PIMA COUNTY, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2015 BOARD OF SUPERVISORS Sharon Bronson Chair District #3 Richard Elías Vice Chair District #5 Ally Miller District #1 Ramón Valadez District #2 Ray Carroll District #4 COUNTY ADMINISTRATOR C. H. Huckelberry Prepared by the Department of Finance and Risk Management Keith Dommer, Director Michelle Campagne, Deputy Director Ellen Moulton, Deputy Director Paul J. Guerrero, CPA, Division Manager Financial Control & Reporting Andy Welch, Division Manager Financial Control & Reporting Supervisors Emilia Eveningred Pete Rodriguez Blanca Rossetti Accountants Linda Baldazo Brenda DeBoo-Nicely Valentin R. Dominguez, CPA Jessica Espinoza Linda House Chih-Yu Lee, CPA Janet Mabon Ryan Maese Lorraine Nuñez Elizabeth Partlow Janet Peete Alex Ramires Jennifer Serrano Phillip Summersett James D. Weingart, CMA PIMA COUNTY, ARIZONA Comprehensive Annual Financial Report For the Year Ended June 30, 2015 TABLE OF CONTENTS Exhibit I. INTRODUCTORY SECTION Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting Organizational Chart 1-7 8 9 II. FINANCIAL SECTION Independent Auditors' Report A. B. Page 11 - 13 MANAGEMENT'S DISCUSSION AND ANALYSIS (required supplementary information) 15 - 33 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position Statement of Activities Governmental Fund Financial Statements (Major and Other) Balance Sheet Reconciliation of the Governmental Funds Balance Sheet to the Government-wide Statement of Net Position Statement of Revenues, Expenditures and Changes in Fund Balances Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-wide Statement of Activities Proprietary Fund Financial Statements (Major and Other) Statement of Net Position Statement of Revenues, Expenses and Changes in Fund Net Position Statement of Cash Flows Fiduciary Fund Financial Statements Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position A-1 A-2 35 36 - 37 A-3 38 A-4 39 A-5 40 A-6 41 A-7 42 A-8 A-9 43 44 - 45 A-10 A-11 46 47 PIMA COUNTY, ARIZONA Comprehensive Annual Financial Report For the Year Ended June 30, 2015 Table of Contents (continued) Exhibit Notes to Financial Statements Note 1: Summary of Significant Accounting Policies Note 2: Change in Accounting Principle and Correction of a Misstatement - Prior Period Adjustment Note 3: Cash and Investments Note 4: Fund Balance Classifications of the Governmental Funds Note 5: Capital Assets Note 6: Claims, Judgments and Risk Management Note 7: Long-Term Liabilities Note 8: Short-Term Liabilities Note 9: Landfill Liabilities Note 10: Pension and Other Post Employment Benefits Note 11: Due from Other Governments Note 12: Interfund Transactions Note 13: Construction and Other Significant Commitments Note 14: Deficit Fund Balances C. 48 - 54 55 56 - 59 60 61 - 62 63 - 64 65 - 74 74 75 76 - 93 94 95 96 96 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 the County’s Proportionate Share of the Net Pension Liability – Cost-Sharing Pension Plans 97 98 B-2 Schedule of Changes in the County’s Net Pension Liability – and Related Ratios – Agent Pension Plans D. Page 99 100 - 101 Schedule of County Pension Contributions 102 Notes to Pension Plan Schedules 103 Schedule of Agent OPEB Plan’s Funding Progress 104 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 OEM Radio System - Special Revenue Fund School Reserve - Special Revenue Fund Environmental Quality - Special Revenue Fund Waste Tire - Special Revenue Fund Library District - Special Revenue Fund Stadium District - Special Revenue Fund Street Lighting Districts C-1 106 - 107 C-2 108 - 109 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-16 111 112 113 114 115 116 117 118 119 120 121 122 123 124 PIMA COUNTY, ARIZONA Comprehensive Annual Financial Report For the Year Ended June 30, 2015 Table of Contents (continued) Exhibit Page C-17 125 C-18 C-19 126 127 - 128 C-20 129 C-21 C-22 130 131 - 132 C-23 133 C-24 C-25 134 135 C-26 136 Financial Trends Information Net position by component Changes in net position Fund balances - governmental funds Changes in fund balances - governmental funds D-1 through 4 137 - 141 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 D-5 through 12 143 - 154 Other (Nonmajor) Enterprise Funds Combining Statement of Position Combining Statement of Revenues, Expenses and Changes in Fund Net Position Combining Statement of Cash Flows Internal Service Funds Combining Statement of Net Position Combining Statement of Revenues, Expenses and Changes in Fund Net Position Combining Statement of Cash Flows 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 PIMA COUNTY, ARIZONA Comprehensive Annual Financial Report For the Year Ended June 30, 2015 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 Lease, lease-purchase installment notes payable and purchase agreements Ratio of annual debt service expenditures for general bonded debt to total general expenditures D-13 through 19 155 - 163 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 26 165 - 172 Operating Information Employees by function Operating indicators by program Capital assets and infrastructure by program D-27 through 29 173 - 175 Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2015 INTRODUCTORY SECTION Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting Organizational Chart FINANCIAL SECTION STATISTICAL SECTION INTRODUCTION PIMA COUNTY INTRODUCTORY SECTION The purpose of the Introductory Section in a comprehensive annual financial report (CAFR) is to familiarize readers with the organizational structure of the government, the nature and scope of the services it provides, and the specifics of its legal operating environment. COUNTY ADMINISTRATOR’ ’S OFFICE PIMA COUNTY GOVERNMENTAL CENTER 130 W. CONGRESS, FLOOR 10, TUCSON, AZ 85701-1317 (520) 724-8661 FAX (520) 724-8171 C.H. HUCKEL’’BERRY County Administrator December 3, 2015 To the Honorable Board of Supervisors and Citizens of Pima County, Arizona: We are pleased to submit the Comprehensive Annual Financial Report (CAFR) of Pima County for the fiscal year ended June 30, 2015. This report presents comprehensive financial and operating information about the County’s activities for the fiscal year. 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. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. The State of Arizona Office of the Auditor General is required to audit financial transactions and accounts kept by counties. The Auditor General has issued an unmodified (“clean”) opinion on the Pima County financial statements for the year ended June 30, 2015. The Auditor General’s report is located at the front of the financial section of this report. Management’s discussion and analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. The Comprehensive Annual Financial Report consists of three sections:  The INTRODUCTORY section describes 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 Auditor General’s report, the MD&A, the audited basic financial statements, the 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 generally accepted accounting principles.  The STATISTICAL section contains comprehensive statistical data on the County’s financial, physical, economic, and demographic characteristics. 1 Pima County Profile Covering an area of approximately 9,200 square miles, Pima County is one of the oldest continuously inhabited areas of the United States. It is situated in the southern part of Arizona with a portion of its southern boundary bordering Mexico. Created in 1864, Pima County includes a large portion of southern Arizona acquired from Mexico by the Gadsden Purchase of 1854. Pima County has purchased thousands of acres of open space and ranches to preserve and protect the stunning landscapes and historic and cultural sites. The County’s population has grown from 395 in 1820 to an estimated population of 1,022,079 in 2015, according to the Arizona Department of Administration, Office of Employment and Population Statistics. The County has a vibrant multicultural diversity. A major commercial and academic hub, Pima County is home to Tucson, the second largest city in Arizona. Although the County has five incorporated cities and towns, more than a third of the population lives outside of any incorporated cities or towns. 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 chairman is selected by the Board from among its members. The Board is responsible for establishing the policies of the County, which provide guidance to the various County constitutional officers and departments. The Board has the legal authority and responsibility to establish spending limits and approve the budgets of all County departments, and also sets the amount of taxes to be levied. The Board appoints a County Administrator who is responsible for the general administrative and overall operations of the various departments of the County. The County has several other elected officials including the Assessor, County Attorney, Recorder, Sheriff, Clerk of the Superior Court, the Constables, Superintendent of Schools, Treasurer, and Judges for the Superior Courts, Juvenile Courts, and Justice Courts. 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 County may be financially accountable if an organization is fiscally dependent on the County. Pima County offers a wide variety of governmental services that are organized into the following functional areas:  General Government Services primarily provides internal administrative and support services to County departments directly serving the public. The departments comprising this function include the Assessor; Board of Supervisors; Clerk of the Board; Communications Office; County Administrator; Elections; Facilities Management; Finance and Risk Management; Human Resources; Information Technology; Non Departmental; Procurement; Recorder; and Treasurer.  Community Resources provides educational, cultural, social, economic development and recreational programs to the public. The departments in this functional area are Community and Economic Development Administration; Community Development and Neighborhood Conservation; Community Services, Employment and Training; County Free Library; Economic Development and Tourism; Kino Sports Complex; Natural Resources, Parks and Recreation; School Superintendent; and the Stadium District.  Justice and Law provides public safety, felony and misdemeanor investigation and prosecution, and services for victims, witnesses, and those needing fiduciary assistance. Services are also provided in the areas of indigent defense, civil representation, correctional housing, and juvenile detention. The departments within this area are the Clerk of the Superior Court; Constables; County Attorney; Forensic Science Center; Justice Courts; Juvenile Court; Public Defense Services; Public Fiduciary; Sheriff; and Superior Court. 2  Health Services provides various public health, sanitation, and animal control services, as well as medical assistance to indigents. The component departments are Behavioral Health; Environmental Quality; Health; and Office of Emergency Management and Homeland Security.  Public Works provides construction, operations, and maintenance services related to the County’s infrastructure and related planning and environmental issues. The departments within this area are Capital Projects; Development Services; Office of Sustainability and Conservation, Public Works Administration; Real Property; Regional Flood Control District; Regional Wastewater Reclamation; and Transportation. 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. The County’s component units include the following:  The Pima County Stadium District, the Regional Flood Control District, the Library District, and the Street Lighting Districts are reported as blended component units in special revenue funds in the accompanying financial statements.  The Southwestern Fair Commission is reported as a separate component unit (discrete presentation) in the accompanying financial statements. Additional information on the legally separate entities and the blended component units can be found in the notes to the financial statements (see Note 1). The County also has various independently governed school districts, irrigation districts, fire districts, a health district (Ajo-Lukeville), 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. Following receipt of the County Administrator’s Recommended Budget and public discussion of the Recommended Budget, the Board of Supervisors historically adopts a budget in June. A budget must be adopted on or before the first Monday in August. The Adopted Budget sets a ceiling on expenditures that may be incurred for the County as a whole. This annual budget serves as the foundation for Pima County’s financial planning and control. Pima County has implemented a program-oriented presentation of its budget. All departments are budgeted on a cost unit/object line item basis. Departments may modify line item amounts within their own budgets provided the total program budgeted amount remains unchanged. Changes to the adopted budget that require a transfer between funds are evaluated by the County Administrator prior to recommendation of approval to the Board of Supervisors. Should the County Administrator recommend the change to the Board of Supervisors, the recommendation will be considered at a regularly scheduled, open meeting of the Board. On an annual basis, the County Administrator’s office prepares a five-year Capital Improvement Plan and a one-year Capital Improvement Budget. Economic Outlook Pima County’s major employers are the University of Arizona, Raytheon Missile Systems, State of Arizona, and Davis-Monthan Air Force Base. Major manufacturers include Ventana Medical Systems, IBM and several aerospace and aircraft companies including Raytheon Missile Systems, Bombardier Aerospace, and Honeywell Aerospace. Employment by industry is led by government; educational and health services; trade, transportation and utilities; professional and business services; and leisure and hospitality. The Pima County unemployment rate has decreased from a five year high in 2010 of 9.3% to 6.2% in 2014 and is lower than the national unemployment 3 rate, which was 9.4% in 2010 and had fallen to 6.4% in 2014. Nearly half of Pima County’s population is in the prime working age range of 18 to 54. A sunny, mild, dry climate with an average temperature of 71°F and a unique desert location help promote travel and tourism as a major industry in Pima County. Spending by visitors generates sales in lodging, food services, recreation, transportation, and retail businesses. These sales support jobs for Pima County residents and contribute tax revenues to local and state governments. According to recent research data released by the Arizona Office of Tourism, Pima County direct travel spending generated approximately $2.82 billion (13.5% of Arizona direct travel spending) in 2014. This direct travel spending generated 23,410 direct jobs, $630 million in direct earnings and over $185 million in local and state tax revenues. Unlike other industries, taxes generated by travel industry spending are paid by visitors rather than residents. These visitors bring new money into Pima County’s economy and generate revenue in the County. Some of the best world-class attractions in Arizona are found in Pima County, such as the Arizona-Sonora Desert Museum and the Pima Air and Space Museum. There are several signature events which draw many tourists to the area and have a significant economic impact on the County, including the following:  The area’s largest annual event is the two-week Tucson Gem, Mineral and Fossil Showcase, the largest event of its kind in the world, which attracts an estimated 55,000 people to Tucson and has an estimated economic impact of $120 million.  The annual El Tour de Tucson is Southern Arizona’s largest bicycling event, attracting more than 9,000 cyclists and 30,000 spectators. El Tour’s annual economic impact is estimated to be $13 - $20 million on ride weekend alone and $50 - $70 million year-round. A 2014 Forbes magazine article highlighted Tucson and its 2009 Regional Plan for Bicycling with its identification of 170 miles of potential “Bicycle Boulevards”. Bicycle commuting has recently increased 58 percent and the city now boasts an excellent network of bike lanes stretching 610 miles. The County has completed more than 75% of the 131 miles of the Loop, shared-use paths for residents and visitors on foot, bikes, skates, and horses connecting various parts of the Tucson area. Please refer to the MD&A beginning on page 15 for additional information regarding the County’s economic outlook. Capital Improvement Plan The Adopted Budget for fiscal year 2015-16 includes $134 million for its Capital Improvement Plan (CIP). Under this plan, four departments comprise 88% of the total CIP budget as follows:  Regional Wastewater Reclamation (RWR), with a budget of $48 million  Transportation, with a budget of $42 million  Facilities Management, with a budget of $14 million  Regional Flood Control District, with a budget of $13.9 million Regional Wastewater Reclamation – The RWR department has completed all the regulatory-required infrastructure of the Regional Optimization Master Plan (ROMP). ROMP was designed to expand and upgrade infrastructure to meet regulatory mandates and provide for the future capacity needs of the community for the next several decades. Regional Wastewater Reclamation major projects for fiscal year 2015-2016 include the following:  Minor Rehabilitation Projects are budgeted for $10.0 million. 4  North Rillito Interceptor Rehabilitation Project is budgeted for $9.3 million.  Continental Ranch Pump Station Facility Modification Project is budgeted for $2.3 million.  22nd Street, Alvernon Way to Swan Road Project is budgeted for $2.1 million. Transportation - The Department of Transportation projects are funded by highway user revenues, vehicle license tax revenues and from funding received from the Pima County Regional Transportation Authority, a taxing entity distinct from Pima County. Transportation has four major projects included in the fiscal year 2015-2016 budget:  Valencia Road: Alvernon Way to Wilmot Road project is budgeted for $4.5 million.  Valencia Road: Mark Road to Wade Road project is budgeted for $8.7 million.  Hughes Access Road Relocation project is budgeted for $5.9 million.  Magee Road: La Canada Drive to Oracle Road project is budgeted for $5.3 million. Facilities Management – Now that the Public Service Center at 240 North Stone Avenue is complete, Facilities Management is budgeted for several ongoing projects. Major projects for Facilities Management include:  Public Service Center for 3.0 million  Administration East Building 2nd floor for $2.6 million  Pima Animal Care Center for $2.0 million Regional Flood Control District – The Regional Flood Control District has active projects with a total budget of $13.9 million. Major projects include:  Santa Cruz River Flood Control Erosion Control and Linear Park: Ajo to 29th Street project is budgeted for $1.1 million.  Pantano Wash Ft. Lowell Park to Tanque Verde Road for $3.7 million  Urban Drainage project is budgeted for $4.0 million. Debt Management Bond ratings for Pima County range from A+ to AA-. Pima County maintains a sound financial profile, with healthy operating reserves while its debt burden is manageable and debt repayment is rapid. Pima County continues to utilize debt authorized by Pima County voters in elections from 1997, 2004, 2006 and 2014. At June 30, 2015, $1.6 million from the May 20, 1997, $5.6 million from the May 18, 2004, $0.5 million from the May 16, 2006 and $17.9 from the November 4, 2014 bond elections remained unissued. The County issues Certificates of Participation for building construction and 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 2015-2016 include $45 million of Sewer Obligations and $26 million of General Obligation bonds. The County’s conservative debt management principles play a critical role in the decision regarding when to issue new debt. The County has set an aggressive debt repayment schedule, retiring 80 percent of its debt within 11 years with 100 percent retired at or before 15 years. On November 4, 2014 voters approved a bond proposal to use $22 million to build a new animal shelter. The state constitution sets a cap on general obligation debt at 15 percent of the County’s net secondary assessed valuation. In fiscal year 2014-2015 the constitutional debt limit was $1.1 billion. The actual bonded indebtedness was $384 million, far below the constitutional debt limit. 5 Please refer to the MD&A beginning on page 15 and Note 7 beginning on page 65 for specific details on debt issuances, defeasances, and refundings. Expenditure Limitation Pima County, like all counties and cities in Arizona, is subject to numerous budgetary and related legal requirements. Article 9, Section 20, of the Arizona Constitution sets limits on the County’s legal budget capacity. In general, the Board of Supervisors, as the governing body of the County, cannot authorize expenditures from local revenues in excess of the expenditure limitation determined annually for Pima County by the Arizona Economic Estimates Commission. The expenditure limitation is determined each year by adjusting the amount of actual payments of local revenues received by the County during fiscal year 1979-1980 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 2014-2015 are expected to be under the limit of $525.4 million. 