2010 Comprehensive Annual Financial Report Pima County, Arizona For the Fiscal Year Ended June 30, 2010 PIMA COUNTY, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2010 BOARD OF SUPERVISORS Ramón Valadez Chair District #2 Sharon Bronson Vice Chair District #3 Ann Day District #1 Ray Carroll District #4 Richard Elías District #5 COUNTY ADMINISTRATOR C. H. Huckelberry Prepared by the Department of Finance and Risk Management Tom Burke, Director Ellen Moulton, Deputy Director Paul Guerrero, CPA, Division Manager Financial Control & Reporting Supervisors Amy Emmendorfer Marilyn Hutzler Patrick McGee, CPA Accountants Kakoli Basu Leslie Butler Brenda DeBoo-Nicely Dana Dmitroff Emilia Eveningred Chuo Holliday Linda House Jean Lee, CPA Janet Meinhausen Lorraine Nuñez Louie Padilla Janet Peete Rosemarie Perry Pete Rodriguez Blanca Rossetti Phil Schroeck PIMA COUNTY, ARIZONA Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2010 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 Component Unit Financial Statements Combining Statement of Net Assets Combining Statement of Activities A-12 A-13 42 43 Table of Contents (continued) Exhibit Notes to Financial Statements Note 1: Summary of significant accounting policies Note 2: Fund balance classifications Note 3: Cash and investments Note 4: Due from other governments Note 5: Capital assets Note 6: Claims, judgments and risk management Note 7: Long-term liabilities Note 8: Short-term debt Note 9: Landfill liabilities Note 10: Retirement plans Note 11: Interfund transactions Note 12: Construction and other significant commitments Note 13: Stewardship, compliance, and accountability (deficit fund balances) C. 44 - 49 50 - 51 52 - 55 56 57 - 58 59 - 60 61 - 69 69 69 - 70 70 - 75 75 - 76 76 - 77 77 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 79 80 B-2 81 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 84 - 85 C-2 86 - 87 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 - 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 89 90 91 92 93 94 95 96 97 98 99 100 101 102 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-17 103 C-18 C-19 104 105 - 106 C-20 107 C-21 C-22 108 109 - 110 C-23 111 C-24 C-25 112 113 C-26 114 D-1 through 4 115 - 120 D-5 through 12 121 - 132 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 19 133 - 142 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 26 143 - 150 Operating Information Employees by function Operating indicators by program Capital assets and infrastructure by program D-27 through 29 151 - 153 Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2010 INTRODUCTORY SECTION Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting Organizational Chart FINANCIAL SECTION STATISTICAL SECTION INTRODUCTION PIMA COUNTY 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 ASSESSOR CLERK OF THE SUPERIOR COURT RECORDER SCHOOL SUPERINTENDENT TREASURER __ __ __ __ __ ADMINISTRATION COMMUNITY & ECONOMIC DEVELOPMENT _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ 8 JUSTICE & LAW ENFORCEMENT COUNTY ADMINISTRATOR SUPERVISORS BOARD OF MEDICAL SERVICES CLERK OF THE BOARD PUBLIC WORKS JUSTICE COURTS SUPERIOR COURT JUDGES CONSTABLES COUNTY ATTORNEY SHERIFF _ _ _ _ _ _ _ _ __ Elected Officials Elected Officials _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ RESIDENTS OF PIMA COUNTY PIMA COUNTY ORGANIZATIONAL CHART _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ PIMA COUNTY Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2010 INTRODUCTORY SECTION FINANCIAL SECTION Independent Auditors' Report Basic Financial Statements Required Supplementary Information Other than Management’s Discussion and Analysis Combining Statements and Other Schedules STATISTICAL SECTION FINANCIAL Management’s Discussion and Analysis 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 MELANIE M. CHESNEY 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, aggregate discretely presented component units, each major fund, and aggregate remaining fund information of Pima County as of and for the year ended June 30, 2010, 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 units, 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 Aggregate Discretely Presented Component Units: Southwestern Fair Commission Sports & Tourism Authority Fund Statements Major Fund: Regional Wastewater Reclamation Department Aggregate Remaining Fund Information: Stadium District School Reserve Fund Development Services Self-Insurance Trust Assets Liabilities Revenues Expenses/ Expenditures 0.13% 0.10% 2.39% 0.06% 0.03% 4.78% 0.27% 0.49% 0.08% 0.61% 0.62% 0.26% 95.07% 0.36% 0.00% 94.50% 0.15% 0.00% 38.26% 1.64% 0.00% 34.03% 2.44% 0.13% 98.58% 1.42% 100.00% 0.00% 97.25% 2.75% 98.31% 1.69% 100.00% 100.00% 100.00% 100.00% 0.45% 0.33% 0.63% 8.25% 0.32% 0.18% 0.50% 26.47% 0.82% 1.47% 2.16% 7.09% 1.77% 1.79% 3.27% 7.06% 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, aggregate discretely presented component units, each major fund, and aggregate remaining fund information of Pima County as of June 30, 2010, 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. As described in Note 1, the County implemented the provisions of the Governmental Accounting Standards Board Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, for the year ended June 30, 2010, which represents a change in accounting principle. The Management’s Discussion and Analysis on pages 11 through 28, the Budgetary Comparison Schedule on pages 79 through 80, and the Schedule of Agent Retirement Plans’ Funding Progress on page 81 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 Davenport Auditor General December 17, 2010 Management’s Discussion and Analysis Management’s Discussion and 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, 2010, 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, 2010, the assets of the County exceeded its liabilities (net assets) by $1,988,455, an increase of 9.5% from the prior year. Of this amount, $179,880 is available for general government expenditures (unrestricted net assets). Unrestricted net assets increased by $110,553 from last year, or approximately 160%. $209,214 is restricted for specific purposes (restricted net assets), and $1,599,361 is invested in capital assets, net of related debt and accumulated depreciation. The chart below presents the composition of restricted and unrestricted net assets for the current and prior years: Comparative Composition of Pima County Net Assets $234,138 6/30/2010 $209,214 6/30/2009 $179,880 $69,327 Restricted net assets Unrestricted net assets • The unrestricted net asset balance of $179,880 represents approximately 42.2% of the County’s General Fund expenditures of $426,361 and 20.2% of total governmental funds expenditures of $892,685. • The General Fund unassigned fund balance is $73,837, which comprises 90.5% of the General Fund total fund balance of $81,541. • General Fund expenditures decreased by $35,915 as a result of continued cost saving efforts and a $15,941 ALTCS and AHCCCS refund. • Construction activity remains significant, with Regional Wastewater Reclamation reporting an increase of $48,970, or 113.3%, in construction-in-progress and the Capital Projects fund reporting an increase of $15,972, or 10.9%, in expenditures. 11 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 three components: (1) Government-wide statements, (2) Fund statements, and (3) Notes. Required supplementary information 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. 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. Discretely presented component units are included in the basic financial statements. They consist of legally separate entities 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 County is also presenting Pima County Sports and Tourism Authority (S&TA) as a discrete component unit. Last year, S&TA financial statements were not included in the CAFR due to highly immaterial amounts reported in their financial statements. S&TA is a nonprofit municipal corporation established to promote professional and amateur sports events and other suitable activities for the benefit of the public. The government-wide financial statements can be found on pages 29-31. 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. 12 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. The governmental fund financial statements can be found on pages 32-35. statements for non-major governmental funds can be found on pages 84-87. The combining 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. 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. The proprietary fund financial statements can be found on pages 36-39. The combining statements for other enterprise and internal service funds can be found on pages 103-110. 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. 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 44-77. 13 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 79-81. 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 84-114. 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 $1,988,455 at June 30, 2010. 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, 2010 and 2009 Governmental Activities 2010 2009 Current and other assets Capital assets (net): Land, buildings, equipment, infrastructure & other assets Total assets Current and other liabilities Long-term liabilities Total liabilities Net assets : Invested in capital assets, net of related debt Restricted Unrestricted Total net assets $536,514 $452,751 Business-type Activities 2010 2009 $293,569 $133,963 Total 2010 2009 $830,083 $586,714 1,634,662 2,171,176 1,526,774 1,979,525 808,945 1,102,514 773,117 907,080 2,443,607 3,273,690 2,299,891 2,886,605 106,057 714,248 820,305 86,278 682,111 768,389 47,342 417,588 464,930 48,328 254,359 302,687 153,399 1,131,836 1,285,235 134,606 936,470 1,071,076 1,048,821 972,346 550,540 539,718 1,599,361 1,512,064 152,084 149,966 $1,350,871 203,940 34,850 $1,211,136 57,130 29,914 $637,584 30,198 34,477 $604,393 209,214 179,880 $1,988,455 234,138 69,327 $1,815,529 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, 2010, investment in capital assets totaled $1,599,361, comprising approximately 80.4% 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 $87,297 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. 14 Current and other assets for the primary government increased by $243,369 primarily as a result of: • An increase in restricted cash for business-type activities, specifically, $152,858 of unspent proceeds from the 2010 Sewer Revenue Obligations available for construction at year-end. • Current and other assets for governmental activities increased by $83,763. Most of the increase is due to increases in cash and cash equivalents and due from other governments: - Cash and cash equivalents increased $62,358 as a result of multiple factors affecting cash, the most notable of which was increased property tax revenues along with decreased expenses for highways and streets and welfare. - Due from other governments increased overall by $22,654. $4,573 of the increase is attributable to an ALTCS refund due from the State of Arizona. $6,180 is due from the Regional Transportation Authority (RTA). Federal grant receivables increased by $10,070, primarily due to ARRA grants of $4,828. Current and other liabilities for the primary government increased by $18,793, primarily attributable to a $15,000 payment due to UA Healthcare, Inc. to support healthcare service expansion on the Kino Campus site. Unrestricted net assets for governmental activities increased significantly by $115,116. $40,868 of the increase was due to a reclassification of debt service net assets from restricted to unrestricted. Generally, other factors affecting unrestricted net assets for governmental activities include the increase in general revenues offset by a decrease in expenses. Composition of Net Assets Invested in capital assets, net of related debt - 80% Restricted net assets Unrestricted net assets - 11% 9% Restricted net assets represent resources that are subject to external restrictions on how they may be used. As of June 30, 2010, restricted net assets totaled $209,214 and comprised approximately 10.5% of total net assets. This represents a $24,924 decrease in restricted net assets from the $234,138 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, 2010, unrestricted net assets totaled $179,880 and comprised approximately 9% of total net assets. 15 Governmental activities The following table shows details of the changes in net assets for governmental activities: Table 2 Governmental Activities Schedule of Changes in Net Assets For the Years Ended June 30, 2010 and 2009 2010 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 $ 64,247 142,840 65,820 272,907 Variance Amount Percent 2009 $ 59,886 131,361 68,535 259,782 $ 4,361 11,479 (2,715) 13,125 7.3% 8.7% -4.0% 5.1% 416,501 108,970 5,266 35,803 566,540 393,255 115,046 5,875 42,452 556,628 23,246 (6,076) (609) (6,649) 9,912 5.9% -5.3% -10.4% -15.7% 1.8% Total revenues 839,447 816,410 23,037 2.8% 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 218,504 145,697 68,691 6,669 33,086 87,107 61,642 52,023 428 26,403 700,250 212,196 149,253 79,251 7,434 31,541 115,513 60,520 46,770 (235) 26,780 729,023 6,308 (3,556) (10,560) (765) 1,545 (28,406) 1,122 5,253 663 (377) (28,773) 3.0% -2.4% -13.3% -10.3% 4.9% -24.6% 1.9% 11.2% -282.1% -1.4% -3.9% Excess before contributions and transfers 139,197 87,387 51,810 59.3% Transfers in Change in net assets 538 139,735 4,005 91,392 (3,467) 48,343 -86.6% 52.9% Ending net assets $ 1,350,871 $ 1,211,136 $ 139,735 11.5% Overall, this year’s change in net assets increased by $48,343 from last year, adding another 11.5% to the County’s ending net assets. The $23,037 or 2.8% increase in revenues and $28,773 or 3.9% decrease in expenses from last year contributed to the $51,810 increase in excess before contributions and transfers. Factors affecting the $23,037 increase in revenues from governmental activities: • Increase in Operating grants and contributions of $11,479 is due primarily to receiving $3,818 for the Proposition 204 Hold Harmless funding during the year. In addition, approximately $2,934 was received from the University of Arizona for indigent health. Of the $5,033 received from the 16 Workforce Innovation in Regional Economic Development (WIRED) grant, $4,120 was received during the current year. The purpose of the WIRED grant is to stimulate economic transformation. • Property taxes increased $23,246 as a result of an increase in property valuations for primary and secondary taxes that was partially offset by a decrease in the primary and secondary tax rates. • The decrease in Other general revenues is $6,649. The decrease can be attributed to a $5,000 one-time only revenue received from the Chicago White Sox baseball team last fiscal year for the release from its contract with the Stadium District. Total expenses of governmental activities were $700,250, down 3.9% or $28,773 compared to the previous year’s total of $729,023. Factors contributing to the decrease in expenses: • The $10,560 reduction in expenses for Highways and Streets resulted primarily from the countywide reductions in spending implemented within the fiscal year. • The $28,406 decrease in Welfare is related to refunds of approximately $11,368 received from the Arizona Long-Term Care System (ALTCS) and $4,573 from the Arizona Health Care Cost Containment System (AHCCCS). The chart below presents general and program revenues, as a percentage to total revenues. The amount provided from each revenue source for governmental activities, as a percentage to total revenue for governmental activities, has not changed significantly from the prior fiscal year. Property taxes, operating grants, and state-shared taxes continue to account for approximately 80% of the County’s revenues. General and Program Revenues - Governmental Activites Property Taxes 50% Capital grants & contributions State-shared taxes 8% 13% Investment Earnings 1% Other general revenue Operating grants Charges for Services 17% 7% 17 4% The chart below presents expenses by function, as a percentage to total expenses by function for governmental activities: Expenses by Function - Governmental Activites Health 5% General Government Public Safety 31% 21% Sanitation 1% Education & Economic Opportunity Highways and Streets 10% 7% Interest on long-term debt 4% Culture & Recreation 9% Welfare 12% Each expense by function as a proportion to total expenses by function for governmental activities also has not changed significantly from the prior fiscal year. General government, public safety, and welfare account for approximately two-thirds of the County’s total expenses. Business-type activities Business-type activities, which are 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 businesstype activities added $33,191, or 19.2%, to the County's $172,926 change in total net assets for the year ended June 30, 2010. The following table shows changes in net assets for business-type activities: 18 Table 3 Business-type Activities Schedule of Changes in Net Assets For the Years Ended June 30, 2010 and 2009 2010 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 2009 Variance Amount Percent $ 340,936 4,421 9,319 354,676 $ 328,600 4,626 14,916 348,142 $ 12,336 (205) (5,597) 6,534 3.8% -4.4% -37.5% 1.9% 1,236 2,884 4,120 2,025 2,394 4,419 (789) 490 (299) -39.0% 20.5% -6.8% Total revenues 358,796 352,561 6,235 Expenses: Regional Wastewater Reclamation Pima Health System & Services Development Services Parking Garages Total expenses 110,618 204,619 7,924 1,906 325,067 105,139 224,959 9,992 1,696 341,786 5,479 (20,340) (2,068) 210 (16,719) 5.2% -9.0% -20.7% 12.4% -4.9% 33,729 10,775 22,954 213.0% (4,005) 3,467 Excess before contributions and transfers Transfers in (out) Change in net assets 33,191 6,770 26,421 -86.6% 390.3% Beginning net assets 604,393 597,623 6,770 1.1% $ 637,584 $ 604,393 $ 33,191 5.5% Ending net assets (538) 1.8% Key elements of the change in net assets from business-type activities include: • The $12,336 increase in charges for services is mainly attributable to two 12.75% increases in the Regional Wastewater Reclamation (RWR) user fee volume rate on July 1, 2009 and January 1, 2010, and an 18% increase in the monthly standard service fee. • $3,964 of the increased $5,479 expenses from last year for Regional Wastewater Reclamation is due to increased depreciation expense from significant amounts of equipment capitalized at the end of last fiscal year. • Expenses for Pima Health System & Services decreased by $20,340 mainly due to a $16,054 decrease for medical claims. 19 FINANCIAL ANALYSIS OF THE COUNTY’S FUNDS As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. The County early implemented GASB 54, Fund Balance Reporting and Governmental Fund Type Definitions (see Note 1, Summary of Significant Accounting Policies). As such, a comparative discussion of fund balance classifications between this year and last year, given the different basis of reporting, would not be meaningful. 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, 2010, total fund balance of the General Fund was $81,541. The net change in fund balance for the General Fund was $41,375. Revenues increased by $24,844 and reflects the increase of $22,692 for property taxes due to higher assessed property valuations that were partially offset by lower tax rates. A decrease in expenditures of $35,915 was reported within the General Fund for the fiscal year as a result of a decrease in AHCCCS contributions and cost cutting measures implemented. The excess of revenues over expenditures was $63,178, which is further decreased by net operating transfers out of $22,007. Budget to Actual Comparison for the General Fund Overall, actual revenues were more than budgeted revenues by $5,949 and actual expenditures were less than budgeted expenditures by $68,405. No variances between the budget to actual amounts were significant enough to affect the County’s ability to provide future services. Capital Projects Fund The net change in fund balance for the Capital Projects Fund was a decrease of $703. Revenues increased by $6,318, offset by increased expenditures in capital outlay of $15,972. The increase in capital outlay was largely due to increased expenditures for the Regional Public Safety Communications Systems and the County’s financial enterprise system. The fund reported a $125,219 deficiency of revenues under expenditures that was offset by $125,000 proceeds from the issuance of bonds, resulting in a net change in the fund balance of $703 for the Capital Projects Fund. 20 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. At June 30, 2010, the net change in fund balance was $7,026. Last year, there was a change in funding dates which provided the debt service fund with a significant amount of cash on June 30th . The County returned to a June 30th funding date in fiscal year 2009-10. Revenue increased by $12,153 mainly from the tax levy and growth in property valuations. Expenditures, mainly as a result of decreased principal payments, decreased $12,999 from last fiscal year. Overview of all governmental funds At June 30, 2010, the County's governmental funds reported combined fund balances of $346,270, an increase of $54,023 from the prior year. Approximately 19.6% of the combined fund balances, or $67,817, constitutes unassigned fund balance, which is available to meet the County's current and future needs. 