2012 Comprehensive Annual Financial Report Pima County, Arizona For the Fiscal Year Ended June 30, 2012 PIMA COUNTY, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2012 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 Michelle Campagne, Deputy Director Ellen Moulton, Deputy Director Paul Guerrero, CPA, Division Manager Financial Control & Reporting Supervisors Emilia Eveningred Marilyn Hutzler Pete Rodriguez Accountants Linda Baldazo Leticia Brumbaugh Leslie Butler Sabrena Corwin Brenda DeBoo-Nicely Ted Garza Linda House Jean Lee, CPA Sheri Morgan Lorraine Nuñez Janet Peete Blanca Rossetti Mary Scanlan Phil Schroeck Jennifer Serrano Ann Westmoreland PIMA COUNTY, ARIZONA Comprehensive Annual Financial Report For the Year Ended June 30, 2012 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. MANAGEMENT'S DISCUSSION AND ANALYSIS (required supplementary information) B. BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position Statement of Activities Page 9 - 10 11 - 29 A-1 A-2 31 32 - 33 A-3 34 A-4 35 A-5 36 A-6 37 A-7 38 A-8 A-9 39 40 - 41 Fiduciary Fund Financial Statements Statement of Fiduciary Net Position - Fiduciary Funds Statement of Changes in Fiduciary Net Position - Fiduciary Funds A-10 A-11 42 43 Component Unit Financial Statements Combining Statement of Net Position Combining Statement of Activities A-12 A-13 44 45 Governmental Fund Financial Statements (Major and Other) Balance Sheet - Governmental Funds Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 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 Proprietary Fund Financial Statements (Major and Other) Statement of Net Position - Proprietary Funds Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds Statement of Cash Flows - Proprietary Funds PIMA COUNTY, ARIZONA Comprehensive Annual Financial Report For the Year Ended June 30, 2012 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: Landfill liabilities Note 9: Pension and other post employment benefits Note 10: Interfund transactions Note 11: Construction and other significant commitments Note 12: Subsequent events C. 46 - 53 54 55 - 58 59 59 - 61 62 - 63 64 - 71 72 72 - 78 79 80 81 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 83 84 B-2 85 C-1 88 - 89 C-2 90 - 91 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 93 94 95 96 97 98 99 100 101 102 103 104 105 106 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 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 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 Street Lighting Improvement Districts - Special Revenue Fund PIMA COUNTY, ARIZONA Comprehensive Annual Financial Report For the Year Ended June 30, 2012 Table of Contents (continued) Other (Nonmajor) Enterprise Funds Combining Statement of Position - Nonmajor Enterprise Funds Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Nonmajor Enterprise Funds Combining Statement of Cash Flows - Nonmajor Enterprise Funds Internal Service Funds Combining Statement of Net Position - Internal Service Funds Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Internal Service Funds Combining Statement of Cash Flows - Internal Service Funds Fiduciary Funds Combining Statement of Fiduciary Net Position - Investment Trust Funds Combining Statement of Changes in Fiduciary Net Position Investment Trust Funds Combining Statement of Fiduciary Net Position - Agency Funds Combining Statement of Changes in Fiduciary Net Position - Agency Funds III. STATISTICAL SECTION Financial Trends Information Net position by component Changes in net position 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-17 105 C-18 C-19 106 107 - 108 C-20 109 C-21 C-22 110 111 - 112 C-23 113 C-24 C-25 114 115 C-26 116 D-1 through 4 117 - 121 D-5 through 12 123 - 134 PIMA COUNTY, ARIZONA Comprehensive Annual Financial Report For the Year Ended June 30, 2012 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 19 135 - 144 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 26 145 - 152 Operating Information Employees by function Operating indicators by program Capital assets and infrastructure by program D-27 through 29 153 - 155 Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2012 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. PIMA COUNTY DEPARTMENT OF FINANCE & RISK MANAGEMENT 130 WEST CONGRESS STREET TUCSON, ARIZONA 85701-1317 (520) 724-8472 FAX (520) 770-4173 Thomas E. Burke, Director December 18, 2012 The Honorable Board of Supervisors and Citizens Pima County, Arizona We are pleased to submit, in accordance with state statutes, the Comprehensive Annual Financial Report (CAFR) of Pima County, prepared by the Department of Finance and Risk Management for the fiscal year ended June 30, 2012. This report presents comprehensive financial and operating information about the County’s activities for the fiscal year. The information is useful to its property owners, businesses, and other resource providers. Responsibility for the accuracy, the completeness, and the fairness of the presented data, including all disclosures, rests with the County. This report is prepared in accordance with generally accepted accounting principles (GAAP) and in conformance with standards of financial reporting as established by the Governmental Accounting Standards Board (GASB) using the guidelines as recommended by the Government Finance Officers Association of the United States and Canada (GFOA). GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A can be found immediately following the independent auditors’ report. We believe that the financial information, as presented, is accurate in all material aspects; that it is presented in a manner designed to openly disclose the financial position and results of operations of the County as measured by the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain the maximum understanding of the County’s financial affairs have been included. The CAFR consists of three sections: • The INTRODUCTORY section familiarizes the reader with the organizational structure of the County, the nature and scope of its services, and the specifics of its legal operating environment. • The FINANCIAL section includes the independent auditors’ report, MD&A, audited basic financial statements, notes to the statements, and required supplementary information necessary to fairly present the financial position and results of operations of the County in conformity with GAAP. This section also includes supporting statements and schedules necessary to produce a CAFR. • The STATISTICAL section contains comprehensive statistical data on the County’s financial, physical, economic, and demographic characteristics. Pima County and County Services Pima County is situated in the southern part of Arizona with a portion of its southern boundary bordering Mexico. The County was organized in 1864 under the Arizona Territorial Legislature as one of the State’s four original counties. A five-member Board of Supervisors is responsible for implementing the County’s governmental and administrative affairs. Each member is elected from a designated district to serve a four-year term. The Chair is selected by the Board from among its members. The Board is also responsible for establishing the policies of the County, which provide guidance to the various County constitutional officers and departments. The Board also appoints a County Administrator who is responsible for the general administrative and overall operations of the various departments of the County. Pima County includes in its financial statements all funds, agencies, boards, commissions, and authorities for which the Pima County Board of Supervisors is financially accountable. As the primary government, Pima County is financially accountable if it appoints a voting majority of an organization’s governing body and either it is able to impose its will on that organization or a potential exists for that organization to provide specific benefits to, or impose specific financial burdens on Pima County. Additionally, the primary government may be financially accountable if an organization is fiscally dependent on the primary government. Pima County offers a wide variety of governmental services, including: • Justice and Law Enforcement: Clerk of the Superior Court, Constables, County Attorney, Superior Court, Juvenile Court, Justice Court, Sheriff, Indigent Defense, and Public Fiduciary • Medical Services: Institutional Health, Public Health (including Animal Control), and Forensic Science Center. Pima Health System & Services (including Posada del Sol) has ceased operations as of September 30, 2011; therefore, this CAFR is reporting the final financial activity for the fiscal year • Community and Economic Development: Superintendent of Schools, Community Development and Neighborhood Conservation, Economic Development and Tourism, Community Services, Employment and Training, Community Resources, County Free Library District, Pima County Sports and Tourism Authority, Southwestern Fair Commission, and Stadium District • Public Works: Regional Flood Control District, Development Services (including Planning & Zoning), Transportation, Regional Wastewater Reclamation, Solid Waste, Environmental Quality, Fleet Services, Graphic Services, Cultural Resources, Natural Resources, Parks and Recreation, and Road and Lighting Improvement Districts • County Administration: Board of Supervisors, County Administrator, Assessor, Clerk of the Board, Elections, Finance and Risk Management, Human Resources, Information Technology, Procurement, Recorder, Treasurer, and Facilities Management Pima County is responsible for reporting the financial activities of its component units. These units are either discretely presented or blended. Although they are separate legal entities, blended component units are substantially a part of the County’s financial activities and are combined with data for the County. Blended and discrete component units include: • Southwestern Fair Commission - Activities of the Commission are reported as a discrete component unit of the County in the accompanying financial statements • Pima County Sports and Tourism Authority - Activities of this discrete component unit are reported in the accompanying financial statements 2 • Pima County Stadium District, Regional Flood Control District, Library District, Street Lighting Improvement Districts. Activities are reported as blended component units in special revenue funds in the accompanying financial statements • Special Districts. Pima County includes the financial activities of various road improvement districts in its financial statements. As of June 30, 2012, the County’s road improvement districts are all inactive and are reporting residual balances. The County also has various independently governed schools, irrigation, fire, and a health district and other entities for which the County is not financially accountable. These entities include the Industrial Development Authority, Pima Association of Governments, Pima Council on Aging, the Workforce Investment Board, Regional Transportation Authority, and the Tucson Regional Economic Opportunity, Inc. The financial statements of such districts and entities are not included in the accompanying financial statements except to reflect amounts held in a fiduciary capacity by the County Treasurer. Economic Outlook In response to the ongoing economic recession, Pima County has responded by implementing various cost savings measures: modifying operations over the last 4 years through centralization of internal services to increase efficiency and reduce costs, by reducing the workforce through attrition whenever possible, and by significantly decreasing discretionary spending. Each year, departments have reduced budgets to accommodate reduced revenues. The primary property tax rate remains constant for fiscal year 2012-13 while Preliminary Primary Net Assessed property values decreased 2.84%, generating a reduction in primary property tax revenues of $8.1 million. Reductions in the secondary property tax levies for the Library District, Flood Control District, and Debt Service are also occurring, which will reduce total County property taxes by $12.1 million. The recommended total County budget for fiscal year 2012-13 is $1.2 billion or 5.4% less than the prior year, and 17% less than fiscal year 2007-08. The MD&A beginning on page 11 provides for a general and specific discussion regarding the County’s economic outlook. Expenditure Limitation Arizona voters approved a proposition in 1980 amending the state constitution that established expenditure limitations for local governments, including Pima County. The expenditure limitation is determined each year by adjusting the amount of actual payments of local revenues received by the County during fiscal year 1979-80 to reflect inflation and subsequent population growth for the County. Not subject to this limitation are items such as bond proceeds, related debt service, interest earnings, special voter approved districts, certain highway user revenue funds, federal grant and aid funds, monies received pursuant to intergovernmental agreements, and state grants which are to be used for specific purposes. As in previous years, the County’s expenditures for fiscal year 2011-12 are expected to be under the limit of $501.8 million. Major Program Initiatives and Developments Several significant program initiatives and developments during the year include: 3 Pima Health System & Services On September 30, 2011, the County’s contracts with the Arizona Health Care Cost Containment System (AHCCCS) terminated. This year the CAFR presents the closing of the enterprise fund with a final Statement of Revenues, Expenses and Changes in Net Position. All year end remaining balances have been transferred to the County’s governmental funds. Therefore, there is no Statement of Net Position for PHS&S. Regional Optimization Master Plan The Regional Optimization Master Plan is a master plan to allow Pima County to meet environmental regulatory requirements mandated by the Arizona Department of Environmental Quality (ADEQ) for the County’s sewer system. ADEQ directed the County to meet new stringent quality based on mandates set by the United States Environmental Protection Agency (EPA). The County is pursuing the most cost-effective option for the 32 MGD Wastewater Reclamation Facility (WRF): a design-build-operate contract, with a single contractor providing all three elements. The DBO contract was awarded to CH2MHill on December 7, 2010, for $164 million. The WRF is projected to be operational in September 2014. For fiscal year 2012-13, the capital budget for wastewater infrastructure is $237.7 million. The Regional Optimization Master Plan capital program is primarily funded with obligations paid for with revenues generated mostly by user fees. Debt Management Pima County continues to utilize debt authorized by Pima County voters in numerous elections from 1997 to 2006. At June 30, 2012, $7.7 million from the May 20, 1997, $66.3 million from the May 18, 2004, and $4.7million from the May 16, 2006 bond elections remain unissued at June 30, 2012. The County issues Sewer Revenue Obligations to fund the construction and improvement of the County’s wastewater conveyance systems and treatment facilities. Bond sales anticipated for fiscal year 2012-13 include $50 million of general obligation debt, $60 million in sewer revenue obligations, and approximately $18.5 million to be used for a new Fleet Services facility. A refunding of the 1999 and 2003 capital lease agreements is expected to provide the County an interest rate savings. Please refer to the MD&A beginning on page 11 and Note 7 beginning on page 63 for specific details on debt issuances, defeasances, and refundings. Capital Improvements Major project expenditure budgets for next year include the Justice Court/Municipal Court Complex for $42.2 million; the Regional Public Safety Communications System (PCWIN) for $22.9; $18.5 million for the new Fleet Services Facility, and $8.7 for the Communications Emergency Operations Center. Four significant budgets for transportation projects for the year include: ● La Canada Drive: Ina Road to River Road at $8.9 million ● La Cholla Boulevard: Magee Road to Overton Road at $10.2 million ● Magee Road/Cortaro Farms Road, Thornydale Road to Mona Lisa project at $8.1million ● Magee Road, La Canada Drive to Oracle Road is budgeted at $8.7 million. Please refer to the MD&A beginning on page 11 for details on these and other significant projects. 4 Financial Information Accounting System and Budgetary Control In developing and evaluating the County’s accounting system, consideration is given to the adequacy of internal control procedures. Internal controls for accounting purposes are designed to provide reasonable, but not absolute, assurance regarding: (1) safeguarding of assets against loss from unauthorized use or disposition and (2) reliability of financial records for preparing financial statements and maintaining accountability of assets. The concept of reasonable assurance recognizes that the costs of implementing controls should not exceed their likely derived benefits and the evaluation of costs and benefits requires estimates and judgments by management. All internal control evaluations occur within the above framework. We believe that the County’s internal control structure adequately safeguards assets and provides reasonable assurance of proper recording of financial transactions. Budgetary control is maintained at the elected official or department level with each department budgeted on a account line item basis. Each year, the budget is presented emphasizing the programmatic components of County services by identifying the costs and funding of those programs. Cash Management Most cash, other than imprest accounts, is on deposit with the County Treasurer or the State Treasurer. Amounts temporarily available during the course of the fiscal year are invested by the County Treasurer according to statutory guidelines. To address cash flow needs in the short term, the County maintains a revolving line-of-credit with Bank of America, N.A. For short term needs within the County, the County uses internal borrowings among funds that are recorded in its accounting records. Risk Management Pima County has established a Self Insurance Trust Fund to account for the risk management function of the County. The Fund has an appointed Board of Trustees and provides self-insured coverage to the County for medical malpractice, workers’ compensation, unemployment, general liability, property damage, environmental damage, and employee dental benefits, as well as obtaining coverage for other risks. The Fund is financed by charges to other County funds. Other Information Independent Audit Arizona Revised Statutes require an annual audit of the financial statements. The County is fully compliant with this legal requirement. An independent auditors’ report is included in this CAFR. 5 Single Audit As a recipient of federal and state financial assistance, the County is required to ensure adequate internal controls are in place to comply with applicable laws and regulations related to administration of these programs. This internal control structure is subject to periodic evaluation by management of Pima County. As a part of the County’s Single Audit, tests are made to determine the adequacy of the internal control structure, including that portion related to federal financial assistance programs and whether the County has complied with applicable laws and regulations. The Single Audit for the fiscal year ended June 30, 2011 reported no material weakness and two significant deficiencies in its internal control over compliance. A complete Single Audit report for fiscal year 2010-11 can be found at: http://www.pima.gov/finance/reports.shtml The Single Audit for Pima County for the fiscal year ended June 30, 2012, was not complete at the time of publication of this CAFR. As demonstrated by the statements and schedules included in the financial section of this report, Pima County continues to meet its responsibility for sound financial management. Certificate of Achievement The GFOA awarded a Certificate of Achievement for Excellence in Financial Reporting to Pima County, Arizona, for its CAFR for 24 years from fiscal years ended June 30, 1984 through 2011, except for fiscal years ended June 30, 1990 and June 30, 1999, due to missing the filing deadline. In order to receive a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized CAFR with contents that conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. In addition, for 13 consecutive years, Pima County has received GFOA’s Distinguished Budget Presentation Award for its annual budget. The most current award was received for the fiscal year 2011-2012 budget document. In order to qualify for the Distinguished Budget Presentation Award, the government’s budget had to be judged proficient as a policy document, a financial plan, an operations guide, and a communications device. Acknowledgements Preparation of this report could not be accomplished without the efficient and dedicated service of the staff of the County’s Finance and Risk Management Department. We also wish to thank the Board of Supervisors for its continued support in planning and conducting the County’s financial operations in a responsible fiduciary manner. Respectfully submitted, Tom Burke Director, Finance and Risk Management C. H. Huckelberry County Administrator 6 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, 2012 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. 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, 2012, 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 one component unit, which account for the following percentages of the assets, liabilities, revenues, and expenses or expenditures of the opinion units affected: Opinion Unit/Department Government-Wide Statements Governmental Activities: Stadium District School Reserve Fund Self-Insurance Trust Business-Type Activities: Regional Wastewater Reclamation Department Development Services Aggregate Discretely Presented Component Units: Southwestern Fair Commission Fund Statements Major Fund: Regional Wastewater Reclamation Department Enterprise Fund Aggregate Remaining Fund Information: Stadium District School Reserve Fund Development Services Self-Insurance Trust Assets Liabilities Revenues Expenses/ Expenditures 1.47% 0.10% 2.74% 2.06% 0.03% 4.30% 0.36% 0.46% 0.14% 0.90% 0.52% 0.00% 98.98% 0.29% 99.84% 0.11% 68.83% 2.71% 63.51% 3.73% 99.84% 100.00% 97.82% 98.82% 100.00% 100.00% 100.00% 100.00% 0.43% 0.34% 0.60% 10.22% 0.37% 0.11% 0.51% 25.29% 1.00% 1.26% 2.10% 6.85% 1.81% 1.43% 2.68% 3.83% 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. 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 2910 NORTH 44 th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553-0333 • FAX (602) 553-0051 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, 2012, 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. U.S. generally accepted accounting principles require that the Management’s Discussion and Analysis on pages 11 through 29, the Budgetary Comparison Schedule on pages 81 and 82, and the Schedule of Agent Retirement Plans’ Funding Progress on page 83 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with U.S. generally accepted auditing standards, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquires, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County’s basic financial statements. The combining and individual fund statements and schedules and the introductory and statistical sections listed in the table of contents are presented for purposes of additional analysis and are not required parts of the basic financial statements. Such information is the responsibility of the County’s management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The combining and individual fund statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with U.S. generally accepted auditing standards by us and the other auditors. In our opinion, based on our audit, the procedures performed as described previously, and the reports of the other auditors, the combining and individual fund statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. 