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. A complete Single Audit report for fiscal year 2013-2014 can be found at: http://www.pima.gov/finance/reports.shtml The Single Audit for Pima County for the fiscal year ended June 30, 2015 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. Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Pima County, Arizona, for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2014. Pima County has received this prestigious award for twentynine years from fiscal years ended June 30, 1984 through 2014, except for fiscal years ended June 30, 1990 and June 30, 1999, due to missing the filing deadline. In order to be awarded a Certificate of Achievement, the County had to publish an easily readable and efficiently organized CAFR that satisfied both generally accepted accounting principles and applicable program requirements. A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement for Excellence in Financial Reporting Program’s requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. 6 Pima County also received the GFOA’s Distinguished Budget Presentation Award for its fiscal year 2014-2015 budget document. This was the seventeenth consecutive year that Pima County has achieved this award. To qualify for the Distinguished Budget Presentation Award, Pima County’s budget had to be judged proficient as a policy document, a financial plan, an operations guide, and a communications device. Acknowledgments The preparation of this report could not have been possible without the skill, effort, and dedication of the entire staff of the County’s Finance and Risk Management Department. We wish to thank all government departments for their assistance in providing the data necessary to prepare this report. Credit is also due to the Board of Supervisors for its unfailing support for maintaining the highest standards of professionalism in the management of Pima County’s finances. Respectfully submitted, C. H. Huckelberry County Administrator Tom Burke Deputy County Administrator Keith Dommer Director, Finance and Risk Management 7 8 9 JUVENILE COURT ADMINISTRATION JUSTICE COURTS COUNTY ATTORNEY CONSTABLES CLERK OF THE SUPERIOR COURT ASSESSOR Elected Officials COMMUNITY RESOURCES JUSTICE & LAW ENFORCEMENT COUNTY ADMINISTRATOR BOARD OF SUPERVISORS RESIDENTS OF PIMA COUNTY HEALTH SERVICES CLERK OF THE BOARD TREASURER SUPERIOR COURT SHERIFF SCHOOL SUPERINTENDENT RECORDER PUBLIC WORKS Elected Officials PIMA COUNTY ORGANIZATIONAL CHART (This page is intentionally blank) 10 PIMA COUNTY Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2015 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 Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, business-type activities, discretely presented component unit, each major fund, and aggregate remaining fund information of Pima County as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the County’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of certain departments, one major fund, and the component unit, which account for the following percentages of the assets and deferred outflows, liabilities and deferred inflows, revenues, and expenses or expenditures of the opinion units affected. Opinion Unit/Department Government-Wide Statements Governmental Activities: Stadium District School Reserve Fund Office of Emergency Management’s Radio System Self-Insurance Trust Health Benefit Trust Business-Type Activities: Regional Wastewater Reclamation Department Development Services Discretely Presented Component Unit: Southwestern Fair Commission Fund Statements Major Fund: Regional Wastewater Reclamation Department Enterprise Fund Assets and Deferred Outflows Liabilities and Deferred Inflows Revenues Expenses/ Expenditures 1.63% 0.07% 0.06% 2.76% 1.14% 0.72% 0.17% 0.02% 1.90% 0.99% 1.73% 0.23% 0.33% 2.20% 7.94% 0.72% 0.29% 0.22% 0.99% 7.10% 98.08% 0.29% 98.86% 1.05% 90.97% 3.10% 95.50% 3.59% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 2910 NORTH 44 th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553 -0333 • FAX (602) 553-0051 Opinion Unit/Department Aggregate Remaining Fund Information: Stadium District School Reserve Fund Office of Emergency Management’s Radio System Development Services Self-Insurance Trust Health Benefit Trust Assets and Deferred Outflows Liabilities and Deferred Inflows 0.08% 0.25% 0.28% 0.71% 11.93% 4.90% 0.85% 0.08% 0.17% 4.52% 17.71% 9.20% Revenues 0.30% 0.07% 0.10% 0.24% 0.67% 2.41% Expenses/ Expenditures 0.30% 0.09% 0.07% 0.27% 0.31% 2.23% Those statements were audited by other auditors whose reports 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 from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the County’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the County’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, 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, discretely presented component unit, each major fund, and aggregate remaining fund information of Pima County as of June 30, 2015, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with U.S. generally accepted accounting principles. Emphasis of Matter As discussed in Note 2 to the financial statements, for the year ended June 30, 2015, the County adopted new accounting guidance, Governmental Accounting Standards Board Statement (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information U.S. generally accepted accounting principles require that the Management’s Discussion and Analysis on pages 15 through 33, the Budgetary Comparison Schedules on pages 97 and 98, Schedule of the County’s Proportionate Share of the Net Pension Liability—Cost-Sharing Pension Plans on page 99, Schedule of Changes in the County’s Net Pension Liability and Related Ratios—Agent Pension Plans on pages 100 and 101, Schedule of County Pension Contributions on page 102, and Schedule of Agent OPEB Plans’ Funding Progress on page 104 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 inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information 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. The combining and individual fund statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the 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. In our opinion, 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. Compliance Over the Use of Highway User Revenue Fund and Other Dedicated State Transportation Revenue Monies In connection with our audit, nothing came to our attention that caused us to believe that the County failed to use highway user revenue fund monies received by the County pursuant to Arizona Revised Statutes Title 28, Chapter 18, Article 2, and any other dedicated state transportation revenues received by the County solely for the authorized transportation purposes, insofar as they relate to accounting matters. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the County’s noncompliance with the use of highway user revenue fund monies and other dedicated state transportation revenues, insofar as they relate to accounting matters. The communication related to compliance over the use of highway user revenue fund and other dedicated state transportation revenue monies in the preceding paragraph is intended solely for the information and use of the members of the Arizona State Legislature, the Board of Supervisors, management, and other responsible parties within the County and is not intended to be and should not be used by anyone other than these specified parties. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we will 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 in considering the County’s internal control over financial reporting and compliance. Debbie Davenport Auditor General December 3, 2015 Management’s Discussion and Analysis Pima County, Arizona Management’s Discussion and Analysis For the Year Ended June 30, 2015 Our discussion and analysis of the County’s financial performance provides an overview of the County’s financial activities for the year ended June 30, 2015. Please read it in conjunction with the transmittal letter which begins on page 1 and the County’s basic financial statements, which begin on page 35. All dollar amounts are expressed in thousands (000’s) unless otherwise noted. Financial Highlights • The County’s total net position decreased $575,960, primarily due to the implementation of the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date (GASB 68). • Governmental Activities unrestricted net position decreased from $84,514 in fiscal year 2013-14 to a deficit of ($507,127) in the current fiscal year, while Business-type Activities unrestricted net position decreased by $30,415 from $117,425 in the prior fiscal year to $87,010 in the current fiscal year, primarily due to the implementation of GASB 68. • The County’s primary sources of revenue come from taxes, grants and contributions, charges for services, and state shared taxes as displayed below: • The County’s total net position at June 30, 2015, is $1,783,858. Composition of net position is illustrated in the following chart. 15 Composition of Net Position, as of June 30, 2015 $1,978,347 $2,000,000 $1,500,000 $1,000,000 $500,000 $225,628 $- ($420,117) $(500,000) Net investment Restricted net Unrestricted net in capital assets position position • Governmental Activities total net position at June 30, 2015, is $1,040,415, a decrease of $541,955 (34.3%) from the prior fiscal year. Business-type Activities total net position decreased by $34,005 (4.4%) in the current fiscal year, closing at $743,443. Comparative Total Net Position 6/30/2015 6/30/2014 $1,582,370 $1,800,000 $1,500,000 $1,040,415 $1,200,000 $743,443 $900,000 $777,448 $600,000 $300,000 $Governmental Activities Business-type Activities 16 • The General Fund unassigned fund balance increased by 12% to $47,878, from $42,731 in the prior fiscal year. The unassigned fund balance comprises 91.9% of the total fund balance of $52,125. The County continues to use debt to finance the construction of roads, streets, and buildings, and reports longterm liabilities related to programs. During the current year, total capital assets increased $30,778 (1.0%); longterm liabilities increased $622,742 (41.4%). 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 of resources, liabilities and deferred inflows of resources. 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 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) in contrast to 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: Regional Wastewater Reclamation (RWR), Development Services, and the County’s downtown parking garages. A discretely presented component unit is included in the basic financial statements. It consists of one legally separate entity for which the County is financially accountable. The County reports the Southwestern Fair Commission, which operates the County Fairgrounds and the annual Pima County Fair, as a discretely presented component unit. The government-wide financial statements can be found on pages 35-37. 17 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. The governmental fund financial statements can be found on pages 38-41. The combining statements for non-major governmental funds can be found on pages 106-109. 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 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 employee health and health related benefits, risk management, automotive fleet maintenance and operations, printing services, telecommunications, wireless, and information technology network infrastructure. Because these services predominantly benefit governmental rather than business-type functions, all of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources 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. The RWR Enterprise Fund is considered to be a major fund 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 42-45. The combining statements for other enterprise and internal service funds can be found on pages 125-132. 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 46-47. 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 48-96. Required Supplementary Information (RSI) is presented concerning the County’s General Fund budgetary schedule and the schedule of the County’s Proportionate Share of The Net Pension Liability for Cost Sharing Plans, The Schedule of Changes in the County’s Net Pension Liability and Related Ratios for Agent Pension Plans, the 18 Schedule of County Pension Contributions, and the Schedule of Agent OPEB Plans’ Funding Progress. Required supplementary information can be found on pages 97-104. 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 106136. Government-Wide Financial Analysis As noted earlier, net position may serve as a useful indicator of a government’s financial position over time. An analysis of the results of operations is also useful. The schedule below identifies variances in the results of operations. Schedule of Results of Operations and Net Position For the Years Ended June 30, 2015 and 2014 2015 Charges for services Operating grants and contributions Capital grants and contributions Total program revenues $ 245,000 126,897 2014 48,424 420,321 61,390 420,940 (1,421) 13,768 (12,966) (619) Total general revenues and transfers 592,725 545,804 46,921 Total program and general revenues 1,013,046 966,744 46,302 973,479 922,503 50,976 Total expenses Change in net position $ 39,567 $ $ 246,421 113,129 Variance 44,241 $ $ (4,674) Total program and general revenues increased $46,302, primarily due to the increase of $46,921 in total general revenues and transfers. Operating grants and contributions increased $13,768, partially offset by a decrease of $12,966 in capital grants and contributions. Total expenses increased $50,976, resulting in a decrease of $4,674 (10.6%) in change of net position. An explanation of each of these changes is discussed further in the following governmental and business-type activities sections. The graph presented below illustrates at a summary level and detail level the changes in the elements of the Statement of Net Position for the County at June 30, 2015, and June 30, 2014. 19 Summary of Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Total Net Position $- $1,000,000 $2,000,000 $3,000,000 $127,865 $3,520 $2,220,959 $1,619,999 Total Liabilities Deferred Inflows of Resources (FY15) $5,000,000 $3,954,841 $3,976,297 Total Assets Deferred Outflows of Resources $4,000,000 FY15 FY14 $77,889 $1,783,858 $2,359,818 Total Net Position A general discussion of significant variances between fiscal years follows. For a more detailed discussion, please see the governmental activities and business-type activities sections immediately following this section. Total County assets at June 30, 2015, were $3,954,841, representing a decrease of $21,456 (0.5%) from the prior year. Total liabilities were $2,220,959, an increase of $600,960 (37.1%) from the prior year. Deferred outflows of resources increased from $3,520 to $127,865, while deferred inflows totaled $77,889. No deferred inflows were reported the prior year. The largest portion of the County’s net position reflects its net investment in capital assets (i.e., land, buildings, infrastructure, and equipment), less any related outstanding debt used to acquire those assets. At June 30, 2015, net investment in capital assets totaled $1,978,347, an increase of $37,023 (1.9%) from the prior year. 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. Although the County’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Resources subject to external restrictions on how they may be used comprise the restricted net position of $225,628, representing an increase of $9,073 (4.2%) from the prior year and approximately 12.6% of total net position. As indicated in the Financial Highlights section, unrestricted net position decreased $622,056 in the current year, due to the restatement of net position as of July 1, 2014, in connection with implementation of GASB 68. The following schedule presents, on a comparative basis, both governmental activities and business-type activities within the Statement of Net Position. 20 Schedule of Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position At June 30, 2015 and 2014 Governmental Activities FY2015 Current and other assets Capital assets (net): Land, buildings, equipment, infrastructure & other assets $ Total assets Deferred outflows of resources Pension Deferred charges on refunding Total deferred outflows of resources Current and other liabilities Long-term liabilities Total liabilities Deferred inflows of resources Pension Total deferred inflows of resources Variance 499,542 $ Restricted Unrestricted (deficit) $ (20,745) $ FY2015 223,188 $ FY2014 254,677 Total Variance FY2015 $ (31,489) $ FY2014 701,985 $ 754,219 $ (52,234) 1,965,669 45,567 1,241,620 1,256,409 (14,789) 3,252,856 3,222,078 30,778 2,490,033 2,465,211 24,822 1,464,808 1,511,086 (46,278) 3,954,841 3,976,297 (21,456) 119,381 (662) 5,626 5,626 125,007 2,858 3,520 125,007 (662) 118,719 5,626 5,626 127,865 3,520 124,345 119,381 2,858 122,239 3,520 3,520 72,501 1,429,188 91,818 794,543 (19,317) 634,645 21,657 697,613 24,122 709,516 (2,465) (11,903) 94,158 2,126,801 115,940 1,504,059 (21,782) 622,742 1,501,689 886,361 615,328 719,270 733,638 (14,368) 2,220,959 1,619,999 600,960 70,168 70,168 7,721 7,721 7,721 7,721 77,889 77,889 77,889 77,889 1,385,996 1,354,456 31,540 592,351 586,868 5,483 1,978,347 1,941,324 37,023 161,546 (507,127) 143,400 84,514 18,146 (591,641) 64,082 87,010 73,155 117,425 (9,073) (30,415) 225,628 (420,117) 216,555 201,939 9,073 (622,056) 1,040,415 $ 1,582,370 $ (541,955) $ 743,443 $ 777,448 $ (34,005) $ 1,783,858 $ 2,359,818 $ (575,960) Analysis of Net Position for Governmental activities Current and other assets decreased by $20,745 (4.2%) from $499,542 in the prior fiscal year, mainly due to a decrease of $13,437 in cash and cash equivalents, primarily within capital projects and transportation, and a change in internal balances as a result of transfers between RWR and Capital Projects. Capital assets increased $45,567 (2.3%) to $2,011,236, primarily due to the following increases: • • • • • • Variance 2,011,236 70,168 70,168 Net position: Net investment in capital assets Total net position 478,797 $ FY2014 Business-type Activities Acquisition of Painted Hills for $7,555. Purchase of land at Tucson Mountain Park for $1,211. Acquisition of Stardust property for $8,751. Increase in machinery and equipment of $8,455. Completion of Roy Place building restoration project for $1,060. Completion of tenant improvements at Administration East building, 4th floor, for $1,051. Additionally, the completion of the Public Service Center and other buildings provided an increase of $7,493 in building assets for the County. 21 The implementation of GASB 68, which included a restatement of net position, also significantly contributed to the following changes: • • • • An increase of $118,719 in total deferred outflows of resources. An increase of $70,168 in total deferred inflows of resources. An increase of $634,645 in long-term liabilities. A decrease of $591,641 in unrestricted net position. Analysis of Net Position for Business-type activities Current and other assets of $223,188 represents a decrease of $31,489 (12.4%) compared to the prior year, primarily due to a decrease in restricted cash and cash equivalents for RWR of $28,443. The decrease in capital assets of $14,789 (1.2%) is primarily due to the closure of the Randolph Park Reclamation Facility, which reported a net loss of $27,554. The increase of $5,626 in deferred outflows of resources, and the increase of $7,721 in deferred inflows of resources is due to the implementation of GASB 68. Long-term liabilities decreased a net of $11,903 (1.7%) primarily due to a decrease of $55,974 offset with an increase of $44,154 for the net pension liability. The decreases in liabilities were from the following: • • • $40,980 decrease for payments of RWR bonds, obligations and loans. $8,150 for bond discount and premium. $6,844 decrease in contract retention for construction projects. In summary, the decrease of $41,938 in the current year’s change in net position is primarily due to a decrease in total revenues of $2,560 and an increase in total expenses of $39,796. Total net position of $743,443 at June 30, 2015, represents a 4.4% decrease from the prior year. 22 Governmental activities The following table shows details of the changes in net position for governmental activities: Governmental Activities Schedule of Revenues, Expenses, and Changes in Net Position For the Years Ended June 30, 2015 and 2014 FY2015 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 $ 63,808 126,862 42,570 233,240 FY2014 $ 64,856 113,129 54,583 232,568 Variance Amount Percent $ (1,048) 13,733 (12,013) 672 -1.6% 12.1% -22.0% 0.3% 423,538 130,498 1,931 35,306 591,273 378,032 125,504 2,955 36,592 543,083 45,506 4,994 (1,024) (1,286) 48,190 12.0% 4.0% -34.7% -3.5% 8.9% Total revenues 824,513 775,651 48,862 6.3% 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 259,734 188,189 85,618 (4,882) 38,219 93,524 62,981 35,051 (6,237) 27,696 779,893 230,742 188,782 93,675 4,252 36,085 93,224 63,961 35,756 (5,758) 27,994 768,713 28,992 (593) (8,057) (9,134) 2,134 300 (980) (705) (479) (298) 11,180 12.6% -0.3% -8.6% -214.8% 5.9% 0.3% -1.5% -2.0% 8.3% -1.1% 1.5% 44,620 6,938 37,682 543.1% (17,133) 27,487 (16,715) (9,777) (418) 37,264 2.5% -381.1% 1,012,928 1,592,147 (579,219) -36.4% (541,955) -34.2% Excess before contributions and transfers Transfers out Change in net position Beginning net position, as restated * Ending net position $ 1,040,415 $ 1,582,370 $ *Beginning net position as restated July 1, 2014, due to the provisions of GASB 68. Revenues Total revenues of $824,513 was an increase of $48,862 (6.3%) over the prior year, primarily due to an increase of $45,506 (12.0%) in property taxes, an increase of $4,994 (4.0%) in State-shared taxes, partially offset by a decrease in investment earnings of $1,024 and a decrease of $1,286 in other general revenues. The property tax increase is primarily due to a higher primary property tax rate, while the property valuations remained relatively stable. 