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, 2010 and 2009 2010 2009 Amount Percent Amount Percent Taxes Special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeits Interest Miscellaneous Total revenues $ $ 423,443 536 7,791 296,004 60,376 8,443 4,612 17,442 818,647 51.6% 0.1% 1.0% 36.2% 7.4% 1.0% 0.6% 2.1% 100.0% $ $ 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% Variance Amount Percent $ $ 27,202 95 802 3,768 5,030 2,160 (723) (4,972) 33,362 6.9% 21.5% 11.5% 1.3% 9.1% 34.4% -13.6% -22.2% 4.2% The following provides an explanation of revenues by source that changed significantly over the prior year: • Taxes - Increased property tax revenue resulted from higher property valuations that were partially offset by a decrease in the primary tax rate. • The increase in charges for services results from the General Fund, primarily due to increases from indirect cost recovery of $3 million and from photo traffic enforcement of approximately $1.1 million. • The most significant item affecting the decrease in miscellaneous is from rents and royalties, which decreased approximately $2,169. 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, 2010 and 2009 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 2010 Amount Percent 2009 Amount Percent $ 221,144 136,744 34,274 5,637 32,737 87,089 50,198 48,402 162,306 24.8% 15.3% 3.8% 0.6% 3.7% 9.8% 5.6% 5.4% 18.2% $ 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% 87,307 26,414 433 $ 892,685 9.8% 3.0% 0.0% 100.0% 100,384 26,849 24 $ 926,378 10.8% 2.9% 0.0% 100.0% Variance Amount Percent $ (1,165) (7,873) (3,858) (1,029) 1,111 (28,392) (1,459) 6,103 15,972 -0.5% -5.4% -10.1% -15.4% 3.5% -24.6% -2.8% 14.4% 10.9% (13,077) -13.0% (435) -1.6% 409 1704.2% $ (33,693) -3.6% Total expenditures in governmental funds decreased during fiscal year 2009-10 by $33,693 due primarily from the net decrease in AHCCCS mandatory contributions discussed previously. 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 privatesector 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. The internal service funds consist of the Self-Insurance Trust Fund and multiple smaller funds consisting of Fleet Services, Print Shop, and Wireless/Telecom. The change in net assets for all Internal Service Funds was $4,679, a decrease of $406 from the prior year. The following table presents a comparison of this year’s enterprise fund activities with the prior year: 22 Table 6 Enterprise Funds Schedule of Revenues, Expenses and Changes in Net Assets For the Years Ended June 30, 2010 and 2009 2010 Operating revenues: Net patient services Charges for services Other Total net operating revenues $ 2009 213,986 96,310 2,414 312,710 $ (10,919) 23,839 468 13,388 -5.1% 24.8% 19.4% 4.3% 67,724 161,230 8,791 5,765 1,502 6,760 19,432 7,568 31,543 310,315 72,681 177,284 9,534 7,347 1,485 5,989 20,500 8,668 27,689 331,177 (4,957) (16,054) (743) (1,582) 17 771 (1,068) (1,100) 3,854 (20,862) -6.8% -9.1% -7.8% -21.5% 1.1% 12.9% -5.2% -12.7% 13.9% -6.3% Operating gain (loss) 15,783 (18,467) 34,250 -185.5% Nonoperating revenues (expenses): Intergovernmental revenue Invesment earnings Sewer connection fees Interest expense Loss on disposal of capital assets Amortization of deferred charges Premium tax Total nonoperating revenues 6,412 1,257 17,705 (8,738) (2,259) (263) (4,117) 9,997 4,626 2,039 18,284 (6,060) (341) (227) (4,403) 13,918 1,786 (782) (579) (2,678) (1,918) (36) 286 (3,921) 38.6% -38.4% -3.2% 44.2% 562.5% 15.9% -6.5% -28.2% Income (loss) before contributions and transfers 25,780 (4,549) 30,329 -666.7% 7,319 26,001 (26,539) 32,561 14,916 25,570 (29,575) 6,362 (7,597) 431 3,036 26,199 -50.9% 1.7% -10.3% 411.8% 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 Capital contributions Transfers in Transfers (out) Change in net assets $ 203,067 120,149 2,882 326,098 $ Variance Amount Percent $ $ The increase in revenues, in addition to a decrease in expenses, contributed to the change from an operating loss last year to an operating gain for all enterprise funds this year. RWR contributed approximately two-thirds, or $10,435, to the $15,783 in operating gain for all enterprise funds. RWR’s charges for services increased mainly as a result of increased user fee volume rates and the monthly standard service fee. Its utilities expense decreased as a result of lower natural gas charges. At Pima Health System & Services, total operating expenses decreased by approximately $19,719 mainly due to a decrease in medical claims resulting from the loss of the Ambulatory contract with AHCCCS. Nonoperating revenues contributing to an increased income before contributions and transfers include $2,000 received from the stimulus funds (American Recovery and Reinvestment Act) passed through the Water Infrastructure Financing Authority (WIFA) for RWR. 23 Of the decrease in capital contributions, approximately $7,000 is due to the continued lack of construction activities. 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 Capital Assets and Debt Administration Capital Assets The County’s total investment in capital assets as of June 30, 2010 amounted to $2,443,607 (net of accumulated depreciation), an increase of 6.3% (or $143,716). Of this amount, $107,888 (75.1%) came from governmental activities and $35,828 (24.9%) 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. 24 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, 2010 and 2009 Governmental Activities 2010 2009 Land Construction in progress Buildings and improvements Infrastructure Equipment Total $ Business-type Activities 2010 2009 433,098 176,749 381,800 600,634 42,381 $ 384,368 103,106 380,798 614,951 43,551 $ 15,178 92,178 217,321 398,495 85,773 $ 1,634,662 $ 1,526,774 $ 808,945 $ 13,595 43,208 228,198 399,094 89,022 $ 773,117 Total 2010 $ 2009 448,276 268,927 599,121 999,129 128,154 $ 397,963 146,314 608,996 1,014,045 132,573 $ 2,443,607 $ 2,299,891 Major capital asset events during the current fiscal year included the following: Governmental activities • Land acquisitions increased $48,730, or 12.7%. Open space purchases include $10,843 for Rocking K Holdings, $3,732 Clyne Ranch, and $8,386 for a partial purchase of Sopori Ranch east of Arivaca. $3,486 was spent on the Black Wash Watercourse (Ryan Ranch/Snyder Hill). In addition, $2,430 in land parcels were donated to the County. $9,343 also were donated towards roadway projects. • Construction in progress increased $73,643 or 71.4% compared to last fiscal year. Current cost of major projects still in progress include o $12,146 for the new Psychiatric Hospital o $4,589 for Justice Court/Municipal Court building complex o $5,895 for the Regional Public Safety Communications System o $5,082 for upgrading the County’s financial enterprise system o $6,812 La Cholla Blvd I-10 River Road Project o $12,006 I-19 NB Frontage Rd Canoa to Continental o $5,553 for Sunrise Dr (Craycroft to Kolb) o $5,834 La Canada Dr (Ina to Calle Concordia) • Buildings and improvements activities increased by $1,002 mainly due to the completion of the Pima County Animal Care Center. Business-type activities • Construction in progress increased approximately $48,970, or 113.3%, mainly due to Regional Optimization Master Planning (ROMP) activities. The County’s infrastructure assets are recorded at historical cost and estimated historical cost in the government-wide financial statements. Additional information regarding the County’s capital assets can be found in Note 5 of the financial statements on page 57-58. 25 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, 2010 and 2009 2010 Bonds issued (at face value): General Obligation $113,535 Street and Highway Revenue 23,420 Sewer Revenue Sewer System Revenue Obligations 165,000 Certificate of Participation (COPs) 20,000 Water Infrastructure Financing Authority Loan Payable 10,002 * Total $ 331,957 2009 $75,000 18,940 34,400 $ 128,340 *$2,000 of the $10,002 loan was the amount received from the American Recovery and Reinvestment Act grant passed through WIFA. $113,535 General Obligation Bonds and $23,420 Street and Highway Revenue Bonds were issued during the fiscal year. $165,000 Sewer System Revenue Obligations and $20,000 Certificates of Participation were also issued during the fiscal year. General Obligations bonds were issued to finance projects for new facilities, open space acquisitions and for emergency communication systems, while proceeds from Street and Highway Revenue bonds were used for various roadway projects. Monies from the Sewer System Revenue Obligations will be used primarily to pay a portion of the capital project costs associated with the construction, expansion, and improvement of sewer treatment facilities and conveyance systems for the county-wide sewer system, including the Ina Road and Roger Road Wastewater Reclamation Facilities. The Certificates of Participation Series issued will finance the replacement computer enterprise system. The new enterprise system will serve the County with finance, budget, procurement, human resources, and material management systems. The most recent ratings (uninsured) 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 Obligations Aa3 Aa2 Aa3 n/a May-2010 May-2010 May-2010 May-2010 Standard & Poor's Rating Date A+ AAAA A Oct-2009 Oct-2009 Oct-2009 May-2010 Fitch Ratings Rating Date AAAA AA AA- May-2010 May-2010 May-2010 May-2010 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 $1,479,147, which is significantly in excess of Pima County’s outstanding general obligation debt. 26 Additional information regarding the County’s debt can be found in Note 7 of the financial statements on pages 61-69. Economic Factors and Next Year’s Budget As the national and state and local economies remain in recession, the County has recognized several issues and has reacted and planned accordingly within Adopted Budget for fiscal year 2010-11. Some of the notable topics include: Property taxes The Primary Net Assessed Value of the County for fiscal year 2010-11 decreased $46 million or .51% from fiscal year 2009-10. The market value of existing property decreased by more than 2%, but was partially offset by an increase of 1.7% as a result of new construction added to the tax base. The contraction of the property tax base is expected to continue until fiscal year 2014-15. State shared revenues State shared funding sources in the areas of sales tax, vehicle license tax, and highway user revenues have decreased more than $36.7 million from their peak in fiscal year 2006-07. The state also terminated the County Assistance lottery funding of $250 thousand and the vehicle license tax which experienced an 11% decrease is projected to remain flat in fiscal year 2010-11. Health insurance costs As the cost of health insurance continues to escalate, Pima County has been proactive in attempting to manage its’ health insurance premium cost paid per employee. Cost increases associated with County employee health insurance have escalated at near record amounts in the last two years. While the amount of the increase is capped by contract with United Healthcare, the County’s insurance provider, these rate caps still represent significant premium increases. The health insurance plan options being developed for fiscal year 2010-11 will still require an additional contribution of $2.7 million from the County. University Physician Healthcare Hospital In 2004, the Board of Supervisors approved a lease with University Physicians Healthcare (UPH) for the operation of a hospital in place of the formerly County owned and operated Kino Community Hospital. Under the terms of the lease, the County would make payments to UPH totaling $127 million over 10 years. The scheduled payment for fiscal year 2010-11 is $6.5 million; however, to address an operating deficit at the hospital, the County Administrator recommended that an additional $13.4 million be appropriated to the Budget Stabilization Fund to be used as needed. Any use of these funds will be subject to review and approval by the Board of Supervisors. American Recovery and Reinvestment Act (ARRA) Since signing of the American Recovery and Reinvestment Act on February 17, 2009, the County has been awarded approximately $73,016 in ARRA grants. Significant grants awarded to the County include approximately $15,750 towards health, $8,640 million towards transportation, $5,970 towards workforce training, $4,470 for criminal justice and public safety, and $3,370 for emergency food and shelter/community services. Several County departments are still awaiting a final decision on outstanding ARRA grant requests. 27 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, 2010 (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 $ 437,837 16,188 830 12 67,476 3,060 1,941 3,961 537 2,840 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 $ $ 728 45 24 4 579 1,253 209,884 210,463 1,253 433,098 176,749 15,178 92,178 448,276 268,927 381,800 217,321 398,495 85,773 599,121 398,495 128,154 600,634 1,793 2,171,176 1,102,514 3,273,690 5,072 52,298 14,768 20,173 1,456 247 1,620 67,066 20,173 1,462 3,014 49,774 3,019 683 8,208 84,584 629,664 820,305 16,477 401,111 464,930 101,061 1,030,775 1,285,235 21 9 298 1,048,821 550,540 1,599,361 2,471 13,454 11,623 16,110 15,943 29,914 637,584 64,991 25,749 13,454 69,562 16,110 19,348 179,880 1,988,455 6,931 2,394 64,991 25,749 57,939 $ 490,705 16,188 935 68,361 23,737 5,725 4,403 537 7,776 4,936 6 3,014 42,843 625 683 6,588 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 Component Units Total 105 (12) 885 20,677 3,784 442 42,381 600,634 Total assets 52,868 Exhibit A - 1 3,405 149,966 1,350,871 $ $ See accompanying notes to financial statements 29 1,800 678 21 $ 2,303 4,774 PIMA COUNTY, ARIZONA Statement of Activities For the Year Ended June 30, 2010 (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 Expenses $ $ Component units: Sports & Tourism Authority Southwestern Fair Commission Total component units $ $ Operating Grants and Contributions Charges for Services 31,050 10,218 5,317 3,378 11,003 $ Capital Grants and Contributions 218,504 $ 145,697 68,691 6,669 33,086 87,107 61,642 52,023 428 26,403 700,250 2,532 749 33,682 8,843 53,193 1,043 10,930 2,934 751 31,464 64,247 142,840 65,820 110,618 204,619 7,924 1,906 325,067 1,025,317 $ 127,889 205,176 5,886 1,985 340,936 405,183 54 4,358 9 9,319 87 5,067 $ 5,154 $ 5,371 5,371 $ $ 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 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 $ 4,421 147,261 5 120 125 $ 601 1,442 57,899 4,053 1,825 $ 9,319 75,139 Exhibit A - 2 Net (Expense) Revenue and Changes in Net Assets Governmental Activities $ Primary Government Business-type Activities (153,171) (125,194) 47,718 (2,248) (11,153) (84,173) (54,306) (17,985) (428) (26,403) (427,343) $ $ (427,343) Component Units Total 26,644 4,915 (2,029) 79 29,609 29,609 (153,171) (125,194) 47,718 (2,248) (11,153) (84,173) (54,306) (17,985) (428) (26,403) (427,343) 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 26,644 4,915 (2,029) 79 29,609 (397,734) Business-type activities: Regional Wastewater Reclamation Pima Health System & Services Development Services Parking Garages Total business-type activities Total primary government $ $ $ 297,562 23,374 25,968 69,597 5,688 1,515 84,767 24,203 4,081 7,940 5,266 16,579 538 567,078 139,735 1,211,136 1,350,871 $ 1,236 2,884 (538) 3,582 33,191 604,393 637,584 $ (82) 424 342 297,562 23,374 25,968 69,597 5,688 1,515 84,767 24,203 4,081 7,940 6,502 19,463 286 570,660 172,926 1,815,529 1,988,455 286 628 4,146 4,774 $ Component units: Sports & Tourism Authority 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 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, 2010 (in thousands) General 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 $ 89,785 11,342 396 3,289 25,490 1,419 Capital Projects $ 139,181 Debt Service $ 72 519 17,536 30 2,949 40,314 2,802 150 Exhibit A - 3 Other Governmental Funds Total Governmental Funds $ 95,894 2,044 131 2,059 24,328 1,596 1,557 296 537 113 952 45 $ 365,174 16,188 749 5,867 67,363 3,045 1,557 3,263 537 1,253 952 579 9 18 1,140 534 $ 135,810 $ 157,890 $ 43,275 $ 129,552 $ 466,527 $ 24,256 2 $ $ 1 $ 10,559 1 $ 9,717 1,796 15,826 3 3,014 24 382 149 18,349 534 11,947 2,406 13,816 50,642 6 3,014 13,646 5,123 625 683 46,518 54,269 31,730 2,407 31,851 120,257 4,089 522 2,011 82,957 15,305 3,221 (5,793) 6,118 208,309 16,792 47,234 67,817 97,701 346,270 Liabilities and fund balances Liabilities: Accounts payable Interest payable Contract retentions Employee compensation Due to other funds Due to other governments Deposits and rebates Deferred revenues Total liabilities Fund balances: Nonspendable Restricted Committed Assigned Unassigned 3,093 73,837 18 124,830 1,487 52 (227) Total fund balances 81,541 126,160 Total liabilities and fund balances $ 135,810 $ 157,890 3,905 2,945 625 40,868 40,868 $ 43,275 See accompanying notes to financial statements 32 $ 129,552 $ 466,527 PIMA COUNTY, ARIZONA Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets June 30, 2010 (in thousands) Exhibit A - 4 Fund balances - total governmental funds $ 346,270 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 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 $ 2,359,016 (742,505) 1,616,511 (562,487) (72,638) (19,386) 1,888 (652,623) Some compensated absences are not due and payable shortly after June 30, 2010, and therefore are not reported in the governmental funds Employee compensation Some liabilities are not due and payable shortly after June 30, 2010, and therefore are not reported in the governmental funds Landfill liability Pollution remediation liability (28,487) (19,624) (1,735) (21,359) Deferred revenue in governmental funds is susceptible to full accrual on the government-wide statements 39,930 Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets 50,629 Net assets of governmental activities See accompanying notes to financial statements 33 $ 1,350,871 PIMA COUNTY, ARIZONA Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2010 (in thousands) Exhibit A - 5 Other Governmental Funds Total Governmental Funds $ $ General Revenues: Property Taxes Special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous $ 304,441 2,738 128,927 40,356 7,011 1,198 4,868 Total revenues Capital Projects $ $ 489,539 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 69,325 31,106 4,380 78 1,170 431 936 37,087 70,339 184,606 117,378 2,702 87,089 14,671 13,996 818,647 36,538 19,366 34,274 5,637 30,035 221,144 136,744 34,274 5,637 32,737 87,089 50,198 48,402 162,306 87,307 26,414 433 162,306 Excess (deficiency) of revenues over (under) expenditures 83,565 24,097 430 107 36 426,361 162,306 108,092 195,926 892,685 63,178 (125,219) (37,753) 25,756 (74,038) 43,276 99 23,938 (43,463) 1,909 31,955 (32,361) 125,000 1,118 98,800 (98,355) 44,779 (19,426) 128,066 7,026 6,330 54,028 33,842 91,376 292,247 Other financing sources (uses): Premium on bonds Proceeds from refunding debt Payments to escrow agent Face amount of long-term debt Proceeds from sale of capital assets Transfers in Transfers (out) 204 8,439 (30,446) 125,000 815 23,147 (24,446) Total other financing sources (21,803) 124,516 Net change in fund balances 41,375 Fund balances at beginning of year 40,166 1,909 31,955 (32,361) (703) 126,863 Change in reserve for inventory Change in reserve for prepaids 4 (9) $ 423,443 536 7,791 296,004 60,376 8,443 4,612 17,442 221,682 35,527 34,406 3,635 2,281 3 Total expenditures Fund balances at end of year 49,677 536 5,053 135,893 15,640 1,432 1,308 12,143 81,541 $ 126,160 $ 40,868 See accompanying notes to financial statements 34 $ 97,701 4 (9) $ 346,270 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, 2010 (in thousands) Net change in fund balances - total governmental funds $ Exhibit A - 6 54,028 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 $ 146,492 (55,710) 90,782 Transfers of capital assets between governmental activities and proprietary funds or internal service funds are not reported in the governmental funds but are recognized in the statement of activities 293 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 Proceeds on refunding bonds Debt service - principal payments Payments to escrow agent Deferred issuance costs Amortization expense (125,000) (1,909) (31,955) 87,307 32,361 412 (428) (39,212) 22,789 998 11,689 35,476 (549) (295) (268) (4,564) (5) (5,681) 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. Donations of capital assets Property tax revenues Other 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 Change in compensated absences Change in landfill liability 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 expense of the internal service funds is reported with governmental activities Change in net assets of governmental activities See accompanying notes to financial statements 35 4,049 $ 139,735 PIMA COUNTY, ARIZONA Statement of Net Assets - Proprietary Funds June 30, 2010 (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 $ $ 41 10 862 4,152 81 237 40,708 11,261 181,910 59 2 Other Enterprise Funds $ 6,282 Total Enterprise Funds $ 5 26 23 338 16,187 3,703 151 213,273 54 6,728 27,974 1,422 (1,605) 718 718 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 reported but unpaid losses Current portion incurred but not reported losses Total current liabilities Noncurrent liabilities: Contracts and notes Sewer revenue bonds and obligations payable Wastewater loans payable Reported but unpaid losses Incurred but not reported losses Total noncurrent liabilities 1,768 12,927 1,326 (9,746) 6,275 6,275 592 614 33,695 (16,924) 174 18,151 18,151 1,048,135 13,003 1,102,564 92,392 414 20,173 2,271 2 843 1,566 11 14,063 291 1,656 3,951 1,454 111 708 1,609 8,425 8,052 709 14,768 20,173 6,931 1,456 986 2,394 1,620 8,425 8,052 32 120 38,373 1,152 710 83 - 3,906 2,923 9,278 64,805 6,305 336,648 58,158 401,111 401,111 17,959 13,590 31,549 25,280 439,484 1,152 465,916 40,827 718 543,547 