ 136,337 1 2.8% 137,315 1 2.6% 122,499 1 2.2% 125,597 1 3.0% QWEST 78,642 2 1.8% 84,382 2 1.7% 87,757 2 1.7% 108,829 2 1.9% 104,944 2 2.5% Southwest Gas Corporation 46,191 3 1.0% 51,214 3 1.1% 53,668 3 1.0% 55,710 3 1.0% 59,528 3 1.4% ASARCO Mining 21,200 4 0.5% 18,911 5 0.4% 27,736 4 0.5% 0 0.0% 0 Arizona Portland Cement 13,146 9 0.3% 16,614 0.3% 18,213 7 0.3% 19,990 4 0.4% 21,296 4 0.5% 10 0.2% 12,925 10 0.3% 0.0% 120 TRICO 0 0.0% 0 0.0% 0 0.0% 11,467 ASARCO LLC 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% Star Pass Resorts 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% DND Neffson (Tucson Mall) 15,168 6 0.3% 19,362 4 0.4% 18,733 5 0.4% 18,703 5 0.3% 19,364 5 0.5% Raytheon/Hughes Aircraft ** 14,193 8 0.3% 13,642 9 0.3% 13,349 10 0.3% 13,290 9 0.2% 13,895 9 0.3% Westin La Paloma 15,097 7 0.3% 16,183 7 0.3% 16,703 8 0.3% 16,057 6 0.3% 15,943 6 0.4% 0.0% 13,632 10 0.3% 13,898 9 0.3% 14,461 7 0.3% 14,655 8 0.3% El Conquistador Hotel 0 Ventana Hotel Associates 12,950 10 0.3% 0 0.0% 0 0.0% 0 0.0% 0 0.0% Cyprus/Sierrita Mining Co. 20,000 5 0.4% 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0.3% 0 0.0% 0 0.0% 0 0.0% AT&T 0 0.0% 14,292 HDP Northwest 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% $ 403,536 9.6% $ 384,569 8.5% $ 405,622 8.4% $ 395,381 7.7% $ 403,397 7.2% Total Top Ten 8 Sources: Arizona Department of Revenue, Pima County Assessor's Office. (1) Secondary Assessed Valuation for tax year * * Name change 2001 $ 4,236,070 $ 4,491,395 $4,835,561 $5,221,271 $5,620,156 (continued) Exhibit D - 7 PIMA COUNTY, ARIZONA Principal Property Taxpayers Current Year and Nine Years Ago (amounts in thousands) (continued) 2005 Taxpayer Phelps Dodge 2006 Estimated Assessed Value (1) 21,209 6 0.3% Unisource/Tucson Electric Power Co. 145,937 1 QWEST 104,468 62,970 Southwest Gas Corporation ASARCO Mining Arizona Portland Cement $ Rank Percent of Total Assessed Value 4 0.7% 2.1% 143,362 1 2 1.5% 87,093 3 0.9% 62,846 0.0% 4 Estimated Assessed Value (1) Rank Estimated Assessed Value (1) Rank Percent of Total Assessed Value 121 1.0% $ 156,780 1 1.6% $ 198,694 1 2.0% 1.7% 150,771 1 1.6% 153,431 2 1.6% 158,764 2 1.6% 2 1.1% 94,300 2 1.0% 87,000 3 0.9% 74,646 3 0.8% 3 0.8% 62,919 4 0.7% 63,698 4 0.6% 64,775 4 0.7% 0 0.0% 0 0.0% 44,047 5 0.4% 63,572 5 0.6% 0.3% 22,858 0.3% 23,468 6 0.2% 23,593 7 0.2% 27,561 6 0.3% 14,806 0.2% 18,044 8 0.2% 18,816 9 0.2% 21,029 7 0.2% 0.0% 20,042 8 0.2% 0.0% ASARCO LLC 0 0.0% 10 0 $ Rank 2009 Percent of Total Assessed Value 3 0 0 Estimated Assessed Value (1) Percent of Total Assessed Value 93,656 TRICO Starr Pass Resorts Rank 55,176 0 22,459 Estimated Assessed Value (1) $ 2008 2007 Percent of Total Assessed Value 0.0% 0 0.0% 0 0.0% 17,068 8 0.2% 15,280 10 0.2% 15,889 10 0.2% 19,384 9 0.2% 10 0.2% DND Neffson (Tucson Mall) 22,377 5 0.3% 19,087 7 0.2% 19,897 7 0.2% 21,013 8 0.2% 18,888 Raytheon/Hughes Aircraft ** 16,069 8 0.2% 21,665 6 0.3% 58,987 5 0.6% 33,833 6 0.3% 0 0.0% Westin La Paloma 16,358 7 0.2% 15,504 9 0.2% 15,959 9 0.2% 0 0.0% 0 0.0% El Conquistador Hotel 13,653 10 0.2% 0 0.0% 0 0.0% 0 0.0% 0 0.0% Ventana Hotel Associates 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% Cyprus/Sierrita Mining Co. 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% AT&T 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0.2% 0 0.0% 0 0.0% 0 0.0% 0 0.0% 459,465 6.6% 553,281 6.6% $ 618,100 6.5% $ 667,355 6.8% HDP Northwest Total Top Ten 14,708 $ 440,208 9 7.3% $ $ Sources: Arizona Department of Revenue, Pima County Assessor's Office. (1) Secondary Assessed Valuation for Tax Year * * Name change 2001 $6,050,950 $6,869,955 $8,220,396 $9,594,862 $9,860,981 Exhibit D - 8 PIMA COUNTY, ARIZONA Real Property Tax Levies and Collections Last Ten Fiscal Years (in thousands) Collected to June 30, End of Tax Fiscal Year (2) 122 Fiscal Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Original Real Property Tax Levy $ 201,925 214,642 228,477 241,416 260,570 281,172 302,127 330,240 362,535 379,674 Tax Roll Corrections $ (1,167) (974) (1,023) (1,013) (987) (494) (291) (322) (622) (360) Real Property Tax Levy (Adjusted) $ 200,758 213,668 227,454 240,403 259,583 280,678 301,836 329,918 361,913 379,314 $ Amount 192,409 204,424 218,192 231,619 250,929 271,841 292,019 318,520 348,741 363,624 Percent of Original Levy 95.29% 95.24% 95.50% 95.94% 96.30% 96.68% 96.65% 96.45% 96.20% 95.77% NOTES: (1) Represents the difference between the adjusted levy and collected to June 30, 2009. (2) Amounts collected are on a cash basis rather than the modified accrual basis used in the financial statements. Collected to June 30, 2009 (2) Collections in Subsequent Years $ 8,561 9,154 8,986 8,666 8,635 8,667 9,756 11,286 12,384 $ Amount 200,970 213,578 227,178 