23 Program revenues increased $672 (0.3%) over the prior year, primarily from an increase of $13,733 (12.1%) in operating grants and contributions, offset by a decrease of $12,013 (22.0%) in capital grants and contributions, and a decrease of $1,048 (1.6%) in charges for services. 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 account for approximately 82.7% of the County’s revenues. General and Program Revenues - Governmental Activities Property Taxes 51.4% Capital grants & contributions 5.2% Investment Earnings 0.2% State-shared taxes 15.8% Operating grants 15.4% Charges for Services 7.7% Other general revenue 4.3% Expenses Total expenses increased $11,180 or 1.5% over the prior year, primarily due to the increase of $28,992 (12.6%) in general government expenses, partially offset by a decrease of $8,057 (8.6%) in highways and streets expenses and a decrease of $9,134 in sanitation expenses. The general government increase of $28,992 includes $24,492 due to the implementation of GASB 68. The highways and streets decrease of $8,057 is due to current year’s transportation expenses of $50,804 representing a decrease from transportation project expenses in the prior year ($59,397). Project expenses vary from year to year, some of the larger highways and streets cost increases and decreases are as follows: • • • • • • • • • Valencia Road - Alvernon Way, increase of $4,139. Magee Road – La Canada Drive – Oracle Road, increase of $1,328. Valencia Road - Mark Road - Wade Road, increase of $4,538. La Cholla Blvd. – Magee Road – Overton Road, decrease of $6,484. La Canada – River Road – Ina Road, decrease of $3,634. Orange Grove – Camino de la Tierra – La Cholla Blvd., decrease of $3,119. Ina Road at Oracle Road, decrease of $2,302. Houghton Road – I10 – Tanque Verde Road, decrease of $2,572. Homer Davis Elementary Bicycle and Pedestrian Enhancement, decrease of $1,424. The decrease of $9,134 in sanitation expenses is primarily due to a decrease of $7,696, resulting from a change in the estimate for the landfill liability. 24 The following chart presents expenses by function as a percentage to total expenses. The amount of each expense by function as a percentage to total expenses 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. Expenses by Function - Governmental Activities General Government 32.8% Health 4.8% Public Safety 23.8% Education & Economic Opportunity 4.5% Interest on Culture & long-term debt Recreation 3.5% 8.0% Welfare 11.8% Highways and Streets 10.8% The current year’s excess before contributions and transfers total of $44,620 and transfers (out) of $17,133 result in a change in net position of $27,487, representing an increase of $37,264 over the prior year’s change in net position deficit of ($9,777). At July 1, 2014, the governmental activities beginning net position was restated due to the implementation of the provisions of GASB 68. Ending net position of $1,040,415 in the current year is a decrease of $541,955 from the prior year amount of $1,582,370 (before the restatement); the decrease resulted primarily from the aforementioned GASB 68 implementation. 25 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. The following schedule shows changes in the net position for business-type activities. Business-type Activities Schedule of Revenues, Expenses, and Changes in Net Position For the Years Ended June 30, 2015 and 2014 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 FY2015 FY2014 $ $ 6,807 188,372 (373) 35 (953) (1,291) -0.2% 100.0% -14.0% -0.7% 903 549 1,452 1,237 1,484 2,721 (334) (935) (1,269) -27.0% -63.0% -46.6% Total revenues 188,533 191,093 (2,560) -1.3% Expenses: Regional Wastewater Reclamation Development Services Parking Garages Total expenses 184,884 6,888 1,814 193,586 145,117 6,796 1,877 153,790 39,767 92 (63) 39,796 27.4% 1.4% -3.4% 25.9% (5,053) 37,303 (42,356) -113.5% 17,133 16,715 418 12,080 54,018 (41,938) 2.5% -77.6% 731,363 723,430 7,933 1.1% 777,448 $ (34,005) -4.4% Excess before transfers Transfers in Change in net position Beginning net position, as restated* Ending net position $ 181,192 35 5,854 187,081 Variance Amount Percent 743,443 $ 181,565 $ *Beginning net position as restated July 1, 2014, due to the provisions of GASB 68. Revenues Total revenues for business-type activities decreased $2,560 (1.3%) mainly due to a decrease in capital grants and contributions of $953 (14.0%) resulting from a decrease in the RWR capital contributions, and a decrease of $935 (63.0%) in other general revenues. Expenses Total expenses for business-type activities increased $39,796 (25.9%), largely due to the increase of $39,767 (27.4%) in RWR expenses, including capitalized interest expense of $5,558 and the loss on disposal of capital assets of $29,542, mainly due to the $27,554 loss from the closure of the Randolph Park Reclamation Facility. 26 Financial Analysis of the County’s Funds As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements and generally accepted accounting principles (GAAP). Governmental funds The County’s general government functions are accounted for in the General, Capital Projects, Debt Service, and Special Revenue funds. Included in these funds are special districts governed by the Board of Supervisors (i.e. Flood Control, Library and Stadium Districts) acting as the Board of Directors for each district. 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. Property taxes revenues for the General Fund increased $43,875 reflecting a higher primary property tax rate, while property valuation remained relatively stable. Intergovernmental revenues increased $6,506 primarily due to increases in the state-shared sales tax and state-shared vehicle license tax associated with an anticipated gradual recovery in the local economy. Overall, revenues for the General Fund increased $54,385. General fund expenditures increased $27,441, primarily due to: • An increase of $10,969 in general government, which includes current year operating expenditures of $4,925 that are no longer allocated to other departments, $4,365 increase in the Elections and Recorder departments primarily associated with primary and general elections held during the year, and $1,387 increase in facilities management department due to higher operating costs. • An increase of $13,056 in culture and recreation expenditures as a result of two property acquisitions, Stardust property and Painted Hills. Other financing sources-installment note increased $11,500 from two notes payable: one financing $7,000 towards the acquisition of Stardust property, and the other financing $4,500 towards purchase of the Painted Hills property. Transfers in decreased $14,659 in the current year, primarily due to a one-time transfer in of $18,500 from residual Pima Health Services transition monies in the prior year. Transfers (out) increased $7,523, primarily due to transfers out of $6,117 to the information technology fund, an internal services fund, in accordance with a budget initiative to provide capital and operating costs in support of the County’s information technology infrastructure. The $54,385 increase in revenues, the $27,441 increase in expenses, and a total net increase of $10,667 in other financing uses yielded an increase of $16,277 in net change in fund balance, which ended the year at $52,125. Budget to Actual Comparison for the General Fund Overall, actual revenues were lower than budgeted revenues by $251 and actual expenditures were less than budgeted expenditures by $23,977. 27 Actual expenditures for the General Fund were less than budgeted, primarily within General government- County Administration. The Board of Supervisors’ contingency is available to respond to changing needs or unforeseen circumstances. The under budget variance was primarily due to the contingency expenditures being $25,480 less than budgeted. 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. Capital Projects Fund Revenues for the Capital Projects Fund decreased $3,089, primarily due to a $7,000 decrease in Regional Transportation Authority revenue that was partially offset by an increase in state and city revenue of $4,501. Expenditures (capital outlays) decreased $34,958. This variance results from decreases in capital expenditures from prior year programs. In fiscal year 2013-14, $15,000 more was spent on telecommunications equipment than in fiscal year 2014-15; additionally, transportation project expenditures reported a decrease of $8,057 in the current year, as indicated in the analysis of the governmental activities. The $72,025 face amount of long-term debt issued represents a decrease of $6,135 from fiscal year 2013-14. Proceeds received included $57,025 from certificates of participation and $15,000 from general obligation bonds. Transfers out decreased by $16,082 primarily due to a reduction of transfers out to RWR. Fiscal year 2014-2015 had a transfer out to RWR of $28,651 from the 2015 COPs, the prior fiscal year had a transfer out to RWR of $51,404. There was also an $11,979 transfer to Parking Garages for construction of the garage at the new Public Service Center. The $3,089 decrease in revenues, the $34,958 decrease in expenses and a total decrease of $5,328 in other financing sources yield an increase of $26,541in net change in fund balance in the current year. Debt Service Fund This major fund accounts for the accumulation of resources for the payment of principal and interest of long-term debt. Revenues for the Debt Service Fund decreased $5,691 primarily due to a decrease in property tax revenues as a result of a decreasing secondary property tax rate. Expenditures for the Debt Service Fund decreased $31,631 mainly from a decrease in principal payments. Please see Note 7 beginning on page 65 for more information on bond and certificate of participation details. Issuance of refunding debt was $13,685, an increase of $4,880. The refunding consisted of $13,685 for 2015 HURF bonds. The issuance was used to refund part of the remaining debt of the 2005 HURF bond series. Payments to escrow agents increased to $15,250, an increase of $5,119 from $10,131 in the prior year. These payments were deposited into the trust account and used to pay the defeasance costs for the partial refunding of the 2005 HURF bond series. Transfers in decreased by $6,650, mainly due to a decrease of $15,350 from RWR COPs 2013A that was partially offset by $4,060 from General Fund COPS 2014. The resulting fund balance of $8,424 reflects a $576 increase from prior year. 28 Major Proprietary Fund The County’s Regional Wastewater Reclamation Enterprise (RWR) Fund is a major enterprise fund. A significant change in the Fund’s net position is the restatement of net position at July 1, 2014, due to the implementation of GASB Statement No. 68 Accounting and Financial Reporting for Pension, resulting in a decrease of $39,705. Significant changes during the fiscal year that also reduced the fund’s net position included a loss of $27,554 due to the closure of the Randolph Park Wastewater Reclamation Facility. Net transfers resulted in a decrease of $7,189, and capitalized interest expense increased by $5,558. Operating revenues of $159,959 represent a decrease of $1,717 (1.1%) over the previous year, due to a decrease of $941in other revenues and a decrease of $776 in charges for services. Operating expenses of $134,671 increased $9,511 (7.6%) over the prior year, mainly due to an increase of $4,372 for consultants and professional services, and an increase of $3,478 for repair and maintenance. The deficit in total nonoperating revenues increased $28,333 primarily due to loss on disposal of capital assets resulting from the Randolph Park Reclamation Facility closure of $27,554. Transfers in decreased by $22,753, mainly because the prior fiscal year included a cash transfer from the 2013 COPs. Transfers out decreased by $15,564 as the prior fiscal year funded a debt service payment of $34,645 representing the first principal payment of the 2013A COPs, and the current fiscal year transfers funded a debt service payment of $20,728. The increase in net position of $2,211 together with the decrease resulting from the restatement of net position at July 1, 2014, of $39,705, brings the total net position to $723,537 at fiscal year-end. Capital Assets and Debt Administration Capital Assets The County’s investment in capital assets consists of land, buildings and improvements, sewage conveyance systems, infrastructure, equipment, and construction in progress. Capital assets for the governmental and business-type activities are presented below to illustrate changes from the prior year: Governmental and Business-type Activities Capital Assets As of June 30, 2015 and 2014 Governmental Activities FY2015 Land $ Construction in progress Buildings and improvements Infrastructure Sewage conveyance systems Equipment Total FY2014 Business-type Activities Variance FY2015 521,049 $ 104,275 593,714 675,035 499,163 $ 21,886 $ 212,314 (108,039) 478,182 115,532 667,302 7,733 117,163 108,708 $ 2,011,236 $ 1,965,669 $ 8,455 13,994 $ 50,204 624,068 457,524 95,830 FY2014 Variance Total FY2015 12,630 $ 1,364 $ 535,043 63,730 (13,526) 154,479 651,642 (27,574) 1,217,782 675,035 439,754 17,770 457,524 88,653 7,177 212,993 45,567 $ 1,241,620 $ 1,256,409 $ (14,789) $ 3,252,856 FY2014 $ $ 3,222,078 $ The County’s total capital assets increased $30,778 (1.0%). The most significant changes were: buildings and improvements increased $87,958 (7.8%), land increased $23,250 (4.5 %), equipment increased $15,632 (7.9%), and conveyance systems increased by $17,770 (4.0%); these increases were partially offset by a decrease of $121,565 (44.0%) in construction in progress. 29 Variance 511,793 $ 23,250 276,044 (121,565) 1,129,824 87,958 667,302 7,733 439,754 17,770 197,361 15,632 30,778 Governmental activities Capital assets of Governmental activities increased $45,567 (2.3%), with the increase resulting largely from the following activity: • • • • • • • Acquisition of Painted Hills for $7,555. Purchase of land at Tucson Mountain Park for $1,211. Acquisition of Stardust property for $8,751. Completion of Roy Place building restoration project for $1,060. Completion of tenant improvements at Administration East building, 4th floor, for $1,051. Increase of $7,493 in building and improvements assets resulting from capitalization of the Public Service Center and other buildings. Increase in machinery and equipment of $8,455. Business-type activities Total capital assets decreased $14,789 (1.2%), mainly due to a decrease in building and improvements of $27,574, related to the closure of the Randolph Park Reclamation Facility. Construction in progress decreased $13,526 (21.2%) due in part to the capitalization of $3,667 for the Public Service garage, and $9,799 capitalizations in RWR. Sewage conveyance systems increased $17,770, primarily due to the capitalization of $6,286 for the Conveyance Rehabilitation Program, $6,132 for North Rillito Interceptor Rehabilitation, and $6,306 in the program Minor Rehabilitation Projects 14/15. Equipment increase of $7,177 is largely from the capitalization of $12,539 for Regional Optimization Master Plan Supervisory Control and Data Acquisition, partially offset by a decrease of $7,326 resulting from the disposal of equipment and machinery. The County’s infrastructure assets are recorded at historical cost and estimated historical cost in the governmentwide financial statements. Additional information regarding the County’s capital assets can be found in Note 5 of the financial statements on pages 61-62. Long-term Debt Significant, comparative long-term debt entered into during the last two fiscal years is presented below: Long-Term Debt For the Years Ended June 30, 2015 and 2014 2015 2014 Bonds issued (at face value): General Obligation $ Street and Highway Revenue 15,000 $ 13,685 10,000 24,805 Sewer System Revenue Obligations 48,500 Certificates of Participation (COPs) Installment note payable 57,025 11,500 Total $ 97,210 52,160 239 $ 135,704 During the year, $15,000 of general obligation bonds were issued. The $15,000 of new debt issued in Series 2015 was for the purpose of funding various capital projects in the County. The County also issued $13,685 of 30 transportation revenue bonds for a refunding transaction. This refunding resulted in an economic gain of $848 and a reduction in debt service payments of $857. In addition, the County issued $57,025 in Certificates of Participation Series 2015. The County intends to use the proceeds to expand and improve the existing sewer system facilities. The County may also use a portion of the funds for other capital projects. During the year, the County acquired Stardust and Painted Hills properties with at a total installment purchase contracts payable of $7,000 and $4,500, respectively. The most recent ratings for Pima County’s bonds, COPs and obligations are: Credit Ratings Standard & Poor's Certificates of Participation (COPs) General Obligation Street and Highway Revenue Sewer Revenue Bonds Sewer Revenue Obligations Fitch Ratings Rating Date Rating Date A+ AAAA AA AA- Feb-2015 Feb-2015 Feb-2015 Mar-2014 Jan-2014 AAAA AA AA AA- Feb-2015 Feb-2015 Feb-2015 Dec-2013 Dec-2013 The State of Arizona Constitution limits the amount of general obligation debt a governmental entity may issue to 6.0% of its net assessed valuation without voter approval. However, Pima County has voter approval for general obligation debt up to 15.0%. The current debt limitation for Pima County is $1,136,985, 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 65-74. 31 Economic Factors and Next Year’s Budget Pima County is still contending with a slow, and at times, uneven recovery from the Great Recession. Like all governments in Arizona, Pima County has necessarily adjusted to reduced revenues and increased service demands during this time. The upcoming fiscal 2015-16 budget will be based largely on the County’s response to a set of unique challenges from a variety of outside sources. Primary amongst these is the decision by the Arizona Legislature to balance the State Budget by transferring $23.2 million of fiscal year 2015-16 State costs to Pima County. These additional costs imposed by the State cause significant uncertainties in the development of the County budget and will impact all of Pima County’s existing service priorities and programs, including law enforcement, healthcare and economic development. Recognizing this, the budget that was adopted by the Board of Supervisors for fiscal year 2015-16 is primarily a “maintenance of effort” budget, which will sustain the County’s existing service priorities. The following discussion identifies other significant activities that are expected to affect the County in fiscal 2015-16. State Budget Cost Shifts In attempting to balance the State Budget this year, the Governor and Legislature have accelerated cost transfers to the counties throughout the State. However, Pima County will experience the largest increase this year than any other county in the State. The proposed new cost transfers to the County presently enacted into law equal up to $21.6 million. When added to last year’s transfers, the total is $104.4 million for fiscal year 2015-16, or nearly 31% of the primary property tax levy. Immediate impacts of these cost transfers to the County budget include a two-percent across-the-board reduction in all County expenditures, a $5,000,000 reduction in funding for the Pavement Preservation Program and a primary property tax rate increase of $0.1098. The additional property tax revenues from the rate increase are anticipated to offset $8.1 million of State cost shifts to Pima County. However, the remaining $4.7 million to $13.5 million of these cost shifts must be absorbed within the County’s fiscal year 2015-16 budget. State Aid to Education Cost Shifts A significant portion of the state cost transfers is the cost related to the State Aid to Education tax credit, which has been paid for by the State for the last 35 years. The County is currently mounting a legal challenge to this portion of the State budget. Although the County is hopeful that it will prevail in litigation in the future, an increase in the primary property tax rate of $0.1098 and levy of $8.1 million to partially offset the cost transfer has been adopted for fiscal year 2015-16. If the County prevails in its litigation, the primary property tax rate will be reduced next fiscal year. Property Taxes As previously mentioned, the fiscal year 2015-16 Adopted Budget relies on a $0.1098 increase in the primary property tax rate for the General Government over the fiscal year 2014-15 tax rate. The Library District secondary property tax rate will increase by $0.0800. Debt Service’s secondary tax rate remains unchanged from fiscal year 2014-15 and the Regional Flood Control District secondary property tax rate increases by $0.0100. The total property tax rate for Pima County (excluding the State mandated Fire District Assistance Tax) increased from $5.7167 to 5.9165 per $100 of net taxable value, a net increase of $0.1998. State Shared Revenues State shared sales tax revenue is projected to increase by $1.86 million in fiscal year 2015-16. This increase reflects a gradual recovery in the local economy and continued statewide economic growth. Employee Benefits Costs Over the years, Pima County has continued to change and upgrade its benefits package for employees. Over time, the cost to provide these benefits has steadily increased. As a comparison, the actual cost to the County for employee benefits in fiscal year 2003-04 totaled $65 million whereas the budgeted benefit costs in fiscal year 201516 totals nearly $139 million; resulting in an increase that is more than double the fiscal year 2003-04 amount. A significant portion of this increase is due to higher cost of employee medical insurance, retirement contributions 32 and other benefit costs. Fiscal year 2015-16 aggregate benefits will increase in excess of $5 million over fiscal year 2014-15. The County will have to absorb these increases in the face of other budgetary challenges. Rainy Day Funds Maintaining a budget reserve has given the County a favorable bond rating which in turn has yielded substantial savings from lower interest payments on County bonds. The reserve has also enabled the County to minimize the negative fiscal impacts of a variety of unforeseen events over which the County has had little or no control. The General Fund Reserve for fiscal year 2015-16 totals $30,256,247. This reserve represents 5.6% of projected revenues for fiscal year 2015-16 compared to the ending fund balance of 3.6% of revenue last fiscal year. The reserve has been increased to accommodate a worst-case scenario of State Budget cost shifts totaling $21.6 million. If this reserve is not spent, it will represent the base ending fund balance for fiscal year 2015-16. Requests 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. 