6,275 550,540 18,151 5,576 13,454 11,623 16,110 15,943 28,978 33,414 11,851 636,648 13,454 11,623 16,110 15,943 (515) $ 72,663 81 287 113 15 384 698 74,241 15,178 368,081 632,633 106,177 (405,302) 92,178 808,945 4,936 841,855 6,305 336,648 58,158 Net assets Invested in capital assets, net of related debt Restricted for: Debt service Capital projects Regional wastewater Healthcare Unrestricted $ 41,426 25,280 Total liabilities 52,868 181,910 105 38 885 20,677 3,784 442 260,709 Governmental ActivitiesInternal Service Funds 27,974 13,410 354,253 632,633 103,429 (393,951) 92,178 801,952 4,936 834,862 901 Total assets Total net assets 35,325 Regional Wastewater Reclamation 16,146 23,917 $ 608,651 $ 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 36 936 $ 637,584 $ 51,565 PIMA COUNTY, ARIZONA Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds For the Year Ended June 30, 2010 (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 Gain/(loss) on disposal of capital assets Amortization of deferred charges Premium tax 203,067 2,109 2,655 Regional Wastewater Reclamation Other Enterprise Funds $ $ 110,155 73 $ 7,885 154 203,067 120,149 2,882 $ 39,295 1,734 207,831 110,228 8,039 326,098 41,029 28,532 161,230 773 435 32,961 6,231 6,447 91 266 295 7,927 5,064 1,502 6,021 444 67,724 161,230 8,791 5,765 1,502 6,760 7,686 1,474 244 200,669 9,398 6,044 30,876 99,793 2,348 50 423 9,853 19,432 7,568 31,543 310,315 3,596 9,893 4,739 3,052 305 2,659 36,993 7,162 10,435 (1,814) 15,783 4,036 4,358 506 2,054 688 17,705 (8,725) (2,260) (263) (13) 1 5,309 993 6,412 1,257 17,705 (8,738) (2,259) (263) (4,117) 63 (4,117) Total nonoperating revenues Governmental ActivitiesInternal Service Funds Total Enterprise Funds (161) 735 9,199 7,897 19,634 Capital contributions Transfers in Transfers (out) 256 (1,256) 7,319 22,445 (23,928) Change in net assets 6,897 25,470 194 32,561 4,679 Net assets at beginning of year 9,249 583,181 11,657 604,087 46,886 11,851 636,648 Income (loss) before contributions and transfers Net assets at end of year $ 16,146 $ 608,651 63 35 837 $ 9,997 711 (1,751) 25,780 4,747 3,300 (1,355) 7,319 26,001 (26,539) Some amounts reported for business-type activities in the Statement of Activities are different because a portion of the net expense 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 37 630 $ 33,191 132 16 (216) $ 51,565 PIMA COUNTY, ARIZONA Statement of Cash Flows  Proprietary Funds For the Year Ended June 30, 2010 (in thousands) Pima Health System & Services Cash flows from operating activities: Cash received from other funds for goods and services provided 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 for incurred losses Cash payments to employees for services $ Regional Wastewater Reclamation Other Enterprise Funds $ Total Enterprise Funds 27 7,598 100 (1,534) (2,850) (28,573) (32,990) (5,114) (66,677) 1,778 (14,198) (4,031) (8,509) (5,937) Net cash provided by (used for) operating activities 10,484 38,579 (1,773) 47,290 8,398 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 (15) 256 (1,256) (170) (4,117) 4,533 (1,200) (23) 2,000 (30) 6 (769) (1,169) $ $ (207) 173,002 (23,087) (1,160) 17,278 24 1,719 (58,852) Net cash provided by (used for) capital and related financing activities (206) 108,924 1 $ (15) 2,256 (2,486) (187) (4,117) 4,587 54 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 188 321,786 2,829 (193,631) (17,205) Governmental ActivitiesInternal Service Funds 107,636 73 (27,238) (8,902) Net cash provided by (used for) noncapital financing activities 161 206,552 2,656 (164,859) (5,453) Exhibit A - 9 1,976 39,295 (216) 223 35 38 42 173,002 (23,087) (1,160) 17,278 26 1,719 (59,059) (1,350) 1 108,719 (1,260) 1 90 Cash flows from investing activities: Interest received on cash and investments 582 870 83 1,535 923 Net cash provided by investing activities 582 870 83 1,535 923 Net increase in cash and cash equivalents 10,091 147,204 287 157,582 8,103 Cash and cash equivalents at beginning of year 25,234 73,941 5,995 105,170 64,560 Cash and cash equivalents at end of year $ 35,325 $ 221,145 $ (Continued) See accompanying notes to financial statements 38 6,282 $ 262,752 $ 72,663 PIMA COUNTY, ARIZONA Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2010 (in thousands) Exhibit A - 9.1 (continued) Reconciliation of operating income (loss) to net cash provided by (used for) operating activities Operating income (loss) Pima Health System & Services $ 7,162 Regional Wastewater Reclamation $ 10,435 Other Enterprise Funds $ (1,814) 244 30,876 423 3,603 3 8 (226) (2,519) (318) (23) (68) 125 12 1,832 (2,077) (949) 708 (65) 49 Total Enterprise Funds $ 15,783 Governmental ActivitiesInternal Service Funds $ 4,036 31,543 2,659 Adjustments to reconcile operating income (loss) to net cash provided (used) by 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 (65) Net cash provided by (used for) operating activities $ 10,484 (29) $ 38,579 766 (20) (60) (89) 818 (1,320) (37) $ (1,773) 18 (2,670) 4,054 (7) (131) $ 47,290 Noncash investing, capital, and noncapital financing activities during the year ended June 30, 2010: Regional Wastewater Reclamation Enterprise Fund received contributed developer-built conveyance systems with estimated fair values totaling $6,613, other capital assets totaling $1,774 were received from other governments and $9 from outside entities. These contributions were recorded as an increase in capital assets and capital contributions. Regional Wastewater Reclamation Enterprise Fund recorded a Board of Supervisor approved connection fee credit agreement of $1,358. This credit was recorded as an increase to deferred revenue and a decrease to capital contributions. Regional Wastewater Reclamation Enterprise Fund disposed of capital assets with a net book value of $2,284. Regional Wastewater Reclamation Enterprise Fund retired expired Sewer Credit Agreements totaling $280. This transaction was recorded as a decrease to deferred revenue and an increase in capital contributions. Regional Wastewater Reclamation Enterprise Fund received capital assets with a net book value of $5 from the County's general government. Regional Wastewater Reclamation Enterprise Fund transferred to other enterprise funds the capital assets with a net book value of $9. Other Enterprise Funds retired capital assets with a book value of $1. Other Enterprise Funds transferred capital assets with a net book value of $25: $4 to the County's general government, $16 to the Internal Services Fund and $5 to the Regional Wastewater Reclamation Enterprise Fund. Internal Service Funds transferred in capital assets with a net book value of $16, received capital contributions with a value of $132 and sold capital assets with a net book value of $251. See accompanying notes to financial statements 39 (9) 53 17 247 $ 8,398 PIMA COUNTY, ARIZONA Statement of Fiduciary Net Assets - Fiduciary Funds June 30, 2010 (in thousands) Investment Trust Funds Assets Cash and cash equivalents Interest receivable $ Total assets $ 74,490 322,181 $ 74,490 $ 3,067 51,182 20,241 $ 74,490 Total liabilities $ Agency Funds 321,965 216 Liabilities Employee compensation Due to other governments Deposits and rebates Net Assets Held in trust for pool participants Exhibit A - 10 322,181 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, 2010 (in thousands) Exhibit A - 11 Investment Trust Funds Additions Contributions from participants Total contributions $ Investment earnings Total investment earnings 2,597,653 2,597,653 2,527 2,527 Total additions 2,600,180 Deductions Distributions to participants 2,550,184 Total deductions 2,550,184 Change in net assets 49,996 Net assets held in trust July 1, 2009 Net assets held in trust June 30, 2010 See accompanying notes to financial statements 41 272,185 $ 322,181 PIMA COUNTY, ARIZONA Combining Statement of Net Assets Component Units June 30, 2010 (in thousands) Sports & Tourism Authority ASSETS Cash and cash equivalents Accounts receivable (net) Inventories Other assets Restricted assets: Cash and cash equivalents Capital assets (net): Buildings and improvements Equipment Total assets $ Exhibit A - 12 Southwestern Fair Commission 27 41 $ 701 4 24 Total Component Units $ 4 72 1,800 1,800 1,793 678 5,000 1,793 678 5,072 247 21 247 21 21 21 9 298 9 298 2,471 2,231 4,702 2,471 2,303 4,774 LIABILITIES Accounts payable Deposits and rebates Noncurrent liabilities: Due within one year: Contracts and notes Due in more than one year: Contracts and notes Total liabilities NET ASSETS Invested in capital assets, net of related debt Unrestricted Total net assets 72 72 $ $ See accompanying notes to financial statements 42 728 45 24 4 $ See accompanying notes to financial statements 43 $ $ General revenues: Miscellaneous Total general revenues Change in net assets Net assets at beginning of year Net assets at end of year 5,154 Total component units 87 87 5,067 5,067 $ $ Expenses Southwestern Fair Commission (SFC) Operations Total SFC Sports & Tourism Authority Operations Total Sports & Tourism Authority (S&TA) 5,371 5,371 5,371 Charges for Services $ $ 125 120 120 5 5 Operating Grants and Contributions Program Revenues $ $ S&TA PIMA COUNTY, ARIZONA Combining Statement of Activities Component Units For the Year Ended June 30, 2010 (in thousands) 72 154 154 72 (82) (82) (82) $ $ SFC 132 132 556 4,146 4,702 424 424 424 $ $ Net (Expense) Revenue 286 286 628 4,146 4,774 342 424 424 (82) (82) Total Exhibit A - 13 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (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, 2010, the County adopted early implementation of the provisions of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. GASB Statement No. 54 establishes criteria for classifying governmental fund balances into specifically defined classifications to make the nature and extent of the constraints placed on fund balance more transparent. The classifications are as follows: Nonspendable Fund Balance, Restricted Fund Balance, Committed Fund Balance, Assigned Fund Balance and Unassigned Fund Balance. 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 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. 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 44 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) 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. The Pima County Sports and Tourism Authority (S&TA) is a nonprofit municipal corporation established to promote professional and amateur sports events and other suitable activities for the benefit of the public and to increase opportunities for amateur youth sports in Pima County. S&TA members are appointed and can be removed at any time by the Board of Directors. Based on these factors, and because S&TA does not provide services entirely, or almost entirely to the County, but rather to the general citizenry, S&TA is reported as a separate component unit (discrete presentation) in these financial statements. Complete financial statements for S&TA 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 governmental 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, compensated absences, landfill closure and postclosure care costs and pollution remediation 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. The County may fund certain programs by a combination of restricted, committed, assigned and/or unassigned (general) revenues. When program expenses are incurred and there are restricted, committed, assigned and/or unassigned net assets available to finance the program, the County applies restricted, committed and/or assigned revenues before using unassigned (general) revenues. 45 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) 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 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 units: 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. S&TA’s financial statements are presented using the economic resources measurement focus and the accrual basis of accounting. The S&TA’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 units. 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 governmentwide 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. 46 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) 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. 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 capital facilities and other capital assets, 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 cost-reimbursement 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 statement 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. 47 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) Discretely presented component units: SFC’s cash and cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less. Restricted cash consists of non-negotiable certificates of deposit with maturities greater than three months and less than one year. S&TA considers all highly liquid investments purchased with a maturity of three months or less to be cash and cash equivalents. E. Inventories and Prepaids The County accounts for its inventories in the Health Fund using the purchase method. Inventories of the Health 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 as expenditures 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 arealued 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. 48 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (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 improvements Discretely presented component units: 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 5 to 40 years. S&TA had no capital assets to report on June 30, 2010. 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 as applicable 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. 49 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 2 – Fund Balance Classifications The categories for fund balance are nonspendable, restricted, committed, assigned, and unassigned. Nonspendable fund balances are those items that cannot be spent because of their form or because resources must remain intact. Restricted fund balances are those that have an externally enforceable limit on their usage through legislation or limitations imposed by creditors, grantors or laws and regulations of other governments. Committed fund balances are self imposed limitations set prior to the year end closing. The Pima County Board of Supervisors is the highest level of decision making authority. Imposed limitations on the use of funds must be approved by the Board of Supervisors at a regular supervisory meeting. Any modifications and/or rescissions must also be approved by the board. Assigned fund balances are limitations resulting from the intended use of funds. The Pima County Board of Supervisors and/or its representative, the County Administrator, can authorize the constraints for the specific purpose. Modifications or rescissions of the constraints can also be removed by the same action that limited the funds. 50 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 2 – Fund Balance Classifications (continued) The table below details the fund balance categories and classifications: General Fund Capital Projects Fund Debt Service Fund Other Governmental Funds CAFR Total Fund balances: Nonspendable: Inventory Prepaid expenses Loan receivable Permanent fund principal Total nonspendable $ $ 2,949 1,140 $ 4,089 Restricted for: Capital Projects Streets and highways Other Judicial activities Flood Control District Health Law enforcement Library District Parks and recreation School reserve Social services Streets and highways Tire fund Other purposes Total restricted 18 1,557 296 113 45 2,011 $ 34,766 83,123 124,830 21,470 9,507 4,663 3,192 17,450 108 900 1,560 20,762 1,300 2,045 82,957 641 846 1,487 4,431 10,874 15,305 5,072 11,720 16,792 477 123 522 522 Assigned to: Debt service reserve Judicial activities Health Parks and recreation Landfill School Reserve Other purposes Total assigned $ 40,868 82 3,011 3,093 73,837 81,541 4 52 $ (227) 126,160 51 40,868 99 138 1,122 1,058 934 3,015 47,234 17 138 1,074 1,058 934 48 $ 1,557 3,263 1,253 45 6,118 34,766 83,123 21,470 15,848 4,663 3,192 17,927 108 900 1,683 20,762 1,300 2,567 208,309 6,341 Committed to: Sports promotion (Stadium) Other purposes Total committed Unassigned: Total fund balances 18 40,868 $ 40,868 3,221 $ (5,793) 97,701 $ 67,817 346,270 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 3: 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, 2010, the carrying amount of the County’s deposits was $73,309 and the bank balance was $48,271. 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, 2010, $2,174 of the County’s bank balance was exposed to custodial credit risk because it was uninsured and uncollateralized. Investments—At June 30, 2010, the County’s investments consisted of $264,385 invested in marketable securities and $759,875 invested in the State Treasurer’s Investment Pool. Cash from the County and from externally 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. 52 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 3: Cash and Investments (continued) 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, 2010, credit risk for the County’s investments was as follows: Rating 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 500 State Treasurer Investment Pool 7 Total A1/P1 A/A3 AAA/Aaa AAA/Aaa AAA/Aaa AAA/Aaa AAAm/Aaa AAAf Unrated 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 $ 24,339 93,170 18,312 10,203 14,882 19,627 11,201 557,612 25,226 177,037 $ 951,609 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 $1,024,260 of investments, $253,184, 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, is uninsured and held by a counterparty in the County’s name in book entry 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, 2010 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. 53 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 3: Cash and Investments (continued) As of June 30, 2010, the County had the following investments: Amount Investment Type State Treasurer Investment Pool 5 State Treasurer Investment Pool 500 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 Weighted Average Maturity (Years) $ 557,612 25,226 177,037 24,339 93,170 18,312 10,203 14,882 19,627 72,651 11,201 $ 1,024,260 0.06 4.45 0.08 0.13 1.31 0.60 0.12 0.61 0.40 2.56 0.10 A reconciliation of cash, deposits, and investments to amounts shown on the Statements of Net Assets follows: Cash, deposits and investments: Cash on Hand $ 54 Amount of Deposits $ 73,309 Amount of Investments Total $ 1,024,260 $ 1,097,623 Governmental Business-type Investment Activities Activities Trust Funds Statement of Net Assets: Cash and cash equivalents Restricted cash and cash equivalents Total $ $ 437,837 579 438,416 $ $ 52,868 209,884 262,752 Agency Funds $ 321,965 $ 74,490 $ 321,965 $ 74,490 Totals $ 887,160 210,463 $ 1,097,623 County Treasurer’s Investment 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. 54 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 3: Cash and Investments (continued) The Pool’s assets are subject to applicable risks as discussed above and consist of the following: Principal Interest Rates Commercial paper $24,350 0.2-0.4% Corporate bonds 89,951 0.5-7.3% Federal Farm Credit Bank 17,500 5.0-5.4% Federal Home Loan Bank 10,000 4.1% Fannie Mae (Federal National Mortgage Association) 14,625 2.9-3.4% Freddie Mac (Federal Home Loan Mortgage Corp) 19,200 3.3-4.1% U.S. Treasury 69,490 0.9-4.8% State Treasurer Investment Pool 5 299,862 N/A 54,931 N/A Deposits Interest Receivable 216 N/A Total assets Maturities Fair Value 07/10-12/10 $ 24,339 07/10-05/14 93,170 09/10-07/11 18,312 08/10 10,203 10/10-05/11 14,882 10/10-02/11 19,627 09/10-07/14 72,651 N/A 299,862 N/A 54,931 N/A 216 $608,193 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 increase Net assets held in trust: July 1, 2009 June 30, 2010 $ 463,049 145,144 608,193 0 $ 608,193 $ 7,465,711 (7,385,912) 79,799 528,394 $ 608,193 Discretely Presented Component Units Southwestern Fair Commission—At June 30, 2010, the commission’s cash and cash equivalents consisted of deposits with financial institutions. Of the total balance, $264 was exposed to custodial credit risk because it was uninsured and uncollateralized. Sports & Tourism Authority—At June 30, 2010, the S&TA’s cash and cash equivalents of $27 consisted of deposits with financial institutions. 