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 18, 2012 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, 2012 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, 2012, the net position for the County increased $125 million from the prior year. Increases were experienced in all net asset categories, with a $98 million increase in net investment in capital assets, an increase of $1 million in restricted net position and an increase of $26 million in unrestricted net position. • Assets of the County exceeded its liabilities by $2,274, an increase of 5.8% from the prior year. Of this amount, $223,785 is available for general government expenditures (unrestricted net position). Unrestricted net position increased by $25,731 from last year, or approximately 13%. • $240,165 is restricted for specific purposes (restricted net position), and $1,810 is net investment in capital assets. The chart below presents the composition of restricted and unrestricted net position for the current and prior years: 11 ● General Fund revenues increased by $6,011 from the prior year while expenditures increased by $16,616. • The General Fund unassigned fund balance increased to $77,596, from $73,547 in the prior year. The unassigned fund balances comprise 96% of the total fund balance of $80,767. 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 position presents information on all County assets, deferred outflows, liabilities, and deferred inflows with the difference between them reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the County is improving or deteriorating. The statement of activities presents information showing how net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported 12 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 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, Development Services, and the County’s downtown parking garages. Discretely presented component units are included in the basic financial statements. They consist of two 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 Pima County Sports and Tourism Authority (S&TA) is also reported as a discrete component unit. 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 31-33. 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 fund financial statements focus on near-term inflows and outflows of expendable resources, as well as on balances of expendable resources available at the end of the fiscal year. Such information may be useful in evaluating the County’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The County maintains fifteen individual governmental funds. Information is presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances for the General, Capital Projects and Debt Service funds which are reported as major 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. 13 The governmental fund financial statements can be found on pages 34-37. statements for non-major governmental funds can be found on pages 86-89. 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, deferred outflows, liabilities, and deferred inflows 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 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 38-41. The combining statements for other enterprise and internal service funds can be found on pages 105-112. 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 42-43. 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 46-79. 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 81-83. 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 86-116. 14 GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net position may serve as a useful indicator of a government’s financial position over time. County assets exceeded liabilities by $2,274 at June 30, 2012. The following table shows condensed information for the Schedule of Assets, Liabilities and Net Position: Table 1 Schedule of Assets, Liabilities, and Net Position At June 30, 2012 and 2011 Governmental Activities 2012 2011 Current and other assets Capital assets (net): Land, buildings, equipment, infrastructure & other assets $596,855 $529,767 Business-type Activities 2012 2011 $246,415 $226,442 Total 2012 2011 $843,270 $756,209 1,809,998 1,718,730 1,092,477 905,710 2,902,475 2,624,440 $2,406,853 2,248,497 1,338,892 1,132,152 3,745,745 3,380,649 120,443 716,370 71,038 715,013 42,655 592,539 51,975 393,678 163,098 1,308,909 123,013 1,108,691 Total liabilities 836,813 786,051 635,194 445,653 1,472,007 1,231,704 Net position Net investment in capital assets 1,245,227 1,136,033 564,561 575,525 1,809,788 1,711,558 167,498 157,315 161,807 164,606 72,667 66,470 77,526 33,448 240,165 223,785 239,333 198,054 $1,570,040 $1,462,446 $703,698 $686,499 $2,273,738 $2,148,945 Total assets Current and other liabilities Long-term liabilities Restricted Unrestricted Total net position Assets Current and other assets increased by $87,061 mainly due to an increase in Cash and Cash Equivalents, $91,543. Capital assets increased by $278,035 primarily due to the following: • • An increase of $221,970 in construction in progress, with $45,340 for governmental activities and $176,630 for business-type activities. Capitalization of software, $20,614, resulted in a net increase in Equipment of $23,224 in the governmental activities and an accompanying decrease of $2,799 for business-type activities. Total liabilities for the primary government increased by $240,303. Current liabilities increased $40,085 mainly due to an overall increase in accounts payable, with accounts payable for governmental activities increasing $47,119 and accounts payable for business-type activities increasing by $10,815. 15 Net position The largest portion of the County’s net position 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, 2012, net investment in capital assets totaled $1,809,788, comprising approximately 79.6% of total net position. 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 $98,230 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. Unrestricted net position for the primary government increased $25,731 mainly due to an increase in business-type activities of 99% ($33,022), specifically; the Regional Wastewater Reclamation Fund had an increase in its unrestricted net position of 120% from $25,652 to $56,462. The table below provides the composition of net position for the County as of June 30, 2012. Restricted net position represent resources that are subject to external restrictions on how they may be used. As of June 30, 2012, restricted net position totaled $240,165 and comprised approximately 10% of total net position. This represents an $832 increase in restricted net position from the prior fiscal year. 16 The remaining balance of the County’s net position represents unrestricted net position, which may be used to meet the County’s ongoing obligations to citizens and creditors. As of June 30, 2012, unrestricted net position totaled $223,785 and comprised approximately 10% of total net position. Governmental activities The following table shows details of the changes in net position for governmental activities: Table 2 Governmental Activities Schedule of Changes in Net Position For the Years Ended June 30, 2012 and 2011 2012 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 $ 66,904 143,388 47,528 257,820 Variance Amount Percent 2011 $ 60,077 136,472 65,030 261,579 $ 6,827 6,916 (17,502) (3,759) 11.4% 5.1% -26.9% -1.4% 394,963 116,660 3,416 43,072 558,111 416,985 111,804 2,153 33,336 564,278 (22,022) 4,856 1,263 9,736 (6,167) -5.3% 4.3% 58.7% 29.2% -1.1% Total revenues 815,931 825,857 (9,926) -1.2% 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 223,005 150,349 69,183 7,224 47,248 94,409 61,900 55,126 805 24,776 734,025 218,843 146,395 73,348 6,208 36,475 90,521 67,063 56,626 (2,626) 26,079 718,932 4,162 3,954 (4,165) 1,016 10,773 3,888 (5,163) (1,500) 3,431 (1,303) 15,093 1.9% 2.7% -5.7% 16.4% 29.5% 4.3% -7.7% -2.6% -130.7% -5.0% 2.1% Excess before transfers 81,906 106,925 (25,019) -23.4% Transfers in Change in net position 25,688 107,594 4,650 111,575 21,038 (3,981) 452.4% -3.6% Ending net position $ 1,570,040 17 $ 1,462,446 $ 107,594 7.4% Ending net position for governmental activities increased by $107,594, a 7.4% increase. This year’s change in net position decreased by $3,981 from last year, primarily due to a decrease in overall revenues of $9,926 and an increase in expenses of $15,093. Factors affecting the $9,926 decrease in revenues from governmental activities:  Revenue from capital grants and contributions decreased by $17,502 in Highway and Streets Activity. This is primarily from a decrease in ARRA Stimulus revenue, $4,071, a decrease in State Revenue of $6,232 and a decrease of $10,348 in Capital Contributions. Total expenses for governmental activities were $734,025, up 2.1% or $15,093 compared to the previous year’s total of $718,932. Factors contributing to the increase in expenses:  Health expenses increased by $10,772, of which $7,603 was related to a grant called Communities Putting Prevention to Work which was awarded at $15 million. This grant was predominantly awarded to funding partners in fiscal year 2012. The increase in the Transfers in line item of $21,038 was due to an equity transfer of $26,436 from Pima Health System & Services to Other Special Revenue Fund. 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 72% of the County’s revenues. General and Program Revenues - Governmental Activities Property taxes 50% State-shared taxes Capital grants & contributions 14% 8% Investment earnings 1% Other general revenue Operating grants 16% 4% Charges for services 7% 18 The chart below presents expenses by function as a percentage to total expenses by function for governmental activities: Each expense by function as a proportion to total expenses by function for governmental activities 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. 19 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 position for businesstype activities added $17,199 or 2.5% to the County's $124,793 change in total net position for the year ended June 30, 2012. The following table shows changes in net position for business-type activities: Table 3 Business-type Activities Schedule of Changes in Net Position For the Years Ended June 30, 2012 and 2011 2012 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 $ (141,942) (3,416) (1,516) (146,874) -39.1% -72.8% -36.2% -39.5% 1,001 1,903 2,904 900 2,681 3,581 101 (778) (677) 11.2% -29.0% -18.9% Total revenues 228,334 375,885 (147,551) -39.3% Expenses: Regional Wastewater Reclamation Pima Health System & Services Development Services Parking Garages       Total expenses 117,774 58,773 6,912 1,988 185,447 113,495 200,305 6,982 1,538 322,320 4,279 (141,532) (70) 450 (136,873) 3.8% -70.7% -1.0% 29.3% -42.5% Excess before transfers 42,887 53,565 (10,678) -19.9% Transfers in (out) (25,688) (4,650) (21,038) Change in net position 17,199 48,915 (31,716) 452.4% -64.8% Beginning net position 686,499 637,584 48,915 7.7% 686,499 $ 17,199 2.5% $ 221,479 1,275 2,676 225,430 703,698 $ Variance Amount Percent 363,421 4,691 4,192 372,304 Ending net position $ 2011 $ Key elements of the change in net position from business-type activities include:  Primarily due to the closing of the Pima Health System & Service Enterprise Fund charges for services revenue decreased by $141,942 and Pima Heath System & Services Expenses decreased $141,532.  The increase of $21,038 in the Transfers in (out) line is due to an equity transfer $26,436 from Pima Health System & Services to Other Special Revenue Fund. 20 FINANCIAL ANALYSIS OF THE COUNTY’S FUNDS As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. Governmental funds The County’s general government functions are accounted for in the General, Special Revenue, Debt Service, and Capital Project funds. Included in these funds are special districts governed by the Board of Supervisors (i.e. Flood Control, Library and Stadium Districts). The focus of the County's governmental funds is to provide information on near-term inflows, outflows and balances of expendable resources. Such information is useful in assessing the County's financing requirements. In particular, unassigned 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, 2012, total fund balance of the General Fund was $80,767. The net change in fund balance for the General Fund was $3,212. Revenues increased by $6,011. Property Taxes decreased by $9,846, while Intergovernmental revenues, Charges for services, and Miscellaneous revenues increased by $15,770.  Property taxes decreased $9,846 primarily due to lower assessed property valuations with the tax rates remaining constant.  Intergovernmental revenue increased by $4,077 due to increases in State Shared Sales Tax of $4,093.  Service fee revenue increased by $3,756 primarily in two areas:  Correctional Housing Revenues of $1,772  Fees for Recording Documents of $779.  Miscellaneous earnings increased by $7,937 of which $7,917 was Other Miscellaneous Revenue – Operating. Expenditures for the General Fund increased by $16,616 primarily in two categories:  The net increase in General Government expenditures of $10,997:  County Administrator expenditures increased by $5,129 primarily from a $1,586 increase in payments to other governments and agencies.  Superior Court expenditures increased by $3,463 primarily from increased payroll costs. 21  There was an increase in Public Safety expenditures of $6,663, primarily as a result of the Sheriff Department purchasing a helicopter for $2,556, and Sheriff operations expenditures increasing $2,935. Capital Projects Fund Revenues for the Capital Projects Fund decreased by $3,530 and expenditures in capital outlay decreased by $3,591. The net change in fund balance was an increase of $42,841.  Of the decrease in revenues, $3,147, can be attributed to intergovernmental revenues; Federal revenue decreased by $2,947 and State revenue decreased by $871.  Expenditures decreased by $3,591 in capital outlay primarily from the decrease in expenditures relating to the construction of the Behavioral Health Pavilion, $20,506, with an increase of $15,584 in the Emergency Communications Systems expenditures. The fund reported a $101,129 deficiency of revenues over expenditures. A net transfer in of $65,545 and that resulted in a net change in the fund balance of $42,841 for the Capital Projects Fund. Debt Service Fund The fund accounts for the accumulation of resources for and the payment of principal and interest of general long-term debt. At June 30, 2012, the net change in fund balance was a decrease of $7,605. Secondary tax revenues remained relatively constant with a decrease of $3,160. Expenditures, mainly as a result of increased principal payments, increased $7,840 from last fiscal year. Budget to Actual Comparison for the General Fund Overall, actual revenues were more than budgeted revenues by $18,734 and actual expenditures were less than budgeted expenditures by $45,856. No variances between the budget to actual amounts at the departmental level were significant enough to affect the County’s ability to provide future services. Overview of all governmental funds At June 30, 2012, the County's governmental funds reported combined fund balances of $395,385, an increase of $33,655 from the prior year. Approximately 16.4% of the combined fund balances, or $65,030, constitutes unassigned fund balance, which is available to meet the County's current and future needs. 22 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, 2012 and 2011 2012 2011 Amount Percent Amount Percent Taxes Special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeits Interest Miscellaneous Total revenues $ $ 407,711 245 8,155 327,939 56,881 10,249 2,286 24,796 838,262 48.6% 0.0% 1.0% 39.1% 6.8% 1.2% 0.3% 3.0% 100.0% $ $ 421,623 330 8,494 308,219 54,491 6,786 1,723 14,162 815,828 51.7% 0.1% 1.0% 37.8% 6.7% 0.8% 0.2% 1.7% 100.0% Variance Amount Percent $ $ (13,912) (85) (339) 19,720 2,390 3,463 563 10,634 22,434 -3.3% -25.8% -4.0% 6.4% 4.4% 51.0% 32.7% 75.1% 2.7% The following provides an explanation of revenues by source that changed significantly from the prior year: • The $19,720 increase in intergovernmental revenue was due to a $18,798 increase in Other Governmental Funds. • The $13,912 decrease in tax revenue is due to a $9,846 decrease in the General Fund revenue from decreased property values. The following table presents expenditures by function compared to prior year amounts: 23 Table 5 Governmental Funds Expenditures by Function For the Years Ended June 30, 2012 and 2011 Government Function 2012 Amount Percent General government $ 236,020 Public safety 145,711 Highways and streets 33,651 Sanitation 6,317 Health 46,672 Welfare 94,360 Culture and recreation 52,103 Education and economic opportunity 47,798 Capital outlay 149,612 Debt service: - Principal 78,688 - Interest 24,762 - Miscellaneous 1,179 Total expenditures $ 916,873 2011 Amount Percent 25.7% 15.9% 3.7% 0.7% 5.1% 10.3% 5.7% 5.2% 16.3% $ 223,611 136,709 34,614 5,375 36,511 90,572 49,986 50,432 153,203 25.3% 15.5% 3.9% 0.6% 4.1% 10.3% 5.7% 5.7% 17.3% 8.6% 2.7% 0.1% 100.0% 76,361 26,086 21 $ 883,481 8.6% 3.0% 0.0% 100.0% Variance Amount Percent $ $ 12,409 9,002 (963) 942 10,161 3,788 2,117 (2,634) (3,591) 5.5% 6.6% -2.8% 17.5% 27.8% 4.2% 4.2% -5.2% -2.3% 2,327 3.0% (1,324) -5.1% 1,158 5514.3% 33,392 3.8% Total expenditures in governmental funds increased during the year by $33,392, primarily due to the following: • Health expenditures increased by $10,161 primarily from the Communities Putting Prevention to Work grant. • Public safety expenditures increased by $9,002 due to the Sheriff’s Department purchase of a helicopter, $2,556. • General Government expenditures increased by $12,409 due to a $10,997 increase in the general fund. Proprietary funds The County’s proprietary fund functions are contained in the enterprise and internal service funds. The enterprise funds of the County are Pima Health System & Services, Regional Wastewater Reclamation, Development Services, and Parking Garages. Pima Health System & Services contract with the Arizona Health Care Cost Containment System (AHCCCS) terminated on September 30, 2011. As a result, the fund was closed and year-end balances were transferred to the other governmental funds as of June 30, 2012. These business-type activities are accounted for in a similar fashion to private-sector businesses and the costs for services provided are expected to be covered either fully or in part by generated revenues, which include fees charged to external users. The internal service funds consist of the Self-Insurance Trust Fund and Other Internal Service Funds, which are comprised of multiple smaller funds consisting of Fleet Services, Print Shop, and Wireless/Telecommunications. The change in net position for all Internal Service Funds was $10,128, generated primarily from the operations of the Self Insurance Trust Fund. 24 The following table presents a comparison of this year’s enterprise fund activities with the prior year: Table 6 Enterprise Funds Schedule of Revenues, Expenses and Changes in Net Position For the Years Ended June 30, 2012 and 2011 2012 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 Insurance premiums General and administrative Consultants and professional services Depreciation and amortization Total operating expenses 2011 52,018 153,128 1,387 206,533 $ 205,814 137,838 2,821 346,473 $ (153,796) 15,290 (1,434) (139,940) -74.7% 11.1% -50.8% -40.4% 67,469 157,607 8,986 5,845 1,438 7,611 -22.0% -75.2% 13.0% -100.0% 8.0% -10.4% 100.0% 22.4% -32.9% 11.9% -43.3% 1,553 6,819 23,318 5,471 35,819 174,891 19,058 8,157 32,022 308,193 (14,812) (118,511) 1,172 (5,845) 115 (792) 4,260 (2,686) 3,797 (133,302) Operating gain (loss) 31,642 38,280 (6,638) -17.3% Nonoperating revenues (expenses): Intergovernmental revenue Investment earnings Sewer connection fees Interest expense Loss on disposal of capital assets Amortization of deferred charges Claim and judgment contingency losses Premium tax Total nonoperating revenues 1,380 1,001 16,507 (6,539) 25 (941) (3,080) (1,112) 7,241 4,856 952 19,624 (9,567) (596) (750) (4,099) 10,420 (3,476) 49 (3,117) 3,028 621 (191) (3,080) 2,987 (3,179) -71.6% 5.1% -15.9% -31.7% -104.2% 25.5% 100.0% -72.9% -30.5% Income (loss) before contributions and transfers 38,883 48,700 (9,817) -20.2% 2,571 1,475 (27,163) 15,766 4,027 866 (5,516) 48,077 (1,456) 609 (21,647) $ (32,311) -36.2% 70.3% 392.4% -67.2% Capital contributions Transfers in Transfers (out) Change in net position 52,657 39,096 10,158 Variance Amount Percent $ $ While net patient revenues from Pima Health System & Services decreased by $153,796, revenues continued to exceed operating expenses, generating an operating gain for all enterprise funds this year. Regional Wastewater Reclamation contributed approximately 96%, or $30,476 to the $31,642 operating gain for all enterprise funds. 25 • Charges for service revenue increased by $15,290 due primarily to a $9,853 increase in Regional Wastewater Reclamation Sewer utility service fees. • Medical claims expense decreased $118,511 and employee compensation expense decreased $14,812 due to the termination of the AHCCCS contract with Pima Health System & Services • Transfers in and transfers out are significantly more this year. This fiscal year, the transfer out of $26,436 from Pima Health System & Services to Other Special Revenue was due to the movement of equity from the Enterprise Fund to a new Other Special Revenue Fund. Last fiscal year, Pima Health System & Services transferred out $4,596 as an equity transfer to the General fund. The chart below presents the revenues and expenses for business-type activities: Capital Assets and Debt Administration Capital Assets The County’s total net investment in capital assets as of June 30, 2012 amounted to $2,902 (net of accumulated depreciation), an increase of 10.6% ($278,035). Of this amount, $91,268 (32.8%) came from governmental activities and $186,767 (67.2%) came from business-type activities. The County’s investment in capital assets consists of land, buildings, sewage conveyance systems, infrastructure, equipment, and construction in progress. 26 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, 2012 and 2011 Governmental Activities 2012 2011 Land Construction in progress Buildings and improvements Infrastructure Sewage conveyance systems Equipment Total $ 467,661 $ 248,317 422,879 607,049 Business-type Activities 2012 2011 448,790 $ 202,977 432,149 593,946 15,409 $ 342,111 212,446 442,803 64,092 40,868 79,708 $ 1,809,998 $ 1,718,730 $ 1,092,477 $ Total 2012 2011 15,409 $ 165,481 207,081 483,070 $ 464,199 590,428 368,458 635,325 639,230 607,049 593,946 435,232 442,803 435,232 82,507 143,800 123,375 905,710 $ 2,902,475 $ 2,624,440 Major capital asset events during the current fiscal year included the following: Governmental activities • Construction in progress increased $45,340 or 22.3% compared to last fiscal year. Current major projects in progress include: o the Regional Public Safety Communication System o Pavement Preservation Program o Magee Rd Cortaro Farms Rd: Thornydale Rd to Mona Lisa o Justice Court/Municipal Court Complex o Magee Rd, Cortaro Farms Rd, Mona Lisa Rd to La Canada • Equipment acquisitions increased $23,224, or 56.8%, due to the capitalization of the County’s new financial reporting system, $20,614 and a helicopter by the Sheriff department for $2,590. Business-type activities • Construction in progress increased approximately $176,630, or 106.7%, 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 pages 58-60. 