33 (This page is intentionally blank) 34 Basic Financial Statements PIMA COUNTY, ARIZONA Statement of Net Position June 30, 2015 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 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 $ Deferred outflows of resources Pension Deferred charge on refunding Total deferred outflows of resources Liabilities Accounts payable Interest payable Contract retentions Employee compensation Due to other governments Deposits and rebates Unearned revenue Noncurrent liabilities: Due within one year Due in more than one year Total liabilities Deferred inflows of resources Pension Total deferred inflows of resources Total $ 116,984 789 1,543 76,102 76,891 1,543 521,049 104,275 13,994 50,204 535,043 154,479 593,714 624,068 457,524 95,830 1,217,782 457,524 212,993 675,035 3,172 2,490,033 1,464,808 3,954,841 6,820 119,381 2,858 122,239 5,626 125,007 2,858 127,865 90 7,852 416 19,245 2,383 116 $ 49,887 29,220 4,541 7,265 5,626 1,698 32 71 1,450 397 42,483 3 2,742 22,225 21 908 4,119 17,758 277 1,594 60,241 280 2,742 24,248 26 908 5,713 104,634 1,324,554 1,501,689 47,526 650,087 719,270 152,160 1,974,641 2,220,959 70,168 70,168 7,721 7,721 77,889 77,889 1,385,996 592,351 1,978,347 3,569 60,285 8,039 36,683 72,592 19,419 28,610 (420,117) 1,783,858 $ 2,915 6,484 2,023 5 60,285 8,039 64,612 $ 519,247 13,150 241 Component Unit SW Fair Commission 402,263 $ 13,150 151 (7,852) 49,471 9,975 2,158 7,149 117,163 675,035 Total assets 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 (deficit) Total net position Primary Government Business-type Activities 28,610 (507,127) 1,040,415 $ 36,683 7,980 19,419 87,010 743,443 $ See accompanying notes to financial statements 35 203 40 53 40 336 PIMA COUNTY, ARIZONA Statement of Activities For the Year Ended June 30, 2015 (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 Development Services Parking Garages Total business-type activities Total primary government Component unit: Southwestern Fair Commission Total component unit Expenses $ Operating Grants and Contributions Charges for Services 259,734 $ 188,189 85,618 (4,882) 38,219 93,524 62,981 35,051 (6,237) 27,696 779,893 27,974 12,883 6,136 12,894 200 3,144 577 30,208 6,541 58,864 1,161 10,105 190 963 18,830 63,808 126,862 42,570 35 5,854 $ 35 126,897 $ 120 120 $ 184,884 6,888 1,814 193,586 973,479 $ 172,597 6,324 2,271 181,192 245,000 $ 5,743 5,743 $ 5,959 5,959 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 (loss) Miscellaneous Transfers Total general revenues and transfers Change in net position Net position at beginning of year, as restated Net position at end of year See accompanying notes to financial statements 36 $ Capital Grants and Contributions $ 828 398 37,665 156 3,386 137 $ 5,854 48,424 Exhibit A - 2 Net (Expense) Revenue and Changes in Net Position Governmental Activities $ Primary Government Business-type Activities (200,724) (168,367) 17,047 6,043 (15,064) (93,134) (55,488) (15,507) 6,237 (27,696) (546,653) $ $ (546,653) Component Unit SW Fair Commission Total (6,398) (564) 457 (6,505) (6,505) (200,724) (168,367) 17,047 6,043 (15,064) (93,134) (55,488) (15,507) 6,237 (27,696) (546,653) 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 (6,398) (564) 457 (6,505) (553,158) Business-type activities: Regional Wastewater Reclamation Development Services Parking Garages Total business-type activities Total primary government $ $ 317,682 20,455 32,771 52,630 6,155 1,536 105,522 24,976 4,562 6,164 1,931 16,889 (17,133) 574,140 27,487 1,012,928 1,040,415 $ 903 549 17,133 18,585 12,080 731,363 743,443 317,682 20,455 32,771 52,630 6,155 1,536 105,522 24,976 4,562 6,164 2,834 17,438 $ 592,725 39,567 1,744,291 1,783,858 336 336 (17) 83 $ 66 402 6,082 6,484 Component unit: Southwestern Fair Commission Total component unit 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 (loss) Miscellaneous Transfers Total general revenues and transfers Change in net position Net position at beginning of year, as restated Net position at end of year See accompanying notes to financial statements 37 Exhibit A - 3 PIMA COUNTY, ARIZONA Balance Sheet - Governmental Funds June 30, 2015 (in thousands) General Assets Cash and cash equivalents Property taxes receivable (net) Interest receivable Due from other funds Due from other governments Accounts receivable Inventory Prepaid expenditures Loan receivable Restricted cash and cash equivalents Total assets $ 60,743 9,577 34 2,999 20,932 1,938 Capital Projects $ 149,153 Debt Service $ 23 131 8,983 1,698 7,822 1,837 34 Other Governmental Funds Total Governmental Funds $ $ 285,994 13,150 127 3,943 49,393 7,364 1,453 3,527 1,543 789 2,510 1,543 744 68,276 1,736 36 813 19,478 3,728 1,453 1,017 45 $ 100,276 $ 160,732 $ 9,693 $ 96,582 $ 367,283 $ 13,269 $ 12,991 $ 1 $ 12,194 3 $ 5,465 3,136 10 5 2,317 38,455 3 2,742 21,791 11,838 17 908 4,119 1 23,130 79,873 1,268 10,688 1,306 469 24,120 9,588 2,329 Liabilities, deferred inflows of resources and fund balances Liabilities: Accounts payable Interest payable Contract retentions Employee compensation Due to other funds Due to other governments Deposits and rebates Unearned revenue 2,742 285 7,990 16,041 712 7 159 1,696 Total liabilities 744 106 31,884 24,858 8,767 7,014 486 4,665 1,374 Total deferred inflows of resources 16,267 6,039 1,268 12,463 36,037 Total liabilities and deferred inflows of resources 48,151 30,897 1,269 35,593 115,910 2,515 53,155 6,320 3,769 (4,770) 6,568 179,982 9,385 12,387 43,051 60,989 251,373 Deferred inflows of resources: Unavailable revenue - intergovernmental Unavailable revenue - property taxes Unavailable revenue - other Fund balances Nonspendable Restricted Committed Assigned Unassigned 194 47,878 Total fund balances 52,125 Total liabilities, deferred inflows of resources and fund balances 4,053 126,827 3,065 $ 100,276 8,424 (57) 129,835 $ 160,732 8,424 $ 9,693 See accompanying notes to financial statements 38 $ 96,582 $ 367,283 PIMA COUNTY, ARIZONA Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position June 30, 2015 Exhibit A - 4 (in thousands) Fund balances - total governmental funds $ 251,373 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 Long-term liabilities, such as pension liabilities and bonds payable are not due and payable in the current period and, therefore, are not reported in the governmental funds. Bonds payable Certificates of participation payable Leases and notes payable Compensated absences liability Landfill liability Pollution remediation liability Net pension liability Deferred outflows and inflows of resources related to pensions and deferred charges on debt refundings are applicable to future periods and, therefore are not reported in the governmental funds. Deferred outflows of resources related to pensions Deferred inflows of resources related to pensions Deferred outflows for bond refunding Some receivables are not available to pay for current period expenditures and, therefore, are reported as unavailable revenue in the governmental funds. Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets, deferred outflow of resources, liabilities, and deferred inflows of resources of the internal service funds are included in governmental activities in the Statement of Net Position. Net position of governmental activities $ 2,971,429 (1,008,253) (510,068) (177,771) (11,912) (29,023) (15,075) (294) (644,592) 118,285 (68,663) 2,858 1,963,176 (1,388,735) 52,480 36,037 126,084 $ 1,040,415 See accompanying notes to financial statements 39 PIMA COUNTY, ARIZONA Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds For the Year Ended June 30, 2015 Exhibit A - 5 (in thousands) General Revenues: Property taxes Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous $ Total revenues 324,840 2,989 142,459 41,253 3,789 225 6,167 Capital Projects $ $ 521,722 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 53,164 Other Governmental Funds Total Governmental Funds $ $ 23,038 4,728 12 462 1,276 181 12 53,367 5,467 131,119 14,241 5,720 287 8,225 29,504 53,369 218,426 823,021 39,006 22,761 39,664 1,113 34,260 207 38,072 22,006 256,331 161,484 39,664 2,403 37,787 93,418 68,987 34,280 100,788 81,933 26,439 863 217,325 138,723 1,290 3,527 93,211 30,915 12,274 100,788 149 11 Total expenditures Excess (deficiency) of revenues over (under) expenditures 81,705 26,424 863 79 4 431,371 8,456 296,628 60,222 9,509 1,155 15,680 497,425 100,788 108,992 197,172 904,377 24,297 (71,284) (55,623) 21,254 (81,356) Other financing sources (uses): Installment note Premium on bonds Issuance of refunding debt Payments to escrow agent Face amount of long-term debt issued Proceeds from sale of capital assets Transfers in Transfers (out) 15 9,533 (41,410) 31,335 (51,253) 54,839 (3,024) 104 25,790 (53,057) 11,500 5,949 13,685 (15,250) 72,025 119 121,497 (148,744) Total other financing sources (uses) (20,362) 52,107 56,199 (27,163) 60,781 3,935 (19,177) 576 (5,909) (20,575) 48,190 149,012 7,848 66,833 271,883 8,424 50 15 60,989 50 15 251,373 11,500 5,949 13,685 (15,250) 72,025 Net change in fund balances Fund balances at beginning of year, as restated Changes in nonspendable fund balance: Change in inventory Change in prepaids Fund balances at end of year $ 52,125 $ 129,835 $ See accompanying notes to financial statements 40 $ $ PIMA COUNTY, ARIZONA Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2015 Exhibit A - 6 (in thousands) Net change in fund balances - total governmental funds $ (20,575) 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 $ 101,957 (69,046) 32,911 Debt proceeds provide current financial resources to governmental funds but issuing debt 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 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 issued Premium on bonds Proceeds from issuance of refunding bonds Debt service - principal payments Payments to escrow agent Installment note Amortization expense Deferred outflows - interest (72,025) (5,949) (13,685) 81,933 15,250 (11,500) 6,237 (1,244) (983) 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. In addition, collections of some revenues in the governmental funds exceeded revenues reported in the Statement of Activities. Donations of capital assets Intergovernmental Property tax revenues Other 7,488 7,154 (1,668) 869 13,843 1,271 7,696 345 (1,169) 65 8,208 41,464 (75,995) (34,531) 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 County pension contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the Statement of Net Position because the reported net pension liability is measured a year before the County's report date. Pension expense, which is the change in the net pension liability adjusted for changes in deferred outflows and inflows of resources related to pensions is reported in the Statement of Activities. Pension contributions Pension expense Internal service funds are used by management to charge the costs of certain activities to individual funds. The incorporation of the external activities of these funds, and the elimination of profit/loss generated by primary government customers results in net revenue (expense) for governmental activities. Change in net position of governmental activities 28,614 $ See accompanying notes to financial statements 41 27,487 PIMA COUNTY, ARIZONA Statement of Net Position - Proprietary Funds June 30, 2015 Exhibit A - 7 (in thousands) Business-type Activities Enterprise Funds Regional Wastewater Reclamation Assets Current assets: Cash and cash equivalents Restricted cash and cash equivalents Interest receivable Due from other funds Due from other governments Accounts receivable Inventory Prepaid expense Total current assets Noncurrent assets: Restricted cash and cash equivalents Loan receivable Capital assets: Land Buildings and improvements Sewage conveyance system Equipment Less accumulated depreciation Construction in progress Total capital assets (net) Total noncurrent assets $ $ Total Enterprise Funds 6,243 $ 4 6 304 26 6,583 49,088 116,984 27,014 90 7,878 416 19,245 2,383 116 174,126 Governmental ActivitiesInternal Service Funds $ 116,269 24 130 78 2,611 705 3,622 123,439 49,088 10,000 Total assets Deferred outflows of resources Pension Total deferred outflows of resources Liabilities Current liabilities: Accounts payable Employee compensation Interest payable Due to other funds Due to other governments Unearned revenue 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: Compensated absences payable Loan payable Contracts and notes Sewer revenue bonds and obligations payable Wastewater loans payable Reported but unpaid losses Incurred but not reported losses Net pension liability Total noncurrent liabilities 12,226 739,850 751,093 139,942 (472,540) 50,201 1,220,772 1,269,860 1,768 27,608 1,580 (10,111) 3 20,848 20,848 13,994 767,458 751,093 141,522 (482,651) 50,204 1,241,620 1,290,708 49,250 (23,955) 3,347 48,060 58,060 1,437,403 27,431 1,464,834 181,499 4,847 4,847 779 779 5,626 5,626 1,096 1,096 17,363 1,758 277 25 5 1,594 45,945 1,581 395 265 17,758 2,023 277 26 5 1,594 45,945 1,581 4,028 434 1 68,548 661 69,209 2,631 461 3,092 1,098 585,179 16,564 Total liabilities Deferred inflows of resources Pension Total deferred inflows of resources Net position Net investment in capital assets Restricted for: Debt service Capital projects Healthcare Regional wastewater reclamation Unrestricted Total net position 110,741 27,014 86 7,878 410 18,941 2,383 90 167,543 Other Enterprise Funds 449 18,969 87 4 4,608 6,406 15,567 471 10,000 1,098 585,179 16,564 38,041 643,513 6,113 6,574 44,154 650,087 11,628 8,735 8,605 39,439 712,061 7,235 719,296 55,006 6,652 6,652 1,069 1,069 7,721 7,721 1,505 1,505 571,503 20,848 592,351 48,060 36,683 7,980 36,683 7,980 19,419 87,952 19,419 87,010 14,088 $ 723,537 (942) $ 19,906 See accompanying notes to financial statements 42 $ 743,443 63,936 $ 126,084 PIMA COUNTY, ARIZONA Exhibit A - 8 Statement of Revenues, Expenditures and Changes in Fund Net Position Proprietary Funds For the Year Ended June 30, 2015 (in thousands) Business-type Activities Enterprise Funds Regional Wastewater Reclamation Operating revenues: Charges for services Other Total net operating revenues $ Operating expenses: Employee compensation Operating supplies and services Utilities Sludge and refuse disposal Repair and maintenance Incurred losses Insurance premiums General and administrative Consultants and professional services Depreciation Total operating expenses Operating income (loss) 159,453 506 159,959 Other Enterprise Funds $ $ 168,048 549 168,597 $ 105,548 2,426 107,974 5,222 70 104 38,250 7,318 7,296 1,628 9,849 12,739 11,739 51,248 134,671 2,708 377 221 8,702 15,447 12,116 51,469 143,373 1,568 45,653 10,335 7,012 4,743 4,749 90,430 25,224 17,544 (64) 499 874 13,144 (20,671) (29,542) Total nonoperating revenues (expenses) 8,595 43 8,638 Governmental ActivitiesInternal Service Funds 33,028 7,248 7,296 1,628 9,745 25,288 Nonoperating revenues (expenses): Intergovernmental revenue Investment earnings Sewer connection fees Interest expense Gain/(loss) on disposal of capital assets Total Enterprise Funds 7,933 8,437 499 903 13,144 (20,671) (29,542) 29 767 43 (35,696) 29 (35,667) 810 Income (loss) before contributions and transfers (10,408) (35) (10,443) 18,354 Capital contributions Transfers in Transfers (out) 5,390 28,651 (21,422) 11,979 (2,075) 5,390 40,630 (23,497) 146 12,542 (2,428) 2,211 9,869 12,080 28,614 721,326 10,037 731,363 97,470 Change in net position Net position at beginning of year, as restated Net position at end of year $ 723,537 $ 19,906 $ See accompanying notes to financial statements 43 743,443 $ 126,084 Exhibit A - 9 PIMA COUNTY, ARIZONA Statement of Cash Flows - Proprietary Funds For the Year Ended June 30, 2015 (in thousands) Business-Type Activities Enterprise Funds Regional Other Total Wastewater Enterprise Enterprise Reclamation Funds Funds 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 Governmental ActivitiesInternal Service Funds $ $ 158,144 506 (38,008) (14,190) $ 8,489 (32,812) Net cash provided by (used for) operating activities 73,640 Cash flows from noncapital financing activities: Cash transfers in from other funds Cash transfers out to other funds Loans with other funds Intergovernmental revenues Cash flows from capital and related financing activities: Principal paid on bonds and loans Interest paid on bonds and loans Sewer connection fees Proceeds from sale of capital assets Transfers received for capital acquisition Purchase of capital assets (1,440) (1,929) (5,190) (38,002) 2,477 (30,222) (5,511) (55,137) (7,261) 73,570 10,438 28,651 (23,123) (7,858) 499 12,121 (2,417) (1) (1,831) 9,703 (2,075) 244 106,092 166,633 506 (39,448) (16,119) (70) 28,651 (21,048) (7,858) 499 Net cash provided by (used for) noncapital financing activities $ (2,075) (40,980) (28,844) 12,480 (40,980) (28,844) 12,480 370 11,979 (11,979) (56,651) Net cash used for capital and related financing activities (113,995) 11,979 (68,630) (11,464) (113,995) (11,094) Cash flows from investing activities: Interest received on cash and investments 982 34 1,016 815 Net cash provided by investing activities 982 34 1,016 815 Net increase (decrease) in cash and cash equivalents (39,129) (2,111) (41,240) Cash and cash equivalents at beginning of year 225,972 8,354 234,326 Cash and cash equivalents at end of year $ 186,843 $ (continued) See accompanying notes to financial statements 44 6,243 $ 193,086 9,862 106,407 $ 116,269 PIMA COUNTY, ARIZONA Statement of Cash Flows - Proprietary Funds For the Year Ended June 30, 2015 Exhibit A - 9.1 (in thousands) (continued) Reconciliation of operating income (loss) to net cash provided by (used for) operating activities Operating income (loss) $ Business-Type Activities Enterprise Funds Other Enterprise Funds $ (64) $ Total Enterprise Funds 25,224 Governmental ActivitiesInternal Service Funds $ 17,544 221 51,469 4,749 (902) (407) (505) (36) (149) (6) (1,051) (407) (505) (42) 533 63 12 (2,469) (2,367) (381) (2,748) (535) (1,264) (104) 1 (1,368) 1 2 (533) Regional Wastewater Reclamation 25,288 Adjustments to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization 51,248 Changes in assets and deferred outflows of resources: Decrease (increase) in assets: Accounts receivable Due from other governments Inventory and other assets Prepaid expense Decrease in deferred outflows of resources: Pension plans Changes in liabilities and deferred inflows of resources: Increase (decrease) in liabilities: Accounts payable Due to other funds Due to other governments Reported but unpaid losses Incurred but not reported losses Net pension liability Other liabilities Increase in deferred inflows of resources: Pension plans Net cash provided by (used for) operating activities 2 (4,145) 76 (667) 10 6,652 $ 73,640 1,069 $ (70) $ (4,812) 86 4 (5,485) (3,999) (937) (14) 7,721 1,505 73,570 $ 10,438 Noncash investing, capital, and noncapital financing activities during the year ended June 30, 2015: Regional Wastewater Reclamation Enterprise Fund received developer-built conveyance systems with an estimated fair value of $5,143. These contributions were recorded as an increase in capital assets and capital contributions. Regional Wastewater Reclamation Enterprise Fund retired capital assets with a net book value of $29,542. Regional Wastewater Reclamation Enterprise Fund transferred out assets with a net book value of $374 to the County's Internal Service Funds. Regional Wastewater Reclamation Enterprise Fund retired expired Sewer Credit Agreements totaling $247. These transactions were recorded as a decrease in unearned revenue and an increase in capital contributions. Other Enterprise Funds retired fully depreciated capital assets with an original cost of $330. Internal Service Funds had an exchange of unequal sized parcels of land. The parcel obtained in the exchange was valued at $271. The parcel given up had a value of $417. Internal Service Funds received a transfer in of capital assets from Regional Wastewater Reclamation Fund with a net book value of $374. Internal Service Funds received capital contributions with a net book value of $146 from General Government. Internal Service Funds sold capital assets with a net book value of $180 and donated a capital asset with a net book value of $1. See accompanying notes to financial statements 45 PIMA COUNTY, ARIZONA Statement of Fiduciary Net Position - Fiduciary Funds June 30, 2015 Exhibit A - 10 (in thousands) Investment Trust Funds Assets Cash and cash equivalents Interest receivable Due from other governments Total assets Agency Funds $ 229,269 62 $ 68,649 $ 229,331 $ 163 68,812 Liabilities Employee compensation Due to other governments Deposits and rebates Total liabilities $ $ Net position Held in trust for pool participants $ 229,331 See accompanying notes to financial statements 46 104 40,181 28,527 68,812 PIMA COUNTY, ARIZONA Statement of Changes in Fiduciary Net Position Fiduciary Funds For the Year Ended June 30, 2015 Exhibit A - 11 (in thousands) Investment Trust Funds Additions Contributions from participants Total contributions $ Investment earnings Total investment earnings 580 580 Total additions 2,269,231 Deductions Distributions to participants Total deductions 2,184,552 2,184,552 Change in net position 84,679 Net position held in trust July 1, 2014 Net position held in trust June 30, 2015 See accompanying notes to financial statements 47 2,268,651 2,268,651 144,652 $ 229,331 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 1: Summary of Significant Accounting Policies Pima County’s accounting policies conform to generally accepted accounting principles applicable to governmental units adopted by the Governmental Accounting Standards Board (GASB). For the year ended June 30, 2015, the County implemented the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, and GASB Statement No. 69, Government Combinations and Disposals of Governmental Operations. GASB Statement Nos. 68 and 71 establish standards for measuring and recognizing net pension liabilities, deferred outflows of resources, deferred inflows of resources, and expenses/expenditures related to pension benefits provided through defined benefit pension plans. In addition, Statement No. 68 requires disclosure of information related to pension benefits. GASB Statement No. 69 establishes accounting and financial reporting standards related to government combinations and disposals of government operations. The implementation of GASB Statement No. 69 had no impact on the County’s fiscal year 2014-15 financial statements and therefore no additional note disclosures were required. 