55 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 4: Due from Other Governments Governmental activities: Federal government: Grants and contributions State of Arizona: Taxes and shared revenues Grants and contributions Refunds and discounts City of Tucson: Reimbursement for services Other governments: Reimbursement for services Total due from other governments fund based statements General Fund Capital Projects Fund $ 279 $ 6,667 18,106 220 Debt Other Internal Total Service Governmental Service Governmental Fund Funds Funds Activities $ 12,595 8,462 1,799 $ 4 26,788 1,803 4,573 597 101 3,002 875 8 11,769 24,328 $ 113 $ 4,573 2,288 7 244 10,642 $25,490 $ 17,536 $ $ 9 9 $ 19,541 $ 67,476 Business-type activities: Pima Health System & Services Federal government: Reimbursement for services State of Arizona: Reimbursement for services Grants and contributions Other local governments: Reimbursements for services Total due from other governments fund based statements Other Businesstype Activities $ $ 9 Business-type Activities Total $ 722 140 722 140 14 $ 862 56 9 $ 23 14 $ 885 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 5: Capital Assets Capital asset activity for the year ended June 30, 2010, was as follows: Balance July 1, 2009 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 $ 525,914 1,108,315 110,666 1,744,895 Less accumulated depreciation for: Buildings and improvements Infrastructure Equipment Total accumulated depreciation (145,116) (493,364) (67,115) (705,595) Total capital assets, being depreciated, net Governmental activities capital assets, net 384,368 103,106 487,474 Increases 1,039,300 $ 1,526,774 $ Balance July 1, 2009 Business-type 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 $ (139,077) (221,983) (13,677) (374,737) 716,314 773,117 $ 57 $ $ (1) (25,283) (25,284) 14,285 24,830 9,810 48,925 (537) (4,444) (4,595) (9,576) (13,060) (35,089) (10,448) (58,597) 314 386 4,063 4,763 (9,672) (4,813) 137,985 $ Increases 367,275 621,077 102,699 1,091,051 Less accumulated depreciation for: Buildings and improvements Infrastructure Equipment Total accumulated depreciation Total capital assets, being depreciated, net Business-type activities capital assets, net 13,595 43,208 56,803 48,731 98,926 147,657 1,583 57,677 59,260 Balance June 30, 2010 Decreases (30,097) $ 433,098 176,749 609,847 539,662 1,128,701 115,881 1,784,244 (157,862) (528,067) (73,500) (759,429) 1,024,815 $ 1,634,662 Balance June 30, 2010 Decreases (8,707) (8,707) 15,178 92,178 107,356 1,792 11,569 5,818 19,179 (986) (13) (2,340) (3,339) 368,081 632,633 106,177 1,106,891 (12,073) (12,162) (7,399) (31,634) 390 7 672 1,069 (12,455) 46,805 $ $ $ (2,270) (10,977) (150,760) (234,138) (20,404) (405,302) $ 701,589 808,945 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 5: 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 $ 7,368 11,003 29,950 159 559 17 5,867 787 2,659 58,369 $ Business-type activities: Pima Health System & Services Parking Garages Regional Wastewater Reclamation Development Services Total business-type activities depreciation expense $ 244 216 30,876 207 31,543 $ Balance July 1, 2009 Discretely presented component units: Southwestern Fair Commission (SFC): Capital assets being depreciated: Buildings and improvements Equipment Total capital assets being depreciated $ 4,330 2,190 6,520 Increases $ 158 143 301 Less accumulated depreciation for: Buildings and improvements Equipment Total accumulated depreciation (2,552) (1,520) (4,072) (143) (135) (278) Total capital assets being depreciated, net 2,448 23 SFC capital assets, net $ 2,448 58 $ Balance June 30, 2010 Decreases 23 $ $ (5) (5) 4,488 2,328 6,816 5 5 (2,695) (1,650) (4,345) 2,471 $ 2,471 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 6: 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, and 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 currentyear 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 $38,378 reported in the Fund at June 30, 2010, 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. 2010 2009 Claims liabilities - beginning Current-year claims and changes in estimates Claims payment $ 36,994 9,893 (8,509) $ 31,205 12,600 (6,811) Claims liabilities balance - ending $ 38,378 $ 36,994 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. 59 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 6: Claims, Judgments and Risk Management (continued) Pollution Remediation The County has estimated and reported an environmental liability of $1,735 in the government-wide financial statements for governmental activities (in noncurrent liabilities). Remediation efforts are currently underway at two County sites. At the Administration West building, 150 West Congress Street, the first floor is undergoing demolition and asbestos abatement efforts. The remediation process is scheduled to be completed in the first quarter of FY 2010-11. Remediation efforts continue 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 El Camino del Cerro Road on the south. 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. 60 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 7: Long-Term Liabilities The following schedule details the County’s long-term liability and obligation activity for the year ended June 30, 2010. Balance July 1, 2009 Additions Balance Due within Reductions June 30, 2010 1 year Governmental activities: General obligation bonds Plus unamortized deferred amount Total general obligation bonds $ 386,845 1,187 388,032 $ 113,535 1,290 114,825 725 Flood control bonds $ 82,385 211 82,596 $ 417,995 2,266 420,261 $ 40,245 253 40,498 725 139,565 118 139,683 23,420 207 23,627 21,045 39 21,084 141,940 286 142,226 10,530 35 10,565 Certificates of participation Plus unamortized deferred amount Total certificates of participation 71,930 2,624 74,554 20,000 412 20,412 21,610 718 22,328 70,320 2,318 72,638 23,425 743 24,168 Capital leases payable: Jail capital lease Less unamortized deferred amount Other capital leases Total capital leases 22,715 (1,531) 143 21,327 Reported but unpaid losses (Note 6) Incurred but not reported losses (Note 6) 24,535 12,459 5,839 4,054 Landfill closure and post-closure care costs (Note 9) 19,329 295 19,624 1,467 268 1,735 682,111 $ 169,320 Transportation revenue bonds Plus unamortized deferred amount Total transportation revenue bonds Pollution remediation (Note 6) Total governmental activities long-term liabilities $ 61 2,025 (191) 107 1,941 20,690 (1,340) 36 19,386 2,125 (191) 36 1,970 8,509 21,865 16,513 3,906 2,923 $ 137,183 $ 714,248 554 $ 84,584 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 7: Long-Term Liabilities (continued) Balance July 1, 2009 Additions Reductions Balance June 30, 2010 Due within 1 year Business-type activities: Sewer revenue bonds Less unamortized deferred amount Total revenue bonds payable $ 183,880 (491) 183,389 $ 165,000 13,211 178,211 Sewer revenue obligations Plus unamortized deferred amount Total revenue obligations payable Regional Wastewater Reclamation (RWR) loans payable Less unamortized deferred amount Total loans payable Contracts and notes Total business-type activities long-term liabilities $ $ 64,597 (108) 64,489 8,002 16,770 $ (316) 16,454 8,002 6,316 (35) 6,281 66,283 (73) 66,210 6,481 2,547 2,723 6,305 254,359 $ 188,760 $ 25,531 8,425 8,425 165,000 13,138 178,138 73 73 * 167,110 $ (175) 166,935 $ 417,588 8,052 8,052 $ 16,477 * At June 30, 2010, Regional Wastewater Reclamation has drawn down the total loan amount of $10,002 from the 2009 Water Infrastructure Financing Authority (WIFA) loan. Of this amount $2,000 was a forgivable principal amount from the American Recovery and Reinvestment Act (ARRA) grant. GENERAL OBLIGATION BONDS OUTSTANDING Governmental Activities (Payments made from property tax revenues of the Debt Service Fund) General obligation bonds payable at June 30, 2010, consisted of the outstanding general obligation bonds presented below. Of the total amounts originally authorized, $13,940 from the May 20, 1997, $169,982 from the May 18, 2004, and $29,634 from the May 16, 2006 bond elections remain unissued. The following table presents amounts outstanding by issue. Issue Issue Amount 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 Series of 2009A 90,000 Series of 2009A Refunding 23,535 G.O. bonds outstanding Plus unamortized deferred amount: Interest Rates 4.25 4.00 - 4.25% 3.00 - 5.00% 3.50 - 5.00% 3.00 - 4.50% 3.00 - 4.00% 3.00 - 4.13% 3.00 - 4.00% 3.00 - 3.50% Maturities 2011 2011-17 2011-19 2011-20 2011-21 2011-22 2011-23 2011-24 2011-16 Total G.O. bonds outstanding 62 Outstanding June 30, 2010 $ 1,000 26,850 40,200 42,750 73,675 78,500 49,000 83,100 22,920 417,995 2,266 $ 420,261 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 7: Long-Term Liabilities (continued) The following schedule details general obligation bond debt service requirements to maturity at June 30, 2010. Year Ending June 30, 2011 2012 2013 2014 2015 2016 - 2020 2021 - 2024 Total Principal 40,245 34,055 34,025 32,465 31,690 163,485 82,030 $ 417,995 Interest 16,174 14,637 13,358 12,051 10,711 34,357 6,637 $ 107,925 $ $ REFUNDED GENERAL OBLIGATION BONDS In 2010, the County defeased $23,120 of General Obligation Bonds, Series 1998, 2000 and 2002, by issuing $23,535 of General Obligation Bonds that have an average life of 3.58 years and an interest rate of 2.964%. This refunding transaction resulted in an economic gain of $880, and a reduction in debt service payments of $993. The proceeds of the new bonds were placed in an irrevocable trust to provide for future debt service payments of the refunded debt. Accordingly, the trust account assets and liability for the defeased bonds are not included in the County’s financial statements. Also, the refunded bond debt is not included in the County’s financial statements because as of June 30, 2010, the County had transferred cash to its paying agent to pay off the bonds. The Series 1998 and 2000 Bonds were legally defeased during the fiscal year, while the Series 2002 Bonds remain defeased in substance at the amount disclosed below. Outstanding June 30, 2010 Issue 2002 General Obligation Refunded Bonds $ 4,126 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, $107,718 from the November 4, 1997 bond election remains unissued. Issue Interest Amount Rates Maturities Issue Series of 2002 $ 55,000 4.25 - 4.38% 2011-12 Series of 2003 35,000 3.75 - 4.38% 2011-18 Series of 2005 51,200 3.50 - 5.00% 2011-20 Series of 2007 21,000 3.25 - 4.75% 2011-22 Series of 2008 25,000 3.00 - 4.50% 2011-22 Series of 2009 15,000 3.00 - 4.00% 2011-24 Series of 2009 Refunding 8,420 3.00 - 4.00% 2011-24 Transportation bonds outstanding Plus unamortized deferred amount: Total transportation bonds outstanding 63 Outstanding June 30, 2010 $ 7,095 22,960 44,300 19,465 24,700 15,000 8,420 141,940 286 $ 142,226 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 7: Long-Term Liabilities (continued) The following schedule details transportation bond debt service requirements to maturity at June 30, 2010. Year Ending June 30, 2011 2012 2013 2014 2015 2016 - 2020 2021 - 2024 Total Principal 10,530 11,015 11,170 11,600 12,055 64,035 21,535 $ 141,940 $ Interest 5,709 5,244 4,785 4,354 3,906 11,767 1,734 $ 37,499 $ Pima County has pledged future highway user revenues, net of specified operating expenses, to repay $141,940 in transportation revenue bonds issued between 2002 and 2010. 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 2024. Annual principal and interest payments on the bonds are expected to require approximately 90 percent of net revenues. Total principal and interest remaining to be paid on the bonds is $179,439. Principal and interest paid for bonds in the current year and total customer net revenues were $16,272 and $20,233, respectively. REFUNDED TRANSPORTATION BONDS In 2010, the County defeased $8,300 of Transportation Bonds, Series 2002, by issuing $8,420 of Transportation Bonds that have an average life of 9.08 years and an interest rate of 3.542%. The proceeds of the new bonds were placed in an irrevocable trust to provide for legal defeasance of the refunded debt on January 1, 2010. This refunding transaction was performed primarily to restructure outstanding debt in order to align projected future revenues with corresponding debt service requirements. As a result, there was an increase in debt service payments of $2,541, whose present value benefits the County with an economic gain of $6. 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 2007A for $28,765 to finance the acquisition of and improvements to a 22-story office tower located in downtown Tucson and to acquire and construct replacement facilities for the Pima County Community Services Department. 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. On February 4, 2010, the County issued Certificates of Participation Series 2010 for $20,000 to finance the replacement computer enterprise system composed of servers and other 64 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 7: Long-Term Liabilities (continued) hardware, computer terminals, software and system training. The new enterprise system will serve the County with finance, budget, procurement, human resources and material management systems. The following schedule details outstanding Certificates of Participation payable at June 30, 2010. Issue Interest Amount Rates Maturities Issue Series of 2007A $ 28,765 4.00 - 5.00% 2011-22 Series of 2008 50,000 5.00% 2011 Series of 2009 34,400 4.00% 2011-12 Series of 2010 20,000 2.00 - 5.25% 2011-19 Certificates of participation outstanding Plus unamortized deferred amount: Total certificates of participation outstanding Outstanding June 30, 2010 $ 25,920 10,000 14,400 20,000 70,320 2,318 $ 72,638 The following schedule details debt service requirements to maturity for the County’s Certificates of Participation payable at June 30, 2010. Year Ending June 30, 2011 2012 2013 2014 2015 2016 - 2020 2021 - 2022 Total Principal 23,425 8,165 3,875 4,020 4,170 21,255 5,410 $ 70,320 $ Interest 3,296 2,052 1,766 1,627 1,472 4,230 409 $ 14,852 $ 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 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, 2010, for these leases totaled $36. The net book value of assets acquired through capital leases consists of $17,303 of buildings and $9 of equipment. 65 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 7: Long-Term Liabilities (continued) The following schedule details capital lease debt service requirements to maturity at June 30, 2010. Governmental Activities: Year Ending June 30, 2011 2012 2013 2014 2015 2016 - 2018 Buildings Principal Interest $ 2,125 $ 879 2,230 774 2,780 647 2,485 511 2,605 399 8,465 536 $ 20,690 $ 3,746 Equipment Principal Interest $ 36 $ 1 $ 36 $ 1 SEWER REVENUE BONDS AND LOANS Business-type Activities (Payments made from user charges received in the Regional Wastewater Reclamation Department 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. As of June 30, 2010, the County has issued the total amount originally authorized from the May 18, 2004 bond election. Issue Interest Issue Amount Rates Maturities Series of 1998 $ 29,185 4.00 - 4.50% 2011-15 Series of 2001 Refunding 19,440 4.25 - 5.38% 2011-15 Series of 2004 Refunding 25,770 4.60 - 5.50% 2011-15 Series of 2007 50,000 3.75 - 5.00% 2011-26 Series of 2008 75,000 4.00 - 5.00% 2011-23 Series of 2009 18,940 3.25 - 4.25% 2011-24 Sewer revenue bonds outstanding Less unamortized deferred amount: Total sewer revenue bonds outstanding Outstanding June 30, 2010 $ 8,640 10,125 14,085 42,450 73,680 18,130 167,110 (175) $ 166,935 The following schedule details sewer revenue bond debt service requirements to maturity at June 30, 2010. Year Ending June 30, 2011 2012 2013 2014 2015 2016 - 2020 2021 - 2025 2026 Total Principal 8,425 8,795 10,405 12,030 12,590 59,210 51,925 3,730 $ 167,110 $ 66 Interest 7,145 6,776 6,381 5,916 5,377 19,367 5,983 149 $ 57,094 $ PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 7: Long-Term Liabilities (continued) On June 17, 2010, Pima County entered into an agreement, whereby future revenues were pledged, that provided monies to be used primarily to pay a portion of the capital project costs associated with the construction, expansion and improvement of sewer treatment facilities and conveyance systems for the countywide sewer system, including the Ina Road and Roger Road Wastewater Reclamation Facilities. Issue Interest Outstanding Amount Rates Maturities June 30, 2010 Issue Series of 2010 $ 165,000 2.50 - 5.00% 2014-25 $ 165,000 Sewer revenue obligations outstanding 165,000 Plus unamortized deferred amount: 13,138 Total sewer revenue obligations outstanding $ 178,138 The following schedule details sewer revenue obligation debt service requirements to maturity at June 30, 2010. Year Ending June 30, 2011 2012 2013 2014 2015 2016 - 2020 2021 - 2025 Total Principal Interest 8,339 8,026 8,026 8,026 7,946 35,013 14,983 $ 90,359 $ $ $ 2,000 2,000 64,255 96,745 165,000 In prior years, the Regional Wastewater Reclamation Enterprise Fund entered into loan agreements (1996 to provide funds for the defeasance of prior sewer revenue bonds, and 1997, 2000, and 2004 which were used for construction and improvement of wastewater treatment facilities). In October 2009 the County entered into an additional loan agreement for the funding of construction of wastewater treatment facilities. Interest is payable semiannually and is calculated based on the principal amount of the loan outstanding during such period. Issue Amount Issue 1996 Loans payable $ 11,313 1997 Loans payable 7,500 2000 Loans payable 61,180 2004 Loans payable 19,967 2009 Loans payable 8,002 Loans payable Less unamortized deferred amount: Interest Rate 3.19% 2.95% 2.20% 1.81% 0.96% Total loans payable 67 Maturities 2010-12 2010-11 2010-16 2010-24 2010-24 Outstanding June 30, 2010 $ 4,285 1,295 35,324 17,377 8,002 66,283 (73) $ 66,210 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 7: Long-Term Liabilities (continued) The following schedule details loans payable debt service requirements to maturity at June 30, 2010. Year Ending June 30, 2011 2012 2013 2014 2015 2016 - 2020 2021 - 2024 Total Principal 8,052 8,349 7,406 6,514 6,766 19,453 9,743 $ 66,283 $ Interest 2,139 1,847 1,566 1,318 1,082 2,553 759 $ 11,264 $ Pima County has pledged future user charges, net of specified operating expenses, to repay $167,110 in sewer revenue bonds issued between 1998 and 2009, $66,283 in sewer revenue loans issued between 1996 and 2009, and $165,000 in sewer revenue obligations issued in 2010. Proceeds from the bonds, loans and obligations provided financing for construction of various treatment facilities and sewer infrastructure within Pima County. The bonds, loans and obligations are payable from net sewer revenues and are payable through fiscal year 202526. Annual principal and interest payments on the bonds and obligations are expected to require approximately 26 percent of net revenues. The annual principal and interest payments on the loans are expected to require approximately 24 percent of net revenues. Total principal and interest remaining to be paid on the bonds is $224,204. Total principal and interest remaining to be paid on the loans is $77,547. Total principal and interest remaining to be paid on the obligations is $255,359. Principal and interest paid for bonds, loans and obligations in the current year and total customer net revenues were $27,988, $8,540 and $63,317, respectively. CONTRACTS AND NOTES Business-type Activities (Payments made from restricted assets in the Regional Wastewater Reclamation 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. 68 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 7: Long-Term Liabilities (continued) 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, 2010, is as follows: Net assessed valuation $ 9,860,981 Debt Limit (15% of net assessed valuation): 1,479,147 Less amount of debt applicable to debt limit: General obligation bonds outstanding $ Less fund balance in debt service fund available for payment of general obligation bond principal 417,995 (11,396) Legal debt margin available 406,599 $ 1,072,548 Note 8: 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, 2010, 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, 2009 Balance $0 Draws $ 30,450 Repayments $ 30,450 June 30, 2010 Balance $0 Note 9: 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 $19,624 reported as landfill closure and post-closure care long-term liability within the governmental 69 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 9: Landfill Liabilities (continued) 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 $6,059 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, 2010; actual costs may change due to inflation, changes in technology, or changes in regulations. Landfill Site Ajo * Sahuarita Tangerine Capacity Used June 30, 2010 Estimated Remaining Service Life 68% 47% 92% 41 Years 30 Years 8 Years *Arizona Department of Environmental Quality (ADEQ) approved the Ajo Landfill Type IV Permit Modification package on February 16, 2010 effectively increasing the permitted airspace and the remaining service life of the facility. The expansion involves a 2.77-acre lateral expansion and a 6-foot vertical expansion. 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 $10,277 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 10: 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. 70 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 10: Retirement Plans (continued) The ASRS administers a cost-sharing multiple-employer defined benefit pension plan; a cost-sharing, multipleemployer 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. 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 fivemember 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 3300 N. Central Ave Phoenix, AZ 85012 (602) 240-2000 or (800) 621-3778 PSPRS and CORP 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, 2010, active ASRS members were required by statute to contribute at the actuarially determined rate of 9.4 percent (9.0 percent for retirement and 0.40 percent for long-term disability) of the members’ annual covered payroll. The County is required by statute to contribute at an actuarially determined rate. For the year ended June 30, 2010 the County contributed 9.4 percent (8.34 percent for retirement, .66 percent for health insurance premium, and 0.40 percent for long-term disability) of the members’ annual covered payroll. For the year ended June 30, 2009 the County contributed 9.4 percent (7.99 percent for retirement, .96 percent for health insurance premium, and 0.45 percent for long-term disability) of the members’ annual covered payroll. For the year ended June 30, 2008 the County contributed 9.60 percent (8.05 percent for retirement, 1.05 percent for health insurance premium, and 0.50 percent for long-term disability) of the members’ annual covered payroll. 