240,285 259,564 280,507 301,776 329,806 361,125 363,624 Percent of Adjusted Levy 100.11% 99.96% 99.88% 99.95% 99.99% 99.94% 99.98% 99.97% 99.78% 95.86% Delinquent Taxes Receivable (1) $ (212) 90 276 118 19 171 60 112 788 15,690 Exhibit D - 9 PIMA COUNTY, ARIZONA Assessed, Limited and Full Cash (Secondary) Value of Taxable Property Last Ten Fiscal Years (in thousands) Fiscal Year 1999-00 Primary 1999-00 Secondary Limited and Full Cash Values (1) Net Assessed Value $ 3,853,630 4,000,624 $ Ratio of Net Assessed to Full Cash Value 32,801,718 33,893,530 11.75% 11.80% 2000-01 Primary 2000-01 Secondary 4,111,664 4,236,070 34,898,941 35,819,691 11.78% 11.83% 2001-02 Primary 2001-02 Secondary 4,361,493 4,491,395 37,257,921 38,196,337 11.71% 11.76% 2002-03 Primary 2002-03 Secondary 4,669,336 4,835,561 39,908,791 41,109,997 11.70% 11.76% 2003-04 Primary 2003-04 Secondary 5,022,474 5,221,271 42,927,737 44,423,165 11.70% 11.75% 2004-05 Primary 2004-05 Secondary 5,412,550 5,620,156 46,754,009 48,474,537 11.58% 11.59% 2005-06 Primary 2005-06 Secondary 5,849,549 6,050,950 50,631,267 52,335,111 11.55% 11.56% 2006-07 Primary 2006-07 Secondary 6,467,202 6,869,955 56,437,790 59,890,229 11.46% 11.47% 2007-08 Primary 2007-08 Secondary 7,353,331 8,220,396 64,347,659 72,101,321 11.43% 11.40% 2008-09 Primary 2008-09 Secondary 8,230,967 9,594,862 73,122,499 85,993,246 11.26% 11.16% (1) Limited value is the basis for primary taxes and annual changes therein are restricted by statute; Full Cash Value or Secondary Value approximates market value. 123 PIMA COUNTY, ARIZONA Comparative Net Valuations and Tax Rates (per $100 assessed value) (valuation $ amounts in thousands) Jurisdiction State of Arizona FY 2008-09 (Tax Year 2008) Valuation Rate $ 8,230,967 $0.0000 Pima County General Fund - Primary Debt Service - Secondary Free Library - Secondary Exhibit D - 10 FY 2009-10 (Tax Year 2009) Valuation Rate $ 8,985,712 $0.0000 8,230,967 9,594,862 9,594,862 3.3913 0.6050 0.3393 8,985,712 9,860,981 9,860,981 3.3133 0.7100 0.2643 8,230,967 9,594,862 3.3913 0.9443 4.3356 8,985,712 9,860,981 3.3133 0.9743 4.2876 Education Assistance 8,230,967 0.0000 8,985,712 0.3306 Flood Control District - Secondary 8,684,572 0.2935 Fire District Assistance - Secondary 9,594,862 0.0411 9,860,981 0.0406 Pima Community College District Primary Secondary Total 8,230,967 9,594,862 0.9787 0.1502 1.1289 8,985,712 9,860,981 0.9356 0.1414 1.0770 9,594,862 0.1000 9,860,981 0.1000 3,378,331 3,895,582 0.3231 0.6370 0.9601 3,627,276 4,030,242 0.3144 0.6200 0.9344 City of South Tucson Primary 22,175 0.2143 23,591 0.2035 School Districts Unorganized - Primary 11,950 1.4622 13,854 1.3726 3,334,344 3,866,799 5.3565 1.2094 6.5659 3,599,209 3,975,387 4.9398 1.1303 6.0701 Total County - Primary Total County - Secondary Grand Total Central Arizona Water Conservation District Secondary Cities & Towns City of Tucson Primary Secondary Total Tucson Unified (District #1) Primary Secondary Total 0.2635 (continued) 124 PIMA COUNTY, ARIZONA Comparative Net Valuations and Tax Rates (per $100 assessed value) (valuation $ amounts in thousands) Exhibit D - 10 (continued) Jurisdiction Marana Unified (District #6) Primary Secondary Total FY 2008-09 (Tax Year 2008) Valuation Rate $ 788,663 952,444 $ 3.7725 1.7090 5.4815 FY 2009-10 (Tax Year 2009) Valuation Rate $ 869,433 948,760 $ 3.2634 1.6652 4.9286 Flowing Wells Unified (District #8) Primary Secondary Total 206,794 234,267 4.2244 2.0421 6.2665 219,641 242,759 3.9867 2.1372 6.1239 Amphitheater Unified (District #10) Primary Secondary Total 1,468,535 1,714,181 3.3570 1.5019 4.8589 1,595,327 1,758,161 3.1469 1.4643 4.6112 Sunnyside Unified (District #12) Primary Secondary Total 434,350 488,676 4.6010 3.1999 7.8009 474,332 521,692 4.1213 2.9686 7.0899 Tanque Verde Unified (District #13) Primary Secondary Total 198,996 238,434 3.4139 0.9543 4.3682 218,207 238,861 2.3721 0.8116 3.1837 16,539 18,351 4.5964 0.0000 4.5964 17,938 19,488 4.3158 0.0000 4.3158 Catalina Foothills Unified (District #16) Primary Secondary Total 620,912 717,981 4.1353 1.9700 6.1053 668,966 720,103 2.8268 2.1702 4.9970 Vail Elementary (District #20) Primary Secondary Total 433,249 521,677 3.9845 1.5515 5.5360 482,636 523,749 3.5552 1.6464 5.2016 Ajo Unified (District #15) Primary Secondary Total (continued) 125 PIMA COUNTY, ARIZONA Comparative Net Valuations and Tax Rates (per $100 assessed value) (valuation $ amounts in thousands) Exhibit D - 10 (continued) Jurisdiction Sahuarita Unified (District #30) Primary Secondary Total FY 2008-09 (Tax Year 2008) Valuation Rate $ 357,366 384,176 $ 3.8010 2.1166 5.9176 FY 2009-10 (Tax Year 2009) Valuation Rate $ 451,935 462,350 $ 3.5332 1.8898 5.4230 San Fernando Elementary (District #35) Primary Secondary