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 to be financially accountable. Blended component units, although legally separate entities, are so intertwined with the County that they are in substance part of the County’s operations. Component units should be blended in the County’s financial statements when the component unit’s governing body is substantively the same as the County’s governing body and there is either a financial benefit or burden relationship between the County and the component unit or County management has operational responsibility for it; the component unit provides services entirely, or almost entirely, to the County; or the component unit’s total debt outstanding is expected to be repaid entirely or almost entirely with the County’s resources. Therefore, data from these units is combined with data of the County. 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 following describes the County’s component units: The Pima County Stadium District, a legally separate entity, was created in 1991 when the Board of Supervisors adopted a resolution to create the Stadium District to manage Kino Sports Complex. The District is a tax-levying, public improvement district and political taxing subdivision of the state of Arizona. The Stadium District, in conjunction with Pima County government, maintains the fiscal resources of the entire complex including facilities, grounds, personnel and the various services provided at the venue. Kino Sports Complex, which covers 155 acres, is the largest professional sports and entertainment venue of its kind in Pima County. The facility hosts youth athletics, amateur and professional sports, concerts and community events on its fields. The County Board of Supervisors serves as 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 recreational 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 Library District provides and maintains library services for the County’s residents. The Pima County Board of Supervisors is the 48 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) Board of Directors of the District. The Library District is reported as a special revenue fund (blended component unit) in these financial statements. Separate financial statements for the District are not available. The Pima County Regional Flood Control District was established in 1978. The District is responsible for floodplain management activities for the unincorporated areas of Pima County (except national forests, parks, monuments and Native American Nations), the City of South Tucson, and the Town of Sahuarita. The Pima County Board of Supervisors is the Board of Directors for the Flood Control District. The Regional Flood Control District is reported as a special revenue fund (blended component unit) in these financial statements. Separate financial statements for the District are not available. The Pima County Street Lighting Districts (SLDs) operate and maintain street lighting for specific regions in areas outside local city jurisdictions. The Pima County Board of Supervisors serves as the Board of Directors. SLDs are reported as a special revenue fund in these financial statements and meet substantively the same criteria as blended component units. Separate financial statements for the SLDs 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. 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 Presentation The basic financial statements include both government-wide statements and fund financial statements. The government-wide statements focus on the County as a whole, while the fund financial statements focus on major funds. Each presentation provides valuable information that can be analyzed and compared between years and between governments to enhance the information’s usefulness. Government-wide statements - Provide information about the primary government (the County) and its component units. The statements include a statement of net position and a statement of activities. These statements report the overall government’s financial activities except for fiduciary activities. The statements also distinguish between the governmental and business-type activities of the County and between the County and its discretely presented component units. Governmental activities generally are financed 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: 49 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 1: Summary of Significant Accounting Policies (continued)    charges to customers or applicants for goods, services, or privileges provided; operating grants and contributions; and capital grants and contributions, including special assessments. Revenues that are not classified as program revenues, including internally dedicated resources and all taxes the County levies or imposes, are reported as general revenues. Generally, the effect of interfund activity has been eliminated from the government-wide financial statements to minimize the double-counting of internal activities. However, charges for interfund services provided and used are not eliminated if the prices approximate their external exchange values. Fund 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 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 nonmajor funds. Fiduciary funds are aggregated and reported by fund type. Proprietary fund revenues and expenses are classified as either operating or nonoperating. Operating revenues and expenses generally result from transactions associated with the fund’s principal activity. Accordingly, revenues, such as user charges, in which each party receives and gives up essentially equal values, are operating revenues. Other revenues result from transactions in which the parties do not exchange equal values and are considered nonoperating revenues such as connection fees, intergovernmental revenues, along with investment earnings and revenues ancillary activities generate. Operating expenses include the cost of services, administrative expenses, and depreciation on capital assets. Other expenses, such as interest expense, are considered nonoperating 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 those required to be accounted for in another fund. The General Fund revenues are primarily from property taxes and intergovernmental revenues. 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. Capital Projects Fund revenues are primarily from intergovernmental, face amount of long-term debt and transfers in. The Debt Service Fund accounts for the accumulation of resources for, and the payment of, general long-term debt principal and interest. Revenues are primarily from property taxes, proceeds from refunding debt, and transfers in. The County reports the following major enterprise fund: Regional Wastewater Reclamation (RWR) accounts for the management and operation of wastewater treatment and water pollution control programs. Revenues are primarily from charges for services and connection fees. The County also reports the following fund types: Internal Service Funds account for fleet maintenance and operation, insurance, printing services, and telecommunications services provided to the County’s departments or to other governments on a costreimbursement basis. The County transitioned to a medical self-insurance model on July 1, 2013 that is funded by employee and employer premium rates. 50 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) Investment Trust Funds account for pooled assets and individual investment accounts the County Treasurer holds and invests on behalf of other governmental entities. Agency Funds account for assets the County holds as an agent for the State, cities, towns, and other parties. C. Basis of Accounting The government-wide, proprietary fund and fiduciary fund financial statements are presented using the economic resources measurement focus and the accrual basis of accounting. The agency funds are custodial in nature and do not have a measurement focus but utilize the accrual basis of accounting for reporting its assets and liabilities. 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 the provider imposed have been met. Under the terms of grant agreements, the County funds certain programs by a combination of grants and general revenues. Therefore, when program expenses are incurred, there are both restricted and unrestricted net position resources available to finance the program. The County applies grant resources to such programs before using general revenues. Governmental funds in the fund 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 they become both measurable and available. The County recognizes property taxes to be available if collected within 30 days. In addition, other taxes that are reported as intergovernmental revenues, i.e. state shared sales tax, highway user revenues and vehicle license tax, recreational vehicle taxes, car rental surcharges, and hotel excise taxes are also recognized if collected within 30 days. Grant funded intergovernmental revenues are considered available if collected within 60 days after fiscal year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, compensated absences, landfill closure and postclosure care costs, and pollution remediation obligations, which are recognized as expenditures to the extent they are due and payable. General capital asset acquisitions are reported as expenditures in governmental funds. Issuances of general long-term debt and acquisitions under capital lease agreements are reported as other financing sources. D. Cash and Investments For the statement of cash flows, the County’s cash and cash equivalents are considered to be cash on hand, demand deposits, cash and investments held by the County Treasurer, investments in the State Treasurer’s Local Government Investment Pool, and only those highly liquid investments with a maturity of 3 months or less when purchased. Nonparticipating interest-earning investment contracts are stated at cost. Money market investments and participating interest-earning investment contracts with a remaining maturity of 1 year or less at the time of purchase are stated at amortized cost. All other investments are stated using the market approach at fair value. E. Inventories and Prepaids Inventories in the government-wide and proprietary funds’ financial statements are recorded as assets when purchased and expensed when consumed. 51 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) The County accounts for its inventories in the Health Fund using the purchase method. Inventories of the Health Fund consist of expendable supplies held for consumption and are recorded as expenditures at the time of purchase. Amounts on hand at year-end are shown on the balance sheet as an asset for informational purposes only and as 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. The County accounts for its inventories in the OEM Radio System Fund using the purchases method. Inventories of the OEM Radio System Fund consist of spare parts for the fixed network equipment held for consumption and are recorded as expenditures at the time of purchase. These inventories are stated at cost using the first-in, first-out method or average cost method. Inventories of the Transportation Fund are recorded as assets when purchased and expensed when used. They are valued at lower of cost or market, cost being determined using the moving average method. Inventories of RWR, an enterprise fund, are valued at lower of cost or market, cost being determined using the moving average method. Inventories of 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 fair market value at the time received. Capitalization thresholds (the dollar values above which asset acquisitions are added to the capital asset accounts), depreciation methods, and estimated useful lives of capital assets are as follows: 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 and infrastructure) $100 Straight Line Varies $5,000 Straight Line Varies Buildings and improvements Equipment Software (Reported in equipment) 52 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) Discretely presented component unit: The Southwestern Fair Commission, Inc. capital assets are reported at actual cost. Depreciation is calculated using the straight-line method over the assets’ estimated useful life, which range from 3 to 40 years. H. Deferred Outflows and Inflows of Resources The statement of net position and balance sheet include separate sections for deferred outflows of resources and deferred inflows of resources. Deferred outflows of resources represent a consumption of net position that applies to future periods that will be recognized as an expense or expenditure in future periods. Deferred inflows of resources represent an acquisition of net position or fund balance that applies to future periods and will be recognized as a revenue in future periods. I. Fund Balance Classifications The governmental funds’ fund balances are reported separately within classifications based on a hierarchy of the constraints placed on those resources’ use. 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. The unrestricted fund balance category is composed of committed, assigned, and unassigned resources. Committed fund balances are self-imposed limitations that the County’s Board of Supervisors, the highest level of decisionmaking authority within the County, approved by formal action (ordinance). Only the Board can remove or change the constraints placed on committed fund balances. This approval must be given at a regular supervisory meeting by taking the same type of action it employed to previously commit those amounts. Assigned fund balances are resources constrained by the County’s intent to be used for specific purposes, but are neither restricted nor committed. The Board of Supervisors has authorized the County Administrator to make assignments of resources for a specific purpose. Modifications or rescissions of the constraints can also be removed 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. When an expenditure is incurred that can be paid from either restricted or unrestricted fund balances, it is the County’s policy to use restricted fund balance first. For the disbursement of unrestricted fund balances, the County will use committed amounts first, followed by assigned amounts, and lastly unassigned amounts. J. Investment Earnings Investment earnings are composed of interest, dividends, and net changes in the fair value of applicable investments. 53 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 1: Summary of Significant Accounting Policies (continued) K. Compensated Absences Compensated absences payable consists of vacation leave and a calculated amount of sick leave employees earned based on services already rendered. Employees may accumulate up to 240 hours of vacation depending on years of service, but they forfeit any unused vacation hours in excess of the maximum amount at fiscal year-end. Upon terminating employment, the County pays all unused and unforfeited vacation benefits to employees. Accordingly, vacation benefits are accrued as a liability in the government-wide and proprietary funds’ financial statements. A liability for these amounts is reported in the governmental funds’ financial statements only if they have matured, for example, as a result of employee resignations and retirements by fiscal year-end. Employees may accumulate up to 1920 hours of sick leave. Generally, sick leave benefits provide for ordinary sick pay and are cumulative but employees forfeit them upon terminating employment. Because sick leave benefits do not vest with employees, a liability for sick leave benefits is not accrued in the financial statements. However, employees who have accumulated greater than 240 hours of sick leave and are eligible to retire will receive some benefits. An estimate of those retirement payouts is accrued as a liability in government-wide and proprietary funds’ financial statements in Employee Compensation for the current portion and under Noncurrent Liabilities for the noncurrent portion. 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. In addition, since vacation and sick leave used by employees within the first two pay periods after fiscal year-end is paid for with current financial resources, a compensated absences liability for these amounts is reported in the governmental funds' financial statements within Employee Compensation. L. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plan’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 54 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 2: Change in Accounting Principle and Correction of a Misstatement - Prior Period Adjustment. Net Position as of July 1, 2014, has been restated as follows for the implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pensions Transition for Contributions Made Subsequent to the Measurement Date. In addition, the School Reserve’s governmental activities net position at July 1, 2014, has been restated for adjustments affecting the cumulative results of operations due to error in the prior year’s financial statements. Businesstype Activities Governmental Activities Net position/fund balance as previously reported at June 30, 2014 $ 1,582,370 $ 777,448 Major Enterprise Fund $ 761,031 Nonmajor Enterprise Funds $ 16,417 Nonmajor Governmental Funds $ 66,854 Internal Service Funds $ 106,451 Prior period adjustment Implementation of GASB 68: Net pension liability (measurement date as of June 30, 2013) (609,604) (48,964) (42,185) Deferred outflows - county contributions made during fiscal year 2014 40,183 2,879 2,480 (6,779) (9,542) 399 561 Other: School Reserve reporting error Total prior period adjustment Net position/fund balance as restated, July 1, 2014 (21) (21) (569,442) $ 1,012,928 (46,085) $ 731,363 55 (39,705) $ 721,326 (6,380) $ 10,037 (21) $ 66,833 (8,981) $ 97,470 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 3: Cash and Investments Primary Government Arizona Revised Statutes (A.R.S.) authorize the County to invest public monies in the State Treasurer’s investment pool; obligations issued or guaranteed by the United States or any of the senior debt of its agencies, sponsored agencies, corporations, sponsored corporations, or instrumentalities; specified state and local government bonds, notes, and other evidences of indebtedness; interest-earning investments such as savings accounts, certificates of deposit, and repurchase agreements in eligible depositories; specified commercial paper issued by corporations organized and doing business in the United States; specified bonds, debentures, notes, and other evidences of indebtedness that are denominated in United States dollars; and certain open-end and closed-end mutual funds, including exchange traded funds. In addition, the County Treasurer may invest trust funds in certain fixed income securities of corporations doing business in the United States or District of Columbia. 