71 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 10: Retirement Plans (continued) ASRS Retirement Fund Health Benefit Supplement Fund Long-term Disability Fund Year ended June 30, 2010 2009 2008 $ $ $ 20,234 20,127 20,981 $ $ $ 1,601 2,418 2,737 $ $ $ 970 1,259 1,303 Agent plans For the year ended June 30, 2010, 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 24.24 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 1.83 percent of covered payroll. Active CORP members were required by statute to contribute 8.41 percent of the members’ annual covered payroll, and the County was required to contribute at the actuarially determined rate of 9.38 percent, the aggregate of which is the actuarially required amount. The health insurance premium portion of the contribution rate was actuarially set at 1.30 percent of covered payroll. Actuarial methods and assumptions The contribution requirements for the year ended June 30, 2010 were established by the June 30, 2008 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 2010 contribution requirements, are as follows: 72 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 10: Retirement Plans (continued) PSPRS June 30, 2008 Projected unit credit CORP June 30, 2008 Projected unit credit 8.50% 5.50% - 8.50% 5.00% Level percentage closed for unfunded 8.50% 5.50% - 8.50% 5.00% Level percentage closed for actuarial accrued liability, open for unfunded actuarial accrued liability, excess open for excess 28 Years for unfunded actuarial accrued liability, 20 years for excess 28 Years for unfunded actuarial accrued liability, 20 years for excess Smoothed market value 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 Annual Pension and OPEB Cost The County’s pension/OPEB cost for the PSPRS and CORP agent plans for the year ended June 30, 2010, and related information follows: PSPRS CORP Health Insurance Pension Health Insurance Pension Annual pension/OPEB cost $ 8,761 $ 591 $ 1,943 $ 232 Contibutions made $ 8,912 $ 440 $ 1,993 $ 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 FY 2010, FY 2009 and FY 2008 is as follows. 73 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 10: Retirement Plans (continued) Plan PSPRS Pension Year Ended June 30 Annual Pension/ OPEB Cost Percentage of Annual Cost Contributed Net Pension/ OPEB Obligation 2010 $ 8,761 100% Health insurance 2010 $ 591 74.5% Pension 2009 $ 8,268 100% Health insurance 2009 $ 627 73.8% Pension 2008 $ 6,923 100% Health insurance 2008 $ 565 79% 2010 $ 1,943 100% Health insurance 2010 $ 232 78.8% Pension 2009 $ 2,162 100% Health insurance 2009 $ 236 77.1% Pension 2008 $ 1,513 100% Health insurance 2008 $ 247 66% CORP Pension $ 151 $ 164 $ 121 $ 49 $ 54 $ 84 Funded Status The funded status of the plans, as of the most recent valuation date June 30, 2010, 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. PSPRS Pension Actuarial accrued liability $ 220,865 Actuarial value of assets Unfunded actuarial accrued liability (funding excess) $ 145,388 Funded ratio Covered payroll Unfunded actuarial accrued liability (funding excess) as a percentage of covered payroll 65.8 % $ 31,302 $ $ 75,477 241.1 % 74 CORP Health Insurance $ $ Pension 7,040 $ 64,614 0 $ 50,077 7,040 $ 14,537 0 % 31,302 22.5 % Health Insurance $ 0 $ 77.5 % $ 19,885 $ 73.1 % 3,092 3,092 0 % 19,885 15.5 % PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 10: Retirement Plans (continued) 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, 2010 Projected unit credit CORP June 30, 2010 Projected unit credit 8.50% 5.50% - 8.50% 5.50% Level percentage-of-pay closed 8.50% 5.50% - 8.50% 5.50% Level percentage-of-pay closed 26 Years for unfunded actuarial accrued liability, 20 years for excess 26 Years for unfunded actuarial accrued liability, 20 years for excess 7-year Smoothed market value 7 year Smoothed market value Note 11: Interfund Transactions A. Interfund Assets/ Liabilities Due from / Due to Other Funds are used to record loans or unpaid operating transfers between funds. General Capital Projects Other Governmental 20 401 1,384 Pima Health System & Services 9 RWR 2 839 362 262 To 19 2 20 83 30 1 519 47 2,059 1 10 14 26 83 6,192 4 3,289 2 3 Internal Services 9 287 1,796 ta l er vi ce s In te rn al S e En te rp ri s th er O O t ov he r er nm en ta l PH S & Se rv ic es RW R 2,389 4 Other Enterprise Total G lP Ca pi ta al en er G Amounts recorded as due from: ro je ct s Amounts recorded as due to: 382 75 2,945 287 843 111 32 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 11: 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. 4,539 Debt Service 22,351 Pima Health System & Services 7,183 $ 584 18,901 1,422 165 s al To ta l rn O th RW In te R er E nt Se rv i er pr ce ise es ic Se rv 1,256 17,214 $ Other Governmental & O $ $ PH th pi Ca General Capital Projects S ta er G lP l ra ne Ge Amounts recorded as transfers in: ov ro j er n ec m ts en ta l Amounts recorded as transfers out: $ $ 4 $ 1,330 $ 23,635 60 156 43,276 23,938 256 256 RWR 22,440 Other Enterprise 5 22,445 3,300 3,300 Internal Service 16 Total $ 30,446 $ 24,446 $ 43,463 $ 1,256 $ 23,639 $ 1,351 16 $ 216 $ 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: $ $ 8,439 23,147 Transfer from 289 RWR 4 Other enterprise funds 293 Transfer to Governmental activities Governmental activities Note 12: Construction and Other Significant Commitments At June 30, 2010, Pima County had the following major contractual commitments related to Facilities Management, General Government, Natural Resources, Parks & Recreation, Pima Health Systems and Services, Regional Wastewater Reclamation and Transportation. Facilities Management At June 30, 2010, the Pima County Facilities Management Department had contractual commitments related to service contracts of $40,154. Funding for these expenditures will be provided from general fund revenues. 76 124,817 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2010 (in thousands) Note 12: Construction and Other Significant Commitments (continued) General Government At June 30, 2010, Pima County had contractual commitments related to service contracts for Elections of $2,285, Environmental Quality of $9,116, Finance and Risk Management of $23,332, Fleet Services of $8,421, Human Resources of $56,040, Institutional Health of $72,580 and Sheriff of $58,166. Funding for these expenditures will be provided from general fund revenues. Real Property had contractual commitments related to land acquisitions of $4,944, for which the funding of these expenditures will be provided by general obligation bonds. Natural Resources, Parks and Recreation At June 30, 2010, Pima County had contractual commitments related to construction contracts for Natural Resources, Parks and Recreation of $16,836. Funding for these expenditures will be provided from general obligation bonds. Pima Health Systems & Services At June 30, 2010, Pima County had contractual commitments related to service contracts for Pima Health Systems & Services of $127,816. Funding for these expenditures will be primarily provided from federal and state funding sources. Regional Wastewater Reclamation At June 30, 2010, the Regional Wastewater Reclamation Enterprise fund had construction contractual commitments of $48,708 and other contractual commitments related to service contracts of $2,376. Funding for these expenditures will be primarily from Sewer Revenue Bonds and related fees. Transportation At June 30, 2010, the Pima County Transportation Department had construction contractual commitments of $38,140 and other contractual commitments related to service contracts of $311. 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 13: Stewardship, Compliance, and Accountability (Deficit Fund Balances) The Special Districts Fund (non-major governmental fund) had a deficit fund balance at June 30, 2010, of $487. This deficit can be eliminated in the future through normal operations. 77 (This page is intentionally left blank) 78 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, 2010 (in thousands) Revenues: Property taxes Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Total revenues Budgeted Amounts Original Final $ 301,095 2,442 128,651 37,611 8,830 616 4,345 483,590 $ 301,095 2,442 128,651 37,611 8,830 616 4,345 483,590 Exhibit B - 1 Variance Over/Under Actual $ 304,441 2,738 128,927 40,356 7,011 1,198 4,868 489,539 $ 3,346 296 276 2,745 (1,819) 582 523 5,949 Expenditures: Assessor Board of Supervisors Clerk of Superior Court Community & Economic Development Constables County Administration County Attorney 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 8,409 1,881 10,072 13,579 994 79,807 19,289 106,334 2,706 630 7,700 21,426 30,675 31,180 2,653 118,140 27,554 1,824 1,537 2,454 3,635 2,281 6 494,766 8,409 1,881 10,072 13,579 994 79,807 19,289 106,334 2,706 630 7,700 21,426 30,675 31,180 2,653 118,140 27,554 1,824 1,537 2,454 3,635 2,281 6 494,766 7,897 1,680 10,053 12,598 990 35,815 18,693 87,089 2,702 530 7,544 21,366 31,331 29,519 2,577 117,379 27,443 1,820 1,398 2,018 3,635 2,281 3 426,361 512 201 19 981 4 43,992 596 19,245 4 100 156 60 (656) 1,661 76 761 111 4 139 436 Excess (deficiency) of revenues over (under) expenditures (11,176) (11,176) 63,178 74,354 Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers (out) Total other financing (uses) 4,962 (18,768) (13,806) 4,962 (18,768) (13,806) 204 8,439 (30,446) (21,803) 204 3,477 (11,678) (7,997) Net change in fund balance (24,982) (24,982) 41,375 66,357 Fund balance at beginning of year Fund balance at end of year $ 24,982 - $ 24,982 - See accompanying notes to schedule 79 $ 40,166 81,541 3 68,405 $ 15,184 81,541 PIMA COUNTY, ARIZONA Notes to Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund June 30, 2010 (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 Funds). 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, 2010, expenditures exceeded appropriations by $656 in the General Fund’s Justice and Law Enforcement department. These expenditures were funded by unspent appropriations by the County Administrator. Budgetary control department will monitor to control expenditures in the future. 80 PIMA COUNTY, ARIZONA Shedule of Retirement Plans' Funding Progress June 30, 2010 (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 2010 145,388 Health Insurance 2010 0 Pension 2009 Health Insurance 2009 Pension 2008 (75,477) 65.8% 7,040 (7,040) 142,164 212,291 0 7,088 Health Insurance 2008 133,286 0 220,865 $ 31,302 241.1% 0% 31,302 22.5% (70,127) 67.0% 33,557 209.0% (7,088) 0% 33,557 21.1% 198,116 (64,830) 67.3% 32,495 199.5% 8,056 (8,056) 0% 32,495 24.8% (14,537) 77.5% 19,885 73.1% 3,092 (3,092) 0.0% 19,885 15.6% 60,217 (11,477) 80.9% 20,411 56.2% 3,095 (3,095) 0.0% 20,411 15.1% 55,365 (9,408) 83.0% 21,455 43.8% 2,958 (2,958) 0% 21,455 13.8% CORP Pension 2010 Health Insurance 2010 Pension 2009 Health Insurance 2009 Pension 2008 Health Insurance 2008 $ 50,077 0 48,740 0 45,957 0 $ 64,614 81 $ $ (This page is intentionally left blank) 82 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 Fund - to account for resources used to finance activities involved in the conservation and improvement of public health, animal control and emergency managment. 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 - primarily to account for resources received under the Workforce Investment Act. Financing is provided by the federal government and County resources. 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 is intentionally left blank) 83 PIMA COUNTY, ARIZONA Combining Balance Sheet - Nonmajor Governmental Funds June 30, 2010 (in thousands) Transportation Special Revenue Funds Regional Flood Control Employment District and Training Health 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 Loan receivable Accounts receivable Inventory Prepaid expenditures Other assets Special assessments receivable Restricted cash and cash equivalents Total assets $ 18,640 $ 2,245 18 307 8,394 3 12 3,310 92 1,481 4 952 107 76 111 $ 10,164 $ 999 28 $ 151 316 5,819 2 32 38,933 $ 36 920 442 113 1,000 15 5 176 4,977 78 74 64 $ 29,888 $ 5,864 $ 11,359 $ 6,167 $ 41,518 $ 5,300 $ 2,371 $ 798 $ 733 $ 2,946 $ 874 $ 1,441 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: Nonspendable Restricted Committed Assigned Unassigned 773 4 241 1,080 213 6 128 1,264 196 1,030 885 1,532 1,919 779 10 118 2,685 7,641 2,896 1,837 5,870 4,019 5,033 1,485 20,762 187 3,424 15 9,507 1,560 187 25,362 10,863 1,091 (4) 64 1,525 (643) Total fund balances Total liabilities and fund balances 787 82 266 4,135 22,247 $ 29,888 (1,263) 2,968 $ 9,522 5,864 $ 84 11,359 297 $ 6,167 (1,322) 37,499 $ 41,518 267 $ 5,300 Exhibit C - 1 Total Other Governmental Funds Special Revenue Funds School Reserve $ Environmental Quality 1,515 $ 1,254 Special Districts $ Solid Waste 60 $ Library District 2,016 1 540 148 2 230 257 49 42 146 $ Stadium District 18,575 $ 1,045 40 1 2,487 59 3 98 231 18 30 17 10 $ 2,044 131 2,059 24,328 113 1,596 1,557 296 952 537 45 537 45 $ 2,104 $ 1,446 $ 93 $ 27 172 85 1 $ $ 597 $ 2,651 $ 19,799 $ 2,859 $ 129,552 $ 228 $ 732 $ $ 659 316 1 49 896 115 10,559 1 3,905 2,945 625 13,816 293 2,287 481 31,851 62 17,450 10 1,300 (2,063) 2,011 82,957 15,305 3,221 (5,793) 2,378 97,701 64 1 547 5 27 537 270 140 1,084 900 1 1,167 934 138 11 4,431 1,058 (498) 1,834 $ 2,104 1,306 $ 1,446 (487) $ 597 95,894 2,358 $ 2,651 85 17,512 $ 19,799 $ 2,859 $ 129,552 PIMA COUNTY, ARIZONA Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Governmental Funds For the Year Ended June 30, 2010 (in thousands) 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 Health $ $ Total revenues Expenditures: Current: General government Public safety Highways and streets Sanitation Health Culture and recreation Education and economic opportunity Debt service - principal - interest 396 53,809 243 $ 196 253 2,737 12,101 2,831 166 40 388 54,897 18,263 23,458 257 41 135 149 202 5,146 8,517 513 510 10,536 24,040 22,750 25,222 34,272 $ 22,548 $ 13,340 1,907 58 23,198 7,045 10,414 34,214 $ 34,214 26,924 10,414 Excess (deficiency) of revenues over (under) expenditures 20,683 (8,661) 13,626 Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers (out) 3,257 (19,328) 9,354 (20) Total other financing sources (uses) (16,071) 9,334 Net change in fund balances Fund balance at beginning of year 117 47 5,124 389 1,482 107 4 23,463 23,463 33,977 26 269 26,924 Total expenditures 17,287 35,531 (713) 7,935 (1,259) (10,034) 320 (31) 99 4,970 (8,237) 14 (163) (10,034) 289 (3,168) (149) 4,612 673 3,592 (424) 4,767 (1,408) 17,635 2,291 5,930 721 32,732 1,675 Change in reserve for inventory Change in reserve for prepaid expenditures Fund balance at end of year Other Grants Other 4 $ 22,247 $ 2,968 $ 86 9,522 $ 297 $ 37,499 $ 267 Exhibit C - 2 Special Revenue Funds School Reserve Environmental Quality Special Districts Solid Waste Library District $ $ 4,131 4,131 Stadium District 10 17 19 1 36 40 743 287 237 60 50 49,677 536 5,053 135,893 15,640 1,432 1,308 12,143 2,863 537 4,458 27,949 2,300 221,682 $ $ Total Other Governmental Funds 26,219 $ 536 1,920 897 $ 1,043 3,339 463 $ 1,521 669 36,538 19,366 34,274 5,637 30,035 35,527 34,406 107 36 2 5,637 2,994 30,798 4,293 4,337 32 4,337 2,994 (206) 34 5,637 30,798 4,293 195,926 503 (1,179) (2,849) (1,993) 25,756 (38) 1,000 (400) 568 (699) 4,059 (4,513) 99 23,938 (43,463) 396 (38) 600 (131) (454) (19,426) 265 465 (579) (2,980) (2,447) 6,330 20,492 4,825 91,376 (131) 396 (206) 2,049 1,041 (952) 2,937 4 (9) (9) $ 1,834 $ 1,306 $ (487) $ 2,358 87 $ 17,512 $ 2,378 $ 97,701 (This page is intentionally left blank) 88 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, 2010 (in thousands) Budget Revenues: Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ Variance Over/Under Actual 63,216 31,106 4,380 1,170 431 37,087 Expenditures: Capital outlay 200,125 162,306 37,819 Total expenditures 200,125 162,306 37,819 (136,909) (125,219) 11,690 125,000 815 11,266 (2,434) 9,647 Deficiency of revenues under expenditures 51,474 10,992 750 Exhibit C - 3 $ Other financing sources (uses): Face amount of long-term debt Proceeds from sale of capital assets Transfers in Transfers (out) Total other financing sources 11,881 (22,012) 114,869 125,000 815 23,147 (24,446) 124,516 Net change in fund balance (22,040) (703) Fund balance at beginning of year Fund balance at end of year $ 107,422 85,382 89 $ 126,863 126,160 $ (20,368) (6,612) 420 431 (26,129) 21,337 $ 19,441 40,778 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Debt Service Fund For the Year Ended June 30, 2010 (in thousands) Budget Revenues: Taxes Intergovernmental Investment earnings Total revenues $ Exhibit C - 4 Variance Over/Under Actual 68,930 7 1,000 69,937 $ 69,325 78 936 70,339 $ 395 71 (64) 402 Expenditures: Debt service - principal - interest - miscellaneous Total expenditures 84,450 25,654 35 110,139 83,565 24,097 430 108,092 885 1,557 (395) 2,047 Deficiency of revenues under expenditures (40,202) (37,753) 2,449 41,115 41,115 1,909 31,955 (32,361) 43,276 44,779 1,909 31,955 (32,361) 2,161 3,664 7,026 6,113 Other financing sources (uses): Premium on bonds Proceeds-refunding debt Payments to escrow agent Transfers in Total other financing sources Net change in fund balance Fund balance at beginning of year Fund balance at end of year 913 $ 14,861 15,774 90 $ 33,842 40,868 $ 18,981 25,094 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, 2010 (in thousands) Budget Revenues: Licenses and permits Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ Exhibit C - 5 Variance Over/Under Actual 694 54,877 226 69 183 56,049 $ 396 53,809 243 196 253 54,897 $ (298) (1,068) 17 127 70 (1,152) Expenditures: Highways and streets Total expenditures 40,619 40,619 34,214 34,214 6,405 6,405 Excess of revenues over expenditures 15,430 20,683 5,253 120 3,363 (19,859) (16,376) 3,257 (19,328) (16,071) Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers (out) Total other financing (uses) Net change in fund balance Fund balance at beginning of year Fund balance at end of year (946) $ 11,617 10,671 91 (120) (106) 531 305 4,612 $ 17,635 22,247 5,558 $ 6,018 11,576 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Health - Special Revenue Fund For the Year Ended June 30, 2010 (in thousands) Revenues: Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Total revenues Budget $ Exhibit C - 6 Variance Over/Under Actual 264 17,727 2,737 12,101 2,831 166 40 388 18,263 Expenditures: Health Health grants Total expenditures 17,044 9,667 26,711 16,750 10,174 26,924 294 (507) (213) Deficiency of revenues under expenditures (8,984) (8,661) 323 9,354 9,354 (20) 9,334 (20) (20) 370 673 303 1,497 2,291 4 2,968 794 4 1,101 Other financing sources (uses): Transfers in Transfers (out) Total other financing sources (uses) 2,729 11,091 3,442 201 9,354 Net change in fund balance Fund balance at beginning of year Change in reserve for inventory Fund balance at end of year $ $ 1,867 92 $ $ $ 8 1,010 (611) (35) 40 124 536 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, 2010 (in thousands) Budget Revenues: Taxes Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ Exhibit C - 7 Variance Over/Under Actual 23,293 40 50 35 180 23,598 $ 23,458 257 41 135 149 24,040 $ 165 217 (9) 100 (31) 442 Expenditures: Flood control Total expenditures 12,227 12,227 10,414 10,414 1,813 1,813 Excess of revenues over expenditures 11,371 13,626 2,255 Other financing (uses): Transfers (out) Total other financing (uses) (10,030) (10,030) (10,034) (10,034) Net change in fund balance 1,341 3,592 Fund balance at beginning of year Fund balance at end of year $ 4,800 6,141 93 $ 5,930 9,522 (4) (4) 2,251 $ 1,130 3,381 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, 2010 (in thousands) Budget Revenues: Intergovernmental Miscellaneous Total revenues $ Expenditures: Employment and training Total expenditures Net change in fund balance Fund balance at beginning of year Fund balance at end of year $ 24,494 24,494 Other financing sources (uses): Transfers in Transfers (out) Total other financing sources 94 22,548 202 22,750 $ 23,463 23,463 (1,505) 38 (1,467) 1,031 1,031 (277) (713) (436) 289 31 (31) 289 320 (31) 289 12 (424) (436) 403 415 $ Variance Over/Under Actual 24,053 164 24,217 Deficiency of revenues under expenditures Exhibit C - 8 $ 721 297 $ 318 (118) 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, 2010 (in thousands) Budget Revenues: Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Total revenues $ 4,816 6,797 548 669 8,175 21,005 Exhibit C - 9 Variance Over/Under Actual $ 5,146 8,517 513 510 10,536 25,222 $ 330 1,720 (35) (159) 2,361 4,217 Expenditures: General government Public safety Highways and streets Culture and recreation Education and economic opportunity Debt service - principal - interest Total expenditures 21,765 3,834 50 2,130 1,570 106 5 29,460 13,340 1,907 58 389 1,482 107 4 17,287 8,425 1,927 (8) 1,741 88 (1) 1 12,173 Excess (deficiency) of revenues over (under) expenditures (8,455) 7,935 16,390 Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers (out) Total other financing (uses) 1,513 (1,793) (280) 99 4,970 (8,237) (3,168) 99 3,457 (6,444) (2,888) Net change in fund balance (8,735) 4,767 13,502 Fund balance at beginning of year 25,545 32,732 7,187 Fund balance at end of year $ 16,810 95 $ 37,499 $ 20,689 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, 2010 (in thousands) Revenues: Intergovernmental Investment earnings Miscellaneous Total revenues Budget $ Expenditures: Community Services Clerk of Superior Court County Attorney Facilities Management Elections Justice Court Juvenile Court Parks and Recreation Adult Probation Sheriff Superior Court Medical Assistance County Administrator Total expenditures 47,135 35 376 47,546 $ 14,861 47,785 (239) Other financing sources (uses): Transfers in Transfers (out) Total other financing (uses) Net change in fund