Total 1,032 1,119 3.7920 0.0000 3.7920 1,088 1,125 4.5954 0.0000 4.5954 Empire Elementary (District #37) Primary Secondary Total 6,073 6,945 4.9021 0.0000 4.9021 6,807 7,523 2.9383 0.0000 2.9383 323,703 390,323 1.5067 0.2276 1.7343 349,360 375,806 1.3726 0.2396 1.6122 Indian Oasis Unified (District #40) Primary Secondary Total 1,586 1,586 0.0000 0.0000 0.0000 1,171 1,171 0.0000 0.0000 0.0000 Redington Elementary (District #44) Primary Secondary Total 1,428 1,541 7.4720 0.0000 7.4720 1,459 1,542 7.6340 0.0000 7.6340 33,416 41,902 5.2462 0.4989 5.7451 38,878 45,669 5.0869 0.9637 6.0506 Continental Elementary (District #39) Primary Secondary Total Altar Valley Elementary (District #51)* Primary Secondary Total *Formerly known as the Mary E. Dill School District 126 PIMA COUNTY, ARIZONA Historical Collections - Hotel Excise Tax, Car Rental Surcharges and Recreational Vehicle Tax Last Ten Fiscal Years (amounts in thousands) Fiscal Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Car Rental Surcharges (2) Hotel Excise Tax (1) $ 2,625 2,824 2,495 2,536 2,717 2,885 5,212 7,796 6,901 5,628 $ 1,477 1,557 1,377 1,436 1,277 1,595 1,589 1,357 1,732 1,389 Recreational Vehicle Tax (3) $ (1) Tax increased from 1% to 2% January 1, 1997; the additional 1% can only be used for County sports facilities. In January of 2006, the tax increased from 2% to 6%, of which only 34% can be used for sports facilities. (2) Car rental surcharges increased from $2.50 to $3.50 per rental contract July 1, 1996. Usage is restricted to County sports facilities. (3) Recreational vehicle taxes apply at the rate of $0.50 per vehicle per night and became effective July 1, 1997. Usage of this tax is limited to Spring Training activities. Source: Pima County Finance and Risk Management Department 127 Exhibit D - 11 213 199 190 195 209 200 214 214 222 159 PIMA COUNTY, ARIZONA Streets and Highways Revenues Last Ten Fiscal Years (amounts in thousands) Fiscal Year Amount 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 $ 47,699 48,317 47,071 48,072 51,334 53,878 56,937 44,607 44,060 41,210 Source: Pima County Finance and Risk Management Department 128 Exhibit D - 12 STATISTICAL SECTION DEBT CAPACITY: The debt capacity information is intended to assist users to understand and assess a government’s debt burden and ability to issue debt. Debt capacity information is cited as being very useful for assessing economic condition as frequently as revenue or tax capacity. Five of the schedules presented provide tenyear comparisons. Certain schedules, for example; leases, lease-purchase and purchase agreements, are provided to comply with debt disclosure requirements. Exhibit D - 13 PIMA COUNTY, ARIZONA Ratios of Outstanding Debt by Type to Personal Income and Per Capita Last Ten Fiscal Years ($ amounts in thousands) Governmental Activities General Obligation Bonds Fiscal Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 $ 173,985 192,640 183,381 200,554 232,553 267,927 231,918 290,150 349,542 388,032 Flood Control Bonds $ 6,595 5,840 5,348 4,585 3,805 3,010 2,230 1,470 725 725 Transportation Revenue Bonds $ 32,000 28,000 79,206 105,541 95,461 137,736 127,000 136,541 149,801 139,683 129 Fiscal Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Lease Revenue Bonds $ 1,095 965 825 495 Special Assessment Bonds $ 1,697 1,053 2,506 2,121 1,736 1,093 911 Business-Type Activities Certificates of Participation $ 6,725 4,505 3,045 1,560 Transportation Loans $ 31,731 81,612 74,554 Total Primary Government $ 349,955 370,881 440,959 483,463 515,686 584,227 530,644 664,089 845,872 878,680 Personal Income $ 20,855,000 21,827,000 21,991,000 22,973,000 23,965,000 26,302,000 28,421,000 30,899,000 33,009,000 32,898,000 Percentage of Personal Income 1.68% 1.70% 2.01% 2.10% 2.15% 2.22% 1.87% 2.15% 2.56% 2.67% (a) See schedule D-20 for population data. Note: Capital Leases $ Details regarding outstanding debt can be found in Note 6 page 57 in Notes to the Financial Statements. 5,100 4,060 3,020 1,943 5,739 3,714 1,000 Population at July 1 (a) 854,329 872,394 890,356 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 35,338 34,008 32,596 31,049 29,323 27,879 26,426 24,736 23,223 21,327 Debt per Capita $ 410 425 495 532 557 619 552 661 824 838 Regional Wastewater Loans Payable Sewer Revenue Bonds $ 75,564 71,444 67,811 63,098 60,064 55,809 51,710 94,356 163,701 183,389 $ 14,477 32,314 57,456 63,551 83,941 83,978 80,148 76,111 70,426 64,489 Contracts and Notes $ 2,479 112 3,685 6,849 5,783 4,852 4,562 5,280 5,842 6,481 Total Primary Government $ 349,955 370,881 440,959 483,463 515,686 584,227 530,644 664,089 845,872 878,680 Exhibit D - 14 PIMA COUNTY, ARIZONA Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita Last Ten Fiscal