27 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, 2012 and 2011 2012 Bonds issued (at face value): General Obligation $ 76,225 Street and Highway Revenue (Transportation) 32,945 Sewer Revenue Sewer System Revenue Obligations 189,160 Total $ 2011 $75,000 43,625 298,330 $ 118,625 During the year, $76,225 of General Obligation Bonds were issued, which included $16,225 of General Obligations bonds issued to refund the 2003 Series (maturities 7/1/2014 through 7/1/2017) and $60,000 of new debt issued for the purpose of funding various capital projects in the County. In addition, the County issued $32,945 in Street and Highway Revenue Bonds. Of the amount issued $18,425 was used for the improvement, construction, and reconstruction of streets and highways, $14,520 was used to partially refund the 2003 Series (maturities 7/1/2014 through 7/1/2018). $189,160 of Sewer System Revenue Obligations were issued to finance additions and improvements to the sewage and conveyance systems. The most recent ratings for Pima County’s bonds and COPs are: Table 9 Credit Ratings Standard & Poor's Rating Date Certificate of Participation (COPs) General Obligation Street and Highway Revenue Sewer Bonds* Sewer Revenue Obligations A+ AAAA AAA+ May-2012 Apr-2012 Apr-2012 Nov-2012 Nov-2012 Fitch Ratings Rating Date AAAA AA AA AA- Apr-2012 Apr-2012 Apr-2012 Nov-2012 Nov-2012 * This excludes the 2012A Sewer Refunding bonds which have ratings equal to the Obligations 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 $1,267,242, which is significantly in excess of Pima County’s outstanding general obligation debt. Additional information regarding the County’s debt can be found in Note 7 of the financial statements on Pages 63-70 28 Economic Factors and Next Year’s Budget Primary property taxes The recession continues to impact the local economy, primarily evident by decreasing market values of existing property. The primary net assessed value for fiscal year 2012-13 decreased $236 million or 2.84%. The contraction of the property tax base is expected to continue into fiscal year 2015-16 with the net assessed value projected to decline by more than 6%. The tax rate for fiscal year 2012-13 will remain constant, resulting in a levy that is $8 million less than fiscal year 2011-12. State shared revenues An indication of increased consumer confidence is evident by positive projections of state shared sales tax revenue. Current projections indicate a $7.4 million increase in fiscal year 2012-13. Even with this positive projection however, it is still $13,286 less than the County received at its peak in fiscal year 2006-07. Other revenues General government revenues are expected to decrease by almost $6 million, primarily from $1 million decrease from Federal payments in lieu of property taxes and $4.9 million less from grant, enterprise and special revenue funds for central administrative support services. University of Arizona Medical Center – South Campus A two year agreement with the Arizona Board of Regents (ABOR) on behalf of the University Of Arizona College Of Medicine provides funding for the University of Arizona Medical Center – South Campus: $20 million in fiscal year 2010-11, $15 million in fiscal year 2011-12. The Board of Supervisor’s have approved a second two year contract with ABOR with an annual funding of $15 million for each fiscal year. 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. 29 (This page intentionally left blank) 30 Basic Financial Statements PIMA COUNTY, ARIZONA Statement of Net Position June 30, 2012 Exhibit A - 1 (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 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 $ Primary Government Business-type Activities 504,113 $ 14,456 209 (3,133) 62,462 6,499 2,476 3,513 3,206 107,152 2,326 728 112,242 114,568 728 467,661 248,317 15,409 342,111 483,070 590,428 422,879 212,446 442,803 79,708 635,325 442,803 143,800 607,049 2,306 2,406,853 1,338,892 3,745,745 5,629 65,710 35,317 365 205 2,133 101,027 365 1,991 52,382 3 2,484 4,846 74,713 641,657 836,813 26,995 565,544 635,194 101,708 1,207,201 1,472,007 232 1,245,227 564,561 1,809,788 2,972 64,092 607,049 Total assets Liabilities Accounts payable 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 1,991 47,542 3 2,484 2,713 Net Position Net investment in capital assets Restricted for: Facilities, justice, library, tax stabilization, and community development Highways and streets Debt service Capital projects Regional wastewater Healthcare Unrestricted Total net position 95 3,133 $ 66,470 703,698 611,265 14,456 304 $ 62,462 21,842 5,782 3,524 8,339 15,343 3,306 11 5,133 22,538 31,680 18,449 30,224 1,360 157,315 1,570,040 $ 4,840 103,592 32,322 $ Component Units Total $ See accompanying notes to financial statements 31 103,592 32,322 22,538 61,904 18,449 1,360 223,785 2,273,738 1,056 5 36 60 1,500 666 27 $ 2,425 5,397 PIMA COUNTY, ARIZONA Statement of Activities For the Year Ended June 30, 2012 (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 $ $ 223,005 150,349 69,183 7,224 47,248 94,409 61,900 55,126 805 24,776 734,025 117,774 58,773 6,912 1,988 185,447 919,472 59 4,959 5,018 Operating Grants and Contributions Charges for Services $ $ $ $ 30,444 12,047 5,059 3,487 12,605 2,254 1,008 28,533 9,303 51,567 1,133 24,830 68 403 27,551 66,904 143,388 154,601 58,722 6,073 2,083 221,479 288,383 20 4,940 4,960 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 position Net position at beginning of year Net position at end of year See accompanying notes to financial statements 32 $ Capital Grants and Contributions $ 261 2,325 47,528 2,571 1,275 $ $ $ 1,275 144,663 1 120 121 4,130 5,561 35,251 105 $ 2,676 50,204 Exhibit A - 2 Net (Expense) Revenue and Changes in Net Position Governmental Activities $ Primary Government Business-type Activities (159,898) (123,438) 22,694 (2,604) (9,813) (94,341) (58,982) (24,242) (805) (24,776) (476,205) $ $ (476,205) Component Units Total 39,398 1,224 (734) 95 39,983 39,983 (159,898) (123,438) 22,694 (2,604) (9,813) (94,341) (58,982) (24,242) (805) (24,776) (476,205) 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 39,398 1,224 (734) 95 39,983 (436,222) Business-type activities: Regional Wastewater Reclamation Pima Health System & Services Development Services Parking Garages Total business-type activities Total primary government $ $ $ 280,585 19,991 29,015 65,372 6,285 1,608 93,123 23,537 4,268 8,235 3,416 22,676 25,688 583,799 107,594 1,462,446 1,570,040 $ 1,001 1,903 (25,688) (22,784) 17,199 686,499 703,698 $ (38) 101 63 280,585 19,991 29,015 65,372 6,285 1,608 93,123 23,537 4,268 8,235 4,417 24,579 92 561,015 124,793 2,148,945 2,273,738 92 155 5,242 5,397 $ 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 position Net position at beginning of year Net position at end of year See accompanying notes to financial statements 33 PIMA COUNTY, ARIZONA Balance Sheet - Governmental Funds June 30, 2012 Exhibit A - 3 (in thousands) General Capital Projects Debt Service Other Governmental Funds Total Governmental Funds Assets Cash and cash equivalents Property taxes receivable (net) Interest receivable Due from other funds Due from other governments Accounts receivable Inventory Prepaid expenditures Loan receivable Other assets Restricted cash equivalents Total assets $ 91,085 10,148 73 7,528 21,513 1,903 67 1,984 669 $ 181,519 $ 26,639 2,440 16 1,575 11 $ 123,579 1,868 81 4,892 29,808 3,122 1,374 72 59 1,018 45 $ 422,822 14,456 191 15,143 62,350 6,071 1,441 2,056 728 1,018 2,326 21 1,148 11,018 1,046 2,281 $ 134,970 $ 197,033 $ 30,681 $ 165,918 $ 528,602 $ 20,679 $ 29,136 $ 148 $ $ Liabilities and fund balances Liabilities: Accounts payable Medical claims payable Contract retentions Employee compensation Due to other funds Due to other governments Deposits and rebates Deferred revenues 12,984 543 3 199 19,795 Total liabilities 54,203 Fund balances: Nonspendable Restricted Committed Assigned Unassigned 118 77,596 Total fund balances 80,767 Total liabilities and fund balances 2,720 333 $ 134,970 1,980 20 1,901 77 12,787 271 11 4,445 12,515 2,281 346 2,158 4 10,934 62,750 271 1,991 17,449 15,036 3 2,484 33,233 35,664 2,383 40,967 133,217 1,550 105,468 10,264 16,682 (9,013) 4,270 263,489 17,498 45,098 65,030 124,951 395,385 157,688 7,234 28,298 (3,553) 161,369 $ 197,033 28,298 $ 30,681 See accompanying notes to financial statements 34 $ 165,918 $ 528,602 PIMA COUNTY, ARIZONA Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position June 30, 2012 Exhibit A - 4 (in thousands) Fund balances - total governmental funds $ 395,385 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the 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 $ 2,628,502 (840,418) (603,093) (39,772) (16,431) 2,188 Some compensated absences are not due and payable shortly after June 30, 2012, and therefore are not reported in the governmental funds Employee compensation Some liabilities are not due and payable shortly after June 30, 2012, and are therefore not reported in the governmental funds Landfill liability Pollution remediation liability 1,788,084 (657,108) (29,138) (20,872) (805) (21,677) Deferred revenue in governmental funds is susceptible to full accrual on the government-wide statements 30,521 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 Position 63,973 Net position of governmental activities $ 1,570,040 See accompanying notes to financial statements 35 PIMA COUNTY, ARIZONA Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds For the Year Ended June 30, 2012 Exhibit A - 5 (in thousands) Revenues: Property taxes Special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous General $ 291,647 2,696 127,029 39,117 5,213 621 12,659 Total revenues Capital Projects $ $ 478,982 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 66,148 44,141 3,079 11 698 565 242 48,483 66,401 Other Governmental Funds Total Governmental Funds $ $ 197,190 123,235 2,919 94,292 15,195 12,967 Total expenditures Excess (deficiency) of revenues over (under) expenditures 838,262 38,830 22,476 33,651 6,317 43,753 68 36,908 34,831 78,390 24,762 1,172 298 7 236,020 145,711 33,651 6,317 46,672 94,360 52,103 47,798 149,612 78,688 24,762 1,179 104,324 217,139 916,873 33,184 (101,129) (37,923) 27,257 (78,611) 894 Total other financing sources (uses) (29,972) 25,237 330 45,820 (79,012) 894 7,349 30,745 (33,013) 78,425 1,938 141,924 (115,914) 143,970 30,318 (31,968) 112,348 3,212 42,841 (7,605) (4,711) 33,737 77,555 118,528 35,903 7,349 30,745 (33,013) 78,425 65,677 (132) 129,744 Changes in nonspendable fund balance: Change in inventory Change in prepaids Fund balances at end of year 244,396 149,612 1,608 5,190 (36,770) Fund balances at beginning of year 361,730 (55) (27) $ 407,711 245 8,155 327,939 56,881 10,249 2,286 24,796 445,798 Other financing sources (uses): Capital leases Premium on bonds Proceeds-refunding debt Payments to escrow agent Face amount of long-term debt Proceeds from sale of capital assets Transfers in Transfers (out) Net change in fund balances 149,612 49,916 245 5,459 156,758 14,685 5,036 725 11,572 80,767 $ 161,369 $ 28,298 See accompanying notes to financial statements 36 $ 124,951 (55) (27) $ 395,385 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, 2012 Exhibit A - 6 (in thousands) Net change in fund balances - total governmental funds $ 33,737 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 $ 141,790 (58,595) 83,195 (78,425) (7,349) (30,745) 78,688 33,013 (894) 1,153 (805) (5,364) 8,137 4,234 (18,688) (1,550) (7,867) (803) (928) 228 (3,217) (82) (4,802) 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 Position. 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 Position. Also, governmental funds report the effect of issuance costs, premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities. This amount is the net effect of these differences in the treatment of long-term debt and related items Face amount of long-term debt Premium on bonds Proceeds on refunding bonds Debt service - principal payments Payments to escrow agent Amendment to capital lease Deferred issuance costs Amortization expense 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 Intergovernmental 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 Other 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 position of governmental activities See accompanying notes to financial statements 37 8,695 $ 107,594 PIMA COUNTY, ARIZONA Statement of Net Position - Proprietary Funds June 30, 2012 Exhibit A - 7 (in thousands) 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 Regional Wastewater Reclamation $ $ Total Enterprise Funds 7,661 $ 4 3 145 15,198 3,306 6 189,925 - 5 7,818 40,453 - 13,641 373,747 702,236 112,298 (457,349) 342,111 1,086,684 5,133 1,132,270 - - Total assets Liabilities Current liabilities: Accounts payable Employee compensation Interest payable Due to other funds Deferred revenues Current sewer revenue bonds and obligations payable 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 - Total liabilities - 107,152 71,789 95 47 15,343 3,306 11 197,743 Governmental ActivitiesInternal Service Funds $ 81,291 18 218 112 428 1,035 1,457 84,559 40,453 1,768 12,927 5,793 15,409 386,674 702,236 113,508 (467,461) 342,111 1,092,477 5,133 1,138,063 1,322,195 13,611 1,335,806 106,473 34,994 4,148 365 121 2,131 24,445 2,550 323 692 35,317 4,840 365 121 2,133 24,445 2,550 2,689 955 1,210 (10,112) 5,793 2 68,754 1,017 592 614 38,895 (19,349) 1,162 21,914 21,914 251 1 4,202 2,114 10,212 69,771 15,365 525,930 21,169 15,365 525,930 21,169 3,080 565,544 3,080 565,544 19,253 9,828 29,081 634,298 1,017 635,315 39,293 558,768 5,793 564,561 21,914 6,801 22,538 31,680 18,449 63,263 45,266 12,594 700,491 Some amounts reported for business-type activities in the Statement of Net Position are different because certain internal service fund assets and liabilities are included with business-type activities. 3,207 Net position Net investment in capital assets Restricted for: Debt service Capital projects Regional wastewater reclamation Unrestricted Total net position 99,491 71,789 91 44 Other Enterprise Funds 22,538 31,680 18,449 56,462 $ - $ 687,897 $ Net position of business-type activities See accompanying notes to financial statements 38 $ 703,698 $ 67,180 PIMA COUNTY, ARIZONA Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds For the Year Ended June 30, 2012 Exhibit A - 8 (in thousands) Business-type Activities Enterprise Funds Operating revenues: Net patient services Charges for services Other Pima Health System & Services $ Total net operating revenues Operating expenses: Employee compensation Medical claims Operating supplies and services 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 Claim and judgment contingency losses Premium tax 52,018 6,704 1,182 Regional Wastewater Reclamation $ 8,330 39 $ 52,018 153,128 1,387 $ 42,585 407 138,260 8,369 206,533 42,992 11,370 39,096 587 35,474 5,813 7,646 95 96 9,476 1,553 6,501 222 52,657 39,096 10,158 1,553 6,819 6,655 231 115 58,150 14,212 5,091 35,477 107,784 2,451 149 227 8,957 23,318 5,471 35,819 174,891 1,398 2,209 4,619 3,707 1,302 3,510 33,796 1,754 30,476 (588) 31,642 9,196 105 35 1,380 1,001 16,507 (6,539) 25 (941) (3,080) (1,112) 848 16,507 (6,519) (317) (941) (3,080) (20) 342 (1,112) Income (loss) before contributions and transfers $ Governmental ActivitiesInternal Service Funds Total Enterprise Funds 59,904 1,275 118 Total nonoperating revenues 138,094 166 Other Enterprise Funds 9,405 1,260 (25) 603 6,498 140 7,241 1,235 2,357 36,974 (448) 38,883 10,431 1,000 (18) 2,571 1,475 (27,163) Capital contributions Transfers in Transfers (out) (26,436) Change in net position (24,079) 39,311 534 15,766 10,128 24,079 648,586 12,060 684,725 57,052 12,594 700,491 Net position at beginning of year Net position at end of year $ 2,571 475 (709) $ 687,897 $ 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 position of business-type activities See accompanying notes to financial statements 39 1,433 $ 17,199 19 (322) $ 67,180 PIMA COUNTY, ARIZONA Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2012 Exhibit A - 9 (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 Governmental ActivitiesInternal Service Funds $ $ Net cash provided by (used for) operating activities 55,170 7,886 (61,250) (5,099) $ 140,575 166 (26,849) (8,540) (12,449) (35,366) (15,742) 69,986 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 (26,436) (555) (1,112) 2,347 (234) (244) Net cash provided by (used for) noncapital financing activities (25,776) (478) $ 8,422 $ (1,454) (2,123) (4,996) (52,811) 402 (14,962) (4,496) (7,607) (6,597) 54,093 8,998 (151) (20) 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 Proceeds from premium Sewer connection fees Proceeds from sale of capital assets Purchase of capital assets 42,258 204,167 8,052 (89,553) (15,762) (322) 306 105 (20) 1,000 (26,688) (817) (1,112) 2,452 1,069 (25,185) (16) (199,105) 189,160 (22,030) (11,869) 21,682 16,203 762 (199,105) 333 (7,158) (5,959) (5,197) (6,825) 1,000 (18) (18) 189,160 (22,030) (11,869) 21,682 16,203 762 Net cash provided by (used for) capital and related financing activities 762 Cash flows from investing activities: Interest received on cash and investments 133 793 33 959 1,254 Net cash provided by investing activities 133 793 33 959 1,254 (40,623) 64,342 951 24,670 3,411 40,623 147,391 6,710 194,724 77,880 Net increase/ (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ $ 211,733 $ (continued) See accompanying notes to financial statements 40 7,661 $ 219,394 $ 81,291 PIMA COUNTY, ARIZONA Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2012 Exhibit A - 9.1 (in thousands) Reconciliation of operating income (loss) to net cash provided by (used for) operating activities Operating income (loss) Pima Health System & Services $ 1,754 Regional Wastewater Reclamation $ 30,476 Other Enterprise Funds $ (588) Total Enterprise Funds $ 31,642 115 35,477 227 35,819 2,976 216 91 78 2,481 4 49 72 5,461 265 618 180 250 (136) (18,717) (175) Governmental ActivitiesInternal Service Funds $ 9,196 Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization Other Changes in assets and liabilities: Decrease (increase) in assets: Accounts receivable Due from other governments Inventory and other assets Prepaid expense Increase (decrease) in liabilities: Accounts payable Due to other governments Reported but unpaid losses Incurred but not reported losses Other current liabilities 527 30 (19,854) (39) 887 (1,079) Net cash provided by (used for) operating activities $ (15,742) 108 $ 69,986 (29) $ (151) $ 54,093 Regional Wastewater Reclamation Enterprise Fund received developer-built conveyance systems with estimated fair value of $3,520. This contribution was recorded as an increase in capital assets and capital contributions. Regional Wastewater Reclamation Enterprise Fund recorded a Board of Supervisors' approved connection fee credit agreement of $951. This credit was recorded as an increase to deferred revenue and a decrease to capital contributions. Regional Wastewater Reclamation Enterprise Fund retired expired Sewer Credit Agreements totaling $2. This transaction was recorded as a decrease to deferred revenue and an increase in capital contributions. Regional Wastewater Reclamation Enterprise Fund retired capital assets with a net book value of $314. Pima Health System & Services retired equipment with a net book value of $286. Pima Health System & Services transferred equipment with a net book value of $134 to the County's general government. Internal Service Funds sold capital assets with a net book value of $358. See accompanying notes to financial statements 41 (262) (71) (84) (433) 2,227 (1) (5,397) 155 (1,000) Noncash investing, capital, and noncapital financing activities during the year ended June 30, 2012: Internal Service Funds received a capital contribution of $19. 3,510 158 $ 8,998 PIMA COUNTY, ARIZONA Statement of Fiduciary Net Position - Fiduciary Funds June 30, 2012 Exhibit A - 10 (in thousands) Investment Trust Funds Assets Cash and cash equivalents Interest receivable Due from other governments Total assets $ 297,724 96 $ 57,450 3,704 $ 297,820 Liabilities Employee compensation Due to other governments Deposits and rebates Total liabilities Net position Held in trust for pool participants Agency Funds $ 297,820 See accompanying notes to financial statements 42 $ 61,154 $ 496 38,700 21,958 $ 61,154 PIMA COUNTY, ARIZONA Statement of Changes in Fiduciary Net Position Fiduciary Funds For the Year Ended June 30, 2012 Exhibit A - 11 (in thousands) Investment Trust Funds Additions Contributions from participants Total contributions $ Investment earnings Total investment earnings 1,426 1,426 Total additions 2,610,356 Deductions Distributions to participants 2,710,812 Total deductions 2,710,812 Change in net position (100,456) Net position held in trust July 1, 2011 Net position held in trust June 30, 2012 See accompanying notes to financial statements 43 2,608,930 2,608,930 398,276 $ 297,820 PIMA COUNTY, ARIZONA Combining Statement of Net Position Component Units June 30, 2012 Exhibit A - 12 (in thousands) Sports & Tourism Authority Assets Cash and cash equivalents Accounts receivable (net) Inventories Prepaids Restricted assets: Cash and cash equivalents Capital assets (net): Buildings and improvements Machinery and equipment Total assets $ Southwestern Fair Commission 9 $ 9 Liabilities Accounts payable Deposits and rebates Total liabilities Net Position Net investment in capital assets Unrestricted Total net position $ 9 9 $ 1,047 5 36 60 Total $ 1,056 5 36 60 1,500 1,500 2,306 666 5,620 2,306 666 5,629 205 27 232 205 27 232 2,972 2,416 5,388 2,972 2,425 5,397 $ See accompanying notes to financial statements 44 See accompanying notes to financial statements 45 $ $ 20 20 4,960 4,940 4,940 General revenues: Miscellaneous Total general revenues Change in net position Net position at beginning of year Net position at end of year 5,018 Total component units 59 59 4,959 4,959 $ $ Southwestern Fair Commission (SFC) Operations Total SFC Sports & Tourism Authority (S&TA) Operations Total S&TA Expenses Charges for Services $ $ 121 120 120 1 1 Operating Grants and Contributions Program Revenues (in thousands) $ $ S&TA $ (38) 47 9 $ (38) (38) (38) SFC 92 92 193 5,195 5,388 101 101 101 $ $ Net (Expense) Revenue PIMA COUNTY, ARIZONA Combining Statement of Activities Component Units For the Year Ended June 30, 2012 92 92 155 5,242 5,397 63 101 101 (38) (38) Total Exhibit A - 13 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (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, 2012, the County early implemented the provisions of GASB Statement No. 61, The Financial Reporting Entity: Omnibus, an amendment of GASB Statements No. 14 and No. 34. GASB Statement No. 61 modifies certain requirements for the inclusion of component units in the financial reporting entity. The County also early implemented the provisions of GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. GASB Statement No. 63 establishes criteria for reporting the consumption and acquisition of net position that is applicable to future reporting periods. 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. Each blended component described below provides a financial benefit and/or financial burden to the County. 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. 46 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) The Pima County Street Lighting Improvement Districts (SLIDs) are responsible for street lighting for specific regions of unincorporated Pima County. All budgetary and operational activities are administered by the Pima County Board of Supervisors and meet the criteria for a blended component unit. SLIDs are reported as a special revenue fund in these financial statements. Separate financial statements for the SLIDs 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 annual fair and other events at the fairgrounds. The Commission’s members are appointed and can be removed at any time by the Pima County Board of Supervisors. Based on these factors, and because SFC does not provide services entirely, or almost entirely to the County, but rather to the general citizenry, SFC is reported as a separate component unit (discrete presentation) in these financial statements. Complete financial statements for SFC can be obtained from the Pima County Department of Finance and Risk Management located at 130 West Congress Street, Tucson, Arizona 85701. 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 Supervisors. 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. Separate financial statements are unavailable for S&TA. 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 fund, and fiduciary fund 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 post-closure care costs, and pollution remediation, which are 47 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) 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 an expenditure/expense is incurred that can be paid from either restricted or unrestricted fund balances/net position, the County uses restricted fund balance/net position first. When an expenditure is incurred that can be paid from more than one category of unrestricted fund balances, the County will use committed amounts first, followed by assigned amounts, and lastly unassigned amounts. Fund balances of the governmental funds are reported separately within classifications based on a hierarchy of the constraints placed on the use of those resources. The classifications are based on the relative strength of the constraints that control how the specific amounts can be spent. The classifications are nonspendable, restricted, and unrestricted, which includes committed, assigned, and unassigned fund balance classifications. The nonspendable fund balance classification includes amounts that cannot be spent because they are either not in spendable form, such as inventories, or are legally or contractually required to be maintained intact. Restricted fund balances are those that have externally imposed restrictions on their usage by creditors, such as through debt covenants, grantors, contributors, or laws and regulations. 