balance (239) 2,051 1,812 96 33,977 26 269 34,272 $ 5,124 15 3,605 3,654 3,982 1,154 100 9,807 90 9,060 4,686 281 110 $ Variance Over/Under Actual Deficiency of revenues under expenditures Fund balance at beginning of year Fund balance at end of year Exhibit C - 10 $ (13,158) (9) (107) (13,274) 94 10,001 47 9,028 7,045 439 117 16 35,531 9,737 (15) 49 3,982 1,154 6 (194) 43 32 (2,359) (158) (7) (16) 12,254 (1,259) (1,020) 14 (163) (149) 14 (163) (149) (1,408) (1,169) 1,675 267 $ (376) (1,545) 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, 2010 (in thousands) Budget Revenues: Intergovernmental Total revenues $ Expenditures: School Reserve grants Total expenditures Exhibit C - 11 Variance Over/Under Actual 4,981 4,981 $ 4,981 4,981 4,131 4,131 $ 4,337 4,337 (850) (850) 644 644 Deficiency of revenues under expenditures (206) (206) Net change in fund balance (206) (206) 2,049 (9) 1,834 (439) (9) (654) Fund balance at beginning of year Change in reserve for prepaid expenditures Fund balance at end of year 2,488 $ 2,488 97 $ $ 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, 2010 (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 1,771 1,276 18 18 3,083 1,920 897 10 17 19 2,863 2,669 1,103 3,772 2,146 848 2,994 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 98 $ 149 (379) 10 (1) 1 (220) 523 255 778 (689) (131) 396 396 396 396 (293) 265 558 1,041 1,306 199 757 842 549 $ $ $ 558 $ 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, 2010 (in thousands) Budget Revenues: Special assesments Investment earnings Total revenues $ Variance Over/Under Actual 401 $ 401 Expenditures: Highways and streets Debt service - principal - interest Total expenditures Exhibit C - 13 536 1 537 $ 135 1 136 2 (2) 62 62 32 34 30 28 Excess of revenues over expenditures 339 503 164 Other financing uses: Transfers (out) Total other financing uses (38) (38) (38) (38) Net change in fund balance 301 465 Fund balance at beginning of year Fund balance at end of year (946) (645) $ 99 $ (952) (487) 164 $ (6) 158 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, 2010 (in thousands) Budget Revenues: Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ Expenditures: Sanitation Total expenditures Deficiency of revenues under expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources Net change in fund balance Fund balance at beginning of year Fund balance at end of year $ Exhibit C - 14 Variance Over/Under Actual 1,200 3,864 30 34 5,128 $ 1,043 3,339 36 40 4,458 $ (157) (525) 6 6 (670) 7,178 7,178 5,637 5,637 (2,050) (1,179) 871 1,000 1,000 1,000 (400) 600 (400) (400) (1,050) (579) 471 868 (182) 100 $ 2,937 2,358 1,541 1,541 $ 2,069 2,540 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, 2010 (in thousands) Budget Revenues: Taxes Intergovernmental Fines and forfeits Investment earnings Miscellaneous Total revenues $ Exhibit C - 15 Variance Over/Under Actual 26,001 370 600 272 390 27,633 $ 26,219 463 743 287 237 27,949 $ 218 93 143 15 (153) 316 Expenditures: Culture and recreation Total expenditures 37,483 37,483 30,798 30,798 6,685 6,685 Deficiency of revenues under expenditures (9,850) (2,849) 7,001 Other financing sources (uses): Transfers in Transfers (out) Total other financing sources (uses) 568 568 (699) (131) 568 (699) (699) Net change in fund balance (9,282) (2,980) 6,302 Fund balance at beginning of year Fund balance at end of year 16,892 7,610 20,492 17,512 3,600 9,902 $ 101 $ $ 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, 2010 (in thousands) Budget Revenues: Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ Exhibit C - 16 Variance Over/Under Actual 2,266 1,521 669 60 50 2,300 5,056 5,056 4,293 4,293 763 763 Deficiency of revenues under expenditures (2,790) (1,993) 797 Other financing sources (uses): Transfers in Transfers (out) Total other financing sources (uses) 3,581 (4,513) (932) 4,059 (4,513) (454) 478 Net change in fund balance (3,722) (2,447) 1,275 Expenditures: Culture and recreation Total expenditures Fund balance at beginning of year Fund balance at end of year $ 1,404 850 12 4,955 1,233 102 $ $ 4,825 2,378 $ 117 (181) 48 50 34 478 $ (130) 1,145 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 seven public parking garages located in downtown Tucson. PIMA COUNTY, ARIZONA Combining Statement of Net Assets Nonmajor Enterprise Funds June 30, 2010 (in thousands) Development Services Assets Current assets: Cash and cash equivalents Interest receivable Due from other funds Due from other governments 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 $ 3,486 3 12 9 328 54 3,892 Exhibit C - 17 Total Other Enterprise Funds Parking Garages 2,836 6,282 5 26 23 338 54 6,728 1,768 12,927 231 (8,709) 1,768 12,927 1,326 (9,746) 58 58 6,217 6,217 6,275 6,275 3,950 9,053 13,003 Liabilities Current liabilities: Accounts payable Employee compensation Due to other funds Due to other governments Total current liabilities 20 694 32 271 15 746 120 406 291 709 32 120 1,152 Total liabilities 746 406 1,152 58 3,146 6,217 2,430 6,275 5,576 1,095 (1,037) Total assets Net assets Invested in capital assets Unrestricted Total net assets $ $ 3,204 103 $ 2,796 2 14 14 10 8,647 $ $ 11,851 PIMA COUNTY, ARIZONA Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Nonmajor Enterprise Funds June 30, 2010 (in thousands) Development Services Operating revenues: Charges for services Other $ 5,886 154 Exhibit C - 18 Total Other Enterprise Funds Parking Garages $ 1,999 $ 7,885 154 Total net operating revenues 6,040 1,999 8,039 Operating expenses: Employee compensation Operating supplies and services Utilities Repair and maintenance General and administrative Consultants and professional services Depreciation Total operating expenses 5,908 65 84 81 1,556 44 207 7,945 323 26 182 363 792 6 216 1,908 6,231 91 266 444 2,348 50 423 9,853 Operating loss (1,905) Nonoperating revenues: Investment earnings Total nonoperating revenues: Income/(loss) before contributions and transfers 28 63 35 28 63 119 2,000 (55) Change in net assets Net assets at beginning of year $ (1,751) 1,300 (1,300) 3,300 (1,355) 75 119 194 3,129 8,528 11,657 3,204 104 (1,814) 35 (1,870) Transfers in Transfers (out) Net assets at end of year 91 $ 8,647 $ 11,851 PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Nonmajor Enterprise Funds For the Year Ended June 30, 2010 (in thousands) Exhibit C - 19 Development Services Cash flows from operating activities: Cash received from other funds for goods and services provided 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 27 5,619 100 (163) (2,850) (4,789) Total Other Enterprise Funds Parking Garages $ $ (325) 27 7,598 100 (1,534) (2,850) (5,114) 283 (1,773) 1,979 (1,371) (2,056) Cash flows from noncapital financing activities: Cash transfers in from other funds Cash transfers out to other funds Loans with other funds 2,000 (30) 19 (13) 2,000 (30) 6 Net cash provided by (used for) noncapital financing activities 1,989 (13) 1,976 Cash flows from capital and related financing activities: Proceeds from sale of capital assets 1 1 Net cash provided by capital and related financing activities 1 1 Cash flows from investing activities: Interest on cash and investments 49 34 83 Net cash provided by investing activities 49 34 83 (17) 304 287 2,492 5,995 Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year 3,503 Cash and cash equivalents at end of year $ (Continued) 105 3,486 $ 2,796 $ 6,282 PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Nonmajor Enterprise Funds For the Year Ended June 30, 2010 (in thousands) Exhibit C - 19.1 (continued) Reconciliation of operating income/(loss) to net cash provided by (used for) operating activities Operating income/(loss) Adjustments to reconcile operating income/(loss) to net cash provided by (used for) operating activities: Development Services $ (1,905) Depreciation and amortization Changes in assets and liabilities: Decrease (increase) in assets: Accounts receivable Due from other governments Prepaid expenses Increase (decrease) in liabilities: Accounts payable Due to other governments Other current liabilities Parking Garages $ 207 216 423 (312) (9) 8 (6) (14) 4 (318) (23) 12 (10) (55) 49 (2) (65) 49 (37) (35) Net cash provided by (used for) operating activities $ 91 Total Other Enterprise Funds $ (1,814) (2,056) $ 283 $ (1,773) Noncash investing, capital and financing activities during the year ended June 30, 2010: Development Services Enterprise Fund retired fully depreciated assets with a book value of $1. Development Services Enterprise Fund transferred capital assets with a net book value of $25: $4 to the County's general government, $16 to Other Internal Service Funds and $5 to the Regional Wastewater Reclamation Enterprise Fund. 106 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, network infrastructure and telecommunication services to County departments. PIMA COUNTY, ARIZONA Combining Statement of Net Assets Internal Service Funds June 30, 2010 (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 $ $ $ 50,327 60 287 22,336 21 384 135 22,989 72,663 81 287 113 15 384 698 74,241 210 (135) 158 614 33,485 (16,789) 16 592 614 33,695 (16,924) 174 825 825 17,326 17,326 18,151 18,151 52,077 40,315 92,392 726 76 79 3,906 2,923 7,710 930 634 4 1,656 710 83 3,906 2,923 9,278 113 15 563 51,252 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 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 17,959 13,590 31,549 Total liabilities 39,259 1,568 40,827 825 11,993 17,326 21,421 18,151 33,414 1,568 17,959 13,590 31,549 Net assets Invested in capital assets Unrestricted Total net assets $ 12,818 107 $ 38,747 $ 51,565 PIMA COUNTY, ARIZONA Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Internal Service Funds For the Year Ended June 30, 2010 (in thousands) Self Insurance Trust Operating revenues: Charges for services Other $ 19,344 56 Exhibit C - 21 Total Internal Service Funds Other Internal Service $ 19,951 1,678 $ 39,295 1,734 Total operating revenues 19,400 21,629 41,029 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 1,676 181 15 9,893 3,588 1,395 91 283 35 17,157 4,771 5,128 978 1,151 1,657 3,505 22 2,624 19,836 6,447 5,309 993 9,893 4,739 3,052 3,596 305 2,659 36,993 2,243 1,793 4,036 Operating income Nonoperating revenues (expenses): Intergovernmental revenue Investment earnings (Loss) on disposal of capital assets 35 550 Total nonoperating revenues: Income before capital contributions and transfers: 287 (161) 35 837 (161) 585 126 711 2,828 1,919 4,747 132 132 16 (157) 16 (216) Capital contributions Transfers in Transfers (out) (59) Change in net assets Net assets at beginning of year Net assets at end of year $ 2,769 1,910 4,679 10,049 36,837 46,886 12,818 108 $ 38,747 $ 51,565 PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2010 (in thousands) Cash flows from operating activities: Cash received from other funds 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 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 19,344 44 (3,663) (1,922) (8,509) (1,187) 4,107 19,951 1,734 (10,535) (2,109) (4,750) 39,295 1,778 (14,198) (4,031) (8,509) (5,937) 4,291 8,398 Cash flows from noncapital financing activities: Cash transfers out to other funds Loans with other funds Intergovernmental receipts (59) 220 35 (157) 3 (216) 223 35 Net cash provided by (used for) noncapital financing activities 196 (154) 42 Cash flows from capital and related financing activities: Proceeds from sale of capital assets Purchase of capital assets (34) 90 (1,316) 90 (1,350) Net cash used for capital and related financing activities (34) (1,226) (1,260) Cash flows from investing activities: Interest on cash and investments 614 309 923 Net cash provided by investing activities 614 309 923 Net increase in cash and cash equivalents 4,883 3,220 8,103 45,444 19,116 64,560 Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ (Continued) 109 50,327 $ 22,336 $ 72,663 PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2010 (in thousands) Exhibit C - 22.1 (continued) Reconciliation of operating income to net cash provided by operating activities Operating income Self Insurance Trust $ 2,243 Other Internal Service $ 1,793 Total Internal Service Funds $ 4,036 35 2,624 2,659 Adjustments to reconcile operating income to net cash provided by 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 Reported but unpaid losses Incurred but not reported losses Other current liabilities (12) 3 53 17 57 190 295 (2,670) 4,054 (28) Net cash provided by operating activities $ 4,107 (9) 53 17 247 (277) 18 (2,670) 4,054 (7) 21 $ 4,291 $ Noncash investing, capital and financing activities during the year ended June 30, 2010: Other Internal Service Funds (Fleet Services) transferred in capital assets with a net book value of $16, received capital contribution with a value of $132 and sold capital assets with a net book value of $251. 110 8,398 Combining Statements and Other Schedules Fiduciary Funds PIMA COUNTY, ARIZONA Combining Statement of Fiduciary Net Assets Investment Trust Funds June 30, 2010 (in thousands) Treasurer's Investment Pool Assets Cash and cash equivalents Interest receivable $ 144,928 216 Total assets Exhibit C - 23 Total Investment Trust Funds Individual Investment Accounts $ 145,144 177,037 $ 177,037 321,965 216 322,181 Liabilities Total liabilities Net Assets Held in trust for pool participants $ 145,144 111 $ 177,037 $ 322,181 PIMA COUNTY, ARIZONA Combining Statement of Changes in Fiduciary Net Assets Investment Trust Funds For the Year Ended June 30, 2010 (in thousands) Treasurer's Investment Pool Additions Contributions: Participants Total contributions $ Investment earnings: Total investment earnings 2,351,103 2,351,103 Exhibit C - 24 Total Investment Trust Funds Individual Investment Accounts $ 246,550 246,550 $ 2,597,653 2,597,653 2,209 2,209 318 318 2,527 2,527 2,353,312 246,868 2,600,180 Deductions Distributions to participants 2,350,639 199,545 2,550,184 Total deductions 2,350,639 199,545 2,550,184 2,673 47,323 49,996 142,471 129,714 272,185 Total additions Net increase Net assets held in trust July 1, 2009 Net assets held in trust June 30, 2010 $ 112 145,144 $ 177,037 $ 322,181 PIMA COUNTY, ARIZONA Combining Statement of Fiduciary Net Assets Agency Funds June 30, 2010 (in thousands) Treasurer's Clearing Payroll Assets Cash and cash equivalents $ Total assets $ 3,067 Liabilities Employee compensation Due to other governments Deposits and rebates Total liabilities 3,067 3,007 Exhibit C - 25 Other $ 68,416 Total $ 3,007 68,416 74,490 165 2,842 51,017 17,399 3,067 51,182 20,241 3,067 $ 3,067 113 $ 74,490 3,007 $ 68,416 $ 74,490 PIMA COUNTY, ARIZONA Combining Statement of Changes in Fiduciary Net Assets Agency Funds For the Year Ended June 30, 2010 (in thousands) Payroll Clearing Assets Cash and cash equivalents Total assets Balance 06/30/09 $ Additions 3,931 3,931 $ 688,713 688,713 Exhibit C - 26 Balance 06/30/10 Deductions $ 689,577 689,577 $ 3,067 3,067 Liabilities Employee compensation Total liabilities 3,931 3,931 688,713 688,713 689,577 689,577 3,067 3,067 Treasurer's Clearing Assets Cash and cash equivalents Total assets 3,255 3,255 2,055,634 2,055,634 2,055,882 2,055,882 3,007 3,007 Liabilities Due to other governments Deposits and rebates Total liabilities 25 3,230 3,255 1,094,010 961,624 2,055,634 1,093,870 962,012 2,055,882 165 2,842 3,007 Other Assets Cash and cash equivalents Total assets 59,440 59,440 265,891 265,891 256,915 256,915 68,416 68,416 Liabilities Due to other governments Deposits and rebates Total liabilities 38,481 20,959 59,440 183,846 82,045 265,891 171,310 85,605 256,915 51,017 17,399 68,416 Totals - All Agency Funds Assets Cash and cash equivalents Total assets 66,626 66,626 3,010,238 3,010,238 3,002,374 3,002,374 74,490 74,490 Liabilities Employee compensation Due to other governments Deposits and rebates Total liabilities 3,931 38,506 24,189 66,626 688,713 1,277,856 1,043,669 3,010,238 689,577 1,265,180 1,047,617 3,002,374 3,067 51,182 20,241 74,490 $ 114 $ $ $ PIMA COUNTY Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2010 INTRODUCTORY SECTION FINANCIAL SECTION STATISTICAL SECTION Financial Trends Information Revenue Capacity Information Debt Capacity Information Demographic and Economic Information Operating Information STATISTICAL 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. 115 $ $ $ 716,720 29,322 4,171 38,694 3,669 13,217 41,271 847,064 43,339 6,666 52,734 15,748 19,684 55,941 790,674 1,245 3,008 3,669 13,217 (24,744) 440,985 1,216 18,982 15,748 19,684 (4,109) 432,437 596,562 444,590 66,015 406,079 60,050 358,237 380,916 2,926 35,686 5,450 33,752 272,130 29,322 $ 43,339 215,646 2003 $ $ 3,696 4,011 36,254 962,641 6,185 17,456 52,363 842,676 499 88 3,696 4,011 (4,766) 454,690 451,162 41,020 507,951 5,686 17,368 52,363 391,514 2004 (2) Beginning in fiscal year 2005-06 and in 2008-09, all special revenue funds were reclassified and reported from a functional perspective. 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 Worker's compensation Regional Wastewater Reclamation Healthcare Unrestricted Total primary government net assets 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 Governmental activities Invested in capital assets, net of related debt Restricted for: Special revenue Highways and streets Debt service Capital projects Healthcare Worker's compensation Unrestricted Total governmental activities net assets 2002 $ $ 11,907 27,027 9,042 3,511 6,319 54,302 1,370,950 59,789 $ 48,379 5,464 53,748 1,495,175 53,384 21,353 8,372 77,088 1,227,387 48,379 5,464 15,284 535,822 3,511 6,319 20,851 488,749 1,199,053 438 466,257 468 457,600 38,464 959,353 9,042 33,451 882,201 761,130 11,439 27,027 $ 2006 53,384 21,353 7,934 77,088 59,789 741,453 Fiscal Year 2005 PIMA COUNTY, ARIZONA Net Assets by Component Last Nine Fiscal Years (in thousands) (accrual basis of accounting) 38,628 9,985 57,101 $ 1,571,913 63,014 16,734 9,554 125,947 1,250,950 574 35,480 38,628 9,985 10,845 572,462 476,950 46,256 999,451 63,014 16,734 8,980 90,467 $ 774,000 2007 5,956 13,732 110,175 $ 1,717,367 17,390 14,403 118,847 5,883 9,017 69,327 $ 1,815,529 21,349 45,385 74,424 78,080 71,618 819 14,479 5,883 9,017 34,477 604,393 539,718 34,850 1,211,136 78,080 21,349 44,566 59,945 972,346 1,512,064 $ 2009 1,365,246 791 37,925 5,956 13,732 56,397 597,623 482,822 53,778 1,119,744 71,618 17,390 13,612 80,922 $ 882,424 2008 16,110 19,348 179,880 $ 1,988,455 25,749 13,454 69,562 64,991 1,599,361 13,454 11,623 16,110 15,943 29,914 637,584 550,540 149,966 1,350,871 57,939 3,405 64,991 25,749 $ 1,048,821 2010 Exhibit D - 1 116 $ $ 7,822 1,037 1,662 196 121,587 5,665 172,779 6,971 1,379 1,787 214 121,934 18,207 185,448 74,816 221,970 8,373 1,346 306,505 802,847 23,917 84,457 31,326 35,033 820 654 15,779 496,342 131,925 132,939 39,492 18,667 10,804 5,339 $ $ 21,542 8,498 4,916 65,494 195,445 7,917 1,254 270,110 750,210 23,120 73,243 27,081 37,565 727 649 14,391 480,100 137,296 123,513 42,515 2003 $ $ 8,772 918 1,709 101 135,119 17,413 207,471 21,422 10,289 11,728 71,804 268,869 9,617 1,377 351,667 876,150 30,165 76,894 32,727 33,093 805 967 15,012 524,483 140,827 151,860 42,133 2004 $ $ 1,797 314 133,113 12,188 217,422 9,526 1,643 298 125,121 23,663 210,666 82,701 256,583 14,422 1,479 355,185 1,002,494 165 19,463 647,309 208,293 132,583 70,392 7,258 32,043 103,085 34,510 39,517 26,033 8,136 21,617 4,531 9,693 $ $ Fiscal Year 2006 22,881 6,985 20,549 76,079 249,809 10,857 1,494 338,239 931,474 31,798 96,199 29,663 39,714 849 161 16,152 593,235 194,873 118,412 65,414 2005 * 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. 