Years ($ amounts in thousands) General Obligation Bond Debt Fiscal Year 130 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Flood Control General Obligation Bond Debt $ 173,985 192,640 183,381 200,554 232,553 267,927 231,918 290,150 349,542 388,032 $ 6,595 5,840 5,348 4,585 3,805 3,010 2,230 1,470 725 725 Debt Service Funds Available for Principal $ 6,249 4,309 4,883 2,226 2,648 8,899 8,899 7,431 10,241 10,523 Net General Bond Debt $ 174,331 194,171 183,846 202,913 233,710 262,038 225,249 284,189 340,026 378,234 Secondary Net Assessed Value $ 4,000,624 4,236,070 4,491,395 4,835,561 5,221,271 5,620,156 6,050,950 6,869,955 8,220,396 9,594,862 * The Debt per Capita is shown in actual dollars and not in thousands. Note: Details regarding outstanding debt can be found in Note 6 on page 57 in Notes to the Financial Statements. Percent Net General Bond Debt to Assessed Value 4.36% 4.58% 4.09% 4.20% 4.48% 4.66% 3.72% 4.14% 4.14% 3.94% Net General Bond Debt per Capita* Population at July 1 854,329 872,394 890,356 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 $ 204 223 206 223 252 278 234 283 331 361 PIMA COUNTY, ARIZONA Ratio of Direct and Overlapping Debt to Property Values and Per Capita Last Ten Fiscal Years ($ amounts in thousands) Total Overlapping Debt Fiscal Year 131 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 $ 1,067,544 1,135,282 1,134,289 1,129,103 1,091,892 1,185,435 1,146,388 1,107,662 1,137,114 1,213,050 Secondary Net Assessed Value $ Percentage of Assessed Value 4,000,624 4,236,070 4,491,395 4,835,561 5,221,271 5,620,156 6,050,950 6,869,955 8,220,396 9,594,862 26.68% 26.80% 25.25% 23.35% 20.91% 21.09% 18.95% 16.12% 13.83% 12.64% Population at July 1 Debt per Capita* 854,329 872,394 890,356 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 $ 1,250 1,301 1,274 1,243 1,179 1,256 1,192 1,103 1,108 1,157 * The Debt per Capita is shown in actual dollars and not in thousands. Note: Overlapping governments are those that coincide (at least in part), with the geographic boundaries of the County. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of Pima County. When considering the County's ability to issue and repay long-term debt, the process should recognize the entire debt burden borne by the residents and businesses therein. However, this does not imply that every taxpayer is a resident and is responsible for the repayment of debt of each overlapping government. Exhibit D - 14a PIMA COUNTY, ARIZONA Computation of Direct and Overlapping Governmental Activities Debt Outstanding At June 30, 2009 ($ amounts in thousands) Debt Outstanding Governmental Unit Debt repaid with property tax School Districts $ Pima Community College City of Tucson 555,045 $ Amount Overlapping $ 555,045 31,515 31,515 269,106 269,106 Total overlapping Debt repaid with property tax Direct: Pima County * Exhibit D - 15 388,032 Flood Control District $ 855,666 $ 388,032 725 Total direct 725 $ 388,757 $ 74,554 Other Debt: Certificates of participation Jail capital lease $ 74,554 21,184 21,184 143 143 139,683 139,683 Other capital leases Transportation bonds Total other debt $ 235,564 Total direct and overlapping debt $ 1,479,987 *Excludes improvement districts. Note: Overlapping governments are those that coincide with the geographic boundaries of the County. All overlapping governments are 100% within the County's boundaries. This schedule estimates the portion of the outstanding debt borne by the residents and businesses of Pima County. When considering the county's ability to issue and repay long-term debt, the process should recognize the entire debt burden borne by the residents and businesses therein. However, this does not imply that every taxpayer is a resident of each government and is responsible for the repayment of debt of each overlapping government. 132 Exhibit D - 16 PIMA COUNTY, ARIZONA Legal Debt Margin Last Ten Fiscal Years ($ amounts in thousands) 2000 Assessed Value $ 4,000,624 2001 $ 4,236,070 2002 $ 4,491,395 2003 $ 4,835,561 2004 $ 5,221,271 2005 $ 5,620,156 2006 $ 6,050,950 2007 $ 6,869,955 2008 $ 8,220,396 2009 $ 9,594,862 Legal Debt Margin Debt limit (15% of assessed value) 600,094 635,411 673,709 725,334 783,191 843,023 907,643 1,030,493 1,233,059 1,439,229 173,985 192,640 183,070 200,275 232,105 267,270 231,310 289,590 348,335 386,845 (10,241) (10,523) 338,094 376,322 Debt applicable to limit: General obligation bonds Less: Net assets reserved for repayment of general obligation debt (6,249) 133 Total net debt applicable to the limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit. (4,309) 167,736 $ 432,358 27.95% (4,883) 188,331 $ 447,080 29.64% (2,226) 178,187 $ 495,522 26.45% (2,648) 198,049 $ 527,285 27.30% See Notes to the Financial