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, notes, and other evidence of indebtedness that are denominated in United States dollars must be rated ̎ A ̎ or better by at least two nationally recognized rating agencies at the time of purchase. 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 a pooled collateral program for public deposits and a Statewide Collateral Pool Administrator (Administrator) in the State Treasurer’s Office. The purpose of the pooled collateral program is to ensure that governmental entities’ public deposits placed in participating depositories are secured with collateral of 102 percent of the public deposits, less any applicable deposit insurance. An eligible depository may not retain or accept any public deposit unless it has deposited the required collateral with a qualified escrow agent or the Administrator. The Administrator manages the pooled collateral program, including reporting on each depository’s compliance with the program. 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 unless the investment is denominated in United States dollars. Deposits—At June 30, 2015, the carrying amount of the County’s deposits was $76,765, and the bank balance was $56,588. 56 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 3: Cash and Investments (continued) 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, 2015, $3,568 of the County’s bank balance was exposed to custodial credit risk because it was uninsured and uncollateralized. Investments—At June 30, 2015, the County’s investments consisted of $344,840 invested in marketable securities and $472,404 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, 2015, credit risk for the County’s investments was as follows: Investment Type Commercial paper Corporate bonds Municipal bonds Federal Farm Credit Bank Federal Home Loan Bank Money market mutual fund State Treasurer Investment Pool 5 State Treasurer Investment Pool 500 State Treasurer Investment Pool 7 Rating Rating Agency A- 1/P1 BBB-/Baa3 Unrated AA+/Aaa AA+/Aaa AAAm/Aaa-mf S&P / Moody's S&P / Moody's Amount $ S&P / Moody's S&P / Moody's S&P / Moody's Marketable securities 14,985 232,797 5,818 24,053 33,089 29,088 339,830 S&P AAAf/S1+ Unrated Unrated State Treasurer's Investment Pool 248,520 101,273 122,611 472,404 $ Total 812,234 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 $817,244 of investments, $315,752, consisting of the commercial paper, corporate bonds, municipal bonds, Federal Farm Credit Bank, Federal Home Loan Bank, and U.S. Treasury notes, is uninsured and held by a counterparty in the County’s name in book entry form. 57 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 3: Cash and Investments (continued) Concentration of credit risk—The County has no formal policy with respect to limiting the amount the Treasurer may invest in any one issuer. The County’s exposure as of June 30, 2015 is less than 5% per issuer. Interest rate risk—Interest rate risk is the risk that changes in interest rates will adversely affect an investment’s fair value. The County does not have a formal investment policy with respect to interest rate risk. As of June 30, 2015, 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 Municipal bonds Federal Farm Credit Bank Federal Home Loan Bank U.S. Treasury Notes Money market mutual fund Total $ 248,520 101,273 122,611 14,985 232,797 5,818 24,053 33,089 5,010 29,088 $ 817,244 0.15 4.41 0.10 0.41 1.48 2.03 1.13 2.12 2.03 0.11 A reconciliation of cash, deposits, and investments to amounts shown on the Statements of Net Position follows: Cash on Hand Cash, deposits, and investments: $ 47 $ Governmental Activities Statement of Net Position: Cash and cash equivalents Restricted cash and cash equivalents Total $ $ 402,263 789 403,052 Amount of Deposits 76,765 Amount of Investments $ 817,244 Business-type Activities $ 116,984 76,102 193,086 $ $ Investment Trust Funds Total 894,056 Agency Funds Totals $ 229,269 $ 68,649 $ $ 229,269 $ 68,649 $ 817,165 76,891 894,056 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 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 58 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 3: Cash and Investments (continued) 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. 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: Principal Commercial paper Corporate bonds Municipal bonds Federal Farm Credit Bank Federal Home Loan Bank U.S. Treasury Notes State Treasurer Investment Pool 5 Deposits Interest receivable Total assets $ 15,000 225,728 5,710 24,000 33,000 5,000 156,743 45,467 62 Interest Rates Maturities 0.00% 0.40-7.13% 0.95-1.50% 0.35-0.80% 0.28-2.00% 0.75% N/A N/A N/A 10/15-12/15 09/15-12/18 07/17 11/15-2/17 12/15-04/19 06/17 N/A N/A N/A Fair Value $ $ 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, 2014 June 30, 2015 $ 417,481 100,543 518,024 $ 518,024 $ $ 59 5,866,075 (5,849,328) 16,747 501,277 518,024 14,985 232,797 5,818 24,053 33,089 5,010 156,743 45,467 62 518,024 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 4: Fund Balance Classification of the Governmental Funds The table below details the fund balance categories and classifications: General Fund Capital Projects Fund Debt Service Fund Other Governmental Funds CAFR Total Fund Balance: Nonspendable: Inventory Prepaid expenditures Loan receivable Permanent fund principal Total nonspendable $ $ 2,510 1,543 $ Unassigned: Total Fund Balance 16,406 8,098 5,584 20,028 8,191 44,773 22,080 126,827 10 3,055 3,065 $ 8,424 194 $ 47,878 52,125 (57) 129,835 60 124 1,236 283 1,213 3,464 6,320 124 1,246 283 1,213 6,519 9,385 $ 8,424 8,424 1,665 1,558 4 562 174 12,387 562 174 3,769 8,424 $ 493 6,816 1,435 1,374 53,155 1,665 1,368 190 4 $ 1,453 3,527 1,543 45 6,568 24,504 5,584 20,028 8,191 2,810 6,517 4,009 31,368 493 51,589 1,435 23,454 179,982 2,810 6,517 4,009 31,368 Committed to: Judicial activities Parks and recreation School reserve Sports promotion (Stadium) Other purposes Total committed Assigned to: Debt service reserve Health Law enforcement Parks and recreation School reserve Other purposes Total assigned $ 45 2,515 4,053 Restricted for: Flood Control District Health Judicial activities Justice Court /Public Service Center Law enforcement Library District Pima animal care Sanitation School reserve Streets and highways Waste Tire Other purposes Total restricted 1,453 1,017 (4,770) 60,989 $ 43,051 251,373 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 5: Capital Assets Capital asset activity for the year ended June 30, 2015, was as follows: Balance July 1, 2014 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 $ 693,391 1,332,681 194,395 2,220,467 Less accumulated depreciation for: Buildings and improvements Infrastructure Equipment Total accumulated depreciation (215,209) (665,379) (85,687) (966,275) Total capital assets being depreciated, net Governmental activities capital assets, net 499,163 212,314 711,477 Increases 1,254,192 $ 1,965,669 $ Balance July 1, 2014 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* Sewage conveyance systems Equipment Total capital assets being depreciated $ (200,145) (281,761) (43,816) (525,722) $ 1,180,049 1,256,409 $ $ (506) (193,940) (194,446) $ 521,049 104,275 625,324 136,128 46,457 24,191 206,776 (283) (1,812) (7,028) (9,123) 829,236 1,377,326 211,558 2,418,120 (20,455) (38,305) (15,035) (73,795) 142 1,393 6,327 7,862 (235,522) (702,291) (94,395) (1,032,208) 132,981 (1,261) 1,385,912 241,274 $ Increases 851,787 721,515 132,469 1,705,771 Less accumulated depreciation for: Buildings and improvements Sewage conveyance systems Equipment Total accumulated depreciation Total capital assets being depreciated, net Business-type activities capital assets, net 12,630 63,730 76,360 22,392 85,901 108,293 Balance June 30, 2015 Decreases 1,364 63,494 64,858 (195,707) $ (77,020) (77,020) (112,675) (3,539) (7,869) (124,083) (28,270) (13,980) (9,219) (51,469) 85,025 2,172 7,343 94,540 $ (29,543) (106,563) 2,011,236 Balance June 30, 2015 Decreases 28,346 33,117 16,922 78,385 26,916 91,774 $ $ 13,994 50,204 64,198 767,458 751,093 141,522 1,660,073 (143,390) (293,569) (45,692) (482,651) $ 1,177,422 1,241,620 * The Regional Wastewater Reclamation Enterprise Fund closed the Randolph Park Wastewater Reclamation Facility during the fiscal year with a net book value of $27,554. 61 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (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 Business-type activities: Parking Garages Regional Wastewater Reclamation Department Total business-type activities depreciation expense $ 12,459 13,463 34,475 377 571 92 6,758 851 4,749 73,795 $ $ 221 51,248 $ 51,469 Balance July 1, 2014 Increases Balance June 30, 2015 Decreases Discretely presented component units: Southwestern Fair Commission (SFC): Capital assets being depreciated: Buildings and improvements Equipment Total capital assets being depreciated $ 6,465 2,631 9,096 Less accumulated depreciation for: Buildings and improvements Equipment Total accumulated depreciation Total capital assets being depreciated, net SFC capital assets, net $ 665 106 771 $ 7,130 2,737 9,867 (3,643) (2,186) (5,829) (315) (154) (469) (3,958) (2,340) (6,298) 3,267 302 3,569 3,267 62 $ $ 302 $ 3,569 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 6: Claims, Judgments and Risk Management Self-Insurance Trust Fund (SIT Fund) The SIT Fund, an internal service fund, accounts for the financing of the insured risk 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. The SIT Fund is liable for any single general or automobile liability claim up to $2,500 per occurrence, any workers’ compensation claim up to $1,000 per occurrence, and any single medical malpractice 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 SIT Fund. Settled claims have not exceeded insurance coverage in any of the last 3 fiscal years. Payment of unemployment claims is fully self-funded. Payment of environmental claims is generally selffunded, although some claims filed could result in past insurers being liable for such losses. All of the County’s departments participate in the SIT Fund. With the exception of environmental and unemployment losses, charges are based on actuarial estimates of the amounts needed to pay prior- and currentyear claims. Charges for environmental losses are based on historical experience. Charges for unemployment losses are based on actual claims paid. Claims liabilities at June 30, 2015, for each insurable area are as follows: $ 213 5,405 19,955 104 1,500 $ 27,177 Auto liability General liability Workers' compensation Medical malpractice Environmental liability The above amounts, excluding environmental and unemployment, are reported at their present value using an expected future investment yield assumption of 2 percent. Changes in the unpaid claims liability reported in the SIT Fund are as follows: Year 2013-14 2014-15 Balance July 1 35,768 34,161 Current-Year Claims and Changes in Estimates 4,851 (470)* Claims Payments (6,458) (6,514) Balance June 30 34,161 27,177 *This reduction is due to a decrease in the actuarial estimate for unpaid claims, which was greater than actual claims during the fiscal year ended June 30, 2015. Health Benefits Self-Insurance Trust Fund (HBT Fund) During fiscal year 2013-14, the County created the HBT Fund, an internal service fund, to account for the financing of the County’s self-insured medical/pharmacy plan for employees and their dependents. The HBT Fund is responsible for collecting employer and employee premiums through payroll deductions and reimbursing Aetna, acting as a third-party administrator, for the payment of claims. The plan consists of two plan options, a High Deductible Health Plan and a Preferred Provider Organization Plan. The County purchases commercial stop-loss insurance coverage for claims in excess of coverage provided by the HBT Fund. Settled claims have not exceeded insurance coverage during the past 2 fiscal years. 63 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 6: Claims, Judgments and Risk Management (continued) Claim liabilities are computed using a combination of two actuarial methods: the completion factor approach and the exposure approach. Accrued actuarial liabilities for the HBT Fund at June 30, 2015 for each plan option are as follows: High-Deductible Health Plan: Medical Pharmacy Preferred Provider Organization Plan: Medical Pharmacy $ $ 1,805 675 1,196 524 4,200 Changes in the unpaid claims liabilities reported in the HBT Fund are as follows: Year 2013-14* 2014-15 Balance July 1 $ 6,700 Current-Year Claims and Changes in Estimates $ 47,161 46,123 Claims Payments $ (40,461) (48,623) Balance June 30 $ 6,700 4,200 * The HBT Fund began in fiscal year 2013-14 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. Pollution Remediation The County has estimated and reported an environmental liability of $294 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. 64 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (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, 2015. Balance July 1, 2014 Additions Reductions Balance June 30, 2015 Due within 1 year $ $ $ $ 383,935 7,363 391,298 $ 39,315 1,848 41,163 Governmental activities: General obligation bonds Unamortized premium/discount Total general obligation bonds 407,275 8,731 416,006 15,000 731 15,731 38,340 2,099 40,439 Transportation revenue bonds Unamortized premium/discount Total transportation revenue bonds 128,825 4,256 133,081 13,685 1,750 15,435 28,640 1,106 29,746 113,870 4,900 118,770 13,210 1,599 14,809 Certificates of participation Unamortized premium/discount Total certificates of participation 138,900 10,803 149,703 57,025 3,468 60,493 29,680 2,745 32,425 166,245 11,526 177,771 31,240 3,228 34,468 640 640 11,500 11,500 228 228 11,912 11,912 3,180 3,180 609,604 80,663 37,070 653,197 Reported but unpaid losses (Note 6) Incurred but not reported losses (Note 6) 21,721 19,140 8 46,115 5,493 50,114 16,236 15,141 Landfill closure and post-closure care costs (Note 9) 22,771 Installment note payable Total installment note payable Net pension liabilities * Pollution remediation (Note 6) Compensated absences payable Total governmental activities long-term liabilities $ 7,696 ** 15,075 639 345 294 30,842 1,348 29,494 1,404,147 $ 229,945 $ 204,904 4,608 6,406 $ 1,429,188 $ 104,634 * There was a restatement of net position as a result of the implementation of GASB Statement No.68 (see Note 2). ** This reduction in landfill closure and post-closure costs was due to a change in actuarial estimate associated with the closure of the Tangerine landfill. This reduction in the estimate results in negative Sanitation expenses on the government-wide Statement of Activities (see Exhibit A-2). 65 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 7: Long-Term Liabilities (continued) Balance July 1, 2014 Additions Reductions Balance June 30, 2015 Due within 1 year $ $ 120,095 266 120,361 $ 15,950 259 16,209 Business-type activities: Sewer revenue bonds Unamortized premium/discount Total revenue bonds payable $ 137,650 781 138,431 17,555 515 18,070 Sewer revenue obligations Unamortized premium/discount Total revenue obligations payable 494,130 46,158 540,288 21,890 7,635 29,525 472,240 38,523 510,763 22,740 6,996 29,736 Regional Wastewater Reclamation Loans payable Total loans payable 19,680 19,680 1,535 1,535 18,145 18,145 1,581 1,581 Net pension liabilities * 48,964 4,810 44,154 16,188 1,098 83 3,092 Contracts and notes 7,942 Compensated absences payable 3,175 Total business-type activities long-term liabilities $ 758,480 $ $ 9,344 9,344 $ 70,211 $ 697,613 $ 47,526 * There was a restatement of net position as a result of the implementation of GASB Statement No.68 (see Note 2). The County’s debt consists of various issues of general obligation, HURF revenue, certificates of participation, sewer revenue bonds, loans, and obligations bonds that are generally callable with interest payable semiannually. Bond proceeds primarily pay for acquiring or constructing capital facilities. Bonds have also been issued to advancerefund previously issued bonds. The County repays general obligation bonds from voter-approved property taxes. HURF revenue bonds are repaid from net highway user revenues in the Transportation fund. Certificates of participation are repaid from General fund and other various funds' revenues. Sewer revenue bonds, loans, and obligations are repaid from the charges for services in the Regional Wastewater Reclamation fund. GENERAL OBLIGATION BONDS OUTSTANDING Governmental Activities (Payments made from property tax revenues of the Debt Service Fund) General obligation bonds payable at June 30, 2015, consisted of the outstanding general obligation bonds presented below. Of the total amounts originally authorized, $1,642 from the May 20, 1997, $5,610 from the May 18, 2004, $475 from the May 16, 2006, and $17,954 from November 4, 2014 bond elections remain unissued. 66 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 7: Long-Term Liabilities (continued) Issue Issue Amount 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 Series of 2013A 50,000 Series of 2013B Refunding 38,575 Series of 2014 10,000 Series of 2015 15,000 G.O. bonds outstanding Plus unamortized premium/discount: Interest Rates 3.00 - 4.50% 4.00% 3.25 - 4.13% 3.25 - 4.00% 3.25% 2.25 - 5.00% 2.00 - 4.00% 2.00 - 3.00% 1.75 - 4.00% 3.00 - 4.00% 1.00 - 5.00% 2.00 - 4.00% Maturities 2016-21 2016-22 2016-23 2016-24 2016 2016-26 2016-27 2016-17 2016-28 2016-20 2016-28 2016-29 Call Date July 1, 2017 July 1, 2018 July 1, 2019 July 1, 2019 July 1, 2021 July 1, 2022 July 1, 2023 July 1, 2023 July 1, 2025 Total G.O. bonds outstanding Outstanding June 30, 2015 $ 41,800 58,500 34,185 57,890 120 41,210 41,500 8,055 44,115 34,085 9,000 13,475 383,935 7,363 $ 391,298 The following schedule details general obligation bond debt service requirements to maturity at June 30, 2015. Year Ending June 30, 2016 2017 2018 2019 2020 2021 - 2025 2026 - 2029 Total Principal 39,315 41,445 43,005 40,475 43,450 145,235 31,010 $ 383,935 $ Interest 14,017 12,802 11,445 9,873 8,461 20,547 2,108 $ 79,253 $ REFUNDED GENERAL OBLIGATION BONDS In prior years, the County defeased $1,200 of General Obligation Bonds, Series 2007 with County funds. County funds were placed in an irrevocable trust to provide for future debt service payments of the defeased debt. Accordingly, the trust account assets and liability for the defeased bonds are not included in the County’s financial statements. At June 30, 2015, $1,200 of outstanding bonds are considered defeased. 67 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 7: Long-Term Liabilities (continued) TRANSPORTATION BONDS PAYABLE Governmental Activities (Payments made from street and highway revenues) Pima County transportation revenue bonds were issued to provide monies to construct improvements to the County’s streets and highways. Of the total amount originally authorized, $73,375 from the November 4, 1997 bond election remains unissued. During fiscal year 2014-15, the County defeased $14,955 of Transportation Bonds, Series 2005, by issuing $13,685 of Transportation Bonds that have an average life of 3.84 years and an average interest rate of 4.92%. This refunding transaction resulted in an economic gain of $848 and a reduction in debt service between the refunding debt and the refunded debt of $857. 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 following table presents amounts outstanding by issue. Issue Interest Rates Issue Amount Maturities $ 21,000 3.25 - 4.75% 2016-22 Series of 2007 25,000 3.50 - 4.50% Series of 2008 2016-22 15,000 3.00 - 4.00% 2016-24 Series of 2009 Series of 2009 Refunding 8,420 3.00 - 4.00% 2016-24 Series of 2012 18,425 3.00 - 5.00% 2016-27 14,520 4.00 - 5.00% 2016-18 Series of 2012 Refunding Series of 2014 16,000 3.00 - 5.00% 2016-28 Series of 2014 Refunding 8,805 5.00% 2017-18 2016-20 Series of 2015 Refunding 13,685 4.00 - 5.00% Transportation bonds outstanding Plus unamortized premium/discount: Total transportation bonds outstanding Call Date July 1, 2017 July 1, 2018 July 1, 2019 July 1, 2019 July 1, 2022 July 1, 2023 Outstanding June 30, 2015 $ 13,315 18,285 13,000 6,870 15,565 9,120 15,225 8,805 13,685 113,870 4,900 $ 118,770 The following schedule details transportation bond debt service requirements to maturity at June 30, 2015. Year Ending June 30, 2016 2017 2018 2019 2020 2021 - 2025 2026 - 2028 Total Principal 13,210 14,585 15,245 14,160 14,875 34,485 7,310 $ 113,870 $ 68 Interest 4,711 4,146 3,497 2,825 2,204 4,353 423 $ 22,159 $ PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 7: Long-Term Liabilities (continued) Pima County has pledged future street and highway revenues, to repay $113,870 in transportation revenue bonds issued between 2007 and 2015. Proceeds from the bonds provide financing for construction of various highways and streets within Pima County. The bonds are payable from transportation revenues and are payable through 2028. Total principal and interest remaining to be paid on the bonds is $136,029. It is expected that approximately 35 percent of revenues will be used to pay annual principal and interest on the bonds. Prior year street and highway revenues are required to be greater than two times the maximum annual debt service payment. Principal and interest paid for bonds in the current year, the maximum principal and interest to be paid in any one future year, and total street and highway revenues for the prior fiscal year were $18,722, $18,742 and $49,212, respectively. 