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 authorized by the same action that limited the funds. The unassigned fund balance is the residual classification for the General Fund and includes all spendable amounts not reported in the other classifications. Also, deficits in fund balances of the other governmental funds are reported as unassigned. The County does not have a formal minimum fund balance policy, however, all County funds fund balances or net position are analyzed throughout the year and reserved as necessary during the budgetary appropriation process. 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. C. Basis of Presentation The basic financial statements include both government-wide and fund-based financial statements. The government-wide statements focus on the County as a whole, while the fund-based 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. 48 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) Government-wide statements provide information about the primary government and its component units. The statements include a statement of net position and a statement of activities. These statements report the financial activities of the overall government, except for fiduciary activities. They also distinguish between thegovernmental and business-type activities of the County and between the County and its discretely presentedcomponent 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:    Charges for services (fines and forfeitures, licenses and permits, and special assessments); Operating grants and contributions; and Capital grants and contributions Revenues that are not classified as program revenues, including internally dedicated resources and all taxes levied or imposed by the County, are reported as general revenues. The net effect of interfund activity has been eliminated from the government-wide financial statements to minimize the double counting of internal activities. Fund-based financial statements provide information about the County’s funds, including fiduciary funds and blended component units. Separate statements are presented for the governmental, proprietary, and fiduciary fund categories. The emphasis of fund-based financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as non-major funds. Fiduciary funds are aggregated and reported by fund type. Proprietary funds are financed mainly by fees and charges received from users of the services provided by the fund’s operations. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. 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) provided 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, 49 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) and long-term nursing care. The County’s AHCCCS contracts terminated on September 30, 2011, and the Pima Health System and Services ceased operations. All residual balances of the fund were transferred to the other governmental funds at June 30, 2012. 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 funds are custodial in nature and do not present results of operations. D. Cash and Investments Primary government: For purposes of its statements of cash flows, the County considers only those highly liquid investments, with a maturity period of 3 months or less when purchased, to be cash equivalents. All investments are stated at fair value. If an individual fund has a deficit balance in the amount on deposit with the County Treasurer at year-end, that balance is reclassified as an amount due to other funds. E. Inventories and Prepaids The County accounts for its inventories in the Health Fund using the purchase method. Inventories of the Health Department 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 nonspendable fund balance to indicate that they do not constitute “available spendable resources.” These inventories are stated at cost using the first-in, first-out method or average cost method. Inventories of the Transportation Department are recorded as assets when purchased and expensed when used. Inventories in Transportation are valued at lower of cost or market, cost being determined using the moving average method. Inventories in the government-wide and proprietary funds’ financial statements are recorded as assets when purchased and expensed when consumed. Inventories of RWR, an enterprise fund, are valued at lower of cost or market, cost being determined using the moving average method. 50 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) Inventories of 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. 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 improvements) All Straight Line 20 - 30 Years $100 Straight Line 10 - 50 Years $5 Straight Line 4 - 25 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 Equipment 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. H. Investment Earnings Investment earnings are composed of interest, dividends, and net changes in the fair value of applicable investments. 51 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) 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 benefitsareaccrued as a liability in theJRYHUQPHQWZLGHDQGSURSULHWDU\IXQG financial statementsin (PSOR\HH&RPSHQVDWLRQ 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 fund financial statements in Employee Compensation. &ompensaWHGDEVHQFHV for the governmental funds is accrued based on vacation and sick leave paid within the first two pay periods after fiscal year end. 52 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 2: Fund Balance Classifications The table below details the fund balance categories and classifications: General Fund Capital Projects Fund Debt Service Fund Other Governmental Funds CAFR Total Net Position: Nonspendable: Inventory Prepaid expenses Loan receivable Permanent fund principal Total nonspendable $ 67 1,984 669 $ 2,720 Restricted for: Capital Projects Streets and highways Other Justice Court Complex 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 $ 42,385 78,481 22,651 $ 1,441 2,056 728 45 4,270 157,688 34,367 9,712 9,792 4,385 15,217 17 508 3,186 22,877 1,214 4,193 105,468 42,385 78,481 22,651 34,367 23,883 9,792 4,385 15,217 17 508 3,186 22,877 1,214 4,526 263,489 7,234 7,234 414 4,440 5,410 10,264 414 4,440 12,644 17,498 805 1,648 1,890 1,130 11,209 16,682 28,298 114 805 1,652 1,890 1,130 11,209 45,098 14,171 333 333 1,374 72 59 45 1,550 Committed to: School reserve Sports promotion (Stadium) Other purposes Total committed Assigned to: Debt service reserve Judicial activities Health Parks and recreation Landfill School reserve Other purposes Total assigned Unassigned: Total Net Position $ 114 28,298 4 118 $ 77,596 80,767 28,298 (3,553) 161,369 $ 53 $ 28,298 $ (9,013) 124,951 $ 65,030 395,385 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (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; 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; and bonds of any county municipal district, municipal utility, or special taxing district of any state that are payable from revenues, earnings, or a special tax pledged for all payments on the obligations. 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 of prime quality and be rated within the top two ratings by a nationally recognized rating agency. 2. Corporate bonds, debentures, and notes must be rated within the top three ratings by a nationally recognized rating agency. 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 and certificates of deposit 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. 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, 2012, the carrying amount of the County’s deposits was $57,136 and the bank balance was $66,485. 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, 2012, $1,977 of the County’s bank balance was exposed to custodial credit risk because it was uninsured and uncollateralized. 54 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 3: Cash and Investments (continued) Investments—At June 30, 2012, the County’s investments consisted of $552,258 invested in marketable securities and $471,556 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. 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, 2012, credit risk for the County’s investments was as follows: Investment Type Rating Rating Agency Amount S&P / Moody's $ S&P / Moody's S&P / Moody's S&P / Moody's S&P / Moody's S&P / Moody's Marketable securities Commercial paper Corporate bonds Federal Farm Credit Bank Federal Home Loan Bank Freddie Mac (Federal Home Loan Mortgage Corp) Money market mutual fund A1/P1 A-/A3 AA+/Aaa AA+/Aaa AA+/Aaa AAAm/Aaa State Treasurer Investment Pool 5 State Treasurer Investment Pool 500 State Treasurer Investment Pool 7 S&P AAAf/S1+ Unrated Unrated State Treasurer's Investment Pool 234,756 72,529 164,271 471,556 $ Total 38,545 376,649 15,204 52,582 5,099 11,175 499,254 970,810 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 $1,023,814 of investments, $541,083, consisting of the commercial paper, corporate bonds, Federal Farm Credit Bank, Federal Home Loan Bank, 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. At June 30, 2012, the County had investments in the Federal Home Loan Bank with a fair value of $52,582 or 5.1% of total investments. 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. 55 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 3: Cash and Investments (continued) As of June 30, 2012, the County had the following investments: Investment Type Weighted Average Maturity (Years) Amount $ 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 Freddie Mac (Federal Home Loan Mortgage Corp) U.S. Treasury Notes Money market mutual fund 234,756 72,529 164,271 38,545 376,649 15,204 52,582 5,099 53,004 11,175 0.07 7.36 0.08 0.17 1.72 2.40 1.67 0.48 1.14 0.14 $ 1,023,814 Total A reconciliation of cash, deposits, and investments to amounts shown on the Statements of Net Position follows: Cash on Hand Cash, deposits, and investments: $ 57 Amount of Deposits $ 57,136 Amount of Investments $ 1,023,814 Total $ 1,081,007 Governmental Business-type Investment Activities Activities Trust Funds Statement of Net Position: Cash and cash equivalents Restricted cash and cash equivalents Total Agency Funds Totals $ 504,113 $ 107,152 $ 297,724 $ 57,450 $ 966,439 $ 2,326 506,439 $ 112,242 219,394 $ 297,724 $ 57,450 114,568 $ 1,081,007 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. 56 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 3: Cash and Investments (continued) Substantially, all deposits and investments of the County’s primary government are included in the County Treasurer’s investment pool. Therefore, the deposit and investment risks of the Treasurer’s investment pool are substantially the same as the County’s deposit and investment risks disclosed above. The Pool’s assets consist of the following: Commercial paper Corporate bonds Federal Farm Credit Bank Federal Home Loan Bank Freddie Mac (Federal Home Loan Mortgage Corp) U.S. Treasury Notes State Treasurer Investment Pool 5 Deposits Interest Receivable Total assets Principal Interest Rates Maturities Fair Value $ 38,550 358,606 15,000 52,250 5,000 51,290 76,601 19,605 96 0.1-0.2% 0.4-7.3% 0.5-1.7% 0.3-3.1% 4.1% 1.1-3.9% N/A N/A N/A 07/12-11/12 08/12-03/17 10/13-12/15 08/12-05/16 12/12 08/12-07/14 N/A N/A N/A $ $ A condensed statement of the investment pool’s net position and changes in net position follows: Statement of Net Position Assets held in trust for: Internal participants External participants Total assets Total liabilities Total net position held in trust Statement of Changes in Net Position Total additions Total deductions Net increase Net position held in trust: July 1, 2011 June 30, 2012 57 $ 503,836 133,549 637,385 $ 637,385 $ 7,353,082 (7,321,183) 31,899 $ 605,486 637,385 38,545 376,649 15,204 52,582 5,099 53,004 76,601 19,605 96 637,385 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 4: Due from Other Governments Governmental activities: Capital Projects Fund General Fund Federal government: Grants and contributions State of Arizona: Taxes and shared revenues Grants and contributions Other Cities: Reimbursement for services Other governments: Reimbursement for services Total due from other governments fund based statements $ 187 $ Debt Other Service Governmental Fund Funds - 20,083 $ 1,733 995 802 248 8,483 $ 21,513 $ 11,018 $ $ 11 $ 11 $ 16,951 Internal Service Funds Total Governmental Activities $ $ 1 17,139 7,720 3,305 3 29,536 3,308 1,544 88 3,440 288 20 9,039 29,808 $ 112 $ 62,462 Note 5: Capital Assets Capital asset activity for the year ended June 30, 2012, was as follows: Balance July 1, 2011 (as reclassified)* 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 448,790 202,977 651,767 $ 601,905 1,155,494 118,810 1,876,209 Less accumulated depreciation for: Buildings and improvements Infrastructure Equipment Total accumulated depreciation (169,797) (561,651) (77,798) (809,246) Total capital assets being depreciated, net Governmental activities capital assets, net Increases 1,066,963 $ 1,718,730 58 $ 19,813 122,018 141,831 $ (942) (76,678) (77,620) 9,342 47,894 34,871 92,107 (7,522) (321) (6,686) (14,529) (16,373) (34,688) (11,044) (62,105) 5,324 321 5,939 11,584 30,002 (2,945) 171,833 Balance June 30, 2012 Decreases $ (80,565) $ 467,661 248,317 715,978 603,725 1,203,067 146,995 1,953,787 (180,846) (596,018) (82,903) (859,767) 1,094,020 $ 1,809,998 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 5: Capital Assets (continued) Balance July 1, 2011 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 15,409 165,481 180,890 $ 369,351 681,720 110,063 1,161,134 Less accumulated depreciation for: Buildings and improvements Infrastructure Equipment Total accumulated depreciation Total capital assets being depreciated, net Business-type activities capital assets, net Increases (162,270) (246,488) (27,556) (436,314) 724,820 905,710 $ $ 215,835 215,835 $ (39,205) (39,205) 20,202 21,149 5,339 46,690 (2,879) (633) (1,894) (5,406) (14,624) (13,264) (7,931) (35,819) 2,666 319 1,687 4,672 10,871 226,706 Balance June 30, 2012 Decreases $ (734) (39,939) $ 15,409 342,111 357,520 386,674 702,236 113,508 1,202,418 (174,228) (259,433) (33,800) (467,461) $ 734,957 1,092,477 * At July 1, 2011, the general government buildings, improvements, and infrastructure of $40 and $104, respectively were reclassified to equipment. 59 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 5: Capital Assets (continued) Depreciation expense was charged to functions as follows: Governmental activities: General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Internal service funds Total governmental activities depreciation expense $ 10,203 9,981 29,711 1,119 687 85 5,938 871 3,510 62,105 $ Business-type activities: Pima Health System & Services Parking Garages Regional Wastewater Reclamation Development Services Total business-type activities depreciation expense $ 115 218 35,477 9 35,819 $ Balance July 1, 2011 Increases Balance June 30, 2012 Decreases Discretely presented component units: Southwestern Fair Commission (SFC): Capital assets being depreciated: Buildings and improvements Equipment Total capital assets being depreciated $ 5,017 2,417 7,434 Less accumulated depreciation for: Buildings and improvements Equipment Total accumulated depreciation Total capital assets being depreciated, net SFC capital assets, net $ 366 171 537 (2,857) (1,738) (4,595) (220) (184) (404) 2,839 133 2,839 60 $ $ 133 $ (45) (45) $ 5,383 2,543 7,926 (3,077) (1,877) (4,954) 45 45 2,972 $ 2,972 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (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 $2,500, per occurrence; workers’ compensation claim up to $1,000, per occurrence; or any medical malpractice claims in aggregate up to $5,000, in any policy year. The County purchases commercial insurance for claims in excess of coverage provided by the Fund and for some other risks of loss. Settled claims have not exceeded insurance coverage in any of the last three fiscal years. Payment of unemployment and dental claims is fully self-funded. Payment of environmental claims is generally self-funded, although some claims filed could result in past insurers being liable for such losses. All of the County’s departments participate in the Fund. With the exception of environmental, dental, and unemployment losses, charges are based on actuarial estimates of the amounts needed to pay prior- and current-year claims. Charges for environmental losses are based on historical experience. Charges for dental and unemployment losses are based on actual claims paid. The claims liability of $35,397 reported in the Fund at June 30, 2012, 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. 2012 2011 Claims liabilities - beginning Current-year claims and changes in estimates Claims payment $ 40,795 2,209 (7,607) $ 38,378 9,099 (6,682) Claims liabilities balance - ending $ 35,397 $ 40,795 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. 61 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 6: Claims, Judgments, and Risk Management (continued) Pollution Remediation The County has estimated and reported an environmental liability of $805 in the government-wide financial statements for governmental activities (in noncurrent liabilities). Remediation efforts are currently underway at one County site: El Camino del Cerro. 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. 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 and injection wells, and/or changes in the estimated extent of contamination. 62 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (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, 2012. Balance July 1, 2011 Additions Balance Due within Reductions June 30, 2012 1 year $ $ $ Governmental activities: General obligation bonds Plus unamortized deferred amount Total general obligation bonds 452,750 3,106 455,856 456,145 5,412 461,557 $ 49,175 400 49,575 26,285 159 26,444 138,070 3,466 141,536 12,055 73 12,128 46,895 1,340 48,235 8,165 298 8,463 38,730 1,042 39,772 3,875 23 3,898 18,565 (790) 2,230 (290) 298 2,238 16,335 (500) 596 16,431 2,780 (282) 298 2,796 2,210 5,397 23,455 11,942 4,202 2,114 131,410 (35) 131,375 Transportation revenue bonds Plus unamortized deferred amount Total transportation revenue bonds Certificates of participation Plus unamortized deferred amount Total certificates of participation Capital leases payable: Jail capital lease Less unamortized deferred amount Other capital leases Total capital leases 76,225 3,689 79,914 32,945 3,660 36,605 894 894 17,775 Reported but unpaid losses (Note 6) Incurred but not reported losses (Note 6) 23,456 17,339 2,209 Landfill closure and post-closure care costs (Note 8) 19,944 928 1,033 Pollution remediation (Note 6) Total governmental activities long-term liabilities $ 715,013 72,830 1,383 74,213 $ 20,872 228 $ 120,550 63 $ 119,193 805 $ 716,370 $ 74,713 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 7: Long-Term Liabilities (continued) Balance July 1, 2011 Additions Reductions Balance June 30, 2012 Due within 1 year $ $ 169,310 1,712 171,022 $ 14,895 5,225 3,114 8,339 348,935 30,418 379,353 9,550 3,685 (14) 3,671 23,719 2,550 23,719 2,550 1,341 15,365 Business-type activities: Sewer revenue bonds Plus unamortized deferred amount Total revenue bonds payable $ 182,430 2,352 184,782 Sewer revenue obligations Plus unamortized deferred amount Total revenue obligations payable 165,000 11,849 176,849 Regional Wastewater Reclamation (RWR) loans payable Less unamortized deferred amount Total loans payable 27,404 (14) 27,390 $ 189,160 21,683 210,843 4,657 Contracts and notes 12,049 3,080 Incurred but not reported losses Total business-type activities long-term liabilities 13,120 640 13,760 $ 393,678 $ 225,972 14,895 9,550 3,080 $ 27,111 $ 592,539 $ 26,995 GENERAL OBLIGATION BONDS OUTSTANDING Governmental Activities (Payments made from property tax revenues of the Debt Service Fund) General obligation bonds payable at June 30, 2012, consisted of the outstanding general obligation bonds presented below. Of the total amounts originally authorized, $7,697 from the May 20, 1997, $66,318 from the May 18, 2004, and $4,666 from the May 16, 2006 bond elections remain unissued. The following table presents amounts outstanding by issue. Issue Amount Issue 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 Series of 2011 75,000 Series of 2012A 60,000 Series of 2012B Refunding 16,225 G.O. bonds outstanding Plus unamortized deferred amount: Interest Rates 4.00% 3.00 - 5.00% 3.50 - 5.00% 3.00 - 4.50% 3.50 - 4.00% 3.00 - 4.13% 3.00 - 4.00% 3.00 - 3.50% 2.00 - 5.00% 1.00 - 4.00% 2.00 - 3.00% Maturities 2013 2013-19 2013-20 2013-21 2013-22 2013-23 2013-24 2013-16 2013-26 2013-27 2013-17 Total G.O. bonds outstanding 64 Outstanding June 30, 2012 $ 3,750 32,660 35,635 62,295 71,250 38,000 73,435 10,820 52,075 60,000 16,225 456,145 5,412 $ 461,557 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 7: Long-Term Liabilities (continued) The following schedule details general obligation bond debt service requirements to maturity at June 30, 2012. Year Ending June 30, 2013 2014 2015 2016 2017 2018 - 2022 2023 - 2027 Total Principal 49,175 41,775 37,015 38,045 39,710 189,105 61,320 $ 456,145 $ Interest 16,974 15,361 13,886 12,560 11,207 34,457 5,764 $ 110,209 $ REFUNDED GENERAL OBLIGATION BONDS In 2012, the County defeased $15,850 of General Obligation Bonds, Series 2003 by issuing $16,225 of General Obligation Bonds that have an average life of 3.54 years and an average interest rate of 2.355%. This refunding transaction resulted in an economic gain of $875 and a reduction in debt service payments of $910. 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. The Series 2003 Bonds remain legally defeased in substance at the amount disclosed below. Principal Outstanding June 30, 2012 Issue 2003 General Obligation Refunded Bonds $ 15,850 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, $89,375 from the November 4, 1997 bond election remains unissued. Issue Interest Amount Rates Maturities Issue Series of 2003 35,000 4.00% 2013 Series of 2005 51,200 3.50 - 5.00% 2013-20 Series of 2007 21,000 3.25 - 4.75% 2013-22 Series of 2008 25,000 3.25 - 4.50% 2013-22 Series of 2009 15,000 3.00 - 4.00% 2013-24 Series of 2009 Refunding 8,420 3.00 - 4.00% 2013-24 Series of 2012 18,425 3.00 - 5.00% 2013-27 Series of 2012 Refunding 14,520 4.00 - 5.00% 2013-18 Transportation bonds outstanding Plus unamortized deferred amount: Total transportation bonds outstanding 65 Outstanding June 30, 2012 2,670 36,865 17,770 24,400 15,000 8,420 18,425 14,520 138,070 3,466 $ 141,536 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 7: Long-Term Liabilities (continued) The following schedule details transportation bond debt service requirements to maturity at June 30, 2012. Year Ending June 30, 2013 2014 2015 2016 2017 2018 - 2022 2023 - 2027 Total Principal 12,055 12,425 12,910 13,430 14,050 59,985 13,215 $ 138,070 $ Interest 5,537 4,969 4,488 3,983 3,372 8,743 1,116 $ 32,208 $ Pima County has pledged future highway user revenues, net of specified operating expenses, to repay $138,070 in transportation revenue bonds issued between 2003 and 2012. 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 2027. Annual principal and interest payments on the bonds are expected to require approximately 96 percent of net revenues. Total principal and interest remaining to be paid on the bonds is  $170,278.  Principal and interest paid  for bonds in the current year and  total QHWKLJKZD\XVHU UHYHQXHVwere $15,940 and $13,499, respectively. REFUNDED TRANSPORTATION BONDS In 2012, the County defeased $15,270 of Transportation Bonds, Series 2003, by issuing $14,520 of Transportation Bonds that have an average life of 4.18 years and an average interest rate of 4.195%. The proceeds of the new bonds were placed in an irrevocable trust to provide for legal defeasance of the refunded debt on July 1, 2013. This refunding transaction was performed primarily to restructure outstanding debt in order to align projected future revenues with corresponding debt service requirements and resulted in a reduction in debt service payments of $1,167 and an economic gain of $1,106. The Series 2003 Bonds remain legally defeased in substance at the amount disclosed below. Principal Outstanding June 30, 2012 Issue 2003 Transportation Refunded Bonds $ 15,270 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 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 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. 