Statements (Note 6 page 64) for calculation of the legal debt margin for the current year. (8,899) 229,457 $ 553,734 29.30% (5,571) 258,371 $ 584,652 30.65% (7,431) 225,739 $ 681,904 24.87% 282,159 $ 748,334 27.38% $ 894,965 27.42% $ 1,062,907 26.15% Exhibit D - 17a PIMA COUNTY, ARIZONA Regional Wastewater Reclamation Pledged Sewer Revenue Debt Coverage Last Ten Fiscal Years (amounts in thousands) Fiscal Year 134 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 (1) (2) (3) (4) Sewer User Revenues (2) $ 60,177 62,134 60,845 68,374 79,528 89,525 105,827 103,959 109,264 105,987 Less: Operating Expense (3) $ 35,334 39,643 42,571 46,937 44,566 46,795 57,371 69,597 78,521 73,186 Debt Service (1) Available Net Revenue $ 24,843 22,491 18,274 21,437 34,962 42,730 48,456 34,362 30,743 32,801 Principal $ 4,727 $ 5,006 7,662 8,887 7,979 4,705 9,501 13,738 13,072 5,975 * Interest 5,157 4,531 5,782 5,913 5,378 4,472 5,710 6,409 7,315 5,990 * Coverage Ratio (4) 2.51 2.36 1.36 1.45 2.62 4.66 3.19 1.71 1.51 2.74 ** Debt Service Requirements include principal and interest payable in the 12 months following each fiscal year. Includes sewer connection fees. Excludes grants, depreciation, interest expense and amortization. Sewer revenue debt rate covenants require minimum coverage of 1.20. * Due to banking regulation change, principal paid on bonds July 1, 2009 are not reflected in the principal payments during the current year. ** 2008-2009 estimated as of June 30, 2009; annual debt disclosure statements pending Note: Beginning in 2008-2009, this exhibit was restated to reflect Regional Wastewater Reclamation disclosure document information. Details regarding outstanding debt can be found on page 58 in Notes to Financial Statements. Exhibit D - 17b PIMA COUNTY, ARIZONA Transportation Revenue Bonds - Pledged Revenue Bond Coverage Last Ten Fiscal Years (amounts in thousands) Fiscal Year 135 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Less: Operating Expense Transportation Revenue $ 52,345 53,264 50,599 51,852 55,777 57,819 61,944 64,781 65,009 58,891 $ 31,714 31,006 34,855 34,059 36,865 38,349 39,336 42,639 43,490 38,082 Available Net Revenue $ 20,631 22,258 15,744 17,793 18,912 19,470 22,608 22,142 21,519 20,809 Debt Service * Principal Interest $ 4,000 4,000 8,535 10,215 8,905 10,710 11,435 11,745 12,365 15,145 $ 1,444 1,244 3,370 4,394 3,965 6,058 5,257 5,659 6,147 6,203 Note: Details regarding the County's outstanding debt can be found in Notes to Financial Statements. Operating expenditures do not include interest, depreciation, or amortization. * Debt Service Requirements include principal and interest payable in the 12 months following each fiscal year. Coverage Ratio 3.79 4.24 1.32 1.22 1.47 1.16 1.35 1.27 1.16 0.97 PIMA COUNTY, ARIZONA Pledged Revenue Bond Coverage - Lease Revenue Bonds Last Ten Fiscal Years (amounts in thousands) Fiscal Year 136 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Less: Operating Expense Lease Revenue $ 6 6 2 1 0 $ 7 7 7 7 27 * * * * * * This debt was satisfied in full during FY 2003-04. Available Net Revenue $ (1) (1) (5) (6) (27) Exhibit D - 17c Debt Service Principal Interest $ 130 140 145 155 460 $ Coverage Ratio 68 61 52 31 99 (0.01) (0.00) (0.03) (0.03) (0.05) PIMA COUNTY, ARIZONA Lease, Lease-Purchase and Purchase Agreements (amounts in thousands) Function/Department Clerk of Superior Court - equipment Jail * Juvenile Court Public Works Building Sheriff FY 03-04 $ $ FY 04-05 195 3,824 74 1,643 42 $ 5,778 $ 147 2,764 FY 05-06 $ 31 3,042 42 2,953 FY 06-07 $ 42 $ 3,115 * Funds derived from a sale/leaseback of the County's Adult Corrections Facility provided funding for construction of Kino Veteran's Memorial Sportspark & Tucson Electric Park Stadium. Source: Pima County Finance and Risk Management Department 137 82 3,015 Exhibit D - 18 FY 07-08 FY 08-09 FY 09-10 $ 82 5,920 $ 131 3,027 $ 111 3,007 $ 6,002 $ 3,158 $ 3,118 21 $ 3,118 PIMA COUNTY, ARIZONA Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures Last Ten Fiscal Years (amounts in thousands) Fiscal Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Principal $ 34,803 36,873 35,358 43,648 46,998 41,255 48,672 50,940 56,459 96,751 Total Debt Service Interest $ 12,122 13,173 12,366 13,904 13,702 14,794 18,147 17,672 19,757 24,322 $ 46,925 50,046 47,724 57,552 60,700 56,049 66,819 68,612 76,216 121,073 Total General Expenditures * $ Exhibit D - 19 Ratio of Debt Service To General Expenditures 442,415 467,614 487,476 515,774 546,136 589,708 640,336 689,968 755,413 780,044 * Includes General, Special Revenue and Debt Service Funds, while excluding Capital Projects Fund. 138 10.6% 10.7% 9.8% 11.2% 11.1% 9.5% 10.4% 9.9% 10.1% 15.5% STATISTICAL SECTION DEMOGRAPHIC AND ECONOMIC