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. On May 22, 2013, the County issued Certificates of Participation Series 2013A for $80,175. The County intends to use $60,000 of the proceeds from that issue for projects related to its sewer system. Although no sewer revenues are pledged for the repayment of the Certificates, the County intends to transfer available cash from the Regional Wastewater Reclamation Fund to repay that portion of the proceeds actually used for sewer projects. The County also issued $12,705 of Refunding Certificates of Participation, Series 2013B. The Certificates were issued with a premium of $1,260 and the proceeds were used to refund and redeem $1,220 of Certificates of Participation, Series 1999, and $12,335 of Certificates of Participation, Series 2003, previously reported by the County as a jail capital lease. On February 12, 2014, the County issued Certificates of Participation Series 2014 for $52,160 to finance the costs of completing the Public Service Center and Office Tower. The County may also use a portion of the funds for other capital projects. On April 15, 2015, the County issued Certificates of Participation Series 2015 for $57,025 to expand and improve the County’s existing sewer system facilities. The County may also use a portion of the funds for other capital projects. 69 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 7: Long-Term Liabilities (continued) The following schedule details outstanding Certificates of Participation payable at June 30, 2015. Issue Interest Issue Rates Maturities Amount Series of 2007A $ 28,765 5.00% 2016-22 2016-19 Series of 2010 20,000 4.00 - 5.25% 80,175 5.00% 2016-23 Series of 2013A Series of 2013B Refunding 12,705 5.00% 2016-18 Series of 2014 52,160 4.00 - 5.00% 2016-29 Series of 2015 57,025 1.00 - 5.00% 2016-19 Certificates of participation outstanding Plus unamortized premium/discount: Total certificates of participation outstanding Call Date July 1, 2017 December 1, 2023 Outstanding June 30, 2015 $ 16,835 9,830 24,195 7,955 50,405 57,025 166,245 11,526 $ 177,771 The following schedule details debt service requirements to maturity for the County’s Certificates of Participation payable at June 30, 2015. Year Ending June 30, 2016 2017 2018 2019 2020 2021 - 2025 2026 - 2029 Total Principal 31,240 26,955 27,615 22,695 8,505 31,105 18,130 $ 166,245 Interest 7,044 5,910 4,784 3,557 2,737 7,891 1,869 $ 33,792 $ $ INSTALLMENT NOTE PAYABLE Governmental Activities In prior years, the County acquired tasers and computer equipment under contract agreements at a total purchase price of $764 and $239, respectively. During fiscal year 2014-15, the County acquired Stardust and Painted Hills properties under contract agreements at a total purchase price of $8,750 with a down payment of $1,750, and at a total purchase price of $7,500 with a down payment of $3,000, respectively. The following schedule details debt service requirements to maturity for the County’s installment note payable at June 30, 2015. Year Ending June 30, 2016 2017 2018 2019 2020 Equipment Principal Interest $ 234 $ 10 178 4 $ 412 $ 14 Land Principal Interest $ 2,946* $ 679 2,216 506 2,347 376 2,423 237 1,568 94 $ 11,500 $ 1,892 * In September of 2015, the County made an additional payment of $902 on the installment note for the Painted Hills property. 70 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 7: Long-Term Liabilities (continued) SEWER REVENUE BONDS, OBLIGATIONS, AND LOANS 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, 2015, the County has issued the total amounts originally authorized from the May 20, 1997 and May 18, 2004 bond elections. Issue Interest Issue Rates Amount Maturities Series of 2007 $ 50,000 4.00 - 5.00% 2016-26 Series of 2008 75,000 4.00 - 5.00% 2016-23 Series of 2009 18,940 3.50 - 4.25% 2016-24 Series of 2011 Refunding 43,625 3.00 - 5.00% 2016 Sewer revenue bonds outstanding Plus unamortized premium/discount: Total sewer revenue bonds outstanding Call Date July 1, 2017 July 1, 2018 July 1, 2019 Outstanding June 30, 2015 $ 32,535 68,945 13,385 5,230 120,095 266 $ 120,361 The following schedule details sewer revenue bond debt service requirements to maturity at June 30, 2015. Year Ending June 30, 2016 2017 2018 2019 2020 2021 - 2025 2026 Total Principal 15,950 11,250 11,810 12,405 13,025 51,925 3,730 $ 120,095 $ Interest 5,057 4,354 3,886 3,414 2,914 5,983 149 $ 25,757 $ 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 Agua Nueva (previously known as Roger Road) and Tres Rios (previously known as Ina 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. In December 2012, the County issued Sewer Revenue Obligations Series 2012A for $128,795. The net proceeds of the issuance were used primarily to pay a portion of the costs of the construction, expansion and improvement of sewer treatment facilities and conveyance systems for the System, including the Agua Nueva and Tres Rios Wastewater Reclamation Facilities. 71 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 7: Long-Term Liabilities (continued) In February 2014, the County issued Sewer Revenue Obligations Series 2014 for $48,500. The net proceeds of the issuance were used primarily to pay a portion of the costs of the construction, expansion and improvement of sewer treatment facilities and conveyance systems for the System. Issue Interest Issue Rates Maturities Amount Series of 2010 $ 165,000 3.00 - 5.00% 2016-25 2016-26 Series of 2011B 189,160 5.00% 128,795 1.75 - 5.00% 2016-27 Series of 2012A 48,500 4.00 - 5.00% 2016-28 Series of 2014 Sewer revenue obligations outstanding Plus unamortized premium/discount: Total sewer revenue obligations outstanding Call Date July 1, 2020 July 1, 2021 July 1, 2022 July 1, 2023 Outstanding June 30, 2015 $ 161,000 154,120 111,185 45,935 472,240 38,523 $ 510,763 The following schedule details sewer revenue obligation debt service requirements to maturity at June 30, 2015. Year Ending June 30, 2016 2017 2018 2019 2020 2021 - 2025 2026 - 2028 Total Principal 22,740 36,170 37,795 39,615 41,585 240,345 53,990 $ 472,240 $ Interest 22,967 21,989 20,366 18,548 16,571 50,461 3,976 $ 154,878 $ In prior years, the Regional Wastewater Reclamation Enterprise Fund entered into various loan agreements (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 2004 Loans payable 2009 Loans payable Issue Amount $ 19,967 8,002 Interest Rate Maturities 1.81% 2016-24 0.96% 2016-24 Total loans payable 72 Outstanding June 30, 2015 $ 12,493 5,652 $ 18,145 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 7: Long-Term Liabilities (continued) The following schedule details loans payable debt service requirements to maturity at June 30, 2015. Year Ending June 30, 2016 2017 2018 2019 2020 2021 - 2024 Total Principal 1,581 1,629 1,679 1,730 1,783 9,743 $ 18,145 $ Interest 529 480 430 378 324 759 $ 2,900 $ Pima County has pledged future user charges, net of specified operating expenses, to repay $120,095 in sewer revenue bonds issued between 2007 and 2011, $18,145 in sewer revenue loans issued between 2004 and 2009, and $472,240 in sewer revenue obligations issued between 2010 and 2014. 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 2028. It is expected that approximately 71 percent of net revenues will be used to pay annual principal and interest payments on the bonds and obligations and approximately 2 percent of net revenues will be used to pay annual principal and interest on the loans. Total principal and interest remaining to be paid on the bonds, loans and obligations are $145,852, $21,045, and $627,118, respectively. Principal and interest paid for loans, bonds and obligations in the current year, and total customer net revenues were $2,134, $69,198, and $94,739, 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 in amounts set by each debt issue. At June 30, 2015, the RWR met the requirements of the debt covenants, including maintaining a surety bond. The County is also authorized to issue for the RWR additional parity bonds or revenue obligations if certain conditions are met, primarily that net revenues for parity bonds and pledged revenues for revenue obligations for the fiscal year immediately preceding issuance of the new debt 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. 73 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 7: Long-Term Liabilities (continued) LEGAL DEBT MARGIN County General Obligation Bonds General obligation debt may not exceed 6 percent of the value of the County’s taxable property as of the latest assessment. However, with voter approval, debt may be incurred up to 15 percent of the value of taxable property. Pima County has received voter approval for all general obligation debt. The legal debt margin at June 30, 2015, is as follows: Net assessed valuation $ 7,579,899 Debt limit (15% of net assessed valuation): $ 1,136,985 Less amount of debt applicable to debt limit: General obligation bonds outstanding $ 383,935 Less fund balance in debt service fund available for payment of general obligation bond principal (6,037) Legal debt margin available 377,898 $ 759,087 Note 8: Short-Term Liabilities LINE OF CREDIT The County maintains a revolving line of credit with Bank of America National Trust and Savings Association to meet its short-term cash needs. At June 30, 2015, the County had an outstanding balance of $0. Advances on the line of credit are payable on demand. The credit line is secured by the County’s general taxing authority. Line of credit July 1, 2014 Balance $0 Draws $50,000 74 Repayments $50,000 June 30, 2015 Balance $0 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 9: Landfill Liabilities Solid Waste Landfill Closure and Post-Closure Care Costs: State and Federal laws and regulations require the County to place a final cover on its solid waste landfill sites when these sites stop accepting waste and to perform certain maintenance and monitoring functions at the sites for thirty years after their closure. Although closure and post-closure care costs will not be paid until near or after the date the landfills stop accepting waste, the County records a portion of these closure and post-closure care costs as a long-term liability in each period, based on landfill capacity used as of each balance sheet date. The $15,075 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 $4,408 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, 2015; actual costs may change due to inflation, changes in technology, or changes in regulations. Landfill Site Capacity Used June 30, 2015 Estimated Remaining Service Life Ajo Sahuarita *Tangerine 74% 58% 98% 36 Years 27 Years 1 Year *The Tangerine Landfill stopped accepting waste from the public on December 1, 2013 but remains open for internal County waste disposal needs until its remaining capacity is fully used. The County plans to fund the estimated closure and post-closure care costs with proceeds of general obligation bonds. 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 $11,121 when closure occurs and plans to fund the costs with proceeds of general obligation bonds. At this time, there is no closure date available. On June 1, 2013 Tucson Recycling and Waste Services was contracted to operate the Landfill and Transfer Station operations on behalf of Pima County in an agency capacity. The closure and post-closure costs remain the liability of Pima County. 75 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits The County contributes to the Arizona State Retirement System (ASRS), the Corrections Officer Retirement Plan - Detention Officers (CORP), the Corrections Officer Retirement Plan - Administrative Office of the Courts (CORP AOC), 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), all component units of the State of Arizona. At June 30, 2015, the County reported the following aggregate amounts related to pensions for all plans to which it contributes: Statement of Net Position and Statement of Activities Net pension liabilities Deferred outflows of resources Deferred inflows of resources Pension expense Governmental Activities $ 653,197 119,381 70,168 81,256 Business-Type Activities $ 44,154 5,626 7,721 3,099 Total $ 697,351 125,007 77,889 84,355 The County’s accrued payroll and employee benefits includes $2,375 of outstanding pension contribution amounts payable to all pension plans for the year ended June 30, 2015. Also, the County reported $80,652 of pension contributions as expenditures in the governmental funds related to all pension plans to which it contributes. The ASRS, CORP, CORP AOC, PSPRS - Pima County Sheriffs, and EORP plans are described below. The PSPRS, Pima County - County Attorney Investigators is not described due to its relative insignificance to the County's financial statements. A. Arizona State Retirement System Plan description—County employees not covered by the other pension plans described below participate in the Arizona State Retirement System (ASRS). The ASRS administers a cost-sharing multiple-employer defined benefit pension plan, a cost-sharing multiple-employer defined benefit health insurance premium benefit (OPEB) plan, and a cost-sharing multiple-employer defined benefit long-term disability (OPEB) plan. The Arizona State Retirement System Board governs the ASRS according to the provisions of A.R.S. Title 38, Chapter 5, Articles 2 and 2.1. The ASRS issues a publicly available financial report that includes its financial statements and required supplementary information. The report is available on its Web site at www.azasrs.gov. 76 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) Benefits provided—The ASRS provides retirement, health insurance premium supplement, long-term disability, and survivor benefits. State statute establishes benefit terms. Retirement benefits are calculated on the basis of age, average monthly compensation, and service credit as follows: ASRS Years of service and age required to receive benefit Final average salary is based on Retirement Initial membership date: Before July 1, 2011 On or after July 1, 2011 Sum of years and age equals 80 30 years age 55 10 years age 62 25 years age 60 5 years age 50* 10 years age 62 any years age 65 5 years age 50* any years age 65 Highest 36 consecutive months of last 120 months Highest 60 consecutive months of last 120 months 2.1% to 2.3% 2.1% to 2.3% Benefit percent per year of service *With actuarially reduced benefits. Retirement benefits for members who joined the ASRS prior to September 13, 2013, are subject to automatic cost-of-living adjustments based on excess investment earnings. Members with a membership date on or after September 13, 2013, are not eligible for cost-of-living adjustments. Survivor benefits are payable upon a member’s death. For retired members, the survivor benefit is determined by the retirement benefit option chosen. For all other members, the beneficiary is entitled to the member’s account balance that includes the member’s contributions and employer’s contributions, plus interest earned. Contributions—In accordance with state statutes, annual actuarial valuations determine active member and employer contribution requirements. The combined active member and employer contribution rates are expected to finance the costs of benefits employees earn during the year, with an additional amount to finance any unfunded accrued liability. For the year ended June 30, 2015, active ASRS members were required by statute to contribute at the actuarially determined rate of 11.6 percent (11.48 percent for retirement and 0.12 percent for long-term disability) of the members’ annual covered payroll, and the County was required by statute to contribute at the actuarially determined rate of 11.6 percent (10.89 percent for retirement, 0.59 percent for health insurance premium benefit, and 0.12 percent for long-term disability) of the active members’ annual covered payroll. In addition, the County was required by statute to contribute at the actuarially determined rate of 9.57 percent (9.31 percent for retirement, 0.20 percent for health insurance premium benefit, and 0.06 percent for long-term disability) of annual covered payroll of retired members who worked for the County in positions that would typically be filled by an employee who contributes to the ASRS. The County’s contributions to the pension plan for the year ended June 30, 2015, were $25,218. The County’s contributions for the current and 2 preceding years for OPEB, all of which were equal to the required contributions, were as follows: ASRS Year ended June 30 2015 2014 2013 Health Benefit Supplement Fund $ 1,363 1,387 1,452 Long-Term Disability Fund $ 277 555 536 During fiscal year 2015, the County paid for ASRS pension and OPEB contributions as follows: 60 percent from the General Fund, 10 percent from major funds, and 30 percent from other funds. 77 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) Pension liability—At June 30, 2015, the County reported a liability of $379,139 for its proportionate share of the ASRS’ net pension liability. The net pension liability was measured as of June 30, 2014. The total pension liability used to calculate the net pension liability was determined using update procedures to roll forward the total pension liability from an actuarial valuation as of June 30, 2013, to the measurement date of June 30, 2014. The County’s proportion of the net pension liability was based on the County’s actual contributions to the plan relative to the total of all participating employers’ contributions for the year ended June 30, 2014. The County’s proportion measured as of June 30, 2014, was 2.56 percent, which was an increase of 0.03 from its proportion measured as of June 30, 2013. Pension expense and deferred outflows/inflows of resources—For the year ended June 30, 2015, the County recognized pension expense for ASRS of $26,439. At June 30, 2015, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: ASRS Deferred Outflows of Resources $ 19,269 Differences between expected and actual experience Net difference between projected and actual earnings on pension plan investments Deferred Inflows of Resources $ Changes in proportion and differences between county contributions and proportionate share of contributions 3,803 County contributions subsequent to the measurement date 25,218 Total $ 48,290 66,300 378 $ 66,678 The $25,218 reported as deferred outflows of resources related to ASRS pensions resulting from County contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to ASRS pensions will be recognized in pension expense as follows: Year ending June 30 2016 2017 2018 2019 $ 78 (6,708) (6,708) (13,615) (16,575) PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) Actuarial Assumptions—The significant actuarial assumptions used to measure the total pension liability are as follows: ASRS Actuarial valuation date Actuarial roll forward date Actuarial cost method Investment rate of return Projected salary increases Inflation Permanent benefit increase Mortality rates June 30, 2013 June 30, 2014 Entry age normal 8% 3–6.75% 3% Included 1994 GAM Scale BB Actuarial assumptions used in the June 30, 2013, valuation were based on the results of an actuarial experience study for the 5-year period ended June 30, 2012. The long-term expected rate of return on ASRS pension plan investments was determined to be 8.79 percent using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: ASRS Asset Class Equity Fixed income Real estate Commodities Total Target Allocation 63% 25% 8% 4% 100% Long-Term Expected Real Rate of Return 7.03% 3.20% 4.75% 4.50% Discount Rate—The discount rate used to measure the ASRS total pension liability was 8 percent, which is less than the long-term expected rate of return of 8.79 percent. The projection of cash flows used to determine the discount rate assumed that contributions from participating employers will be made based on the actuarially determined rates based on the ASRS Board’s funding policy, which establishes the contractually required rate under Arizona statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 79 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) Sensitivity of the County’s proportionate share of the ASRS net pension liability to changes in the discount rate—The following table presents the County’s proportionate share of the net pension liability calculated using the discount rate of 8 percent, as well as what the County’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (7 percent) or 1 percentage point higher (9 percent) than the current rate: ASRS County’s proportionate share of the net pension liability 1% Decrease (7%) $ 479,213 Current Discount Rate (8%) $ 379,139 1% Increase (9%) $ 324,845 Pension plan fiduciary net position—Detailed information about the pension plan’s fiduciary net position is available in the separately issued ASRS financial report. B. Public Safety Personnel Retirement System and Corrections Officer Retirement Plan Plan descriptions—County sheriff employees who are regularly assigned hazardous duty participate in the Public Safety Personnel Retirement System (PSPRS). The PSPRS administers an agent multiple-employer defined benefit pension plan and an agent multiple-employer defined benefit health insurance premium