66 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 7: Long-Term Liabilities (continued) The following schedule details outstanding Certificates of Participation payable at June 30, 2012. Issue Interest Amount Rates Maturities Issue Series of 2007A $ 28,765 4.25 - 5.00% 2013-22 Series of 2010 20,000 3.00 - 5.25% 2013-19 Certificates of participation outstanding Plus unamortized deferred amount: Total certificates of participation outstanding Outstanding June 30, 2012 $ 22,505 16,225 38,730 1,042 $ 39,772 The following schedule details debt service requirements to maturity for the County’s Certificates of Participation payable at June 30, 2012. Year Ending June 30, 2013 2014 2015 2016 2017 2018 - 2022 Total Principal 3,875 4,020 4,170 4,345 4,570 17,750 $ 38,730 $ Interest 1,766 1,627 1,472 1,297 1,074 2,269 $ 9,505 $ 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 heavy equipment for use at its landfill sites. The outstanding balance as of June 30, 2012, for these leases totaled $596. The net book value of assets acquired through capital leases consists of $15,908 of buildings and $867 of equipment. The following schedule details capital lease debt service requirements to maturity at June 30, 2012. Governmental Activities: Year Ending June 30, 2013 2014 2015 2016 2017 2018 Buildings Principal Interest $ 2,780 $ 647 2,485 511 2,605 399 2,710 293 2,820 181 2,935 62 $ 16,335 $ 2,093 67 Equipment Interest Principal $ 298 298 $ 596 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 7: Long-Term Liabilities (continued) SEWER REVENUE BONDS, LOANS, AND OBLIGATIONS Business-type Activities (Payments made from user charges received in the RWR) Pima County sewer revenue bonds, as presented below, were issued to provide monies to construct improvements to the County’s Regional Wastewater Reclamation system and for the defeasance of prior sewer revenue bonds. As of June 30, 2012, the County has issued the total amounts originally authorized from the May 20, 1997 and May 18, 2004 bond elections. Issue Interest Amount Rates Issue Maturities Series of 2004 Refunding 25,770 4.60 - 5.50% 2013-15 Series of 2007 50,000 3.75 - 5.00% 2013-26 Series of 2008 75,000 4.00 - 5.00% 2013-23 Series of 2009 18,940 3.25 - 4.25% 2013-24 Series of 2011 Refunding 43,625 2.00 - 5.00% 2013-16 Sewer revenue bonds outstanding Plus unamortized deferred amount: Total sewer revenue bonds outstanding Outstanding June 30, 2012 $ 10,405 38,770 73,580 16,715 29,840 169,310 1,712 $ 171,022 The following schedule details sewer revenue bond debt service requirements to maturity at June 30, 2012. Year Ending June 30, 2013 2014 2015 2016 2017 2018 - 2022 2023 - 2026 Total Principal $ 14,895 16,765 17,555 15,950 11,250 65,300 27,595 $ 169,310 Interest $ 7,347 6,661 5,882 5,057 4,354 14,260 2,086 $ 45,647 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. In December 2011, the County issued Sewer Revenue Obligations Series 2011B for $189,160 to provide additional funding for the construction and improvements of the County’s wastewater conveyance systems and treatment facilities. 68 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 7: Long-Term Liabilities (continued) Issue Interest Amount Rates Maturities Issue Series of 2010 $ 165,000 2.50 - 5.00% 2014-25 Series of 2011B 189,160 1.00 - 5.00% 2013-26 Sewer revenue obligations outstanding Plus unamortized deferred amount: Total sewer revenue obligations outstanding Outstanding June 30, 2012 $ 165,000 183,935 348,935 30,418 $ 379,353 The following schedule details sewer revenue obligation debt service requirements to maturity at June 30, 2012. Year Ending June 30, 2013 2014 2015 2016 2017 2018 - 2022 2023 - 2026 Total Principal 9,550 11,935 12,330 12,850 25,915 149,710 126,645 $ 348,935 $ Interest 17,028 16,646 16,169 15,596 14,984 54,785 14,609 $ 149,817 $ 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 2004 which was 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 1996 Loans payable 2004 Loans payable 2009 Loans payable Issue Amount $ 11,313 19,967 8,002 Interest Rate Maturities 3.19% 2013 1.81% 2013-24 0.96% 2013-24 Total loans payable Outstanding June 30, 2012 $ 1,105 15,518 7,096 $ 23,719 The following schedule details loans payable debt service requirements to maturity at June 30, 2012. Year Ending June 30, 2013 2014 2015 2016 2017 2018 - 2022 2023 - 2026 Total Principal 2,550 1,489 1,535 1,581 1,629 8,922 6,013 $ 23,719 $ 69 Interest 687 622 576 529 480 1,613 278 $ 4,785 $ PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 7: Long-Term Liabilities (continued) Pima County has pledged future user charges, net of specified operating expenses, to repay $169,310 in sewer revenue bonds issued between 2004 and 2011, $23,719 in sewer revenue loans issued between 1996 and 2009, and $348,935 in sewer revenue obligations issued in 2010 and 2011. 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 2026. Annual principal and interest payments on the bonds and obligations are expected to require approximately 42 percent of net revenues. The annual principal and interest payments on the loans are expected to require approximately 9 percent of net revenues. Total principal and interest remaining to be paid on the bonds is $214,957. Total principal and interest remaining to be paid on the loans is $28,504. Total principal and interest remaining to be paid on the obligations is $498,752. Principal and interest paid for bonds, loans and obligations in the current year and total customer net revenues were $39,586, $4,069, and $80,142, respectively. All sewer revenue bonds were issued and the loan agreements were executed with a first lien on the pledge of the RWR net revenues and have restrictive covenants, primarily related to minimum utility rates and limitations on future bond issues. The bond covenants also require the RWR to either maintain a surety bond guaranteeing the payment of annual debt service or to maintain in the Bond Reserve Account monies equal to the average annual debt service payment. At June 30, 2012, the RWR had a surety bond to meet the requirements of the debt covenants. The County is also authorized to issue for the RWR additional parity bonds if certain conditions are met, primarily that net revenues for the fiscal year immediately preceding issuance of the parity bonds exceed 120 percent of the maximum annual debt service requirements immediately after such issuance. CONTRACTS AND NOTES Business-type Activities (Payments made from restricted assets in the RWR) Contracts and notes consist of contract retentions for several construction projects. Generally, interest is not accrued and the timing of payments is based on completion of the related construction projects. LEGAL DEBT MARGIN County General Obligation Bonds General obligation debt may not exceed 6 percent of the value of the County’s taxable property as of the latest assessment. However, with voter approval, debt may be incurred up to 15 percent of the value of taxable property. Pima County has received voter approval for all general obligation debt. The legal debt margin at June 30, 2012, is as follows: Net assessed valuation $ 8,448,282 Debt limit (15% of net assessed valuation): 1,267,242 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 456,145 (22,602) Legal debt margin available 433,543 $ 70 833,699 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 8: Landfill Liabilities Solid Waste Landfill Closure and Post-Closure Care Costs: State and Federal laws and regulations require the County to place a final cover on its solid waste landfill sites when these sites stop accepting waste and to perform certain maintenance and monitoring functions at the sites for thirty years after their closure. Although closure and post-closure care costs will not be paid until near or after the date the landfills stop accepting waste, the County records a portion of these closure and post-closure care costs as a long-term liability in each period, based on landfill capacity used as of each balance sheet date. The $20,872 reported as landfill closure and post-closure care long-term liability within the governmental activities represents the cumulative amount reported to date, based on the percentage used of each landfill's total estimated capacity. The County will recognize the remaining estimated cost of closure and post-closure care of $5,608 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, 2012; actual costs may change due to inflation, changes in technology, or changes in regulations. Landfill Site Capacity Used June 30, 2012 Ajo Sahuarita Tangerine 71% 51% 95% Estimated Remaining Service Life 38 Years 30 Years 5 Years 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 $10,596 when closure occurs and plans to fund the costs with proceeds of general obligation bonds and with solid waste tipping fees. At this time, there is no closure date available. Note 9: Pension and Other Post (PSOR\PHQW%HQHILWV 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 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 retiree’s 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. 71 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 9: PensionV and Other 3RVW(PSOR\PHQW%HQHILWV (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 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 seven-member board, known as The Board of Trustees, 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 Board of Trustees of PSPRS and the participating local boards according to the provisions of A.R.S. Title 38, Chapter 5, Article 6. Each plan issues a publicly available financial report that includes its financial statements and required supplementary information. A report may be obtained by contacting the applicable plan. ASRS PSPRS and CORP 3300 N. Central Ave Phoenix, AZ 85012 (602) 240-2000 or (800) 621-3778 3010 East Camelback Road Suite 200 Phoenix, AZ 85016-4416 (602) 255-5575 Funding Policy The Arizona State Legislature establishes and may amend active plan members’ and the County’s contribution rates for ASRS, PSPRS and CORP. Cost-sharing plans For the year ended June 30, 2012, active ASRS members were required by statute to contribute at the actuarially determined rate of 10.74 percent (10.5 percent for retirement and 0.24 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, 2012 the County contributed 10.74 percent (9.87 percent for retirement, 0.63 percent for health insurance premium, and 0.24 percent for long-term disability) of the members’ annual covered payroll. For the year ended June 30, 2011, the County contributed 9.85 percent (9.01 percent for retirement, .59 percent for health insurance premium, and 0.25 percent for longterm disability) of the members’ annual covered payroll. For the year ended June 30, 2010, the County contributed 9.4 percent (8.34 percent for retirement, 0.66 percent for health insurance premium, and 0.40 percent for long-term disability) of the members’ annual covered payroll. 72 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 9: Pension and Other Post (PSOR\PHQW%HQHILWV (continued) ASRS Retirement Fund Health Benefit Supplement Fund Long-term Disability Fund Year ended June 30, 2012 2012 2011 2010 $ $ $ 21,290 21,774 20,234 $ $ $ 1,359 1,426 1,601 $ $ $ 518 604 970 Agent plans For the year ended June 30, 2012, active PSPRS members were required by statute to contribute 8.65 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 5.00 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, 2012 were established by the June 30, 2010 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 multi-year 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 2012 contribution requirements, are as follows: 73 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 9: Pension and Other Post (PSOR\PHQW%HQHILWV (continued) PSPRS June 30, 2010 Projected unit credit Actuarial valuation date Actuarial cost method Actuarial Assumptions: Investment rate of return Projected salary increases includes inflation at Amortization method Remaining amortization period CORP June 30, 2010 Projected unit credit 8.50% 5.50% - 8.50% 5.50% Level percent-of-pay closed 8.50% 5.50% - 8.50% 5.50% Level percent-of-pay closed 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 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, 2012, and related information follows: PSPRS CORP Health Insurance Pension Health Insurance Pension Annual pension/Healthcare cost $ 8,445 $ 638 $ 2,076 $ 288 Contributions made $ 8,699 $ 384 $ 2,218 $ 146 74 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 9: Pension and Other Post Employment Benefits (continued) 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 2012, FY 2011 and FY 2010 is as follows: Plan Year Ended June 30 Annual Pension/ Healthcare Cost Percentage of Annual Cost Contributed Net Pension/ Healthcare Obligation PSPRS Pension 2012 $ 8,445 103% Health insurance 2012 $ 638 60% Pension 2011 $ 8,303 103% Health insurance 2011 $ 624 63% Pension 2010 $ 8,761 102% Health insurance 2010 $ 591 75% Pension 2012 $ 2,076 107% Health insurance 2012 $ 288 51% Pension 2011 $ 1,824 108% Health insurance 2011 $ 282 50% Pension 2010 $ 1,943 102% Health insurance 2010 $ 232 79% $ 254 $ 232 $ 151 $ 142 $ 140 $ 49 CORP Funded Status The funded status of the plans, as of the most recent valuation date of June 30, 2012, 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. 75 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 9: Pension & Other Post (PSOR\PHQW%HQHILWV (continued) PSPRS Pension Actuarial accrued liability $ 268,903 Actuarial value of assets $ 149,085 Unfunded actuarial accrued liability (funding excess) $ 119,818 Funded ratio $ Unfunded actuarial accrued liability (funding excess) as a percentage of covered payroll Remaining amortization period Asset valuation method $ $ 55.4 % Covered payroll Actuarial valuation date Actuarial cost method Actuarial Assumptions: Investment rate of return Projected salary increases includes inflation at Amortization method CORP Health Insurance 31,920 375.4 % Pension 7,325 $ 83,526 0 $ 51,797 7,325 $ 31,729 0 % $ 31,920 22.9 % Health Insurance $ 3,161 0 $ 3,161 62.0 % $ 21,743 0 % $ 21,743 145.9 % PSPRS June 30, 2012 Entry Age Normal CORP June 30, 2012 Entry Age Normal 8.00% 5.00% - 9.00% 5.00% Level percentage of pay closed 8.00% 5.00% - 8.25% 5.00% Level percentage of pay closed 24 Years for unfunded , 20 years for overfunded 7-year smoothed market 24 Years for unfunded , 20 years for overfunded 7-year smoothed market 76 14.5 % PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 10: Interfund Transactions A. Interfund Assets/Liabilities Due from / Due to Other funds are used to record loans or unpaid operating transfers between funds. $ 12 $ Se rv ic e $ 77 680 $ 44 To ta l In te r R RW 7,408 77 na l ta l $ 130 Debt Service O t ov her er nm en G eb tS er D Ca p $ Capital Projects vi ce Pr oj ec ts ita l al en er G Amounts recorded as due to: General s Amounts recorded as due from: $ 31 $ 7,528 217 1,148 3 4,892 1,575 Other Governmental 412 50 1 43 RWR 1,575 4,427 44 Other Enterprise 3 3 Internal Services 218 218 Total $ 543 $ 1,901 $ 77 $ 12,515 $ 121 $ 251 $ 15,408 B. Transfers Transfers are used to record transactions between individual funds to subsidize their operations and fund debt service payments and capital construction projects. General Capital Projects $ Other Governmental 56,512 7,420 16,792 $ 19,535 175 $ Other Enterprise 132 s Se rv ice To tal na l In ter ise R RW Ot he rE nt er pr vi ce Se r PH S& 5,190 8,815 RWR s m en tal Ot he rG $ Debt Service Total ov er n Pr oj ec ts Ca p ita l al ne r Ge Amounts recorded as transfers in: Amounts recorded as transfers out: $ $ 326 96 613 $ $ 18 254 65,677 68 25,237 26,110 45,820 343 475 1,000 $ 36,770 $ 5,190 1,000 132 $ 79,012 $ 77 26,436 $ 709 $ 18 $ 322 $ 143,399 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 11: Construction and Other Significant Commitments At June 30, 2012, Pima County had the following major contractual commitments related to Facilities Management; General Government; Natural Resources, Parks and Recreation; Pima Health System and Services; Regional Flood Control; Regional Wastewater Reclamation; and Transportation. Facilities Management At June 30, 2012, the Pima County Facilities Management Department had construction contractual commitments of $42,025 and other contractual commitments related to service contracts of $6,525. Funding for these expenditures will be provided from general fund revenues. General Government At June 30, 2012, Pima County had contractual commitments related to service contracts for Community Development and Neighborhood Conservation Department of $11,051, Office of Court Appointed Counsel of $55,324 and, Institutional Health of $63,593. Procurement Department had construction contractual commitments of $95,429 and other contractual commitments related to service contracts of $3,851. Sheriff Department had contractual commitments related to construction contracts of $3,275 and other related contractual commitments related to service contracts of $8,960. Funding for these expenditures will be provided from general fund revenues. Natural Resources, Parks and Recreation At June 30, 2012, Pima County had contractual commitments related to construction contracts for Natural Resources, Parks and Recreation of $14 and other contractual commitments related to services of $20,032. Funding for these expenditures will be provided from general obligation bonds. Pima Health System & Services At June 30, 2012, Pima County had contractual commitments related to service contracts for Pima Health System & Services of $18,922. Funding for these expenses will be primarily provided from federal and state funding sources. Regional Flood Control At June 30, 2012, the Regional Flood Control fund had construction contractual commitments of $790 and other contractual commitments related to service contracts of $7,196. Funding for these expenditures will be primarily from tax levy revenues. Regional Wastewater Reclamation At June 30, 2012, the Regional Wastewater Reclamation Enterprise Fund had construction contractual commitments of $77,916 and other contractual commitments related to service contracts of $30,958. Funding for these expenses will be primarily from Sewer Revenue Obligations and related fees. Transportation At June 30, 2012, the Pima County Transportation Department had construction contractual commitments of $37,415 and other contractual commitments related to service contracts of $21,481. 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. 78 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2012 (in thousands) Note 12: Subsequent Event Sewer System Revenue Obligations – On December 1, 2012 the RWR will issue Series 2012A Obligations in the amount of $150,000 to provide funds for the construction of improvements and extensions to the sewer system of the County. Interest is payable semiannually and is calculated based on the principal amount of the loan outstanding during such period. Payments will be made from user charges received in the Regional Wastewater Reclamation Enterprise Fund. 79 (This page intentionally left blank) 80 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, 2012 Exhibit B - 1 (in thousands) Budgeted Amounts Original Final Revenues: Property taxes Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Total revenues $ 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 Total expenditures 287,133 2,613 123,412 36,554 5,793 470 4,273 460,248 $ 287,133 2,613 123,412 36,554 5,793 470 4,273 460,248 8,455 1,923 10,188 12,407 1,087 84,688 19,502 100,825 2,756 8,455 1,923 10,188 12,407 1,087 84,688 19,502 100,825 2,756 10,378 22,445 27,252 31,352 2,548 121,877 28,153 1,823 1,539 2,456 491,654 Excess (deficiency) of revenues over (under) expenditures Actual $ 291,647 2,696 127,029 39,117 5,213 621 12,659 478,982 Variance $ 4,514 83 3,617 2,563 (580) 151 8,386 18,734 10,378 22,445 27,252 31,352 2,548 121,877 28,153 1,823 1,539 2,456 491,654 7,993 1,777 10,283 11,536 1,080 43,490 19,477 94,292 2,919 3 7,814 22,271 32,729 30,245 3,345 123,236 29,568 271 1,431 2,038 445,798 462 146 (95) 871 7 41,198 25 6,533 (163) (3) 2,564 174 (5,477) 1,107 (797) (1,359) (1,415) 1,552 108 418 45,856 (31,406) (31,406) 33,184 64,590 Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers (out) Total other financing sources (uses) 5,035 (27,280) (22,245) 5,035 (27,280) (22,245) 1,608 5,190 (36,770) (29,972) 1,608 155 (9,490) (7,727) Net change in fund balance (53,651) (53,651) 3,212 56,863 Fund balance at beginning of year Fund balance at end of year 53,651 $ 53,651 $ See accompanying notes to schedule 81 $ 77,555 80,767 $ 23,904 80,767 PIMA COUNTY, ARIZONA Notes to Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund June 30, 2012 (in thousands) Note 1: Budgetary Basis of Accounting Arizona Revised Statutes (ARS § 42-17101) require that on or before the third Monday in July of each year, the Board of Supervisors adopts 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 Funds 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, 2012, expenditures exceeded appropriations in the following General Fund departments (the legal level of budgetary control) by the following amounts: Justice & Law Enforcement, $5,477; Forensic Science Center, $163; Clerk of Superior Court, $95; Superior Court, $1,415; Recorder, $797; Graphics, $3; and Sheriff, $1,359. These expenditures were funded by greater than anticipated revenues and unspent appropriations. 82 PIMA COUNTY, ARIZONA Schedule of Retirement Plans' Funding Progress June 30, 2012 Exhibit B - 2 (in thousands) Plan Year Ended June 30 PSPRS Pension 2012 Health Insurance 2012 Pension 2011 Health Insurance 2011 Pension 2010 Health Insurance 2010 CORP Pension 2012 Health Insurance 2012 Pension 2011 Health Insurance 2011 Pension 2010 Health Insurance 2010 Actuarial Value of Plan Assets $ 149,085 Actuarial Accrued Liability $ 0 $ 149,088 145,388 $ 51,797 $ 51,477 $ 50,077 0 (7,325) 0.0% 242,778 (93,690) 61.4% (7,353) 0.0% (75,477) 65.8% (7,040) 0.0% (31,729) 62.0% (3,161) 0.0% (23,574) 68.6% (3,261) 0.0% (14,537) 77.5% (3,092) 0.0% $ 220,865 $ 83,526 $ 3,161 $ 0 $ 55.4% 7,040 0 $ (119,818) $ 7,353 0 $ Funded Ratio 7,325 0 $ 268,903 Funding (Liability) Excess 75,051 $ 3,261 $ 64,614 $ 3,092 83 Annual Covered Payroll $ $ $ $ $ $ Unfunded Liability as Percentage of Covered Payroll 31,920 375.4% 31,920 22.9% 30,805 304.1% 30,805 23.9% 31,302 241.1% 31,302 22.5% 21,743 145.9% 21,743 14.5% 20,441 115.3% 20,441 16.0% 19,885 73.1% 19,885 15.6% (This page intentionally left blank) 84 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 care, and emergency management. 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. 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 for roads and streets. The Special Districts are a blended component unit of Pima County. 