INFORMATION: The dual objectives of the demographic and economic information are to assist users in understanding certain aspects of the environment in which a government operates and to provide information that facilitates the comparisons of financial statement data over time and across governments. Information of this type can help readers assess a government’s condition by providing information about community expansion, average age increases or decreases and changes in personal income and unemployment. This type of data is important to readers in assessing economic condition. PIMA COUNTY, ARIZONA Demographic and Economic Statistics Last Ten Fiscal Years Calendar Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Population (a) 854,329 872,394 890,356 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 Personal Income (b) $ 20,855,000 21,827,000 21,991,000 22,973,000 23,965,000 26,302,000 28,421,000 30,899,000 33,009,000 32,898,000 Per Capita Personal Income ($) $ 24,057 24,698 24,787 25,395 25,797 27,599 28,894 30,813 32,470 32,343 Exhibit D - 20 Unemployment Rate (a) 2.6% 2.8% 4.7% 4.8% 3.5% 4.1% 4.4% 3.3% 4.7% 7.9% Note : a) Population and unemployment data are obtained from projections supplied by the Arizona Department of Economic Security Statistics Unit. b) Personal income is obtained from "Arizona's Economy" magazine. 139 Exhibit D - 21 PIMA COUNTY, ARIZONA Principal Employers Current and Nine Years Ago 2000 Employees Rank Employer Raytheon 2001 Percent of Total County Employment Employees Rank 2002 Percent of Total County Employment Employees Rank 2003 Percent of Total County Employment Employees Rank 2004 Percent of Total County Employment Employees Rank Percent of Total County Employment 9,800 4 2.5% 10,149 3 2.6% 10,400 3 2.6% 10,100 3 2.4% 10,171 2 2.4% University of Arizona 10,850 2 2.8% 11,032 2 2.8% 11,606 1 2.9% 11,335 2 2.7% 10,078 3 2.3% State of Arizona 10,071 3 2.6% 9,978 4 2.5% 9,932 4 2.5% 9,732 5 2.3% 9,753 4 2.3% Davis Monthan AFB 8,346 5 2.1% 8,796 6 2.2% 9,200 5 2.3% 9,947 4 2.3% 7,692 5 1.8% Tucson Unified School District 8,239 6 2.1% 9,102 5 2.3% 8,278 6 2.1% 8,234 6 1.9% 7,690 6 1.8% 4,000 9 0.9% 4,420 9 1.0% Wal-Mart Stores, Inc. Fort Huachuca 140 11,140 1 2.8% 11,376 1 2.9% 10,969 2 2.8% 11,580 1 2.7% 11,939 1 2.8% Pima County Government 6,832 7 1.7% 7,119 7 1.8% 7,175 7 1.8% 7,135 7 1.7% 6,987 7 1.6% City of Tucson 5,494 8 1.4% 6,058 8 1.5% 5,933 8 1.5% 6,168 8 1.5% 5,495 8 1.3% 3,375 10 0.8% 3,515 10 0.8% 19.2% 77,740 Tohono O'odam Nation Phelps Dodge 3,275 10 0.8% 4,200 9 1.1% T M C HealthCare Inc. Carondelet Health Network Total Total Work Force 3,596 77,643 9 0.9% 3,329 19.7% 81,139 394,100 10 3,783 10 1.0% 3,800 9 1.0% 0.8% 20.5% 393,200 81,076 20.4% 397,900 81,606 424,400 18.1% 431,400 (continued) Sources: www.azstarnet.com/sn/star200, a website of the Arizona Daily Star. Exhibit D - 21 PIMA COUNTY, ARIZONA Principal Employers Current Year and Nine Years Ago (continued) 2005 Employees Rank Employer 2006 Percent of Total County Employment Employees Rank 2007 Percent of Total County Employment Employees Rank 2008 Percent of Total County Employment Employees Rank 2009 Percent of Total County Employment Employees Rank Percent of Total County Employment Raytheon 10,300 3 2.3% 10,756 2 2.4% 11,184 1 2.5% 12,515 1 2.7% 11,539 1 2.4% University of Arizona 10,348 2 2.3% 10,282 3 2.3% 10,354 2 2.3% 10,535 3 2.3% 10,575 2 2.2% State of Arizona 9,750 4 2.2% 9,742 4 2.2% 9,927 3 2.2% 10,754 2 2.3% 9,329 3 1.9% Davis Monthan AFB 8,727 5 2.0% 8,233 5 1.9% 8,233 5 1.8% 7,701 5 1.7% 7,509 4 1.5% Tucson Unified School District 7,684 6 1.7% 7,623 6 1.7% 7,419 6 1.6% 8,018 4 1.7% 7,227 5 1.5% Wal-Mart Stores, Inc. 4,595 9 1.0% 9 1.1% 5,625 9 1.2% 5,805 10 1.3% 6,715 6 1.4% 12,250 1 2.8% 4,980 4,980 13,098 1 3.0% 9,119 4 2.0% 6,701 7 1.5% 6,463 7 1.3% 6,767 7 1.5% 6,765 7 1.5% 7,290 7 1.6% 6,954 6 1.5% 6,235 8 1.3% 5,840 9 1.3% 5,987 9 1.2% 5,848 8 1.3% 5,635 10 1.2% 17.6% 77,214 Fort Huachuca 141 Pima County Government Freeport-McMoran Copper City of Tucson 6,757 8 1.5% 5,306 8 1.2% 5,848 8 1.3% Phelps Dodge 4,500 10 1.0% 4,123 10 0.9% 4,900 10 1.1% 18.3% 85,888 19.3% 79,899 Tohono O'odam Nation Total Total Work Force 81,678 443,100 Note: Data is obtained from www.azstarnet.com/sn/star200, a website of the Arizona Daily Star. 443,300 17.6% 453,500 80,671 459,200 15.9% 486,400 PIMA COUNTY, ARIZONA Population and Employment Last Ten Calendar Years Exhibit D - 22 EMPLOYMENT Calendar Year 142 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Population 854,329 872,394 890,356 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 Civilian Labor Force 394,100 393,200 397,900 424,400 431,400 443,100 443,300 453,500 459,200 486,400 Total Unemployment