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 Business-type activities: Regional Wastewater Reclamation Pima Health System & Services Development Services Parking Garages Total business-type activities expenses Total primary government expenses 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 2002 PIMA COUNTY, ARIZONA Changes in Net Assets Last Nine Fiscal Years (in thousands) (accrual basis of accounting) $ $ 2,991 698 139,324 15,085 221,307 26,663 9,797 11,732 4,747 10,270 98,222 261,859 15,400 1,579 377,060 1,099,776 168 18,924 722,716 223,266 148,831 92,985 9,623 33,800 97,154 55,482 42,483 2007 3,031 716 144,479 48,672 $ 257,161 25,502 9,550 9,316 5,930 9,965 106,803 295,494 14,750 1,877 418,924 1,196,617 138 22,860 777,693 $ 239,399 165,715 88,488 9,658 36,977 106,546 60,616 47,296 2008 $ $ 2,754 691 131,361 68,535 259,782 26,283 10,386 4,616 4,668 10,488 105,139 224,959 9,992 1,696 341,786 1,070,809 (235) 26,780 729,023 212,196 149,253 79,251 7,434 31,541 115,513 60,520 46,770 2009 $ $ (continued) 2,532 749 142,840 65,820 272,907 31,050 10,218 5,317 3,378 11,003 110,618 204,619 7,924 1,906 325,067 1,020,974 428 26,403 695,907 214,161 145,697 68,691 6,669 33,086 87,107 61,642 52,023 2010 Exhibit D - 2 117 390,878 63,909 32,317 96,226 Total primary government Change in net assets Governmental activities Business-type activities Total primary government $ 13,954 32,317 905 2,888 3,309 11,261 (13,954) 358,561 237,049 2,495 1,600 76,752 21,093 9,550 5,479 8,157 10,340 Business-type activities: State shared tax Investment earnings Miscellaneous Capital contributions Extraordinary item Transfers Total business-type activities 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 (294,652) (294,652) Net (expense) revenue Governmental activities Business-type activities Total governmental activities net expense 63,601 179,322 7,754 1,454 6,505 258,636 444,084 $ 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 (continued) $ $ 44,311 12,079 56,390 404,174 959 1,727 5,828 12,479 (2,673) 17,980 36,300 85,496 13,705 99,201 442,561 13,196 40,053 1,146 747 2,750 22,214 (13,196) 402,508 (7,447) (17,980) 367,874 (317,012) (26,348) (343,360) 325,319 532,790 82,432 224,820 11,830 1,460 4,777 272,507 2,745 1,709 83,202 23,413 3,201 6,321 3,102 14,063 5,441 $ $ 2004 251,844 2,557 1,597 78,504 21,904 9,216 7,052 5,064 12,774 2,789 (323,563) (24,221) (347,784) 282,284 455,063 71,626 195,872 8,464 1,413 4,909 2003 $ $ 70,711 43,971 114,682 477,704 (1,935) 24,424 1,163 1,609 2,865 20,722 1,935 453,280 294,643 2,822 1,819 91,510 23,630 7,571 6,771 6,140 16,254 185 (382,569) 19,547 (363,022) 357,786 568,452 92,379 244,932 14,730 1,507 4,238 2005 $ $ 63,863 47,073 110,936 513,688 134 19,938 3,849 1,348 14,607 (134) 493,750 316,170 6,856 1,808 103,158 25,894 7,975 5,683 12,942 12,828 247 323 (429,887) 27,135 (402,752) 104,501 253,748 17,140 1,485 4,997 449 382,320 599,742 Fiscal Year 2006 PIMA COUNTY, ARIZONA Changes in Net Assets Last Nine Fiscal Years (in thousands) (accrual basis of accounting) $ $ 39,804 36,640 76,444 572,741 (721) 31,528 5,510 1,522 25,217 721 541,213 343,525 8,715 1,884 106,985 26,967 9,468 5,149 16,439 16,309 5,051 (501,409) 5,112 (496,297) 106,266 257,142 11,239 1,548 5,174 803 382,172 603,479 2007 $ $ 43,711 25,868 69,579 572,137 (113) 7,894 6,721 1,286 113 564,243 377,810 8,176 1,952 103,171 27,166 7,748 6,365 16,326 15,416 (520,532) 17,974 (502,558) 106,448 291,980 8,992 1,720 4,806 22,952 436,898 694,059 2008 $ $ 91,392 6,770 98,162 561,047 (4,005) 414 2,025 2,394 139,734 33,191 172,925 566,316 (538) 3,582 1,236 2,884 538 562,734 (4,343) 4,005 560,633 1,140 (423,000) 29,609 (393,391) 127,889 205,176 5,886 1,985 4,421 9,319 354,676 627,583 416,500 5,688 1,515 84,767 24,203 4,081 7,940 5,266 16,579 $ $ 2010 393,255 6,591 1,534 89,177 25,869 5,741 6,123 5,875 21,323 (469,241) 6,356 (462,885) 105,162 216,108 5,654 1,676 4,626 14,916 348,142 607,924 2009 Exhibit D - 2 118 $ $ 61,134 46,985 116,661 48,616 30,986 88,778 31,142 2,486 28,656 8,542 $ $ 9,176 21,886 2,233 19,653 2002 $ $ 131,847 82,793 42,312 6,742 33,548 2,549 30,999 2003 $ $ 150,198 97,270 45,325 7,603 32,696 7,068 25,628 Fiscal Year 2004 $ $ 214,780 147,650 54,384 12,746 37,227 4,056 33,171 2005 $ $ 162,423 84,472 66,167 11,784 51,575 5,152 46,423 2006 *Due to implementation of GASB 54 in FY 2010 categories regarding fund balances have been redefined. See Note 2 page 50 for details. All other governmental funds Reserved Unreserved, reported in: Special revenue funds Nonspendable* Restricted Committed Assigned Unassigned Capital projects funds Nonspendable* Restricted Committed Assigned Unassigned Debt Service Assigned Total other governmental funds General Fund Reserved Unreserved Nonspendable* Restricted Committed Assigned Unassigned Total general fund 2001 PIMA COUNTY, ARIZONA Fund Balances - Governmental Funds Last Ten Fiscal Years (amounts in thousands) (modified accrual basis of accounting) $ $ 173,100 89,328 69,773 13,999 57,560 8,889 48,671 2007 $ $ 247,188 152,643 77,451 17,094 70,389 5,415 64,974 2008 $ $ 252,081 126,821 86,121 39,139 40,166 4,363 35,803 2009 $ $ 18 124,830 1,487 52 (227) 40,868 264,729 2,011 82,957 15,305 3,221 (5,793) 3,093 73,837 81,541 4,089 522 2010 Exhibit D - 3 119 11.76% 3,047 Net change in fund balances Debt service as a percentage of noncapital expenditures 4,315 (107) Extraordinary item Residual equity - net Change in reserves - net 50,358 34,335 (72,276) 10.26% 35,964 50 70,271 81,921 52,753 (65,658) 796 (22,551) 590 22,420 (34,357) 597,146 555,287 (13,578) 23,102 73,136 25,581 37,524 109,670 37,342 14,128 391 22,584 71,260 22,242 32,458 87,673 39,823 15,003 186 562,789 244,807 598 6,077 260,218 31,112 4,882 6,952 8,143 125,416 123,021 27,835 $ $ 2002 122,023 117,058 24,977 541,709 227,542 845 4,882 253,863 26,613 4,365 15,468 8,131 12,417 $ $ Total other financing sources (uses) Proceeds-refunding bonds Issuance cost on bonds Premium on bonds Payments to refund escrow agents Capital leases Proceeds from sale of capital assets Compensated loss on capital assets Face amount of long-term debt Transfers in Transfers (out) Other financing sources (uses): Excess (deficiency) of revenues over (under) expenditures Total expenditures 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 Total revenues Taxes Special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Revenues 2001 $ $ 11.56% 17,592 629 (6,237) 70,321 85,000 78,457 (93,597) 177 37 (163) 410 (47,121) 613,260 24,029 84,238 25,214 35,057 97,147 45,544 15,695 24 132,416 127,155 26,741 566,139 258,375 1,023 6,087 245,378 35,721 5,047 4,152 10,356 2003 $ $ 11.53% 17,499 (366) 44,255 65,000 68,583 (89,916) 406 148 (6,846) 6,880 (26,390) 649,302 30,322 76,725 27,141 32,146 103,167 49,025 14,851 161 140,319 146,275 29,170 622,912 279,527 505 6,566 273,225 43,505 5,010 2,656 11,918 2004 $ $ 9.87% 69,113 385 119,523 116,200 50,008 (46,962) 27 250 (50,795) 717,212 30,802 96,996 23,172 38,098 127,632 42,891 16,127 25 193,308 109,798 38,363 666,417 $ $ Fiscal Year 300,972 244 7,265 278,414 53,568 5,967 5,181 14,806 2005 10.90% (38,009) (177) 9,168 4,836 59,948 (56,263) 231 416 (47,000) 761,343 203,881 121,229 39,394 6,271 30,038 103,034 28,561 37,918 121,007 50,547 19,448 15 714,343 321,474 215 7,452 291,059 63,582 6,014 11,382 13,165 2006 $ $ PIMA COUNTY, ARIZONA Changes in Fund Balances - Governmental Funds Last Ten Fiscal Years (amounts in thousands) (modified accrual basis of accounting) 9.88% 16,368 (211) 148,576 146,320 86,089 (86,688) 1,426 1,429 (131,997) 893,332 222,434 132,930 42,683 6,766 32,311 97,168 45,197 38,474 202,659 53,733 18,965 12 761,335 348,700 521 7,132 303,392 63,508 6,550 13,988 17,544 2007 $ $ 10.48% 86,917 (55) 178,017 175,000 128,406 (127,692) 312 27 1,964 (91,045) 895,147 237,640 149,475 43,741 8,310 34,352 106,607 50,509 42,286 139,539 59,719 22,639 330 804,102 381,862 556 7,710 312,634 58,890 6,480 14,218 21,752 2008 $ $ 15.89% (25,330) (55) 115,818 109,400 171,186 (166,319) 876 675 (141,093) 926,378 222,309 144,617 38,132 6,666 31,626 115,481 51,657 42,299 146,334 100,384 26,849 24 785,285 396,241 441 6,989 292,236 55,346 6,283 5,335 22,414 2009 $ $ 15.31% 54,478 128,066 125,000 98,800 (98,355) 1,118 1,909 (32,361) 31,955 (73,588) 892,235 221,144 136,744 34,274 5,637 32,737 87,089 50,198 48,402 162,306 87,307 26,414 433 818,647 423,443 536 7,791 296,004 60,376 8,443 4,612 17,442 2010 Exhibit D - 4 (This page is intentionally left blank) 120 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. 121 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 5,889,572 $ 246,938 263,270 281,243 302,323 323,147 359,662 428,486 493,055 525,779 536,958 $ 17,692 18,348 21,508 21,595 27,920 29,803 30,802 35,442 37,783 39,797 $ 4,361,493 4,669,335 5,022,474 5,412,550 5,849,549 6,467,202 7,353,331 8,239,672 8,985,712 8,939,647 5.5828 5.4998 5.4981 5.4967 5.4611 5.3406 5.0674 4.6702 4.5917 4.6798 Total Direct Tax Rate $ 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 82,348,215 Estimated Limited Value 11.71% 11.70% 11.70% 11.58% 11.55% 11.46% 11.43% 11.27% 11.15% 10.86% Assessed Value as a Percentage of Limited Value 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. $ Other Taxable Assessed Value Notes: 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 2,473,320 Vacant Land Pima County Assessor's Office. $ Residential Property Exhibit D - 5 Source: 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Tax Year Commercial Property PIMA COUNTY, ARIZONA Taxable Assessed Value and Estimated Actual Value of Property Last Ten Tax Years (amounts in thousands) 122 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1.1202 1.1202 1.1569 1.1847 1.2364 1.2257 1.1321 0.9601 0.9344 0.9550 0.2828 0.2706 0.2513 0.2383 0.2383 0.2383 0.2258 0.2143 0.2035 0.1999 0.1300 0.1300 0.1200 0.1200 0.1200 0.1200 0.1000 0.1000 0.1000 0.1000 10.4000 10.4000 10.4000 12.9000 12.9000 12.9000 12.9000 19.3500 19.3500 19.3500 Flowing Wells Irrigation District (2) 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 Silverbell Irrigation District (2) 4.0720 4.0720 4.0720 4.0720 4.0720 3.8420 3.6020 3.3913 3.3133 3.3133 County Primary 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. (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). 1.5470 1.5333 1.4884 1.3428 1.3114 1.2515 1.1845 1.1355 1.0770 1.0848 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 Tax Year 0.4974 0.4889 0.4717 0.4560 0.4358 0.0000 0.0000 0.0000 0.3306 0.3564 State Community of Education College Arizona Assistance District Central AZ City City Water of of South Conserv Tucson Tucson District 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Tax Year 24.7500 24.7500 50.0000 60.0000 60.0000 60.0000 65.0000 66.0000 66.0000 66.0000 CortaroMarana Irrigation District (2) 0.8950 0.8150 0.8150 0.8150 0.7150 0.7150 0.6850 0.6050 0.7100 0.7500 County Secondary 0.2124 0.2124 0.2124 0.2124 0.2575 0.3675 0.3975 0.3393 0.2643 0.3100 County Library District 0.5000 Mobile Home Relocation District (3) 0.1438 Town of Casas Adobes Incorporation Costs Overlapping Rates 0.3546 0.3546 0.3546 0.3546 0.3746 0.3746 0.3446 0.2935 0.2635 0.2635 Flood Control District (1) County Direct Rates 0.2313 Town of Tortolita Incorporation Costs 0.0488 0.0458 0.0441 0.0427 0.0420 0.0415 0.0383 0.0411 0.0406 0.0430 Fire District Assistance 5.5828 5.4998 5.4981 5.4967 5.4611 5.3406 5.0674 4.6702 4.5917 4.6798 Total 2.8000 2.8000 2.8000 2.8000 2.8000 2.8000 2.8000 0.3000 0.3000 0.3000 0.3000 0.3000 Gladden Farms Vanderbilt Farms Community Community Facilities Facilities District District PIMA COUNTY, ARIZONA Direct and Overlapping Property Tax Rates Last Ten Tax Years (per $100 of assessed value) 3.3000 3.3000 3.3000 3.3000 Quail Creek Community Facilities District 0.3000 0.3000 Gladden Farms Saguaro Springs Phase II Community Community Facilities Facilities District District Exhibit D - 6 123 8.0490 7.4427 Flowing Wells Unified (#8) Amphitheater Unified (#10) 7.2295 9.1329 7.5344 7.2314 8.7860 Catalina Foothills Unified (#16) Vail Elementary (#20) Sahuarita Unified (#30) 6.3052 2.0647 Altar Valley Elementary (#51) Unorganized* 2.0296 6.3035 6.4230 1.9583 6.3615 5.6853 2.3198 1.8931 6.2759 3.9915 2.2216 1.8090 6.2607 4.8856 2.1532 *County Education District; applies only to those geographical areas within Pima County not part of formal school districting. 6.3661 Redington Elementary (#44) Indian Oasis Unified (#40) 2.4398 2.4346 6.1171 Continental Elementary (#39) 6.4699 8.0930 6.6965 7.6596 8.1495 6.7510 6.8422 4.4994 5.7985 8.6482 6.4258 7.1232 6.0991 7.8829 2005 Empire Elementary (#37) 8.3095 7.0008 6.6459 4.4316 5.6661 8.4846 6.3375 6.5883 6.5034 8.3286 2004 3.7121 9.0113 7.1748 7.0256 5.3016 7.1785 9.1041 6.7601 6.6568 6.7979 8.7610 2003 San Fernando Elementary (#35) 7.0956 4.1555 7.0508 Ajo Unified (#15) 6.6818 6.8484 9.6945 7.0207 7.2175 7.3623 9.2780 2002 Tanque Verde Unified (#13) 10.3706 7.7028 Marana Unified (#6) Sunnyside Unified (#12) 9.8088 2001 Tucson Unified (#1) School District 1.7394 5.7696 4.8853 2.0682 8.4864 3.7481 7.7345 6.7032 6.7428 4.4929 5.4806 9.1529 6.1193 6.8677 5.9117 7.3857 2006 1.6020 5.8086 4.8952 1.8970 7.5703 3.7900 6.1807 6.0327 6.3942 4.8627 5.1033 8.1490 5.4964 6.5674 5.7887 7.0500 2007 PIMA COUNTY, ARIZONA Direct and Overlapping Property Tax Rates - School Districts Last Ten Years (per $100 of assessed value) 1.4622 5.7451 7.4720 1.7343 4.9021 3.7920 5.9176 5.5360 6.1053 4.5964 4.3682 7.8009 4.8589 6.2665 5.4815 6.5659 2008 1.3726 6.0506 7.6340 1.6122 2.9383 4.5954 5.4230 5.2016 4.9970 4.3158 3.1837 7.0899 4.6112 6.1239 4.9286 6.0701 2009 1.4797 6.2500 7.0689 1.6945 2.9195 3.6883 6.5753 4.8839 4.2154 4.9069 3.3545 6.9680 5.0511 6.0407 4.6995 6.2976 2010 Exhibit D - 6a 124 13,642 16,183 13,632 14,292 Raytheon/Hughes Aircraft ** Westin La Paloma El Conquistador Hotel AT&T $ 384,569 8 10 7 9 5 6 4 2 3 1 Rank 8.5% 0.0% 0.3% 0.3% 0.3% 0.3% 0.4% 0.0% 0.3% 0.0% 0.4% 0.0% 0.0% 1.7% 1.1% 0.0% 2.8% Percent of Total Assessed Value * * Name change 2001 (1) Secondary Assessed Valuation for tax year $ 4,491,395 Sources: Arizona Department of Revenue, Pima County Assessor's Office. Total Top Ten 0 18,911 ASARCO Mining HDP Northwest 0 16,614 0 Star Pass Resorts Arizona Portland Cement Northwest Hospital 19,362 0 TRICO DND Neffson (Tucson Mall) 0 84,382 QWEST ASARCO LLC 51,214 0 $ 136,337 Southwest Gas Corporation Phelps Dodge Unisource/Tucson Electric Power Co. Taxpayer Estimated Assessed Value (1) 2001 $ 405,622 0 0 13,898 16,703 13,349 27,736 0 18,213 0 18,733 0 0 87,757 53,668 18,250 $ 137,315 Estimated Assessed Value (1) 9 8 10 4 7 5 2 3 6 1 Rank 2002 $4,835,561 8.4% 0.0% 0.0% 0.3% 0.3% 0.3% 0.5% 0.0% 0.3% 0.0% 0.4% 0.0% 0.0% 1.7% 1.0% 0.3% 2.6% Percent of Total Assessed Value $ 395,381 0 0 14,461 16,057 13,290 0 0 19,990 0 18,703 11,467 0 108,829 55,710 14,375 $ 122,499 Estimated Assessed Value (1) 7 6 9 4 5 10 2 3 8 1 Rank 2003 $5,221,271 7.7% 0.0% 0.0% 0.3% 0.3% 0.2% 0.0% 0.0% 0.4% 0.0% 0.3% 0.2% 0.0% 1.9% 1.0% 0.3% 2.2% Percent of Total Assessed Value PIMA COUNTY, ARIZONA Principal Property Taxpayers Current Year and Nine Years Ago (amounts in thousands) $ 403,397 0 0 14,655 15,943 13,895 0 0 21,296 0 19,364 12,925 0 104,944 59,528 15,250 $ 125,597 Estimated Assessed Value (1) 8 6 9 4 5 10 2 3 7 1 Rank 2004 $5,620,156 7.2% 0.0% 0.0% 0.3% 0.4% 0.3% 0.0% 0.0% 0.5% 0.0% 0.5% 0.3% 0.0% 2.5% 1.4% 0.4% 3.0% Percent of Total Assessed Value $ 440,208 14,708 0 13,653 16,358 16,069 0 0 22,459 0 22,377 0 0 104,468 62,970 21,209 $ 145,937 Estimated Assessed Value (1) 9 10 7 8 4 5 2 3 6 1 Rank 2005 (continued) $6,050,950 7.3% 0.2% 0.0% 0.2% 0.2% 0.2% 0.0% 0.0% 0.3% 0.0% 0.3% 0.0% 0.0% 1.5% 0.9% 0.3% 2.1% Percent of Total Assessed Value Exhibit D - 7 125 Taxpayer 87,093 QWEST 0 HDP Northwest 9 6 8 5 7 10 2 3 4 1 Rank 2006 6.6% 0.0% 0.0% 0.0% 0.2% 0.3% 0.0% 0.2% 0.3% 0.0% 0.2% 0.2% 0.0% 1.1% 0.8% 0.7% 1.7% Percent of Total Assessed Value * * Name change 2001 (1) Secondary Assessed Valuation for Tax Year $6,869,955 Sources: Arizona Department of Revenue, Pima County Assessor's Office. $ 459,465 0 AT&T Total Top Ten 0 El Conquistador Hotel 15,504 Westin La Paloma 0 ASARCO Mining 21,665 17,068 Starr Pass Resorts Raytheon/Hughes Aircraft ** 22,858 Arizona Portland Cement 0 19,087 DND Neffson (Tucson Mall) Northwest Hospital 14,806 TRICO 0 62,846 Southwest Gas Corporation ASARCO LLC 55,176 $ 143,362 Estimated Assessed Value (1) Phelps Dodge Unisource/Tucson Electric Power Co. (continued) $ 553,281 0 0 0 15,959 58,987 0 15,280 23,468 0 19,897 18,044 0 94,300 62,919 93,656 $ 150,771 Estimated Assessed Value (1) 9 5 10 6 7 8 2 4 3 1 Rank 2007 $8,220,396 6.6% 0.0% 0.0% 0.0% 0.2% 0.6% 0.0% 0.2% 0.2% 0.0% 0.2% 0.2% 0.0% 1.0% 0.7% 1.0% 1.6% Percent of Total Assessed Value $ 618,100 0 0 0 0 33,833 44,047 15,889 23,593 0 21,013 18,816 0 87,000 63,698 156,780 $ 153,431 Estimated Assessed Value (1) 6 5 10 7 8 9 3 4 1 2 Rank 2008 $9,594,862 6.5% 0.0% 0.0% 0.0% 0.0% 0.3% 0.4% 0.2% 0.2% 0.0% 0.2% 0.2% 0.0% 0.9% 0.6% 1.6% 1.6% Percent of Total Assessed Value PIMA COUNTY, ARIZONA Principal Property Taxpayers Current Year and Nine Years Ago (amounts in thousands) $ 667,355 0 0 0 0 0 63,572 19,384 27,561 0 18,888 21,029 20,042 74,646 64,775 198,694 $ 158,764 Estimated Assessed Value (1) 5 9 6 10 7 8 3 4 1 2 Rank 2009 $9,860,981 6.8% 0.0% 0.0% 0.0% 0.0% 0.0% 0.6% 0.2% 0.3% 0.0% 0.2% 0.2% 0.2% 0.8% 0.7% 2.0% 1.6% Percent of Total Assessed Value $ 492,722 0 0 0 0 0 0 16,582 16,635 17,097 17,715 21,208 28,878 55,076 65,879 89,289 $ 164,363 Estimated Assessed Value (1) 10 9 8 7 6 5 4 3 2 1 Rank 2010 $9,342,561 5.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% 0.2% 0.2% 0.2% 0.2% 0.3% 0.6% 0.7% 1.0% 1.8% Percent of Total Assessed Value Exhibit D - 7 126 Amount 204,424 218,192 231,619 250,929 271,841 292,019 318,520 348,741 363,624 384,983 Amounts collected are on a cash basis rather than the modified accrual basis used in the financial statements. $ Percent of Original Levy 95.24% 95.50% 95.94% 96.30% 96.68% 96.65% 96.45% 96.20% 95.77% 95.75% (2) Real Property Tax Levy (Adjusted) $ 213,668 227,454 240,403 259,583 280,678 301,836 329,918 361,913 379,314 401,975 Represents the difference between the adjusted levy and collected to June 30, 2010. Tax Roll Corrections $ (974) (1,023) (1,013) (987) (494) (291) (322) (622) (360) (87) (1) NOTES: Fiscal Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Original Real Property Tax Levy $ 214,642 228,477 241,416 260,570 281,172 302,127 330,240 362,535 379,674 402,062 Collected to June 30, End of Tax Fiscal Year (2) Collections in Subsequent Years 9,154 8,986 8,666 8,635 8,667 9,756 11,298 12,893 14,785 PIMA COUNTY, ARIZONA Real Property Tax Levies and Collections Last Ten Fiscal Years (in thousands) $ Amount 213,578 227,178 240,285 259,564 280,507 301,776 329,818 361,634 378,409 384,983 Percent of Adjusted Levy 99.96% 99.88% 99.95% 99.99% 99.94% 99.98% 99.97% 99.92% 99.76% 95.77% Collected to June 30, 2010 (2) Delinquent Taxes Receivable (1) 90 276 118 19 171 60 100 279 905 16,992 Exhibit D - 8 PIMA COUNTY, ARIZONA Exhibit D - 9 Assessed, Limited and Full Cash (Secondary) Value of Taxable Property Last Ten Fiscal Years (in thousands) Fiscal Year 2000-01 Primary 2000-01 Secondary Limited and Full Cash Values (1) Net Assessed Value $ 4,111,664 4,236,070 $ Ratio of Net Assessed to Full Cash Value 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% 2009-10 Primary 2009-10 Secondary 8,985,712 9,860,981 80,593,121 88,095,754 11.15% 11.19% (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. 127 PIMA COUNTY, ARIZONA Comparative Net Valuations and Tax Rates (per $100 assessed value) (valuation $ amounts in thousands) Jurisdiction State of Arizona FY 2009-10 (Tax Year 2009) Valuation Rate $ 8,985,712 $0.0000 Pima County General Fund - Primary Debt Service - Secondary Free Library - Secondary Exhibit D - 10 FY 2010-11 (Tax Year 2010) Valuation Rate $ 8,939,647 $0.0000 8,985,712 9,860,981 9,860,981 3.3133 0.7100 0.2643 8,939,647 9,342,561 9,342,561 3.3133 0.7500 0.3100 8,985,712 9,860,981 3.3133 0.9743 4.2876 8,939,647 9,342,561 3.3133 1.0600 4.3733 Education Assistance 8,985,712 0.3306 8,939,647 0.3564 Flood Control District - Secondary 8,885,190 0.2635 8,529,150 0.2635 Fire District Assistance - Secondary 9,860,981 0.0406 9,345,594 0.0430 Pima Community College District Primary Secondary Total 8,985,712 9,860,981 0.9356 0.1414 1.0770 8,939,647 9,342,561 0.9755 0.1093 1.0848 9,860,981 0.1000 9,342,561 0.1000 3,627,276 4,030,242 0.3144 0.6200 0.9344 3,667,566 3,914,105 0.3289 0.6261 0.9550 City of South Tucson Primary 23,591 0.2035 25,107 0.1999 School Districts Unorganized - Primary 13,854 1.3726 15,711 1.4797 3,599,209 3,975,387 4.9398 1.1303 6.0701 3,632,596 3,809,571 5.0489 1.2487 6.2976 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 (continued) 128 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 2009-10 (Tax Year 2009) Valuation Rate $ 869,433 948,760 $ 3.2634 1.6652 4.9286 FY 2010-11 (Tax Year 2010) Valuation Rate $ 852,820 890,671 $ 3.0360 1.6635 4.6995 Flowing Wells Unified (District #8) Primary Secondary Total 219,641 242,759 3.9867 2.1372 6.1239 218,438 233,154 3.8837 2.1570 6.0407 Amphitheater Unified (District #10) Primary Secondary Total 1,595,327 1,758,161 3.1469 1.4643 4.6112 1,613,751 1,695,333 3.6518 1.3993 5.0511 Sunnyside Unified (District #12) Primary Secondary Total 474,332 521,692 4.1213 2.9686 7.0899 489,883 512,628 3.9944 2.9736 6.9680 Tanque Verde Unified (District #13) Primary Secondary Total 218,207 238,861 2.3721 0.8116 3.1837 220,027 227,156 2.3744 0.9801 3.3545 17,938 19,488 4.3158 0.0000 4.3158 19,941 20,821 4.9069 0.0000 4.9069 Catalina Foothills Unified (District #16) Primary Secondary Total 668,966 720,103 2.8268 2.1702 4.9970 679,717 697,492 2.7180 1.4974 4.2154 Vail Elementary (District #20) Primary Secondary Total 482,636 523,749 3.5552 1.6464 5.2016 486,043 507,007 3.1463 1.7376 4.8839 Ajo Unified (District #15) Primary Secondary Total (continued) 129 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 2009-10 (Tax Year 2009) Valuation Rate $ 451,935 462,350 $ 3.5332 1.8898 5.4230 FY 2010-11 (Tax Year 2010) Valuation Rate $ 304,949 309,567 $ 3.1373 3.4380 6.5753 San Fernando Elementary (District #35) Primary Secondary Total 1,088 1,125 4.5954 0.0000 4.5954 1,525 1,887 3.6883 0.0000 3.6883 Empire Elementary (District #37) Primary Secondary Total 6,807 7,523 2.9383 0.0000 2.9383 7,381 7,988 2.9195 0.0000 2.9195 349,360 375,806 1.3726 0.2396 1.6122 355,497 365,271 1.4797 0.2148 1.6945 Indian Oasis Unified (District #40) Primary Secondary Total 1,171 1,171 0.0000 0.0000 0.0000 1,039 1,040 0.0000 0.0000 0.0000 Redington Elementary (District #44) Primary Secondary Total 1,459 1,542 7.6340 0.0000 7.6340 1,556 1,598 7.0689 0.0000 7.0689 38,878 45,669 5.0869 0.9637 6.0506 37,918 41,025 5.2001 1.0499 6.2500 Continental Elementary (District #39) Primary Secondary Total Altar Valley Elementary (District #51)* Primary Secondary Total *Formerly known as the Mary E. Dill School District 130 PIMA COUNTY, ARIZONA Historical Collections - Hotel Excise Tax Car Rental Surcharges and Recreational Vehicle Tax Last Ten Fiscal Years (amounts in thousands) Fiscal Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Car Rental Surcharges (2) Hotel Excise Tax (1) $ 2,824 2,495 2,536 2,717 2,885 5,212 7,796 6,901 5,628 5,637 $ 1,557 1,377 1,436 1,277 1,595 1,589 1,357 1,732 1,389 1,521 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 131 Exhibit D - 11 199 190 195 209 200 214 210 222 159 181 PIMA COUNTY, ARIZONA Streets and Highways Revenues Last Ten Fiscal Years (amounts in thousands) Fiscal Year Amount 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 $ 48,317 47,071 48,072 51,334 53,878 56,937 44,607 44,060 41,210 38,739 Source: Pima County Finance and Risk Management Department 132 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. Eight 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. 