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. Street Lighting Improvement District (SLIDs) Fund – to account for financial activity related to street lighting in unincorporated Pima County. The SLIDs are a blended component unit of Pima County. Employment and Training – In prior years, this fund was used to account for resources funded primarily with grant proceeds from the Workforce Investment Act. With the implementation on July 1, 2011 of a new financial reporting system, this fund was combined with other governmental grants and now reports under the Other Special Revenue Grants Fund. (This page is intentionally blank) 85 PIMA COUNTY, ARIZONA Combining Balance Sheet - Nonmajor Governmental Funds June 30, 2012 (in thousands) Transportation Special Revenue Funds Regional Flood Control District Other Health Other Grants School Reserve 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 Restricted cash and cash equivalents Total assets $ 20,311 $ 1,323 13 11 7,261 1 1,307 1,215 114 1,310 147 64 $ 10,577 $ 791 16 64,651 11 35 194 299 59 1,751 10 6 4 $ $ 1,651 1 3,107 19,945 493 404 61 56 1,018 $ 30,038 $ 4,057 $ 11,409 $ 66,995 $ 23,513 $ 2,205 $ 828 $ 492 $ 514 $ 2,631 271 11 875 245 $ 6,346 $ 125 Liabilities and fund balances Liabilities: Accounts payable Medical claims payable Contract retentions Employee compensation Due to other funds Deposits and rebates Deferred revenues Total liabilities Fund balances: Nonspendable Restricted Committed Assigned Unassigned 575 2,275 713 261 192 2 718 5,851 4,055 1,310 22,877 64 995 881 9,283 1,487 2,607 28 1,687 5,520 19,117 153 10 9,712 65 43,216 5,337 12,857 56 10,121 (1,057) Total fund balances Total liabilities and fund balances 834 323 2 3,864 24,187 $ 30,038 (5,781) 2 $ 508 414 1,130 9,722 4,057 $ 86 11,409 61,475 $ 66,995 4,396 $ 23,513 2,052 $ 2,205 Exhibit C - 1 Special Revenue Funds Environmental Quality $ 2,484 Special Districts $ Solid Waste 73 $ Library District 3,249 $ Stadium District 16,674 $ 2 1,077 13 282 5 110 304 170 410 45 163 8 2,332 Street Lighting Improvement Districts Total Other Governmental Funds $ $ 254 1,868 81 4,892 29,808 59 3,122 1,374 72 1,018 45 1 45 $ 2,655 $ 205 $ 73 $ 3,703 $ 18,224 $ 2,791 $ 255 $ 165,918 $ 531 $ 808 $ 303 $ 4 $ 12,787 271 11 4,445 12,515 4 10,934 95 179 64 2 803 1 57 15 14 2 1,350 151 493 599 2,962 526 1,357 1,214 45 15,217 4 40,967 1,550 105,468 10,264 16,682 (9,013) 251 73 4,440 805 1,890 (2,175) 2,162 $ 2,655 73 $ 73 123,579 3,104 $ 3,703 15,262 $ 18,224 87 2,265 $ 2,791 251 $ 255 124,951 $ 165,918 PIMA COUNTY, ARIZONA Combining Statement of Revenue, Expenditures and Changes in Fund Balance - Nonmajor Governmental Funds For the Year Ended June 30, 2012 (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 District Other Health $ $ Total revenues Expenditures: Current: General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Debt service - principal - miscellaneous 1,097 45,181 140 $ Other Grants School Reserve 20,256 123 293 2,182 3,264 2,811 159 11 484 19 4 86 132 74 20,901 7,944 4,226 280 6,184 46,834 8,911 20,571 39,535 82,793 10,663 32,257 4,368 6,437 7,445 316 $ $ 80,445 $ 3,754 7 2,341 33,335 18,205 3,754 175 1,541 23,238 68 57 29,585 3,705 Total expenditures 33,335 18,205 10,663 38,341 67,146 3,705 Excess (deficiency) of revenues over (under) expenditures 13,499 (9,294) 9,908 1,194 15,647 49 Other financing sources (uses): Proceeds on capital leases Proceeds from sale of capital assets Transfers in Transfers (out) 330 2,901 (22,280) 8,326 (203) (14,050) 28,056 (30,426) 454 (8,930) Total other financing sources (uses) (19,049) 8,123 (14,050) (2,370) (8,476) Net change in fund balances (5,550) (1,171) (4,142) (1,176) 7,171 Fund balance at beginning of year, as restated 29,737 1,228 13,864 62,651 (2,775) Change in inventory Change in prepaids Fund balance at end of year 49 2,030 (55) (27) $ 24,187 $ 2 $ 88 9,722 $ 61,475 $ 4,396 $ 2,052 Exhitbit C - 2 Special Revenue Funds Environmental Quality Special Districts Solid Waste Library District $ $ $ Stadium District 29,274 Street Lighting Improvement Districts $ 386 Total Other Governmental Funds $ 5 14 79 639 127 704 21 1,130 1 49,916 245 5,459 156,758 14,685 5,036 725 11,572 250 4,712 31,211 2,978 387 244,396 136 38,830 22,476 33,651 6,317 43,753 68 36,908 34,831 298 7 245 2,161 $ 12 10 277 2,460 1,133 3,486 467 $ 1,609 218 6,317 2,310 31,982 4,694 31,982 4,694 136 217,139 (1,716) 251 27,257 298 7 2,310 6,622 150 250 (1,910) (771) 894 390 (103) 4,893 (3,020) 894 330 45,820 (79,012) (103) 1,873 (31,968) (874) 157 800 390 1,694 540 250 1,622 (216) (177) 3,320 16,136 251 (4,711) 2,108 129,744 (55) (27) $ 2,162 $ 73 $ 3,104 $ 15,262 89 $ 2,265 $ 251 $ 124,951 (This page intentionally left blank) 90 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, 2012 Exhibit C -3 (in thousands) Budget Revenues: Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ 937 53,977 Expenditures: Capital outlay 221,159 149,612 71,547 Total expenditures 221,159 149,612 71,547 (167,182) (101,129) 66,053 103,000 26,049 129,049 78,425 65,677 (132) 143,970 (24,575) 39,628 (132) 14,921 (38,133) 42,841 80,974 Other financing sources (uses): Face amount of long-term debt 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 $ 105,312 67,179 91 $ Variance 44,141 3,079 698 565 48,483 Deficiency of revenues under expenditures 49,384 3,656 Actual $ 118,528 161,369 $ $ (5,243) (577) 698 (372) (5,494) 13,216 94,190 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Debt Service Fund For the Year Ended June 30, 2012 Exhibit C - 4 (in thousands) Budget Revenues: Taxes Intergovernmental Investment earnings Total revenues 65,603 Expenditures: Debt service - principal - interest - miscellaneous Total expenditures 75,645 25,139 40 100,824 78,390 24,762 1,172 104,324 (2,745) 377 (1,132) (3,500) Deficiency of revenues under expenditures (35,221) (37,923) (2,702) Other financing sources (uses): Premium on bonds Proceeds-refunding debt Payments to escrow agent Transfers in Total other financing sources 25,237 25,237 7,349 30,745 (33,013) 25,237 30,318 7,349 30,745 (33,013) 0 5,081 Net change in fund balance (9,984) (7,605) 2,379 $ 65,603 22,780 12,796 92 $ Variance 66,148 11 242 66,401 Fund balance at beginning of year Fund balance at end of year $ Actual $ 35,903 28,298 $ $ 545 11 242 798 13,123 15,502 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, 2012 Exhibit C - 5 (in thousands) Budget Revenues: Licenses and permits Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ Actual 822 47,259 120 118 171 48,490 $ Variance 1,097 45,181 140 123 293 46,834 $ 275 (2,078) 20 5 122 (1,656) Expenditures: Highways and streets Total expenditures 36,200 36,200 33,335 33,335 2,865 2,865 Excess of revenues over expenditures 12,290 13,499 1,209 Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers (out) Total other financing (uses) 2,901 (22,280) (19,379) 330 2,901 (22,280) (19,049) 330 330 (7,089) (5,550) 1,539 Net change in fund balance Fund balance at beginning of year Fund balance at end of year $ 23,380 16,291 93 $ 29,737 24,187 $ 6,357 7,896 PIMA COUNTY, ARIZONA Schedule of Revenue, Expenditures and Changes in Fund Balance - Budget and Actual Health - Special Revenue Fund For the Year Ended June 30, 2012 Exhibit C - 6 (in thousands) Budget Revenues: Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Total revenues $ Actual 2,829 1,876 3,192 158 49 8,104 2,182 3,264 2,811 159 11 484 8,911 Expenditures: Health 16,700 18,205 (1,505) Total expenditures 16,700 18,205 (1,505) Deficiency of revenues under expenditures (8,596) (9,294) (698) 8,123 8,326 (203) 8,123 203 (203) (1,171) (698) 1,228 (55) (1,564) (55) Other financing sources (uses): Transfers in Transfers (out) Total other financing sources 8,123 Net change in fund balance (473) Fund balance at beginning of year Change in inventory Fund balance at end of year $ Variance 2,792 $ 2,319 94 $ 2 $ $ (647) 1,388 (381) 1 11 435 807 (2,317) 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, 2012 Exhibit C - 7 (in thousands) Budget Revenues: Taxes Licenses and permits Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ Expenditures: Flood control Total expenditures Actual 20,178 25 35 181 20,419 20,256 19 4 86 132 74 20,571 12,044 12,044 10,663 10,663 1,381 1,381 8,375 9,908 1,533 (14,056) (14,056) (14,050) (14,050) 6 6 (5,681) (4,142) 1,539 Excess of revenues over expenditures Other financing sources (uses): Transfers (out) Total other financing (uses) Net change in fund balance Fund balance at beginning of year Fund balance at end of year $ 11,751 6,070 95 $ Variance $ 13,864 9,722 $ $ 78 19 4 61 97 (107) 152 2,113 3,652 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, 2012 Exhibit C - 8 (in thousands) Budget Revenues: Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Total revenues $ Expenditures: General government Public safety Culture and recreation Education and economic opportunity Total expenditures Excess (deficiency) of revenues over (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 Actual 13,031 7,345 426 255 7,385 28,442 $ 20,901 7,944 4,226 280 6,184 39,535 $ 7,870 599 3,800 25 (1,201) 11,093 54,674 3,809 520 1,860 60,863 32,257 4,368 175 1,541 38,341 22,417 (559) 345 319 22,522 (32,421) 1,194 33,615 2,989 (6,189) (3,200) 28,056 (30,426) (2,370) 25,067 (24,237) 830 (35,621) (1,176) 34,445 58,431 $ Variance 22,810 96 62,651 $ 61,475 4,220 $ 38,665 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Buget and Actual Other Grants - Special Revenue Fund For the Year Ended June 30, 2012 Exhibit C - 9 (in thousands) Budget Revenues: Intergovernmental Investment earnings Miscellaneous Total revenues $ Expenditures: Community Development Community Services County Attorney Facilities Management Elections Environmental Quality Institutional Health Justice Court Juvenile Court Health Office of Emergency Management Finance Parks and Recreation Library Recorder Sheriff Superior Court Transportation Forensic Science Center County Administrator Total expenditures 80,279 11 841 81,131 $ 17,360 19,185 5,409 50 1,166 758 $ $ 166 (4) 1,500 1,662 7,445 720 316 289 1 67,146 (633) 15,647 16,280 279 279 454 (8,930) (8,476) 175 (8,930) (8,755) (354) 7,171 7,525 936 68 141 1,147 21,198 815 18 57 81,764 Net change in fund balance 80,445 7 2,341 82,793 3,348 3,612 1,053 (4) 1,166 (178) (68) (9) 8,477 (5,220) 284 (18) 28 180 192 939 528 237 72 (1) 14,618 85 180 192 8,384 1,248 553 361 Other financing sources (uses): Transfers in Transfers (out) Total other financing sources (uses) Variance 14,012 15,573 4,356 54 132 9,624 15,978 1,099 Excess (deficiency) of revenues over (under) expenditures Fund balance at beginning of year, as restated Fund balance at end of year Actual 296 (58) 97 $ (2,775) 4,396 $ (3,071) 4,454 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, 2012 Exhibit C - 10 (in thousands) Revenues: Intergovernmental Total revenues Budget $ Expenditures: School Reserve grants Total expenditures 3,643 3,643 Actual $ 3,643 3,643 Variance 3,754 3,754 $ 3,705 3,705 111 111 (62) (62) Excess of revenues over expenditures 49 49 Net change in fund balance 49 49 Fund balance at beginning of year Change in prepaids Fund balance at end of year 2,030 $ 98 2,030 2,030 (27) $ 2,052 (27) $ 22 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, 2012 Exhibit C - 11 (in thousands) Revenues: Licenses and permits Fines and forfeits Investment earnings Miscellaneous Total revenues Budget $ Actual 1,896 15 18 1,929 2,161 12 10 277 2,460 Expenditures: Environmental Quality 2,381 2,310 71 Total expenditures 2,381 2,310 71 (452) 150 602 Other financing sources: Transfers in Total other financing sources 390 390 390 390 Net change in fund balance (62) 540 Excess (deficiency) of revenues over (under) expenditures Fund balance at beginning of year Fund balance at end of year 1,535 1,473 $ 99 $ Variance $ 1,622 2,162 $ 265 12 (5) 259 531 602 $ 87 689 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, 2012 Exhibit C - 12 (in thousands) Revenues: Special assessments Miscellaneous Total revenues Budget $ Actual 265 $ 265 Expenditures: Highways and streets Debt service - principal - interest Total expenditures Variance 245 5 250 $ 9 9 (20) 5 (15) 9 9 Excess of revenues over expenditures 256 250 (6) Net change in fund balance 256 250 (6) Fund balance at beginning of year Fund balance at end of year $ (208) 48 100 $ (177) 73 $ 31 25 PIMA COUNTY, ARIZONA Shedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Solid Waste - Special Revenue Fund For the Year Ended June 30, 2012 Exhibit C - 13 (in thousands) Revenues: Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues Budget $ Expenditures: Sanitation Debt service - principal - miscellaneous Total expenditures Actual 1,050 3,151 10 36 4,247 6,447 Deficiency of revenues under expenditures 83 335 4 43 465 6,447 (2,200) (1,910) 290 894 800 1,694 894 (1,400) $ $ 130 (298) (7) (175) 800 800 Net change in fund balance 1,133 3,486 14 79 4,712 6,317 298 7 6,622 Other financing sources: Proceeds on capital leases Transfers in Total other financing sources Fund balance at beginning of year Fund balance at end of year $ Variance 2,231 831 101 894 (216) $ 3,320 3,104 1,184 $ 1,089 2,273 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, 2012 Exhibit C - 14 (in thousands) Budget Revenues: Taxes Intergovernmental Fines and forfeits Investment earnings Miscellaneous Total revenues $ Actual 29,044 435 600 51 320 30,450 $ Variance 29,274 467 639 127 704 31,211 $ 230 32 39 76 384 761 Expenditures: Culture and recreation Total expenditures 32,213 32,213 Deficiency of revenues under expenditures (1,763) (771) 992 (77) (77) (103) (103) (26) (26) Net change in fund balance (1,840) (874) 966 Fund balance at beginning of year Fund balance at end of year 12,887 11,047 Other financing sources: Transfers (out) Total other financing sources $ 102 31,982 31,982 $ 16,136 15,262 231 231 $ 3,249 4,215 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, 2012 Exhibit C - 15 (in thousands) Revenues: Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues Budget $ Expenditures: Culture and recreation Total expenditures Actual 1,496 39 12 381 1,928 $ Variance 1,609 218 21 1,130 2,978 $ 113 179 9 749 1,050 4,283 4,283 4,694 4,694 (411) (411) Deficiency of revenues under expenditures (2,355) (1,716) 639 Other financing sources (uses): Transfers in Transfers (out) Total other financing sources 4,630 (3,020) 1,610 4,893 (3,020) 1,873 263 263 Net change in fund balance (745) Fund balance at beginning of year Fund balance at end of year 1,839 $ 1,094 103 $ 157 902 2,108 269 2,265 $ 1,171 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Lighting District For the Year Ended June 30, 2012 Exhibit C - 16 (in thousands) Budget Revenues: Taxes Miscellaneous Total revenues $ Actual 108 108 386 1 387 108 108 136 136 (28) (28) Excess of revenues over expenditures 251 251 Net change in fund balance 251 251 Expenditures: General government Total expenditures $ Variance $ 278 1 279 Fund balance at beginning of year Fund balance at end of year $ $ 104 251 $ 251 Combining Statements and Other Schedules Other (Nonmajor) Enterprise Funds Other (Nonmajor) Enterprise Funds Development Services – to account for the operations of providing zoning permits, enforcing ordinances in compliance with state statutes, and administering uniform building codes. Parking Garages – to account for the management and operation of six public parking garages located in downtown Tucson. PIMA COUNTY, ARIZONA Combining Statement of Net Position Nonmajor Enterprise Funds June 30, 2012 Exhibit C - 17 (in thousands) Development Services Assets Current assets: Cash and cash equivalents Interest receivable Due from other funds Accounts receivable Prepaid expense Total current assets Noncurrent assets: Capital assets: Land and other improvements Buildings and improvements Equipment Less accumulated depreciation Total capital assets (net of accumulated depreciation) Total noncurrent assets $ 3,743 2 3 98 5 3,851 Total Other Enterprise Funds Parking Garages 3,967 7,661 4 3 145 5 7,818 1,768 12,927 244 (9,146) 1,768 12,927 1,210 (10,112) 5,793 5,793 5,793 5,793 3,851 9,760 13,611 Liabilities Current liabilities: Accounts payable Employee compensation Deferred revenue Total current liabilities 56 673 729 267 19 2 288 323 692 2 1,017 Total liabilities 729 288 1,017 3,122 5,793 3,679 5,793 6,801 Net position Net investment in capital assets Unrestricted $ 3,122 105 3,918 2 $ 47 966 (966) Total assets Total net position $ $ 9,472 $ 12,594 PIMA COUNTY, ARIZONA Combining Statement of Revenues, Expenses and Changes in Fund Net Position Nonmajor Enterprise Funds For the Year Ended June 30, 2012 Exhibit C - 18 (in thousands) Operating revenues: Charges for services Other Development Services $ 6,073 39 Total Other Enterprise Funds Parking Garages $ 2,257 $ 8,330 39 Total net operating revenues 6,112 2,257 8,369 Operating expenses: Employee compensation Operating supplies and services Repair and maintenance General and administrative Consultants and professional services Depreciation Total operating expenses 5,482 30 13 1,283 147 9 6,964 331 65 209 1,168 2 218 1,993 5,813 95 222 2,451 149 227 8,957 Operating revenue (loss) Nonoperating revenues: Intergovernmental revenue Investment earnings Total nonoperating revenues: Income/(loss) before transfers Transfers in Transfers (out) 264 (588) 105 16 19 105 35 121 19 140 (731) 283 (448) 1,000 (15) Change in net position Net position at beginning of year Net position at end of year (852) $ 254 280 534 2,868 9,192 12,060 3,122 106 1,000 (18) (3) $ 9,472 $ 12,594 PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Nonmajor Enterprise Funds For the Year Ended June 30, 2012 Exhibit C - 19 (in thousands) Development Services Cash flows from operating activities: Cash received from customers for goods and services provided 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 6,197 (113) (2,083) (4,676) Total Other Enterprise Funds Parking Garages $ (675) 2,225 (1,341) (40) (320) $ 524 8,422 (1,454) (2,123) (4,996) (151) Cash flows from noncapital financing activities: Cash transfers in from other funds Cash transfers out to other funds Loans with other funds Intergovernmental revenue 1,000 (15) (19) 105 (3) 1 1,000 (18) (18) 105 Net cash provided by (used for) noncapital financing activities 1,071 (2) 1,069 Cash flows from investing activities: Interest on cash and investments 15 18 33 Net cash provided by investing activities 15 18 33 Net increase in cash and cash equivalents 411 540 951 3,332 3,378 6,710 Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year $ (continued) 107 3,743 $ 3,918 $ 7,661 PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Nonmajor Enterprise Funds For the Year Ended June 30, 2012 Exhibit C - 19.1 (in thousands) (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 $ (852) 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 $ 264 9 218 227 40 45 72 (36) 4 4 49 72 51 199 (136) 11 250 (136) (29) (40) Net cash provided by (used for) operating activities $ 108 Total Other Enterprise Funds $ (588) (675) $ 524 $ (151) Combining Statements and Other Schedules Internal Service Funds Internal Service Funds Self Insurance Trust Fund – to account for the risk management function of the County. The Fund provides self insurance coverage to the County for medical malpractice, workers’ compensation, unemployment, dental, general liability, environmental liability, and property damage as well as acquiring coverage for other risks. Other Internal Service – to account for the acquisition, operation, and maintenance of fleet services equipment provided to County departments, as well as to account for the provision of printing, infrastructure, and telecommunication services to County departments. PIMA COUNTY, ARIZONA Combining Statement of Net Position Internal Service Funds June 30, 2012 Exhibit C - 20 (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 Self Insurance Trust Other Internal Service Total Internal Service Funds $ $ $ 64,409 14 328 554 65,305 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 16,882 4 218 112 100 1,035 903 19,254 592 Total assets 81,291 18 218 112 428 1,035 1,457 84,559 160 (140) 614 38,735 (19,209) 1,162 592 614 38,895 (19,349) 1,162 612 612 21,302 21,302 21,914 21,914 65,917 40,556 106,473 470 155 2,219 800 251 2,689 955 251 1 4,202 2,114 10,212 Liabilities Current liabilities: Accounts payable Employee compensation Due to other funds Deferred revenue 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 19,253 9,828 29,081 Total liabilities 36,023 3,270 39,293 Net position Net investment in capital assets Unrestricted 612 29,282 21,302 15,984 21,914 45,266 Total net position 1 4,202 2,114 6,942 $ 29,894 109 3,270 19,253 9,828 29,081 $ 37,286 $ 67,180 PIMA COUNTY, ARIZONA Combining Statement of Revenues, Expenses and Changes in Fund Net Position Internal Service Funds For the Year Ended June 30, 2012 Exhibit C - 21 (in thousands) Operating revenues: Charges for services Other Self Insurance Trust $ 19,182 201 Total operating revenues Total Internal Service Funds Other Internal Service $ 23,403 206 $ 42,585 407 19,383 23,609 42,992 Operating expenses: Employee compensation Operating supplies and services Incurred losses Insurance premiums General and administrative Repair and maintenance Consultants and professional services Depreciation Total operating expenses 2,108 422 2,209 3,527 620 218 830 26 9,960 5,538 8,983 7,646 9,405 2,209 4,619 3,707 1,398 1,302 3,510 33,796 Operating income (loss) 9,423 (227) 9,196 962 298 (25) 1,260 (25) 962 273 1,235 10,385 46 10,431 Nonoperating revenues (expenses): Investment earnings (Loss) on disposal of capital assets Total nonoperating revenues (expenses): Income before transfers: Capital contributions Transfers (out) 19 (255) (67) Change in net position 10,318 Net position at beginning of year 19,576 Net position at end of year 1,092 3,087 1,180 472 3,484 23,836 $ 29,894 110 19 (322) (190) 10,128 37,476 $ 37,286 57,052 $ 67,180 PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2012 Exhibit C - 22 (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 Self Insurance Trust Other Internal Service Total Internal Service Funds $ $ $ (5,474) 42,258 402 (14,962) (4,496) (7,607) (6,597) 4,654 4,344 8,998 Cash flows from noncapital financing activities: Cash transfers out to other funds Loans with other funds (67) (1,353) (255) 1,659 (322) 306 Net cash provided by (used for) noncapital financing activities (1,420) 1,404 (16) Net cash provided by operating activities 18,855 201 (4,107) (1,565) (7,607) (1,123) 23,403 201 (10,855) (2,931) Cash flows from capital and related financing activities: Proceeds from sale of equipment Purchase of capital assets 333 (7,158) 333 (7,158) Net cash used for capital and related financing activities (6,825) (6,825) Cash flows from investing activities: Interest on cash and investments 956 298 1,254 Net cash provided by investing activities 956 298 1,254 (779) 3,411 Net increase (decrease) in cash and cash equivalents 4,190 Cash and cash equivalents at beginning of year 60,219 Cash and cash equivalents at end of year $ (continued) 111 64,409 17,661 $ 16,882 77,880 $ 81,291 PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2012 Exhibit C - 22.1 (in thousands) (continued) Reconciliation of operating income (loss) to net cash provided by operating activities Self Insurance Trust $ 9,423 Operating income (loss) Other Internal Service $ (227) Total Internal Service Funds $ 9,196 Adjustments to reconcile operating income to net cash provided by (used for) operating activities: Depreciation and amortization Other 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 Net cash provided by operating activities 26 158 3,484 (327) 65 (71) (84) (804) 371 317 (1) (5,397) 84 $ 4,654 3,510 158 (262) (71) (84) (433) 1,910 2,227 (1) (5,397) 155 71 $ 4,344 $ 8,998 Noncash investing, capital, and financing activities during the year ended June 30, 2012: Other Internal Service Funds (Fleet Services) received capital contributions with a value of $14 from Pima Health System & Services and sold capital assets with a net book value of $358. akjdj;adj;lkjdaksjdfaskkjdkj;a Other Internal Service Funds (Telecommunications) received capital contributions with a value of $5 from Pima Health System & Services. jkj;j;lkj;kj;kj;wljklkwjr;wkljr;kwjr;wkjre;elkrjerj;j 112 Combining Statements and Other Schedules Fiduciary Funds PIMA COUNTY, ARIZONA Combining Statement of Fiduciary Net Position Investment Trust Funds June 30, 2012 Exhibit C - 23 (in thousands) Treasurer's Investment Pool Assets Cash and cash equivalents Interest receivable $ 133,453 96 Total assets Total Investment Trust Funds Individual Investment Accounts $ 133,549 164,271 $ 164,271 297,724 96 297,820 Liabilities Total liabilities Net Position Held in trust for pool participants $ 133,549 113 $ 164,271 $ 297,820 PIMA COUNTY, ARIZONA Combining Statement of Changes in Fiduciary Net Position Investment Trust Funds For the Year Ended June 30, 2012 Exhibit C - 24 (in thousands) Treasurer's Investment Pool Additions Contributions: Participants Total contributions $ Investment earnings: Total investment earnings 2,436,771 2,436,771 Total Investment Trust Funds Individual Investment Accounts $ 172,159 172,159 $ 2,608,930 2,608,930 1,097 1,097 329 329 1,426 1,426 2,437,868 172,488 2,610,356 Deductions Distributions to participants 2,453,146 257,666 2,710,812 Total deductions 2,453,146 257,666 2,710,812 Total additions Net decrease Net position held in trust July 1, 2011 Net position held in trust June 30, 2012 $ 114 (15,278) (85,178) (100,456) 148,827 249,449 398,276 133,549 $ 164,271 $ 297,820 PIMA COUNTY, ARIZONA Combining Statement of Fiduciary Net Position Agency Funds June 30, 2012 Exhibit C - 25 (in thousands) Treasurer's Clearing Payroll Assets Cash and cash equivalents Due from other