Rate 2.6% 2.8% 4.7% 4.8% 3.5% 4.1% 4.4% 3.3% 4.7% 7.9% Mining 1,800 1,800 1,500 1,400 1,200 1,500 1,700 1,900 2,100 1,300 Construction 22,100 21,600 21,800 23,700 24,000 26,600 28,500 28,100 23,600 16,500 Manufacturing 33,500 34,000 32,300 29,100 28,500 28,600 29,300 29,000 26,900 25,900 Trades and Services 191,600 190,800 184,500 184,500 185,000 199,300 219,200 228,600 221,600 215,900 Finance, Insurance and Real Estate 13,800 14,100 15,100 14,800 15,600 18,200 17,500 17,800 16,300 16,700 Sources: Arizona Department of Economic Security, Economic Forecasting Project University of Arizona, "Arizona's Economy" U of A Business Research Program (EBR), College of Business & Public Administration Note: Beginning with the July, 2003 issue, "Arizona's Economy" stopped using the Standard Industrial Classification System reporting format (SICS) and began using the North American Industrial Classification System reporting format (NAICS). PIMA COUNTY, ARIZONA Transportation and Real Estate Last Ten Calendar Years Calendar Year 143 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Sources: Aircraft Movements 262,845 260,258 259,794 271,802 239,966 261,037 289,440 263,910 240,329 190,445 Transportation No. of Air Bus Passengers Ridership 3,526,164 3,733,205 3,459,183 3,522,401 3,611,696 3,928,773 4,251,710 4,284,880 4,474,352 3,777,057 15,334,429 14,513,188 13,628,899 15,016,131 15,393,817 15,847,429 17,179,275 17,857,865 19,491,376 21,648,350 Riders Per Mile 1.90 1.87 1.80 1.91 1.96 2.00 2.18 2.21 2.27 2.46 Exhibit D - 23 Residential Bldg Permits Real Estate Multiple Listings 2,453 3,182 3,367 9,441 10,432 12,103 11,903 6,265 4,171 2,364 University of Arizona, "Arizona's Economy" U of A Business Research Program, Eller Business Review (EBR), College of Business & Public Administration Pima Association of Governments Tucson Association of Realtors, Multiple Listing Service, Inc. 11,127 11,229 11,860 12,933 15,054 17,039 16,630 13,821 10,718 10,472 Sales Volume In $ 000's $ 1,667,928 1,775,178 1,955,348 2,271,131 2,899,012 3,908,054 4,462,020 3,757,536 2,810,383 2,245,644 PIMA COUNTY, ARIZONA Economic Indicators by Calendar Year Last Ten Calendar Years ($ amounts in thousands) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Construction Activity No. of Dwelling Construction Units Awards Awarded Aggregate Retail Sales Calendar Year $ 8,170,826 8,632,021 8,728,079 8,804,946 9,550,501 10,366,181 11,478,781 11,829,081 11,922,231 10,799,849 Exhibit D - 24 $ 1,561,110 1,536,760 1,678,354 8,489 7,694 7,716 8,015 9,281 12,640 10,313 10,313 3,728 1,986 University of Arizona, "Arizona's Economy" U of A Business Research Program (EBR), College of Business & Public Administration. 144 Bank Deposits $ 5,619,000 5,664,000 6,554,000 7,175,000 7,895,000 9,013,000 10,134,000 10,497,000 10,765,000 10,855,000 PIMA COUNTY, ARIZONA Population Statistics June 30, 2009 Age Group Population 0-4 5-9 10-14 15-19 20-24 25-39 40-54 55-59 60-64 65-69 70-74 75+ 69,774 68,112 62,765 66,977 75,574 216,485 206,745 65,342 56,934 44,652 35,835 79,601 Total 1,048,796 POPULATION PROJECTIONS Year Projected Population 2009 2011 2016 2021 2041 2051 1,048,796 1,092,369 1,195,933 1,290,058 1,598,868 1,721,232 Source: Arizona Department of Economic Security 145 Exhibit D - 25 PIMA COUNTY, ARIZONA Average Annual Jail Population Last Ten Calendar Years Calendar Year Average Jail Population 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1,339 1,330 1,481 1,462 1,539 1,739 2,009 2,028 2,008 1,913 Source: Pima County Sheriff's Department 146 Exhibit D - 26 STATISTICAL SECTION OPERATING INFORMATION: The objective of the operating information is to provide contextual information about a government’s operations and resources to assist users in using financial information to understand and assess a government’s economic condition. Two types of information are considered important: 1. Basic information about infrastructure assets, utilities and public works; in essence, the capital resources at the government’s disposal. Examples include miles of streets and sewers and wastewater treatment volume. 