133 $ 192,640 183,381 200,554 232,553 267,927 231,918 290,150 349,542 388,032 420,261 $ 5,840 5,348 4,585 3,805 3,010 2,230 1,470 725 725 Flood Control Bonds Note: $ 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Fiscal Year 28,000 79,206 105,541 95,461 137,736 127,000 136,541 149,801 139,683 142,226 Transportation Revenue Bonds 965 825 495 $ 370,881 440,959 483,463 515,686 584,227 530,644 664,089 845,872 878,680 1,058,962 Total Primary Government $ Lease Revenue Bonds $ $ 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 34,974,000 Personal Income 1,053 2,506 2,121 1,736 1,093 911 Special Assessment Bonds $ 1.70% 2.01% 2.10% 2.15% 2.22% 1.87% 2.15% 2.56% 2.67% 3.03% Percentage of Personal Income 31,731 81,612 74,554 72,638 4,505 3,045 1,560 Certificates of Participation $ 872,394 890,356 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 1,070,723 Population at July 1 (a) 5,100 4,060 3,020 1,943 5,739 3,714 1,000 Transportation Loans Details regarding outstanding debt can be found in Note 7 page 61 in Notes to the Financial Statements. (a) See schedule D-20 for population data. 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Fiscal Year General Obligation Bonds Governmental Activities $ $ 425 495 532 557 619 552 661 824 838 989 Debt per Capita 34,008 32,596 31,049 29,323 27,879 26,426 24,736 23,223 21,327 19,387 Capital Leases $ 71,444 67,811 63,098 60,064 55,809 51,710 94,356 163,701 183,389 166,935 Sewer Revenue Bonds $ 165,000 $ 32,314 57,456 63,551 83,941 83,978 80,148 76,111 70,426 64,489 66,210 Regional Wastewater Loans Payable $ 112 3,685 6,849 5,783 4,852 4,562 5,280 5,842 6,481 6,305 $ 370,881 440,959 483,463 515,686 584,227 530,644 664,089 845,872 878,680 1,058,962 Total Primary Government Exhibit D - 13 Contracts and Notes Business-Type Activities Sewer Revenue Obligations PIMA COUNTY, ARIZONA Ratios of Outstanding Debt by Type to Personal Income and Per Capita Last Ten Fiscal Years ($ amounts in thousands) 134 192,640 183,381 200,554 232,553 267,927 231,918 290,150 349,542 388,032 420,261 Fiscal Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 $ 5,840 5,348 4,585 3,805 3,010 2,230 1,470 725 725 $ 4,309 4,883 2,226 2,648 8,899 5,571 7,431 10,241 10,523 11,396 Debt Service Funds Available for Principal $ 194,171 183,846 202,913 233,710 262,038 228,577 284,189 340,026 378,234 408,865 Net General Bond Debt $ 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 9,860,981 Secondary Net Assessed Value Note: Details regarding outstanding debt can be found in Note 7 on page 61 in Notes to the Financial Statements. * The Debt per Capita is shown in actual dollars and not in thousands. $ General Obligation Bond Debt Flood Control General Obligation Bond Debt 4.58% 4.09% 4.20% 4.48% 4.66% 3.78% 4.14% 4.14% 3.94% 4.15% Percent Net General Bond Debt to Assessed Value 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) 872,394 890,356 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 1,070,723 Population at July 1 $ 223 206 223 252 278 238 283 331 361 382 Net General Bond Debt per Capita* Exhibit D - 14 135 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 1,302,802 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 $ 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 9,860,981 Secondary Net Assessed Value 26.80% 25.25% 23.35% 20.91% 21.09% 18.95% 16.12% 13.83% 12.64% 13.21% Percentage of Assessed Value Note: 872,394 890,356 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 1,070,723 Population at July 1 $ 1,301 1,274 1,243 1,179 1,256 1,192 1,103 1,108 1,157 1,217 Debt per Capita* 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. * The Debt per Capita is shown in actual dollars and not in thousands. $ Total Overlapping Debt Fiscal Year PIMA COUNTY, ARIZONA Ratio of Direct and Overlapping Debt to Property Values and Per Capita Last Ten Fiscal Years ($ amounts in thousands) Exhibit D - 14a PIMA COUNTY, ARIZONA Computation of Direct and Overlapping Governmental Activities Debt Outstanding At June 30, 2010 ($ amounts in thousands) Debt Outstanding Governmental Unit Debt repaid with property tax School Districts $ Pima Community College City of Tucson 609,939 $ Amount Overlapping $ 609,939 18,490 18,490 254,076 254,076 Total overlapping Debt repaid with property tax Direct: Pima County * Exhibit D - 15 420,261 Total direct $ 882,505 $ 420,261 $ 420,261 $ 72,638 Other Debt: Certificates of participation Jail capital lease $ 72,638 19,350 19,350 36 36 142,226 142,226 Other capital leases Transportation bonds Total other debt $ 234,250 Total direct and overlapping debt $ 1,537,016 *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. 136 137 29.64% 26.45% 495,522 $ $ 27.30% 527,285 198,049 (2,226) 200,275 725,334 4,835,561 2003 $ $ 29.30% 553,734 229,457 (2,648) 232,105 783,191 5,221,271 2004 See Notes to the Financial Statements (Note 7 page 69) for calculation of the legal debt margin for the current year. Total net debt applicable to the limit as a percentage of debt limit. 447,080 Legal debt margin 178,187 (4,883) (4,309) 673,709 4,491,395 183,070 $ $ 2002 192,640 635,411 4,236,070 188,331 $ $ Total net debt applicable to the limit General obligation bonds Less: Net assets reserved for repayment of general obligation debt Debt applicable to limit: Debt limit (15% of assessed value) Legal Debt Margin Assessed Value 2001 $ $ 30.65% 584,652 258,371 (8,899) 267,270 843,023 5,620,156 2005 $ $ PIMA COUNTY, ARIZONA Legal Debt Margin Last Ten Fiscal Years ($ amounts in thousands) 24.87% 681,904 225,739 (5,571) 231,310 907,643 6,050,950 2006 $ $ 27.38% 748,334 282,159 (7,431) 289,590 1,030,493 6,869,955 2007 $ $ 27.42% 894,965 338,094 (10,241) 348,335 1,233,059 8,220,396 2008 $ $ 26.15% 1,062,907 376,322 (10,523) 386,845 1,439,229 9,594,862 2009 $ $ 27.49% 1,072,548 406,599 (11,396) 417,995 1,479,147 9,860,981 2010 Exhibit D - 16 138 $ 105,827 103,959 109,264 105,987 128,067 Sewer User Revenues (1) $ 57,371 69,597 78,521 73,186 69,904 Less: Operating Expense (2) $ 48,456 34,362 30,743 32,801 58,163 Available Net Revenue 20,163 78,326 Pledged Revenues (3) Note: Beginning with fiscal year 2009-10 sewer revenue debt coverage is presented with 5 years of data . Data for each successive year will be added until 10 years are presented. (1) Includes sewer connection fees. (2) Excludes grants, depreciation, interest expense and amortization. (3) Pledged revenues defined by the 2010 Sewer Obligations Purchase Agreement. (4) Sewer revenue debt rate covenants require minimum coverage of 1.20. (5) For fiscal year 2009-2010, a new Debt Coverage calculation was implemented. (6) Debt service requirements include principal and interest payable during the Bond Fiscal Year. The Bond Year is defined as the one-year period commencing each July 2 and ending on the next forthcoming July 1. 2005-06 2006-07 2007-08 2008-09 2009-10 Fiscal Year Plus: Ending cash Balances of Prior Fiscal Year (unrestricted) $ 10,053 13,957 13,325 14,187 16,952 Principal $ 5,619 6,340 7,221 9,469 9,838 Interest Debt Service (6) PIMA COUNTY, ARIZONA Regional Wastewater Reclamation Pledged Sewer Revenue Debt Coverage Last Five Fiscal Years (amounts in thousands) Coverage Ratio (4) 3.09 1.69 1.50 1.39 2.92 (5) Exhibit D - 17a 139 $ 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 $ 31,006 34,855 34,059 36,865 38,349 39,336 42,639 43,490 38,082 34,214 Less: Operating Expense $ 22,258 15,744 17,793 18,912 19,470 22,608 22,142 21,519 20,809 20,683 Available Net Revenue $ 4,000 8,535 10,215 8,905 10,710 11,435 11,745 12,365 15,145 10,530 $ * Debt Service Requirements include principal and interest payable in the 12 months following each fiscal year. 1,244 3,370 4,394 3,965 6,058 5,257 5,659 6,147 6,203 5,709 Debt Service * Principal Interest 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. 53,264 50,599 51,852 55,777 57,819 61,944 64,781 65,009 58,891 54,897 Transportation Revenue Fiscal Year PIMA COUNTY, ARIZONA Transportation Revenue Bonds - Pledged Revenue Bond Coverage Last Ten Fiscal Years (amounts in thousands) 4.24 1.32 1.22 1.47 1.16 1.35 1.27 1.16 0.97 1.27 Coverage Ratio Exhibit D - 17b 140 * * * * * * $ Lease Revenue 6 2 1 0 $ 7 7 7 27 Less: Operating Expense * This debt was satisfied in full during FY 2003-04. 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Fiscal Year $ (1) (5) (6) (27) Available Net Revenue $ 140 145 155 460 $ Debt Service Principal Interest PIMA COUNTY, ARIZONA Pledged Revenue Bond Coverage - Lease Revenue Bonds Last Ten Fiscal Years (amounts in thousands) 61 52 31 99 (0.00) (0.03) (0.03) (0.05) Coverage Ratio Exhibit D - 17c 141 195 3,824 74 1,643 42 5,778 $ $ FY 03-04 $ $ 2,953 42 147 2,764 FY 04-05 $ $ 3,115 42 31 3,042 FY 05-06 Source: Pima County Finance and Risk Management Department * 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. Clerk of Superior Court - equipment Jail * Juvenile Court Public Works Building Sheriff Function/Department $ $ 3,118 21 82 3,015 FY 06-07 $ $ 6,002 82 5,920 FY 07-08 PIMA COUNTY, ARIZONA Lease, Lease-Purchase and Purchase Agreements (amounts in thousands) $ $ 3,158 131 3,027 FY 08-09 $ $ 3,118 111 3,007 FY 09-10 $ $ 3,041 37 3,004 FY 10-11 Exhibit D - 18 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 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Principal $ 36,873 35,358 43,648 46,998 41,255 48,672 50,940 56,459 96,751 83,565 Total Debt Service Interest $ 13,173 12,366 13,904 13,702 14,794 18,147 17,672 19,757 24,322 24,097 $ 50,046 47,724 57,552 60,700 56,049 66,819 68,612 76,216 121,073 107,662 Total General Expenditures * $ Exhibit D - 19 Ratio of Debt Service To General Expenditures 467,614 487,476 515,774 546,136 589,708 640,336 689,968 755,413 780,044 730,379 * Includes General, Special Revenue and Debt Service Funds, while excluding Capital Projects Fund. 142 10.7% 9.8% 11.2% 11.1% 9.5% 10.4% 9.9% 10.1% 15.5% 14.7% 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 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Population (a) 872,394 890,356 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 1,070,723 Personal Income (b) $ 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 34,974,000 Per Capita Personal Income ($) $ 24,698 24,787 25,395 25,797 27,599 28,894 30,813 32,470 32,343 33,931 Exhibit D - 20 Unemployment Rate (a) 2.8% 4.7% 4.8% 3.5% 4.1% 4.4% 3.3% 4.7% 7.9% 8.6% 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. 143 144 9,947 393,200 81,076 Note: Data is obtained from www.azstarnet.com/star200, a website of the Arizona Daily Star. Total Work Force 20.5% 397,900 20.4% 81,606 81,139 1.0% 6,168 11,580 7,135 Total 10 1.0% 1.5% 2.8% 1.8% 3,375 1.1% 9 8 2 7 2.1% 2.3% 9,732 Tohono O'odam Nation 9 0.8% 5,933 3,783 4,200 10 1.5% 10,969 Phelps Dodge 3,329 Carondelet Health Network 8 2.9% 7,175 3,800 6,058 City of Tucson 1 1.8% T M C HealthCare Inc. 11,376 Fort Huachuca 7 6 5 2.5% 11,335 7,119 8,278 9,200 4 2.9% 10,100 Pima County Government 2.3% 2.2% 9,932 1 2.6% 8,234 5 6 2.5% 11,606 3 Employees 9,102 8,796 Davis Monthan AFB 4 2.8% 10,400 Rank Percent of Total County Employment Tucson Unified School District 9,978 State of Arizona 2 2.6% Employees 2002 4,000 11,032 University of Arizona 3 Percent of Total County Employment Wal-Mart Stores, Inc. 10,149 Raytheon Employer Employees Rank 2001 10 8 1 7 6 9 4 5 2 3 Rank 2003 424,400 19.2% 0.8% 1.5% 2.7% 1.7% 1.9% 0.9% 2.3% 2.3% 2.7% 2.4% Percent of Total County Employment PIMA COUNTY, ARIZONA Principal Employers Current Year and Nine Years Ago 77,740 3,515 5,495 11,939 6,987 7,690 4,420 7,692 9,753 10,078 10,171 Employees 10 8 1 7 6 9 5 4 3 2 Rank 2004 431,400 18.1% 0.8% 1.3% 2.8% 1.6% 1.8% 1.0% 1.8% 2.3% 2.3% 2.4% Percent of Total County Employment 81,678 4,500 6,757 12,250 6,767 7,684 4,595 8,727 9,750 10,348 10,300 Employees 10 8 1 7 6 9 5 4 2 3 Rank 2005 (continued) 443,100 18.3% 1.0% 1.5% 2.8% 1.5% 1.7% 1.0% 2.0% 2.2% 2.3% 2.3% Percent of Total County Employment Exhibit D - 21 145 6,765 Pima County Government 80,908 4,123 10 8 1 7 6 9 5 4 3 2 443,300 18.2% 0.9% 1.2% 3.0% 1.5% 1.7% 1.1% 1.9% 2.2% 2.3% 2.4% Percent of Total County Employment 79,899 4,900 5,848 9,119 7,290 7,419 5,625 8,233 9,927 10,354 11,184 Employees 10 8 4 7 6 9 5 3 2 1 Rank 2007 Note: Data is obtained from www.azstarnet.com/star200, a website of the Arizona Daily Star. Total Work Force Total Tohono O'odam Nation Phelps Dodge Freeport-McMoran Copper Carondelet Health Network 5,306 7,623 Tucson Unified School District City of Tucson 4,980 Wal-Mart Stores, Inc. 13,098 8,233 Davis Monthan AFB Fort Huachuca 9,742 10,282 University of Arizona State of Arizona 10,756 Employer 2006 Employees Rank Raytheon (continued) 453,500 17.6% 1.1% 1.3% 2.0% 1.6% 1.6% 1.2% 1.8% 2.2% 2.3% 2.5% Percent of Total County Employment 80,671 5,840 5,848 6,701 6,954 8,018 5,805 7,701 10,754 10,535 12,515 Employees 9 8 7 6 4 10 5 2 3 1 Rank 2008 459,200 17.6% 1.3% 1.3% 1.5% 1.5% 1.7% 1.3% 1.7% 2.3% 2.3% 2.7% Percent of Total County Employment PIMA COUNTY, ARIZONA Principal Employers Current Year and Nine Years Ago 77,214 5,987 5,635 6,463 6,235 7,227 6,715 7,509 9,329 10,575 11,539 Employees 9 10 7 8 5 6 4 3 2 1 Rank 2009 486,400 15.9% 1.2% 1.2% 1.3% 1.3% 1.5% 1.4% 1.5% 1.9% 2.2% 2.4% Percent of Total County Employment 75,882 4,566 5,399 6,236 6,511 7,012 7,192 7,755 8,708 10,363 12,140 Employees 10 9 8 7 6 5 4 3 2 1 Rank 2010 488,500 15.5% 0.9% 1.1% 1.3% 1.3% 1.4% 1.5% 1.6% 1.8% 2.1% 2.5% Percent of Total County Employment Exhibit D - 21 146 1,800 1,500 1,400 1,200 1,500 1,700 1,900 2,100 1,300 1,800 21,600 21,800 23,700 24,000 26,600 28,500 28,100 23,600 16,500 14,300 34,000 32,300 29,100 28,500 28,600 29,300 29,000 26,900 25,900 24,500 Manufacturing 190,800 184,500 184,500 185,000 199,300 219,200 228,600 221,600 215,900 216,800 14,100 15,100 14,800 15,600 18,200 17,500 17,800 16,300 16,700 17,400 Finance, Insurance and Real Estate 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). 2.8% 4.7% 4.8% 3.5% 4.1% 4.4% 3.3% 4.7% 7.9% 8.6% Construction Trades and Services Note: 393,200 397,900 424,400 431,400 443,100 443,300 453,500 459,200 486,400 488,500 Mining EMPLOYMENT 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 872,394 890,356 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 1,070,723 Population Total Unemployment Rate Exhibit D - 22 Sources: 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Calendar Year Civilian Labor Force PIMA COUNTY, ARIZONA Population and Employment Last Ten Calendar Years 147 Sources: 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Calendar Year 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 3,696,875 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 20,483,709 Transportation No. of Air Bus Passengers Ridership 1.87 1.80 1.91 1.96 2.00 2.18 2.21 2.27 2.46 2.22 Riders Per Mile 3,182 3,367 9,441 10,432 12,103 11,903 6,265 4,171 2,364 2,340 Residential Bldg Permits 11,229 11,860 12,933 15,054 17,039 16,630 13,821 10,718 10,472 12,471 Real Estate Multiple Listings 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. 260,258 259,794 271,802 239,966 261,037 289,440 263,910 240,329 190,445 169,780 Aircraft Movements PIMA COUNTY, ARIZONA Transportation and Real Estate Last Ten Calendar Years $ 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 2,457,147 Sales Volume In $ 000's Exhibit D - 23 PIMA COUNTY, ARIZONA Economic Indicators by Calendar Year Last Ten Calendar Years ($ amounts in thousands) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Construction Activity No. of Dwelling Construction Units Awards Awarded Aggregate Retail Sales Calendar Year $ 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 10,614,927 Exhibit D - 24 $ 1,536,760 1,678,354 7,694 7,716 8,015 9,281 12,640 10,313 6,110 3,728 1,986 2,221 University of Arizona, "Arizona's Economy" U of A Business Research Program (EBR), College of Business & Public Administration. 148 Bank Deposits $ 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 11,134,000 PIMA COUNTY, ARIZONA Population Statistics June 30, 2010 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+ 71,079 69,474 64,062 66,666 77,251 220,021 208,792 67,399 60,585 46,912 37,029 81,453 Total 1,070,723 POPULATION PROJECTIONS Year Projected Population 2010 2012 2017 2022 2042 2052 1,070,723 1,113,749 1,215,512 1,307,914 1,611,534 1,733,499 Source: Arizona Department of Economic Security 149 Exhibit D - 25 PIMA COUNTY, ARIZONA Average Annual Jail Population Last Ten Calendar Years Calendar Year Average Jail Population 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1,330 1,481 1,462 1,539 1,739 2,009 2,028 2,008 1,913 1,826 Source: Pima County Sheriff's Department 150 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. 151 6,839 Total 6,527 1,385 481 42 548 162 149 3 5,142 2,040 1,902 288 0 413 185 197 117 2004 6,820 1,241 449 42 0 631 116 3 5,579 2,952 1,434 351 0 408 20 164 250 2005 7,250 1,461 668 0 0 634 156 3 5,789 2,911 1,401 526 45 414 23 180 289 6,855 1,187 472 0 0 559 153 3 5,668 2,776 1,442 334 41 408 22 466 179 * Previously known as Wastewater Management - Liquid Waste. In fiscal year 2005-2006 Wastewater Management-Solid Waste was classified as a governmental fund. It now appears under the category "Sanitation". 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. 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. 7,093 1,202 508 0 0 563 128 3 5,891 2,860 1,560 330 40 404 26 485 186 Full-time employees (FTEs) as of 6/30: 2006 2007 2008 Variances can be noted in the Governmental Activities categories due to a change in classification criteria in fiscal year 2005. Note: Internal service funds FTEs were added to the General Government function in FY 2004-2005. 1,811 Total business-type activities 506 43 607 511 141 3 5,028 Total governmental activities Business-type activities Regional Wastewater Reclamation* Wastewater Management- Solid Waste Kino Hospital Pima Health System & Services Development Services Parking Garages 1,851 1,986 290 0 407 174 180 140 Governmental activities General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Function/Program 2003 PIMA COUNTY, ARIZONA Employees by Function Last Eight Years 6,644 1,034 507 0 0 451 73 3 5,610 2,684 1,491 311 34 397 29 480 184 2009 6,728 978 488 0 0 422 66 2 5,750 2,870 1,488 264 33 422 32 467 174 2010 Exhibit D - 27 152 $ $ 112,791,318 $ 12,908,101 9,356,754 2,598,134 72,540,294 $ 97,403,283 20,698,771 18,609,343 5,592,348 67,890,856 1,338,000 6,063,771 486,402 107 344,470 22,465 147,117 165,387 65.0 9,718 $ 98,220,398 $ 42,755,555 42,916,920 5,071,608 7,476,315 1,430,690 6,249,123 474,045 129 388,092 23,785 146,739 165,441 65.5 11,245 42,016 37,868 4,148 32,501 2005 $ 99,185,638 $ 16,646,964 2,018,849 3,568,917 76,950,908 1,390,792 6,276,794 488,250 135 391,295 17,218 155,377 171,179 66.4 8,325 31,016 27,846 3,170 30,686 141 438,051 25,700 142,773 153,595 68.5 8,734 34,131 30,204 3,927 33,929 2007 $ 154,588,664 $ 37,402,683 66,095,100 21,944,399 29,146,482 1,395,849 6,371,480 492,973 Fiscal Year 2006 (1) MGD: Millions of Gallons per Day (2) Sidewinders attendance 7/08 through 9/08; beginning in fiscal year 2008-09, the team is no longer in Tucson Capital Projects Completed Land Buildings Improvements Infrastructure 1,300,000 5,761,423 458,736 101 280,850 23,070 Parks & Recreation Athletic field permits issued Community center admissions Volunteer hours Library Volumes in collection Total volumes borrowed Number of cardholders 137,302 167,552 64.5 8,289 40,636 36,823 42,074 45,994 3,813 33,815 2004 3,920 32,159 Cultural and Recreational Spring training attendance (2) Sidewinders attendance (1) Wastewater Avg. daily sewage treated (MGD) New connections Total violations/citations Traffic violations/citations Criminal Total Civil Total Sheriff Physical arrests Program: 2003 PIMA COUNTY, ARIZONA Operating Indicators by Program Last Eight Years $ 113,810,324 $ 18,619,333 17,591,833 4,673,301 72,925,857 1,429,365 6,874,888 554,339 147 445,137 19,622 160,626 143,611 67.3 4,452 47,509 41,542 5,967 32,796 2008 $ 106,021,120 $ 59,922,798 14,336,536 9,028,251 22,733,535 1,425,235 7,409,820 516,780 149 403,887 25,756 103,407 58,879 67.8 1,477 56,239 49,817 6,422 33,571 2009 $ 65,029,616 $ 36,953,802 11,994,142 1,921,052 14,160,620 1,427,089 7,517,692 526,170 168 351,692 14,321 84,520 65.4 1,950 48,217 41,800 6,417 27,946 2010 Exhibit D - 28 153 2 606 7,437 18 12 12 $ 7 10,334 17,771 25 12 12 3,177 74.76 2,411 32 67 12 9 8 138 10,313 1,773 672,427 6 5 280 2004 $ 7 13,942 31,713 32 12 12 3,249 81.50 2,419 34 73 14 9 8 138 10,558 1,782 926,828 6 5 276 2005 $ (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. * Data unavailable for FY 2010 Open Space Acquisitions Properties added Acres Cumulative acreage Total properties Libraries County (2) City 3,049 74.76 Wastewater Sanitary sewers (miles) Treatment capacity (MGD) 138 10,219 1,750 691,236 2,366 30 64 12 8 7 $ 6 5 252 Parks & Recreation Urban parks (acres) Playgrounds (1) Baseball/softball diamonds Soccer/football fields Community centers Swimming pools Flood Control Bank protection (miles) Flood plain / drainageway (acres) Transportation (streets and highways) Streets (miles) Pothole repair Sheriff Stations Zone offices Patrol Units Program: 2003 17 1,235 32,948 49 12 13 3,314 87.45 2,885 36 78 14 9 9 138 10,622 1,798 964,051 6 5 303 $ Fiscal Year 2006 7 4 302 2007 18 3,668 36,616 67 25 3,464 92.45 2,932 41 84 16 9 9 139 10,840 1,801 1,150,950 PIMA COUNTY, ARIZONA Capital Assets and Infrastructure by Program Last Eight Years $ 9 757 37,373 76 26 3,492 90.00 2,991 41 90 17 11 9 140 10,999 1,893 1,321,034 7 4 324 2008 $ 5 14,753 52,126 81 26 3,462 91.50 2,881 38 85 17 8 9 140 11,053 1,893 1,257,087 7 4 323 2009 9 5,390 57,516 90 26 3,472 94.26 2,881 38 85 17 8 9 140 11,966 1,893 * 7 4 361 2010 Exhibit D - 29 (This page is intentionally left blank) 154