governments $ $ $ 496 Total assets Liabilities Employee compensation Due to other governments Deposits and rebates Total liabilities 496 Other 56,954 Total $ 3,704 3,704 56,954 61,154 1,549 2,155 37,151 19,803 496 38,700 21,958 496 $ 496 115 $ 57,450 3,704 3,704 $ 56,954 $ 61,154 PIMA COUNTY, ARIZONA Combining Statement of Changes in Fiduciary Net Position Agency Funds For the Year Ended June 30, 2012 Exhibit C - 26 (in thousands) Payroll Clearing Assets Cash and cash equivalents Total assets Balance 06/30/11 (as restated) $ Liabilities Employee compensation Total liabilities Additions 1,971 1,971 $ 1,440,360 1,440,360 Balance 06/30/12 Deductions $ 1,441,835 1,441,835 $ 496 496 1,971 1,971 1,440,360 1,440,360 1,441,835 1,441,835 Treasurer's Clearing Assets Cash and cash equivalents Due from other governments Total assets 2,151,904 364 2,152,268 2,151,904 3,340 3,340 Liabilities Due to other governments Deposits and rebates Total liabilities 818 2,522 3,340 1,139,272 1,012,996 2,152,268 1,138,541 1,013,363 2,151,904 1,549 2,155 3,704 Other Assets Cash and cash equivalents Total assets 61,172 61,172 212,156 212,156 216,374 216,374 56,954 56,954 Liabilities Due to other governments Deposits and rebates Total liabilities 42,810 18,362 61,172 162,807 49,349 212,156 168,466 47,908 216,374 37,151 19,803 56,954 Totals - All Agency Funds Assets Cash and cash equivalents Due from other governments Total assets 63,143 3,340 66,483 3,804,420 364 3,804,784 3,810,113 3,810,113 57,450 3,704 61,154 Liabilities Employee compensation Due to other governments Deposits and rebates Total liabilities 1,971 43,628 20,884 66,483 1,440,360 1,302,079 1,062,345 3,804,784 1,441,835 1,307,007 1,061,271 3,810,113 496 38,700 21,958 61,154 $ 116 $ 496 496 3,704 2,151,904 $ $ PIMA COUNTY Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2012 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. Business-type activities Net investment in capital assets Restricted for: Debt service Capital projects Regional Wastewater Reclamation Healthcare Unrestricted (deficit) Total business-type activities net position Governmental activities Net investment in capital assets Restricted for: Special revenue Highways and streets Debt service Capital projects Healthcare Workers' compensation Unrestricted Total governmental activities net position $ $ 52,363 6,185 17,456 3,696 4,011 36,254 962,641 29,322 4,171 38,694 3,669 13,217 41,271 847,064 $ 842,676 499 88 3,696 4,011 (4,766) 454,690 716,720 1,245 3,008 3,669 13,217 (24,744) 440,985 451,162 41,020 507,951 66,015 406,079 444,590 5,686 17,368 2,926 35,686 391,514 52,363 $ 2004 29,322 272,130 2003 $ $ 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 2005 (in thousands) (accrualbasis 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 5,883 9,017 69,327 $ 1,815,529 21,349 45,385 74,424 17,390 14,403 118,847 5,956 13,732 110,175 $ 1,717,367 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 Fiscal Year 2007 2008 PIMA COUNTY, ARIZONA Net Position by Component Last Ten Fiscal Years (1) Beginning in fiscal year 2005-06 and in 2008-09, all special revenue funds were reclassified and reported from a functional perspective. Primary government Net investment in capital assets Restricted for: (1) Facilities, justice, library, tax stabilization and community development (1) Special revenue (1) Highways and streets Debt service Capital projects Workers' compensation Regional Wastewater Reclamation Healthcare Unrestricted Total primary government net position 117 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 17,161 27,636 198,054 $ 2,148,945 32,906 12,567 84,617 64,446 1,711,558 12,567 24,236 17,161 23,562 33,448 686,499 575,525 164,606 1,462,446 60,381 4,074 57,939 3,405 149,966 1,350,871 64,446 32,906 $ 1,136,033 2011 64,991 25,749 $ 1,048,821 2010 Exhibit D - 1 $ $ 18,449 1,360 223,785 2,273,738 32,322 22,538 61,904 103,592 1,809,788 66,470 703,698 22,538 31,680 18,449 564,561 157,315 1,570,040 30,224 1,360 103,592 32,322 1,245,227 2012 118 $ 21,422 10,289 11,728 8,772 918 1,709 101 135,119 17,413 207,471 7,822 1,037 1,662 196 121,587 5,665 172,779 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 18,667 10,804 5,339 $ $ 2004 $ $ 1,797 314 133,113 12,188 217,422 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 9,526 $ $ 2006 26,033 8,136 21,617 4,531 9,693 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 $ $ 168 18,924 722,716 2,991 698 139,324 15,085 221,307 26,663 9,797 11,732 4,747 10,270 2008 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 Fiscal Year 223,266 148,831 92,985 9,623 33,800 97,154 55,482 42,483 2007 98,222 261,859 15,400 1,579 377,060 1,099,776 * 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 74,816 221,970 8,373 1,346 306,505 802,847 Business-type activities: Regional Wastewater Reclamation Pima Health System & Services Development Services Parking Garages Total business-type activities expenses Total primary government expenses 131,925 132,939 39,492 23,917 84,457 31,326 35,033 820 654 15,779 496,342 $ 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 2003 (in thousands) (accrual basis of accounting) PIMA COUNTY, ARIZONA Changes in Net Position Last Ten Fiscal Years $ $ 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 $ $ 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 1,025,317 428 26,403 700,250 218,504 145,697 68,691 6,669 33,086 87,107 61,642 52,023 2010 $ $ 2,191 1,024 136,472 65,030 261,579 27,802 9,034 4,891 3,699 11,436 113,495 200,305 6,982 1,538 322,320 1,041,252 (2,625) 26,078 718,932 218,843 146,395 73,348 6,208 36,475 90,521 67,063 56,626 2011 $ $ (continued) 2,254 1,008 143,388 47,528 257,820 30,444 12,047 5,059 3,487 12,605 117,774 58,773 6,912 1,988 185,447 919,472 805 24,776 734,025 223,005 150,349 69,183 7,224 47,248 94,409 61,900 55,126 2012 Exhibit D - 2 119 404,174 44,311 12,079 56,390 Total primary government Change in net position: Governmental activities Business-type activities Total primary government 85,496 13,705 99,201 442,561 $ 70,711 43,971 114,682 477,704 (1,935) 24,424 13,196 40,053 959 1,727 5,828 12,479 (2,673) 17,980 36,300 Business-type activities: State shared tax Investment earnings Miscellaneous Capital contributions Extraordinary item Transfers Total business-type activities 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 1,163 1,609 2,865 20,722 (13,196) 402,508 (7,447) (17,980) 367,874 $ 2005 1,146 747 2,750 22,214 272,507 2,745 1,709 83,202 23,413 3,201 6,321 3,102 14,063 5,441 (317,012) (26,348) (343,360) 325,319 532,790 82,432 224,820 11,830 1,460 4,777 251,844 2,557 1,597 78,504 21,904 9,216 7,052 5,064 12,774 2,789 $ $ 2004 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 $ (323,563) (24,221) (347,784) Net (expense) revenue Governmental activities Business-type activities Total governmental activities net expense 71,626 195,872 8,464 1,413 4,909 282,284 455,063 $ 2003 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) $ $ 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 2006 $ $ 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) $ $ Fiscal Year 106,266 257,142 11,239 1,548 5,174 803 382,172 603,479 2007 (in thousands) (accrual basis of accounting) PIMA COUNTY, ARIZONA Changes in Net Position Last Ten Fiscal Years 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 4,005 560,633 1,140 393,255 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 $ $ 139,734 33,191 172,925 570,659 (538) 3,582 1,236 2,884 538 567,077 416,500 5,688 1,515 84,767 24,203 4,081 7,940 5,266 16,579 (427,343) 29,609 (397,734) 127,889 205,176 5,886 1,985 4,421 9,319 354,676 627,583 2010 $ $ 111,575 48,915 160,490 567,859 (4,650) (1,069) 900 2,681 4,650 568,928 416,985 5,591 1,538 88,631 23,173 4,527 8,125 2,153 13,555 (457,353) 49,984 (407,369) 148,010 207,652 5,688 2,071 4,691 4,192 372,304 633,883 2011 $ $ 107,594 17,199 124,793 561,015 (25,688) (22,784) 1,001 1,903 25,688 583,799 394,963 6,285 1,608 93,123 23,537 4,268 8,235 3,416 22,676 (476,205) 39,983 (436,222) 154,601 58,722 6,073 2,083 1,275 2,676 225,430 483,250 2012 Exhibit D - 2 120 $ $ 150,198 97,270 82,793 131,847 45,325 42,312 32,696 7,068 25,628 7,603 $ $ 6,742 33,548 2,549 30,999 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 $ $ 173,100 89,328 69,773 13,999 57,560 $ $ 247,188 152,643 77,451 17,094 70,389 5,415 64,974 Fiscal Year 2008 8,889 48,671 2007 $ $ 252,081 126,821 86,121 39,139 40,166 4,363 35,803 2009 *Due to implementation of GASB 54 in FY 2010 catagories regarding fund balances have been redefined. See Note 1 page 49 for details. See Note 2 page 54 for purpose 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 2003 (in thousands) (modified accrual basis of accounting) PIMA COUNTY, ARIZONA Fund Balances - Governmental Funds Last Ten Fiscal Years $ $ 157,688 7,234 (3,553) 28,298 314,618 (791) 35,903 284,175 1,550 105,468 10,264 16,682 (9,013) 118 77,596 80,767 2,720 333 12 112,668 6,639 $ $ 18 124,830 1,487 52 (227) 40,868 264,729 357 73,547 77,555 3,315 336 2012 2,011 94,567 37,978 4,368 (9,180) $ $ 2011 2,011 82,957 15,305 3,221 (5,793) 3,093 73,837 81,541 4,089 522 2010 Exhibit D - 3 121 Debt service as a percentage of noncapital expenditures Net change in fund balances Change in reserves - net 11.56% $ 17,592 629 (6,237) Extraordinary item 65,000 68,583 (89,916) 85,000 78,457 (93,597) 11.53% $ 17,499 (366) 44,255 406 70,321 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 22,639 330 804,102 675 (73,588) 892,235 926,378 (141,093) 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 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 9.87% $ 69,113 385 119,523 116,200 50,008 (46,962) 27 10.90% $ (38,009) (177) 9,168 4,836 59,948 (56,263) 9.88% $ 16,368 (211) 148,576 146,320 86,089 (86,688) 1,426 10.48% $ 86,917 (55) 178,017 175,000 128,406 (127,692) 312 27 15.89% $ (25,330) (55) 115,818 109,400 171,186 (166,319) 876 15.31% $ 54,478 128,066 125,000 98,800 (98,355) 1,118 1,909 (32,361) 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 $ 381,862 556 7,710 312,634 58,890 6,480 14,218 21,752 Fiscal Year 2008 $ 348,700 521 7,132 303,392 63,508 6,550 13,988 17,544 2007 148 (6,846) 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 31,955 250 (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 $ 300,972 244 7,265 278,414 53,568 5,967 5,181 14,806 2005 6,880 (26,390) 177 37 (163) 410 (47,121) 649,302 30,322 76,725 27,141 32,146 103,167 49,025 14,851 161 24,029 84,238 25,214 35,057 97,147 45,544 15,695 24 613,260 140,319 146,275 29,170 622,912 $ 279,527 505 6,566 273,225 43,505 5,010 2,656 11,918 2004 132,416 127,155 26,741 566,139 $ 258,375 1,023 6,087 245,378 35,721 5,047 4,152 10,356 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 2003 (in thousands) (modified accrual basis of accounting) PIMA COUNTY, ARIZONA Changes in Fund Balances - Governmental Funds Last Ten Fiscal Years 13.54% $ 15,460 70 83,043 75,000 109,715 (105,007) 59 3,276 (67,653) 883,481 223,611 136,709 34,614 5,375 36,511 90,572 49,986 50,432 153,203 76,361 26,086 21 815,828 $ 421,623 330 8,494 308,219 54,491 6,786 1,723 14,162 2011 13.50% $ 33,655 (82) 112,348 78,425 141,924 (115,914) 7,349 (33,013) 894 1,938 30,745 (78,611) 916,873 236,020 145,711 33,651 6,317 46,672 94,360 52,103 47,798 149,612 78,688 24,762 1,179 838,262 $ 407,711 245 8,155 327,939 56,881 10,249 2,286 24,796 2012 Exhibit D - 4 (This page intentionally left blank) 122 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. 123 2,955,066 3,265,040 3,615,603 4,076,600 4,689,972 5,352,916 5,853,947 5,889,572 5,332,608 5,036,810 $ 281,243 302,323 323,147 359,662 428,486 493,055 525,779 536,958 500,836 472,558 $ 21,508 21,595 27,920 29,803 30,802 35,442 37,783 39,797 39,984 50,260 $ 5,022,474 5,412,550 5,849,549 6,467,202 7,353,331 8,239,672 8,985,712 8,939,647 8,310,120 8,073,938 5.4981 5.4967 5.4611 5.3406 5.0674 4.6702 4.5917 4.6798 4.8491 4.8520 Total Direct Tax Rate $ 42,927,737 46,754,009 50,631,267 56,437,790 64,347,659 73,122,499 80,593,121 82,348,215 78,036,208 76,085,641 Estimated Limited Value 11.70% 11.58% 11.55% 11.46% 11.43% 11.27% 11.15% 10.86% 10.65% 10.61% 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: 1,764,657 1,823,592 1,882,879 2,001,137 2,204,072 2,358,259 2,568,203 2,473,320 2,436,692 2,514,310 Vacant Land Pima County Assessor's Office. $ Residential Property Exhibit D - 5 Source: 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Tax Year Commercial Property (amounts in thousands) PIMA COUNTY, ARIZONA Taxable Assessed Value and Estimated Actual Value of Property Last Ten Tax Years 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Tax Year 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 State of Arizona 0.4717 0.4560 0.4358 0.0000 0.0000 0.0000 0.3306 0.3564 0.4259 0.4717 Education Assistance 1.4884 1.3428 1.3114 1.2515 1.1845 1.1355 1.0770 1.0848 1.1094 1.1741 Community College District 1.1569 1.1847 1.2364 1.2257 1.1321 0.9601 0.9344 0.9550 1.1621 1.2639 0.2513 0.2383 0.2383 0.2383 0.2258 0.2143 0.2035 0.1999 2.6603 2.7640 9.6038 10.4000 12.9000 12.9000 12.9000 12.9000 19.3500 19.3500 19.3500 19.3500 19.3500 Flowing Wells Irrigation District (2) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Tax Year 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 3.8420 3.6020 3.3913 3.3133 3.3133 3.4178 3.4178 County Primary 0.3546 0.3546 0.3746 0.3746 0.3446 0.2935 0.2635 0.2635 0.2635 0.2635 Flood Control District (1) 50.0000 60.0000 60.0000 60.0000 65.0000 66.0000 66.0000 66.0000 66.0000 66.0000 CortaroMarana Irrigation District (2) 0.5000 0.5000 Mobile Home Relocation District (3) 0.1438 Town of Casas Adobes Incorporation Costs 0.2124 0.2124 0.2575 0.3675 0.3975 0.3393 0.2643 0.3100 0.3460 0.3460 County Library District Overlapping Rates 0.8150 0.8150 0.7150 0.7150 0.6850 0.6050 0.7100 0.7500 0.7800 0.7800 County Secondary County Direct Rates (per $100 of assessed value) 0.2313 Town of Tortolita Incorporation Costs 0.0441 0.0427 0.0420 0.0415 0.0383 0.0411 0.0406 0.0430 0.0418 0.0447 Fire District Assistance PIMA COUNTY, ARIZONA Direct and Overlapping Property Tax Rates Last Ten Tax Years 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. 0.1200 0.1200 0.1200 0.1200 0.1000 0.1000 0.1000 0.1000 0.1000 0.1000 Street Central AZ City City Lighting Water of of South Impro. Conserv Tucson Tucson District District (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. 124 2.8000 2.8000 2.8000 2.8000 2.8000 2.8000 2.8000 2.8000 2.8000 Gladden Farms Community Facilities District 5.4981 5.4967 5.4611 5.3406 5.0674 4.6702 4.5917 4.6798 4.8491 4.8520 Total 0.3000 0.3000 0.3000 0.3000 0.3000 0.3000 0.3000 Vanderbilt Farms Community Facilities District 3.3000 3.3000 3.3000 3.3000 3.3000 3.3000 Quail Creek Community Facilities District 0.3000 0.3000 0.3000 Gladden Farms Phase II Community Facilities District Exhibit D - 6 0.3000 0.3000 0.3000 Saguaro Springs Community Facilities District 125 1.9583 1.8090 6.2607 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 *County Education District; applies only to those geographical areas within Pima County not part of formal school districting. 1.8931 6.2759 4.8856 2.1532 Unorganized* 8.1495 6.3615 3.9915 2.2216 6.1171 8.3095 6.7510 Altar Valley Elementary (#51) 9.0113 Sahuarita Unified (#30) 7.0008 6.8422 5.6853 7.1748 Vail Elementary (#20) 6.6459 4.4994 Redington Elementary (#44) 7.0256 Catalina Foothills Unified (#16) 4.4316 5.7985 2.3198 5.3016 Ajo Unified (#15) 5.6661 8.6482 Continental Elementary (#39) 7.1785 Tanque Verde Unified (#13) 8.4846 6.4258 8.0930 9.1041 Sunnyside Unified (#12) 6.3375 7.1232 6.4699 6.7601 Amphitheater Unified (#10) 6.5883 6.0991 Empire Elementary (#37) 6.6568 Flowing Wells Unified (#8) 6.5034 7.8829 2005 3.7121 6.7979 Marana Unified (#6) 8.3286 2004 San Fernando Elementary (#35) 8.7610 2003 Tucson Unified (#1) School District (per $100 of assessed value) 1.3726 6.0506 5.7451 1.4622 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 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 PIMA COUNTY, ARIZONA Direct and Ovrelapping Property Tax Rates - School Districts Last Ten Tax Years 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 1.9585 6.4355 6.5675 1.7682 5.9198 1.5729 1.2484 4.0331 5.5183 5.9120 6.7630 2.0258 2.7531 4.8541 5.4067 4.6550 4.7472 3.5338 5.6740 4.2095 4.1538 6.3154 5.5539 5.9778 5.5863 7.3187 2012 3.8042 6.9415 5.4033 5.9689 5.2047 6.9480 2011 Exhibit D - 6a 126 0 0 Verizon Wireless Starr Pass Resort Developments LLC 14,461 El Conquistador Hotel $ 395,381 7 6 9 4 5 10 2 3 8 1 Rank 7.7% 0.0% 0.3% 0.3% 0.2% 0.0% 0.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.3% 0.2% 1.9% 1.0% 0.0% 0.3% 2.2% Percent of Total Assessed Value (1) Secondary Assessed Valuation for tax year $5,221,271 Sources: Arizona Department of Revenue, Pima County Assessor's Office. Total Top Ten 0 16,057 Westin La Paloma HDP Northwest 13,290 0 Raytheon ASARCO Mining 19,990 0 Wal-Mart Stores Incorporated Arizona Portland Cement 0 Northwest Hospital LLC 0 18,703 DND Neffson Co. (Tucson Mall) Target Corporation 11,467 108,829 55,710 0 14,375 $ 122,499 Trico Electric Co-Op Inc. QWEST Corporation Southwest Gas Corporation ASARCO LLC Phelps Dodge Corporation Unisource/Tucson Electric Power Co. Taxpayer Estimated Assessed Value (1) 2003 $ 403,397 0 14,655 15,943 13,895 0 21,296 0 0 0 0 0 19,364 12,925 104,944 59,528 0 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% 0.3% 0.4% 0.3% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% 0.0% 0.5% 0.3% 2.5% 1.4% 0.0% 0.4% 3.0% Percent of Total Assessed Value $ 440,208 14,708 13,653 16,358 16,069 0 22,459 0 0 0 0 0 22,377 0 104,468 62,970 0 21,209 $ 145,937 Estimated Assessed Value (1) 2005 9 10 7 8 4 5 2 3 6 1 Rank (amounts in thousands) 7.3% 0.2% 0.2% 0.2% 0.2% 0.0% 0.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.3% 0.0% 1.5% 0.9% 0.0% 0.3% 2.1% Percent of Total Assessed Value $6,050,950 PIMA COUNTY, ARIZONA Principal Property Taxpayers Last Ten Tax Years 9 15,504 $ 459,465 0 0 6 5 8 7 10 2 3 4 1 Rank 21,665 0 22,858 17,068 0 0 0 0 19,087 14,806 87,093 62,846 0 55,176 $ 143,362 Estimated Assessed Value (1) 2006 $6,869,955 6.7% 0.0% 0.0% 0.2% 0.3% 0.0% 0.3% 0.2% 0.0% 0.0% 0.0% 0.0% 0.2% 0.2% 1.1% 0.8% 0.0% 0.7% 1.7% Percent of Total Assessed Value $ 553,281 0 0 15,959 58,987 0 23,468 15,280 0 0 0 0 19,897 18,044 94,300 62,919 0 93,656 $ 150,771 Estimated Assessed Value (1) 9 5 6 10 7 8 2 4 3 1 Rank 2007 (continued) $8,220,396 6.6% 0.0% 0.0% 0.2% 0.6% 0.0% 0.2% 0.2% 0.0% 0.0% 0.0% 0.0% 0.2% 0.2% 1.0% 0.7% 0.0% 1.0% 1.6% Percent of Total Assessed Value Exhibit D - 7 127 Taxpayer 6 5 7 10 8 9 3 4 1 2 Rank 2008 6.5% 0.0% 0.0% 0.0% 0.3% 0.4% 0.2% 0.2% 0.0% 0.0% 0.0% 0.0% 0.2% 0.2% 0.9% 0.6% 0.0% 1.6% 1.6% Percent of Total Assessed Value (1) Secondary Assessed Valuation for Tax Year $9,594,862 Sources: Arizona Department of Revenue, Pima County Assessor's Office. 618,100 0 HDP Northwest Total Top Ten 0 El Conquistador Hotel 33,833 Raytheon 0 44,047 ASARCO Mining Westin La Paloma 23,593 Arizona Portland Cement 0 Target Corporation 15,889 0 Verizon Wireless Starr Pass Resort Developments LLC 0 Wal-Mart Stores Incorporated 21,013 DND Neffson Co. (Tucson Mall) 0 18,816 Trico Electric Co-Op Inc. Northwest Hospital LLC 87,000 QWEST Corporation 0 156,780 153,431 63,698 $ $ Estimated Assessed Value (1) Southwest Gas Corporation ASARCO LLC Phelps Dodge Corporation Unisource/Tucson Electric Power Co. (continued) $ $ 667,355 0 0 0 0 63,572 27,561 19,384 0 0 0 0 18,888 21,029 74,646 64,775 20,042 198,694 158,764 Estimated Assessed Value (1) 5 6 9 10 7 3 4 8 1 2 Rank 2009 $9,860,981 6.8% 0.0% 0.0% 0.0% 0.0% 0.6% 0.3% 0.2% 0.0% 0.0% 0.0% 0.0% 0.2% 0.2% 0.8% 0.7% 0.2% 2.0% 1.6% Percent of Total Assessed Value $ 492,722 0 0 0 0 0 16,635 16,582 0 0 0 17,097 17,715 21,208 55,076 65,879 28,878 89,289 $ 164,363 Estimated Assessed Value (1) (amounts in thousands) 9 10 8 7 6 4 3 5 2 1 Rank 2010 PIMA COUNTY, ARIZONA Principal Property Taxpayers Last Ten Tax Years $9,342,561 5.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% 0.2% 0.0% 0.0% 0.0% 0.2% 0.2% 0.2% 0.6% 0.7% 0.3% 1.0% 1.8% Percent of Total Assessed Value $ 532,828 0 0 0 0 0 0 16,153 17,519 0 0 17,390 17,931 21,217 51,942 64,533 58,585 99,048 $ 168,510 Estimated Assessed Value (1) 10 8 9 7 6 5 3 4 2 1 Rank 2011 $8,448,282 6.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% 0.2% 0.0% 0.0% 0.2% 0.2% 0.3% 0.6% 0.8% 0.7% 1.2% 2.0% Percent of Total Assessed Value $ 608,128 0 0 0 0 0 0 0 0 14,291 15,581 17,723 17,998 22,133 53,225 61,718 83,778 142,419 $ 179,262 Estimated Assessed Value (1) 10 9 8 7 6 5 4 3 2 1 Rank 2012 $8,171,212 7.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% 0.2% 0.2% 0.2% 0.3% 0.7% 0.8% 1.0% 1.7% 2.2% Percent of Total Assessed Value Exhibit D - 7 128 NOTES: Amount 231,619 250,929 271,841 292,019 318,520 348,741 363,624 384,983 383,978 369,100 Amounts collected are on a cash basis rather than the modified accrual basis used in the financial statements. $ Percent of Original Levy 95.94% 96.30% 96.68% 96.65% 96.45% 96.20% 95.77% 95.75% 95.39% 96.19% (2) Real Property Tax Levy (Adjusted) $ 240,403 259,583 280,678 301,836 329,918 361,913 379,314 401,975 402,166 383,709 Represents the difference between the adjusted levy and collected to June 30, 2012. Tax Roll Corrections $ (1,013) (987) (494) (291) (322) (622) (360) (87) (366) (1) Fiscal Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Original Real Property Tax Levy $ 241,416 260,570 281,172 302,127 330,240 362,535 379,674 402,062 402,532 383,709 Collected to June 30, End of Tax Fiscal Year (2) (in thousands) Collections in Subsequent Years $ 8,666 8,635 8,667 9,756 11,298 12,946 15,416 16,556 16,005 PIMA COUNTY, ARIZONA Real Property Tax Levies and Collections Last Ten Fiscal Years $ Amount 240,285 259,564 280,507 301,776 329,818 361,687 379,040 401,539 399,983 369,100 Percent of Adjusted Levy 99.95% 99.99% 99.94% 99.98% 99.97% 99.94% 99.93% 99.89% 99.46% 96.19% Collected to June 30, 2012 (2) Delinquent Taxes Receivable (1) $ 118 19 171 60 100 226 274 436 2,183 14,609 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 2002-03 Primary 2002-03 Secondary Limited and Full Cash Values (1) Net Assessed Value $ 4,669,336 4,835,561 $ Ratio of Net Assessed to Full Cash Value 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% 2010-11 Primary 2010-11 Secondary 8,939,647 9,342,561 82,348,221 86,228,902 10.86% 10.83% 2011-12 Primary 2011-12 Secondary 8,310,120 8,448,282 78,036,208 80,152,473 10.65% 10.54% (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. 