2. Descriptive service information, which would help to evaluate the size of the government. This would include types of services, the related demand and volume, and the non-financial resources employed to provide the services. PIMA COUNTY, ARIZONA Employees by Function Last Seven Years 2003 Exhibit D - 27 Full-time employees (FTEs) as of 6/30: 2005 2006 2007 2004 2008 2009 Function/Program Governmental activities General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity 1,851 1,986 290 0 407 174 180 140 2,040 1,902 288 0 413 185 197 117 2,952 1,434 351 0 408 20 164 250 2,911 1,401 526 45 414 23 180 289 2,776 1,442 334 41 408 22 466 179 2,860 1,560 330 40 404 26 485 186 2,684 1,491 311 34 397 29 480 184 Total governmental activities 5,028 5,142 5,579 5,789 5,668 5,891 5,610 506 43 607 511 141 3 481 42 548 162 149 3 449 42 0 631 116 3 668 0 0 634 156 3 472 0 0 559 153 3 508 0 0 563 128 3 507 0 0 451 73 3 Total business-type activities 1,811 1,385 1,241 1,461 1,187 1,202 1,034 Total 6,839 6,527 6,820 7,250 6,855 7,093 6,644 Business-type activities Regional Wastewater Reclamation* Wastewater Management- Solid Waste Kino Hospital Pima Health System & Services Development Services Parking Garages Note: Internal service funds FTEs were added to the General Government function in FY 2004-2005. Variances can be noted in the Governmental Activities categories due to a change in classification criteria in fiscal year 2005. Variances can be noted in the Governmental Activities categories due to employees being added to the Library District from the City of Tucson on July 1, 2006. Variances can also be noted in the Business Activities categories due to the closure of Kino Hospital which resulted in the absorption of some Kino employees into Pima Health System & Services. In fiscal year 2005-2006 Wastewater Management-Solid Waste was classified as a governmental fund. It now appears under the category "Sanitation". * Previously known as Wastewater Management - Liquid Waste. 147 PIMA COUNTY, ARIZONA Operating Indicators by Program Last Seven Years 2004 2003 2005 Exhibit D - 28 Fiscal Year 2006 2007 2008 2009 Program: Sheriff Physical arrests 32,159 33,815 32,501 30,686 33,929 32,796 33,571 3,920 3,813 4,148 3,170 3,927 5,967 6,422 42,074 36,823 37,868 27,846 30,204 41,542 49,817 45,994 40,636 42,016 31,016 34,131 47,509 56,239 8,289 65.0 9,718 65.5 11,245 66.4 8,325 68.5 8,734 67.3 4,452 67.8 1,477 Cultural and Recreational Spring training attendance (2) Sidewinders attendance 137,302 167,552 147,117 165,387 146,739 165,441 155,377 171,179 142,773 153,595 160,626 143,611 103,407 58,879 Parks & Recreation Athletic field permits issued Community center admissions Volunteer hours 101 280,850 23,070 107 344,470 22,465 129 388,092 23,785 135 391,295 17,218 141 438,051 25,700 147 445,137 19,622 149 403,887 25,756 1,300,000 5,761,423 458,736 1,338,000 6,063,771 486,402 1,430,690 6,249,123 474,045 1,390,792 6,276,794 488,250 1,395,849 6,371,480 492,973 1,429,365 6,874,888 554,339 1,425,235 7,409,820 516,780 Traffic violations/citations Criminal Total Civil Total Total violations/citations Wastewater Avg. daily sewage treated (MGD) New connections (1) Library Volumes in collection Total volumes borrowed Number of cardholders Capital Projects Completed Land Buildings Improvements Infrastructure $ 12,908,101 9,356,754 2,598,134 72,540,294 $ 20,698,771 18,609,343 5,592,348 67,890,856 $ 42,755,555 42,916,920 5,071,608 7,476,315 $ 16,646,964 2,018,849 3,568,917 76,950,908 $ 37,402,683 66,095,100 21,944,399 29,146,482 $ 18,619,333 17,591,833 4,673,301 72,925,857 $ 59,922,798 14,336,536 9,028,251 22,733,535 $ 97,403,283 $ 112,791,318 $ 98,220,398 $ 99,185,638 $ 154,588,664 $ 113,810,324 $ 106,021,120 (1) MGD: Millions of Gallons per Day (2) Sidewinders attendance 7/09 through 9/09; beginning in fiscal year 2008-09, the team is no longer in Tucson 148 PIMA COUNTY, ARIZONA Capital Assets and Infrastructure by Program Last Seven Years 2003 2004 2005 6 5 252 6 5 280 6 5 276 1,750 691,236 1,773 $ 672,427 138 10,219 Parks & Recreation Urban parks (acres) Playgrounds (1) Baseball/softball diamonds Soccer/football fields Community centers Swimming pools Wastewater Sanitary sewers (miles) Treatment capacity (MGD) Fiscal Year 2006 Exhibit D - 29 2007 2008 2009 6 5 303 7 4 302 7 4 324 7 4 323 1,782 $926,828 1,798 $964,051 1,801 $ 1,150,950 1,893 $ 1,321,034 1,893 $ 1,257,087 138 138 138 10,558 138 10,622 139 10,840 140 10,999 140 11,053 2,366 30 64 12 8 7 2,411 32 67 12 9 8 2,419 34 73 14 9 8 2,885 36 78 14 9 9 2,932 41 84 16 9 9 2,991 41 90 17 11 9 2,881 38 85 17 8 9 3,049 74.76 3,177 74.76 3,249 81.50 3,314 87.45 3,464 92.45 3,492 90.00 3,462 91.50 12 12 12 12 12 12 12 13 25 26 26 2 606 7,437 18 7 10,334 17,771 25 7 13,942 31,713 32 17 1,235 32,948 49 18 3,668 36,616 67 9 757 37,373 76 5 14,753 52,126 81 Program: Sheriff Stations Zone offices Patrol Units Transportation (streets and highways) Streets (miles) Pothole repair Flood Control Bank protection (miles) Flood plain / drainageway (acres) Libraries County (2) City Open Space Acquisitions Properties added Acres Cumulative acreage Total properties $ (1) 2005 Baseball/softball diamonds adjusted after department review (2) On July 1, 2006, the Pima County Library District assumed control of the operations of all County libraries. 149 (This page is intentionally blank) 150