129 PIMA COUNTY, ARIZONA Comparative Net Valuations and Tax Rates Exhibit D - 10 (per $100 assessed value) (valuation $ amounts in thousands) Jurisdiction State of Arizona FY 2011-12 (Tax Year 2011) Valuation Rate $ 8,310,120 $0.0000 Pima County General Fund - Primary Debt Service - Secondary Free Library - Secondary FY 2012-13 (Tax Year 2012) Valuation Rate $ 8,073,938 $0.0000 8,310,120 8,448,282 8,448,282 3.4178 0.7800 0.3460 8,310,120 8,448,282 3.4178 1.1260 4.5438 Education Assistance 8,310,120 0.4259 8,073,938 0.4717 Flood Control District - Secondary 7,634,237 0.2635 7,244,629 0.2635 Fire District Assistance - Secondary 8,481,951 0.0418 8,171,212 0.0447 Pima Community College District Primary Secondary Total 8,310,120 8,448,282 1.0846 0.0248 1.1094 8,073,938 8,171,212 1.1484 0.0257 1.1741 8,448,282 0.1000 8,116,015 0.1000 3,422,619 3,487,960 0.4297 0.7324 1.1621 3,313,879 3,377,401 0.4125 0.8514 1.2639 23,614 24,688 0.2265 2.4338 2.6603 23,256 23,716 0.2305 2.5335 2.7640 16,801 1.7682 17,996 1.9585 3,313,108 3,388,423 5.4701 1.4779 6.9480 3,215,914 3,264,317 6.0804 1.2383 7.3187 Total County - Primary Total County - Secondary Grand Total Central Arizona Water Conservation District Secondary Cities & Towns City of Tucson Primary Secondary Total City of South Tucson Primary Secondary Total School Districts Unorganized - Primary Tucson Unified (District #1) Primary Secondary Total 8,073,938 8,171,212 8,116,015 3.4178 0.7800 0.3460 3.4178 1.1260 4.5438 (continued) 130 PIMA COUNTY, ARIZONA Comparative Net Valuations and Tax Rates Exhibit D - 10 (per $100 assessed value) (valuation $ amounts in thousands) (continued) Jurisdiction Marana Unified (District #6) Primary Secondary Total FY 2011-12 (Tax Year 2011) Valuation Rate $ 780,413 794,566 $ 3.5510 1.6537 5.2047 FY 2012-13 (Tax Year 2012) Valuation Rate $ 755,872 766,418 $ 3.9419 1.6444 5.5863 Flowing Wells Unified (District #8) Primary Secondary Total 205,273 212,616 3.4062 2.5627 5.9689 203,705 208,198 3.3742 2.6036 5.9778 Amphitheater Unified (District #10) Primary Secondary Total 1,517,536 1,549,557 3.9571 1.4462 5.4033 1,465,994 1,482,678 4.0830 1.4709 5.5539 Sunnyside Unified (District #12) Primary Secondary Total 439,615 455,198 3.7893 3.1522 6.9415 435,018 447,031 3.7819 2.5335 6.3154 Tanque Verde Unified (District #13) Primary Secondary Total 198,984 200,702 2.7218 1.0824 3.8042 184,135 184,878 3.0083 1.1455 4.1538 19,368 19,839 5.6740 0.0000 5.6740 19,744 20,066 3.5338 0.0000 3.5338 Catalina Foothills Unified (District #16) Primary Secondary Total 623,029 629,511 2.6674 1.5421 4.2095 583,516 585,344 3.8770 0.8702 4.7472 Vail Elementary (District #20) Primary Secondary Total 461,391 471,045 3.3502 1.3048 4.6550 443,206 452,491 4.0849 1.8271 5.9120 Ajo Unified (District #15) Primary Secondary Total (continued) 131 PIMA COUNTY, ARIZONA Comparative Net Valuations and Tax Rates Exhibit D - 10 (per $100 assessed value) (valuation $ amounts in thousands) (continued) Jurisdiction Sahuarita Unified (District #30) Primary Secondary Total FY 2011-12 (Tax Year 2011) Valuation Rate $ 315,986 319,085 $ 3.4833 1.9234 5.4067 FY 2012-13 (Tax Year 2012) Valuation Rate $ 371,039 372,867 $ 3.2630 2.2553 5.5183 San Fernando Elementary (District #35) Primary Secondary Total 1,211 1,508 4.8541 0.0000 4.8541 1,233 1,521 4.0331 0.0000 4.0331 Empire Elementary (District #37) Primary Secondary Total 7,636 7,992 2.7531 0.0000 2.7531 7,861 8,050 1.2484 0.0000 1.2484 334,446 338,328 1.7682 0.2576 2.0258 318,391 320,208 1.3547 0.2182 1.5729 1,060 1,060 0.0000 0.0000 0.0000 1,168 1,168 0.0000 0.0000 0.0000 1,417 1,433 6.7630 0.0000 6.7630 1,389 1,398 5.9198 0.0000 5.9198 36,367 37,661 5.3985 1.1690 6.5675 34,926 35,281 5.1783 1.2572 6.4355 Continental Elementary (District #39) Primary Secondary Total Baboquivari Unified School (District #40) Primary Secondary Total Redington Elementary (District #44) Primary Secondary Total Altar Valley Elementary (District #51)* Primary Secondary Total *Formerly known as the Mary E. Dill School District 132 PIMA COUNTY, ARIZONA Historical Collections - Hotel Excise Tax Car Rental Surcharge and Recreational Vehicle Tax Last Ten Fiscal Years Exhibit D - 11 (amounts in thousands) Fiscal Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Car Rental Surcharges (2) Hotel Excise Tax (1) $ 2,536 2,717 2,885 5,212 7,796 6,901 5,628 5,637 5,887 6,626 $ 1,436 1,277 1,595 1,589 1,357 1,732 1,389 1,521 1,538 1,464 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 athletic activities. Source: Pima County Finance and Risk Management Department 133 195 209 200 214 210 222 159 181 165 146 PIMA COUNTY, ARIZONA Streets and Highways Revenue Last Ten Fiscal Years Exhibit D - 12 (amounts in thousands) Fiscal Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Highway User Revenue Amount $ 48,072 51,334 53,878 56,937 58,638 57,847 53,907 50,535 50,460 44,890 $ 41,756 43,292 44,607 44,060 41,210 38,739 38,974 33,665 Vehicle License Tax $ 12,122 13,645 14,031 13,787 12,697 11,796 11,486 11,225 Note: Beginning with fiscal year 2004-05, this schedule identifies the Highway User Revenue and Vehicle License Tax individually Source: Pima County Finance and Risk Management Department 134 STATISTICAL SECTION DEBT CAPACITY: The debt capacity information is intended to assist users to understand and assess a government’s debt burden and ability to issue debt. Debt capacity information is cited as being very useful for assessing economic condition as frequently as revenue or tax capacity. Five of the schedules presented provide ten-year comparisons. Certain schedules, for example; leases, lease-purchase, and purchase agreements, are provided to comply with debt disclosure requirements. 135 200,554 232,553 267,927 231,918 290,150 349,542 388,032 420,261 455,856 461,557 Fiscal Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 $ 4,585 3,805 3,010 2,230 1,470 725 725 Flood Control Bonds Note: $ 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Fiscal Year 105,541 95,461 137,736 127,000 136,541 149,801 139,683 142,226 131,375 141,536 Transportation Revenue Bonds 495 $ 483,463 515,686 584,227 530,644 664,089 845,872 878,680 1,058,962 1,046,919 1,248,820 Total Primary Government $ Lease Revenue Bonds $ $ 22,973,000 23,965,000 26,302,000 28,421,000 30,899,000 33,009,000 32,898,000 34,974,000 36,263,000 37,000,000 Personal Income 2,121 1,736 1,093 911 Special Assessment Bonds $ 2.10% 2.15% 2.22% 1.87% 2.15% 2.56% 2.67% 3.03% 2.89% 3.38% Percentage of Personal Income 31,731 81,612 74,554 72,638 48,235 39,772 1,560 Certificates of Participation $ 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 1,070,723 1,092,369 1,113,749 Population at July 1 (a) 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 63 in Notes to the Financial Statements. (a) See schedule D-20 for population data. $ General Obligation Bonds Governmental Activities ($ amounts in thousands) $ $ 532 557 619 552 661 824 838 989 957 1,121 Debt per Capita 31,049 29,323 27,879 26,426 24,736 23,223 21,327 19,387 17,775 16,431 Capital Leases $ 63,098 60,064 55,809 51,710 94,356 163,701 183,389 166,935 184,782 171,022 Sewer Revenue Bonds $ 165,000 176,849 379,418 $ 63,551 83,941 83,978 80,148 76,111 70,426 64,489 66,210 27,390 23,719 Regional Wastewater Loans Payable $ 6,849 5,783 4,852 4,562 5,280 5,842 6,481 6,305 4,657 15,365 $ 483,463 515,686 584,227 530,644 664,089 845,872 878,680 1,058,962 1,046,919 1,248,820 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 136 200,554 232,553 267,927 231,918 290,150 349,542 388,032 420,261 455,856 461,557 Fiscal Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 $ 4,585 3,805 3,010 2,230 1,470 725 725 $ 2,226 2,648 8,899 5,571 7,431 10,241 10,523 11,396 27,904 22,602 Debt Service Funds Available for Principal $ 202,913 233,710 262,038 228,577 284,189 340,026 378,234 408,865 427,952 438,955 Net General Bond Debt $ 4,835,561 5,221,271 5,620,156 6,050,950 6,869,955 8,220,396 9,594,862 9,860,981 9,342,561 8,448,282 Secondary Net Assessed Value Note: Details regarding outstanding debt can be found in Note 7 on page 64 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 ($ amounts in thousands) 4.20% 4.48% 4.66% 3.78% 4.14% 4.14% 3.94% 4.15% 4.58% 5.20% 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 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 1,070,723 1,092,369 1,113,749 Population at July 1 $ 223 252 278 238 283 331 361 382 391 394 Net General Bond Debt per Capita* Exhibit D - 14 137 1,129,103 1,091,892 1,185,435 1,146,388 1,107,662 1,137,114 1,213,050 1,302,802 1,335,431 1,284,219 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 $ 4,835,561 5,221,271 5,620,156 6,050,950 6,869,955 8,220,396 9,594,862 9,860,981 9,342,561 8,448,282 Secondary Net Assessed Value Note: 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 1,070,723 1,092,369 1,113,749 Population at July 1 $ 1,243 1,179 1,256 1,192 1,103 1,108 1,157 1,217 1,222 1,153 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. 23.35% 20.91% 21.09% 18.95% 16.12% 13.83% 12.64% 13.21% 14.29% 15.20% Percentage of Assessed Value * The Debt per Capita is shown in actual dollars and not in thousands. $ Total Overlapping Debt Fiscal Year ($ amounts in thousands) PIMA COUNTY, ARIZONA Ratio of Direct and Overlapping Debt to Property Values and Per Capita Last Ten Fiscal Years Exhibit D - 14a PIMA COUNTY, ARIZONA Computation of Direct and Overlapping Governmental Activities Debt Outstanding At June 30, 2012 Exhibit D - 15 ($ amounts in thousands) Debt Outstanding Governmental Unit Debt repaid with property tax School Districts $ 592,565 Pima Community College City of Tucson $ $ 592,565 6,645 6,645 222,856 222,856 Total overlapping Debt repaid with property tax Direct: Pima County * Amount Overlapping 461,557 Total direct $ 822,066 $ 461,557 $ 461,557 $ 39,772 Other Debt: Certificates of participation Jail capital lease $ 39,772 15,835 15,835 596 596 141,536 141,536 Other capital leases Transportation bonds Total other debt $ 197,739 Total direct and overlapping debt $ 1,481,362 *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. 138 139 27.30% 29.30% 553,734 $ $ 30.65% 584,652 258,371 (8,899) 267,270 843,023 5,620,156 2005 $ $ 24.87% 681,904 225,739 (5,571) 231,310 907,643 6,050,950 2006 See Notes to the Financial Statements (Note 7 page 71) for calculation of the legal debt margin for the current year. Total net debt applicable to the limit as a percentage of debt limit. 527,285 Legal debt margin 229,457 (2,648) (2,226) 783,191 5,221,271 232,105 $ $ 2004 200,275 725,334 4,835,561 198,049 $ $ 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 2003 $ $ 27.38% 748,334 282,159 (7,431) 289,590 1,030,493 6,869,955 2007 ($ amounts in thousands) 2008 $ 27.42% 894,965 338,094 (10,241) 348,335 1,233,059 $ 8,220,396 PIMA COUNTY, ARIZONA Legal Debt Margin Last Ten Fiscal Years $ $ 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 $ $ 30.32% 976,538 424,846 (27,904) 452,750 1,401,384 9,342,561 2011 $ 34.21% 833,699 433,543 (22,602) 456,145 1,267,242 $ 8,448,282 2012 Exhibit D - 16 140 105,827 103,959 109,264 105,987 128,067 151,212 158,397 $ 57,371 69,597 78,521 73,186 69,904 74,638 73,241 Less: Operating Expense (2) $ 48,456 34,362 30,743 32,801 58,163 76,574 85,156 Available Net Revenue 20,163 11,260 32,806 78,326 87,834 117,962 Pledged Revenues (3) $ 10,053 13,957 13,325 14,187 16,952 17,110 20,895 Principal Includes sewer connection fees. Excludes grants, depreciation, interest expense and amortization. Pledged revenues defined by BOS 2010-50. Sewer revenue debt rate covenants require minimum coverage of 1.20. For fiscal year 2009-2010, a new Debt Coverage calculation was implemented. Debt service requirements include principal and interest payable during the Bond Fiscal Year. Per the bond resolution, the Bond Fiscal Year is defined as 7/2/20XX to 7/1/20XX. $ Sewer User Revenues (1) $ 5,619 6,340 7,221 9,469 9,838 17,047 21,658 Interest Debt Service (6) $ Total 15,672 20,297 20,546 23,656 26,790 34,157 42,553 Note: Sewer revenue debt coverage is presented with 5 years of data beginning with fiscal year 2009-10. Data for each successive year will be added until 10 years are presented. (1) (2) (3) (4) (5) (6) 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Fiscal Year Plus: Ending cash Balances of Prior Fiscal Year (unrestricted) (amounts in thousands) PIMA COUNTY, ARIZONA Regional Wastewater Reclamation Pledged Sewer Revenue Debt Coverage Last Seven Fiscal Years Coverage Ratio (4) 3.09 1.69 1.50 1.39 2.92 (5) 2.57 2.77 Exhibit D 17a 141 $ 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 $ 34,059 36,865 38,349 39,336 42,639 43,490 38,082 34,214 34,552 33,335 Less: Operating Expense $ 17,793 18,912 19,470 22,608 22,142 21,519 20,809 20,683 18,159 13,499 Available Net Revenue $ 10,215 8,905 10,710 11,435 11,745 12,365 15,145 10,530 11,015 12,055 $ * Debt Service Requirements include principal and interest payable in the 12 months following each fiscal year. 4,394 3,965 6,058 5,257 5,659 6,147 6,203 5,709 5,244 5,537 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. 51,852 55,777 57,819 61,944 64,781 65,009 58,891 54,897 52,711 46,834 Transportation Revenue Fiscal Year (amounts in thousands) PIMA COUNTY, ARIZONA Transportation Revenue Bonds - Pledged Revenue Bond Coverage Last Ten Fiscal Years 1.22 1.47 1.16 1.35 1.27 1.16 0.97 1.27 1.11 0.77 Coverage Ratio Exhibit D - 17b 142 * * * * * * * * $ Lease Revenue 1 0 $ 7 27 Less: Operating Expense * This debt was satisfied in full during FY 2003-04. 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Fiscal Year $ (6) (27) Available Net Revenue $ 155 460 $ Debt Service Principal Interest (amounts in thousands) PIMA COUNTY, ARIZONA Pledged Revenue Bond Coverage - Lease Revenue Bonds Last Ten Fiscal Years 31 99 (0.03) (0.05) Coverage Ratio Exhibit D - 17c 143 $ $ 2,953 42 147 2,764 FY 04-05 $ $ 3,115 42 31 3,042 FY 05-06 $ $ 3,118 21 82 3,015 FY 06-07 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. ** The capital lease agreement for equipment was paid in full as of June 30, 2011 * Clerk of Superior Court - equipment** Jail * Juvenile Court Sheriff Environmental Quality - Equipment Function/Department $ $ 6,002 82 5,920 FY 07-08 (amounts in thousands) $ $ 3,158 131 3,027 FY 08-09 $ $ 3,118 111 3,007 FY 09-10 PIMA COUNTY, ARIZONA Lease, Lease-Purchase and Purchase Agreements $ $ 3,041 37 3,004 FY 10-11 $ $ 18,565 18,565 FY 11-12 $ $ 16,931 596 16,335 FY 12-13 Exhibit D - 18 PIMA COUNTY, ARIZONA Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures Last Ten Fiscal Years Exhibit D - 19 (amounts in thousands) Fiscal Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Principal $ 43,648 46,998 41,255 48,672 50,940 56,459 96,751 83,565 72,525 78,390 Total Debt Service Interest $ 13,904 13,702 14,794 18,147 17,672 19,757 24,322 24,097 23,945 24,762 $ 57,552 60,700 56,049 66,819 68,612 76,216 121,073 107,662 96,470 103,152 Total General Expenditures * $ Ratio of Debt Service To General Expenditures 515,774 546,136 589,708 640,336 689,968 755,413 780,044 730,379 730,278 767,261 * Includes General, Special Revenue, and Debt Service Funds, while excluding Capital Projects Fund. 144 11.2% 11.1% 9.5% 10.4% 9.9% 10.1% 15.5% 14.7% 13.2% 13.4% 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 Years Calendar Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Population (a) 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 1,070,723 1,092,369 1,113,749 Personal Income (b) $ 22,973,000 23,965,000 26,302,000 28,421,000 30,899,000 33,009,000 32,898,000 34,974,000 36,263,000 37,000,000 Per Capita Personal Income ($) $ 25,395 25,797 27,599 28,894 30,813 32,470 32,343 33,931 37,101 37,361 Exhibit D - 20 Unemployment Rate (a) 4.8% 3.5% 4.1% 4.4% 3.3% 4.7% 7.9% 8.6% 9.1% 7.6% 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. 145 146 4,000 8,234 Wal-Mart Stores, Inc. Tucson Unified School District 81,606 3,375 6,168 7,135 10 8 7 424,400 19.2% 0.8% 1.5% 1.7% 2.7% 1.9% 6 1 0.9% 2.3% 2.3% 2.4% 2.7% 9 4 5 3 2 Rank Percent of Total County Employment 77,740 3,515 5,495 6,987 11,939 7,690 4,420 7,692 9,753 10,171 10,078 Employees 10 8 7 1 6 9 5 4 2 3 Rank 2004 Sources: Data is obtained from www.azstarnet.com/star200, a website of the Arizona Daily Star. University of Arizona, "Arizona's Economy" U of A Business Research Program (EBR), College of Business & Public Administration Total Work Force Total Carondelet Health Network Tohono O'odam Nation Phelps Dodge Freeport-McMoran Copper City of Tucson UA Healthcare US Border Patrol Pima County Government 11,580 9,947 Davis Monthan AFB Fort Huachuca 9,732 10,100 Raytheon State of Arizona 11,335 University of Arizona Employer Employees 2003 431,400 18.1% 0.8% 1.3% 1.6% 2.8% 1.8% 1.0% 1.8% 2.3% 2.4% 2.3% Percent of Total County Employment 81,678 4,500 6,757 6,767 12,250 7,684 4,595 8,727 9,750 10,300 10,348 Employees 10 8 7 1 6 9 5 4 3 2 Rank 2005 443,100 18.3% 1.0% 1.5% 1.5% 2.8% 1.7% 1.0% 2.0% 2.2% 2.3% 2.3% Percent of Total County Employment PIMA COUNTY, ARIZONA Principal Employers Current Year and Nine Years Ago 80,908 4,123 5,306 6,765 13,098 7,623 4,980 8,233 9,742 10,756 10,282 Employees 10 8 7 1 6 9 5 4 2 3 Rank 2006 443,300 18.2% 0.9% 1.2% 1.5% 3.0% 1.7% 1.1% 1.9% 2.2% 2.4% 2.3% Percent of Total County Employment 79,899 4,900 5,848 7,290 9,119 7,419 5,625 8,233 9,927 11,184 10,354 Employees 10 8 7 4 6 9 5 3 1 2 Rank 2007 (continued) 453,500 17.6% 1.1% 1.3% 1.6% 2.0% 1.6% 1.2% 1.8% 2.2% 2.5% 2.3% Percent of Total County Employment Exhibit D - 21 147 15.9% 1.2% 459,200 Sources: Data is obtained from www.azstarnet.com/star200, a website of the Arizona Daily Star. University of Arizona, "Arizona's Economy" U of A Business Research Program (EBR), College of Business & Public Administration Total Work Force 486,400 75,882 77,214 9 5,399 6,511 Total 17.6% 5,987 1.2% 1.3% 6,236 4,566 80,671 1.3% 10 8 1.3% 7,012 Carondelet Health Network Tohono O'odam Nation Phelps Dodge 9 5,635 6,235 7 1.5% 7,192 10 9 7 8 6 5 4 488,500 15.5% 0.9% 1.1% 1.3% 1.3% 1.4% 1.5% 1.6% 1.8% 6,403 6,225 6,709 7,308 8,462 8,866 10,500 75,866 10 9 7 8 6 5 4 3 1 2 485,800 15.6% 1.0% 1.2% 1.3% 1.3% 1.4% 1.5% 1.7% 1.8% 2.2% 2.2% 6,170 6,198 6,674 7,300 8,566 9,061 10,500 10,681 76,744 5,840 1.3% 1.5% 6,463 5 1.4% 7,755 3 2.5% 10,481 Freeport-McMoran Copper 8 6 1.5% 7,227 6 1.5% 8,708 1 2.1% Employees 4,930 6,954 Pima County Government 7 1.7% 6,715 4 1.9% 12,140 2 Rank Percent of Total County Employment 5,848 6,701 Fort Huachuca 4 1.3% 7,509 3 2.4% 10,363 Employees 2011 City of Tucson 8,018 Tucson Unified School District 10 1.7% 9,329 1 2.2% Rank Percent of Total County Employment 5,594 5,805 Wal-Mart Stores, Inc. 5 2.3% 11,539 2 Employees 2010 5,982 7,701 Davis Monthan AFB 2 2.7% 10,575 Rank Percent of Total County Employment UA Healthcare 10,754 State of Arizona 1 2.3% Employees 2009 6,000 12,515 Raytheon 3 Rank Percent of Total County Employment US Border Patrol 10,535 University of Arizona Employer Employees 2008 PIMA COUNTY, ARIZONA Principal Employers Current Year and Nine Years Ago 10 9 8 7 6 5 4 3 2 1 Rank 2012 455,900 16.8% 0.0% 1.2% 1.3% 1.4% 1.4% 1.5% 1.6% 1.9% 2.0% 2.3% 2.3% Percent of Total County Employment Exhibit D - 21 148 29,100 28,500 28,600 29,300 29,000 26,900 25,900 24,500 24,767 23,100 184,500 185,000 199,300 219,200 228,600 221,600 215,900 216,800 219,159 250,900 14,800 15,600 18,200 17,500 17,800 16,300 16,700 17,400 17,589 17,600 Beginning with the October 2012 issue, "Arizona's Economy" changed what Trade and Services were reported. This resulted in an increase of 40,000 jobs being reported. 23,700 24,000 26,600 28,500 28,100 23,600 16,500 14,300 14,456 16,900 Note: b 1,400 1,200 1,500 1,700 1,900 2,100 1,300 1,800 1,820 1,900 Manufacturing 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). 4.8% 3.5% 4.1% 4.4% 3.3% 4.7% 7.9% 8.6% 9.1% 7.6% Construction Trades and Services (b) Note: a 424,400 431,400 443,100 443,300 453,500 459,200 486,400 488,500 485,800 455,900 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 908,227 926,052 943,795 961,519 1,003,918 1,026,506 1,048,796 1,070,723 1,092,369 1,113,749 Population Total Unemployment Rate Exhibit D - 22 Sources: 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Calendar Year (a) Civilian Labor Force PIMA COUNTY, ARIZONA Population and Employment Last Ten Calendar Years 149 Sources: 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Calendar Year 3,522,401 3,611,696 3,928,773 4,251,710 4,284,880 4,474,352 3,777,057 3,696,875 3,721,785 3,663,982 15,016,131 15,393,817 15,847,429 17,179,275 17,857,865 19,491,376 21,648,350 20,483,709 19,746,774 19,971,230 Transportation No. of Air Bus Passengers Ridership 1.91 1.96 2.00 2.18 2.21 2.27 2.46 2.22 2.18 2.15 Riders Per Mile 9,441 10,432 12,103 11,903 6,265 4,171 2,364 2,340 2,400 2,062 Residential Bldg. Permits 12,933 15,054 17,039 16,630 13,821 10,718 10,472 12,471 11,545 13,436 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 Tucson Airport Authority Pima Association of Governments Tucson Association of Realtors, Multiple Listing Service, Inc. 271,802 239,966 261,037 289,440 263,910 240,329 190,445 169,780 164,152 145,967 Aircraft Movements PIMA COUNTY, ARIZONA Transportation and Real Estate Last Ten Calendar Years $ 2,271,131 2,899,012 3,908,054 4,462,020 3,757,536 2,810,383 2,245,644 2,457,147 2,033,702 2,211,369 Sales Volume In $ 000's Exhibit D - 23 PIMA COUNTY, ARIZONA Economic Indicators by Calendar Year Last Ten Calendar Years Exhibit D - 24 ($ amounts in thousands) Aggregate Retail Sales Calendar Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: $ Construction Activity No. of Dwelling Construction Units Awards Awarded 8,804,946 9,550,501 10,366,181 11,478,781 11,829,081 11,922,231 10,799,849 10,614,927 11,144,720 11,834,329 8,015 9,281 12,640 10,313 6,110 3,728 1,986 2,221 2,288 * 2,218 University of Arizona, "Arizona's Economy" U of A Business Research Program (EBR), College of Business & Public Administration. *With Calendar Year 2011 the number of dwelling units awarded includes both single family and multiple family unit structures combined. 150 Bank Deposits $ 7,175,000 7,895,000 9,013,000 10,134,000 10,497,000 10,765,000 10,855,000 11,134,000 11,265,000 11,501,822 PIMA COUNTY, ARIZONA Population Statistics June 30, 2012 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+ 73,568 72,290 67,268 66,044 79,724 228,370 210,787 71,902 64,963 53,556 40,298 84,979 Total 1,113,749 POPULATION PROJECTIONS Year Projected Population 2013 2014 2019 2024 2034 2044 2054 1,134,853 1,155,599 1,253,475 1,342,978 1,503,365 1,636,316 1,758,177 Source: Arizona Department of Economic Security 151 Exhibit D - 25 PIMA COUNTY, ARIZONA Average Annual Jail Population Last Ten Calendar Years Calendar Year Average Jail Population 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1,539 1,739 2,009 2,028 2,008 1,913 1,826 1,636 1,640 1,802 Source: Pima County Sheriff's Department 152 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. 153 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 6,855 1,187 472 0 0 559 153 3 5,668 2,776 1,442 334 41 408 22 466 179 ** Pima Health Systems & Services was sold and the department closed. * 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 6,644 1,034 507 0 0 451 73 3 5,610 2,684 1,491 311 34 397 29 480 184 Full-time employees (FTEs) as of 6/30: 2007 2008 2009 2,911 1,401 526 45 414 23 180 289 2006 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 Ten Fiscal Years 6,728 978 488 0 0 422 66 2 5,750 2,870 1,488 264 33 422 32 467 174 2010 6,704 970 481 0 0 421 66 2 5,734 2,850 1,529 262 23 412 27 461 170 2011 6,470 593 0 59 3 531 5,877 2,473 1,540 274 24 404 377 652 133 2012 Exhibit D - 27 154 Cultural and Recreational Spring training attendance (2) Sidewinders attendance Soccer attendance $ $ 112,791,318 $ 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 $ 12,908,101 9,356,754 2,598,134 72,540,294 1,300,000 5,761,423 458,736 101 280,850 23,070 147,117 165,387 $ 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 37,868 42,016 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 27,846 31,016 3,170 30,686 2006 $ 154,588,664 $ 37,402,683 66,095,100 21,944,399 29,146,482 1,395,849 6,371,480 492,973 141 438,051 25,700 142,773 153,595 68.5 8,734 30,204 34,131 3,927 33,929 1,429,365 6,874,888 554,339 147 445,137 19,622 160,626 143,611 67.3 4,452 41,542 47,509 5,967 32,796 2008 $ 113,810,324 $ 18,619,333 17,591,833 4,673,301 72,925,857 Fiscal Year 2007 (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 (3) *For fiscal year 2010-11 there were no Spring Training games in Tucson Capital Projects Completed Land Buildings Improvements Infrastructure Library Volumes in collection Total volumes borrowed Number of cardholders Parks & Recreation Athletic field permits issued Community center admissions Volunteer hours (3) 137,302 167,552 64.5 8,289 Wastewater Avg. daily sewage treated (MGD) New connections 65.0 9,718 36,823 40,636 42,074 45,994 (1) 3,813 33,815 3,920 32,159 2004 Traffic violations/citations Criminal Total Civil Total Total violations/citations Sheriff Physical arrests Program: 2003 PIMA COUNTY, ARIZONA Operating Indicators by Program Last Ten Fiscal Years $ 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 49,817 56,239 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 41,800 48,217 6,417 27,946 2010 5,655,264 57,876,009 6,366,258 24,259,854 $ 94,157,385 $ 1,414,928 7,199,809 452,400 161 339,550 12,168 * 62.7 1,412 32,270 36,574 4,304 24,108 2011 $ 68,834,665 $ 13,075,719 5,008,707 4,287,186 46,463,053 1,326,375 7,557,865 434,841 228 347,379 10,787 36,001 20,850 62.3 1,355 32,445 36,650 4,205 24,841 2012 Exhibit D - 28 155 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 $ 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 2006 (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. * Annexation by other jurisdictions resulted in a decrease of Transportation (streets and highways) ** Pothole repair was unavailable in FY 2010 *** No soil cement bank protection projects in 2012 **** Jan. 3, 2012 Capacity was reduced when the Town of Marana obtained ownership. 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 $ 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 7 4 302 $ Fiscal Year 2007 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 PIMA COUNTY, ARIZONA Capital Assets and Infrastructure by Program Last Ten Fiscal Years $ 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 $ 4 275 57,791 94 26 3,476 97.76 2,898 39 86 18 11 10 141 12,027 1,892 2,822,770 7 4 355 2011 6 595 58,386 100 26 3,440 97.06 **** 3,012 40 86 18 11 10 *** 13,210 1,897 $ 1,493,531 7 4 358 2012 Exhibit D - 29 (This page intentionally left blank) 156