benefit (OPEB) plan (agent plans). A seven-member board known as the Board of Trustees and the participating local boards govern the PSPRS according to the provisions of A.R.S. Title 38, Chapter 5, Article 4. County detention officers and Administrative Office of the Courts (AOC) probation, surveillance, and juvenile detention officers participate in the Corrections Officer Retirement Plan (CORP). The CORP administers an agent multiple-employer defined benefit pension plan and an agent multiple-employer defined benefit health insurance premium benefit (OPEB) plan for county detention officers (agent plans), and a cost-sharing multiple-employer defined benefit pension plan and a cost-sharing multiple-employer defined benefit health insurance premium benefit (OPEB) plan for AOC officers (cost-sharing plans). The PSPRS Board of Trustees and the participating local boards govern CORP according to the provisions of A.R.S. Title 38, Chapter 5, Article 6. The PSPRS and CORP issue publicly available financial reports that include their financial statements and required supplementary information. The reports are available on the PSPRS Web site at www.psprs.com. Benefits provided—The PSPRS and CORP provide retirement, health insurance premium supplement, disability, and survivor benefits. State statute establishes benefit terms. Retirement, disability, and survivor benefits are calculated on the basis of age, average monthly compensation, and service credit as follows: PSPRS Retirement and Disability Years of service and age required to receive benefit Final average salary is based on Initial membership date: Before January 1, 2012 On or after January 1, 2012 20 years any age 15 years age 62 25 years age 52.5 Highest 36 consecutive months of last 20 years Highest 60 consecutive months of last 20 years 80 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) PSPRS Initial membership date: Before January 1, 2012 On or after January 1, 2012 Benefit percent Normal Retirement Accidental Disability Retirement Catastrophic Disability Retirement Ordinary Disability Retirement 50% less 2.0% for each year of credited service less than 20 years OR plus 2.0% to 2.5% for each year of credited service over 20 years, not to exceed 80% 2.5% per year of credited service, not to exceed 80% 50% or normal retirement, whichever is greater 90% for the first 60 months then reduced to either 62.5% or normal retirement, whichever is greater Normal retirement calculated with actual years of credited service or 20 years of credited service, whichever is greater, multiplied by years of credited service (not to exceed 20 years) divided by 20 Survivor Benefit Retired Members 80% to 100% of retired member’s pension benefit Active Members 80% to 100% of accidental disability retirement benefit or 100% of average monthly compensation if death was the result of injuries received on the job CORP Initial membership date: Before January 1, 2012 On or after January 1, 2012 Retirement and Disability Years of service and age required to receive benefit Sum of years and age equals 80 20 years any age 10 years age 62 25 years age 52.5 10 years age 62 Final average salary is based on Highest 36 consecutive months of last 10 years Highest 60 consecutive months of last 10 years Benefit percent Normal Retirement Accidental Disability Retirement Total and Permanent Disability Retirement 2.0% to 2.5% per year of credited service, not to exceed 80% 50% or normal retirement if more than 20 years of credited service 50% or normal retirement if more than 25 years of credited service 50% or normal retirement if more than 25 years of credited service 81 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) CORP Ordinary Disability Retirement Initial membership date: Before January 1, 2012 On or after January 1, 2012 2.5% per year of credited service or normal retirement, whichever is greater Survivor Benefit Retired Members 80% of retired member’s pension benefit Active Members 40% of average monthly compensation or 100% of average monthly compensation if death was the result of injuries received on the job. If there is no surviving spouse or eligible children, the beneficiary is entitled to 2 times the member’s contributions. Retirement and survivor benefits are subject to automatic cost-of-living adjustments based on excess investment earnings. PSPRS also provides temporary disability benefits of 50 percent of the member’s compensation for up to 12 months. Employees covered by benefit terms—At June 30, 2015, the following employees were covered by the agent pension plans’ benefit terms: Inactive employees or beneficiaries currently receiving benefits Inactive employees entitled to but not yet receiving benefits Active employees Total PSPRS Sheriff 360 91 491 CORP Detention 176 85 461 942 722 Contributions and annual OPEB cost—State statutes establish the pension contribution requirements for active PSPRS and CORP employees. In accordance with state statutes, annual actuarial valuations determine employer contribution requirements for PSPRS and CORP pension and health insurance premium benefits. As allowed by statute, the County contributed 3.65 percent of the PSPRS members' required contribution. The combined active member and employer contribution rates are expected to finance the costs of benefits employees earn during the year, with an additional amount to finance any unfunded accrued liability. Contributions rates for the year ended June 30, 2015, are indicated below. Rates are a percentage of active members’ annual covered payroll. Active members—Pension County Pension Health insurance premium benefit PSPRS Sheriff 7.40% CORP Detention 8.41% CORP AOC 8.41% 40.11% 1.81% 16.53% 1.23% 14.88% 1.24% In addition, the County was required by statute to contribute at the actuarially determined rate of 19.65 percent for the PSPRS and 7.34 percent for the CORP of annual covered payroll of retired members who worked for the County in positions that would typically be filled by an employee who contributes to the PSPRS or CORP. 82 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) For the agent plans, the County’s contributions to the pension plan and annual OPEB cost and contributions for the health insurance premium benefit for the year ended June 30, 2015, were: PSPRS Sheriff $ 12,612 CORP Detention $ 3,441 Annual OPEB cost 608 264 Contributions made 608 264 Pension Contributions made Health Insurance Premium Benefit Contributions to the CORP AOC pension plan for the year ended June 30, 2015, were $2,062. The County’s contributions for the current and 2 preceding years for the CORP AOC OPEB, all of which were equal to the required contributions, were as follows: CORP AOC Year ended June 30 2015 2014 2013 Health Insurance Fund $ 172 151 169 During fiscal year 2015, the County paid for PSPRS and CORP pension and OPEB contributions as follows: 98 percent from the General Fund and 2 percent from other nonmajor funds. Pension liability—At June 30, 2015, the County reported the following net pension liabilities: PSPRS Sheriff CORP Detention CORP AOC (County’s proportionate share) Net Pension Liability $ 184,979 51,973 27,888 The net pension liabilities were measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The total pension liabilities as of June 30, 2014, reflect the following changes of benefit terms and actuarial assumptions. • In February 2014, the Arizona Supreme Court affirmed a Superior Court ruling that a 2011 law that changed the mechanism for funding permanent benefit increases was unconstitutional. As a result, the plans changed benefit terms to reflect the prior mechanism for funding permanent benefit increases and revised actuarial assumptions to explicitly value future permanent benefit increases. • The wage growth actuarial assumption was decreased from 4.5 percent to 4.0 percent. 83 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) Pension actuarial assumptions—The significant actuarial assumptions used to measure the total pension liability are as follows: PSPRS and CORP—Pension Actuarial valuation date Actuarial cost method Discount rate Projected salary increases Inflation Permanent benefit increase Mortality rates June 30, 2014 Entry age normal 7.85% 4.0%–8.0% for PSPRS and 4.0%–7.25% for CORP 4.0% Included RP-2000 mortality table (adjusted by 105% for both males and females) Actuarial assumptions used in the June 30, 2014, valuation were based on the results of an actuarial experience study for the 5-year period ended June 30, 2011. The long-term expected rate of return on PSPRS and CORP pension plan investments was determined to be 7.85 percent using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: PSPRS and CORP Target Allocation 2% 4% 4% 7% 8% 10% 11% 11% 13% 14% 16% 100% Asset Class Short term investments Absolute return Risk parity Fixed income Real assets GTAA Private equity Real estate Credit opportunities Non-U.S. equity U.S. equity Total Long-Term Expected Real Rate of Return 3.25% 6.75% 6.04% 4.75% 5.96% 5.73% 9.50% 6.50% 8.00% 8.63% 7.60% Pension discount rates—The following discount rates were used to measure the total pension liabilities: Discount rates PSPRS Sheriff 7.85% CORP Detention 7.85% CORP AOC 7.85% 84 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) The projection of cash flows used to determine the PSPRS and CORP discount rates assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between the actuarially determined contribution rate and the member rate. Based on those assumptions, the pension plans’ fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Changes in the Net Pension Liability PSPRS - Sheriff Balances at June 30, 2014 Changes for the year: Service cost Interest on the total pension liability Changes of benefit terms Differences between expected and actual experience in the measurement of the pension liability Changes of assumptions or other inputs Contributions—employer Contributions—employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Net changes Balances at June 30, 2015 Total Pension Liability (a) $ 274,018 Increase (Decrease) Plan Fiduciary Net Position (b) $ 126,625 6,346 21,060 7,336 (462) 6,346 21,060 7,336 (462) 34,338 34,338 (11,691) (2,351) (17,221) 11,691 2,351 17,221 (17,811) (17,811) $ 85 Net Pension Liability (a) – (b) $ 147,393 50,807 324,825 $ (139) (92) 139 92 13,221 139,846 37,586 184,979 $ PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) CORP - Detention Balances at June 30, 2014 Changes for the year: Service cost Interest on the total pension liability Changes of benefit terms Differences between expected and actual experience in the measurement of the pension liability Changes of assumptions or other inputs Contributions—employer Contributions—employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Net changes Balances at June 30, 2015 Total Pension Liability (a) $ 86,428 Increase (Decrease) Plan Fiduciary Net Position (b) $ 44,686 Net Pension Liability (a) – (b) $ 41,742 2,852 6,623 1,459 (609) 2,852 6,623 1,459 (609) 10,555 10,555 (2,970) (1,686) (6,030) 2,970 1,686 6,030 (6,975) (6,975) (48) 11 $ 13,905 100,333 $ 3,674 48,360 48 (11) $ 10,231 51,973 The County’s proportion of the CORP AOC net pension liability as of June 30, 2013 and 2014 was based on the County’s actual contributions to the plan relative to the total of all participating counties’ actual contributions for the year ended June 30, 2014. The County’s proportion measured as of June 30, 2013 and 2014 was 12.43 percent. Sensitivity of the County’s net pension liability to changes in the discount rate—The following table presents the County’s net pension liabilities calculated using the discount rates noted above, as well as what the County’s net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current rate: 1% Decrease Current Discount Rate 1% Increase PSPRS Sheriff Rate Net pension liability $ 6.85% 222,343 $ 7.85% 184,979 $ 8.85% 153,640 CORP Detention Rate Net pension liability $ 6.85% 64,884 $ 7.85% 51,973 $ 8.85% 41,274 $ 6.85% 36,826 $ 7.85% 27,888 $ 8.85% 20,462 CORP AOC Rate County’s proportionate share of the net pension liability 86 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) Pension plan fiduciary net position—Detailed information about the pension plans’ fiduciary net position is available in the separately issued PSPRS and CORP financial reports. Pension expense—For the year ended June 30, 2015, the County recognized the following pension expense: Pension Expense $ 26,929 7,060 3,732 PSPRS Sheriff CORP Detention CORP AOC (County’s proportionate share) Pension deferred outflows/inflows of resources—At June 30, 2015, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: PSPRS - Sheriff Deferred Outflows of Resources Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments County contributions subsequent to the measurement date Total $ $ 28,475 12,612 $ 41,087 Deferred Outflows of Resources CORP - AOC Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments County contributions subsequent to the measurement date Total 87 383 5,744 CORP - Detention Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments County contributions subsequent to the measurement date Total Deferred Inflows of Resources $ $ 6,127 Deferred Inflows of Resources $ 498 8,641 2,001 3,441 $ 12,082 $ Deferred Outflows of Resources $ 1,324 4,097 2,499 Deferred Inflows of Resources $ 1,544 $ 1,544 2,062 $ 7,483 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) The amounts reported as deferred outflows of resources related to pensions resulting from county contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: PSPRS Sheriff Year ending June 30 2016 2017 2018 2019 2020 $ 4,348 4,348 4,348 4,348 4,956 CORP Detention $ 1,303 1,303 1,303 1,303 930 CORP AOC $ 798 798 798 798 685 Agent plan OPEB actuarial assumptions—The health insurance premium benefit contribution requirements for the year ended June 30, 2015, were established by the June 30, 2013, actuarial valuations, and those actuarial valuations were based on the following actuarial methods and assumptions. Actuarial valuations involve estimates of the reported amounts’ value and assumptions about the probability of events in the future. Amounts determined regarding the plans’ funded status 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 for the health insurance premium benefit presented as required supplementary information provides multiyear trend information that shows whether the actuarial value of the plans’ assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. Projections of benefits are based on (1) the plans as the County and plans’ members understand them 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 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 PSPRS and CORP plans and related benefits (unless noted), and the following actuarial methods and assumptions were used to establish the fiscal year 2015 contribution requirements: PSPRS and CORP—OPEB Contribution Requirements Actuarial valuation date June 30, 2013 Actuarial cost method Entry age normal Amortization method Level percent closed for unfunded actuarial accrued liability, open for excess Remaining amortization period 23 years for unfunded actuarial accrued liability, 20 years for excess Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Wage growth 7-year smoothed market value; 20% corridor 7.85% 4.5%–8.5% for PSPRS and 4.5%–7.75% for CORP 4.5% for PSPRS and CORP 88 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) Agent plan OPEB trend information—Annual OPEB cost information for the health insurance premium benefit for the current and 2 preceding years follows for each of the agent plans: Year Ended June 30 PSPRS Sheriff 2015 2014 2013 CORP Detention 2015 2014 2013 Annual OPEB Cost $ $ Percentage of Annual Cost Contributed Net OPEB Obligation 608 563 591 100% 100% 64% $ 215 264 252 264 100% 100% 54% $ 121 Agent plan OPEB funded status—The health insurance premium benefit plans’ funded status as of the most recent valuation date, June 30, 2014, along with the actuarial assumptions and methods used in those valuations follow. PSPRS CORP Sheriff Detention Actuarial value of assets (a) $ 7,549 $ 3,248 Actuarial accrued liability (b) 7,337 3,122 Unfunded actuarial accrued liability (funding excess) $ (212) $ (126) (b) – (a) Funded ratio (a)/(b) 102.9% 104.0% Annual covered payroll (c) Unfunded actuarial accrued liability (funding excess) as a percentage of covered payroll (b) – (a) / (c) $ 31,544 (0.7)% $ 19,765 (0.6)% The actuarial methods and assumptions used are the same for all the PSPRS and CORP health insurance premium benefit plans (unless noted), and for the most recent valuation date are as follows: PSPRS and CORP—OPEB Funded Status Actuarial valuation date June 30, 2014 Actuarial cost method Entry age normal Amortization method Level percent closed for unfunded actuarial accrued liability, open for excess 22 years for unfunded actuarial accrued liability, 20 years for excess Remaining amortization period Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Wage growth 7-year smoothed market value; 20% corridor 7.85% 4%–8% for PSPRS and 4%–7.25% for CORP 4% for PSPRS and CORP 89 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) C. Elected Officials Retirement Plan Plan description—Elected officials and judges participate in the Elected Officials Retirement Plan (EORP). EORP administers a cost-sharing multiple-employer defined benefit pension plan and a cost-sharing multipleemployer defined benefit health insurance premium benefit (OPEB) plan for elected officials and judges who were members of the plan on December 31, 2013. This plan was closed to new members as of January 1, 2014. The PSPRS Board of Trustees governs the EORP according to the provisions of A.R.S. Title 38, Chapter 5, Article 3. The EORP issues a publicly available financial report that includes its financial statements and required supplementary information. The report is available on PSPRS’s Web site at www.psprs.com. Benefits provided—The EORP provides retirement, health insurance premium supplement, disability, and survivor benefits. State statute establishes benefit terms. Retirement, disability, and survivor benefits are calculated on the basis of age, average yearly compensation, and service credit as follows: EORP Initial membership date: Before January 1, 2012 On or after January 1, 2012 Retirement and Disability Years of service and age required to receive benefit Final average salary is based on 20 years any age 10 years age 62 5 years age 65 5 years any age* any years and age if disabled 10 years age 62 5 years age 65 any years and age if disabled Highest 36 consecutive months of last 10 years Highest 60 consecutive months of last 10 years 4% per year of service, not to exceed 80% 3% per year of service, not to exceed 75% 80% with 10 or more years of service 40% with 5 to 10 years of service 20% with less than 5 years of service 75% with 10 or more years of service 37.5% with 5 to 10 years of service 18.75% with less than 5 years of service 75% of retired member’s benefit 50% of retired member’s benefit 75% of disability retirement benefit 50% of disability retirement benefit Benefit percent Normal Retirement Disability Retirement Survivor Benefit Retired Members Active Members and Other Inactive Members * With reduced benefits of 0.25% for each month early retirement precedes the member’s normal retirement age, with a maximum reduction of 30%. Retirement and survivor benefits are subject to automatic cost-of-living adjustments based on excess investment earning. 90 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) Contributions—State statutes establish active member and employer contribution requirements. Statute also appropriates $5 million annually through fiscal year 2043 for the EORP from the State of Arizona to supplement the normal cost plus an amount to amortize the unfunded accrued liability and designates a portion of certain court fees for the EORP. For the year ended June 30, 2015, active EORP members were required by statute to contribute 13 percent of the members’ annual covered payroll, and the County was required to contribute 23.5 percent of active EORP members’ annual covered payroll. In addition, the County was required by statute to contribute 23.5 percent of annual covered payroll of retired members who worked for the County in positions that would typically be filled by an employee who contributes to the EORP. The County’s contributions to the pension plan for the year ended June 30, 2015, were $1,502. No OPEB contributions were required or made for the year ended June 30, 2015. The County’s contributions for the current and 2 preceding years for OPEB, all of which were equal to the required contributions, were as follows: EORP Year ended June 30 2015 2014 2013 Health Insurance Fund $ 54 122 During fiscal year 2015, the County paid for EORP pension contributions as follows: 100 percent from the General Fund. Pension liability—At June 30, 2015, the County reported a liability for its proportionate share of the EORP’s net pension liability that reflected a reduction for the County’s proportionate share of the State’s appropriation for EORP. The amount the County recognized as its proportionate share of the net pension liability, the related state support, and the total portion of the net pension liability that was associated with the County were as follows: County’s proportionate share of the EORP net pension liability State’s proportionate share of the EORP net pension liability associated with the County Total $ 51,259 15,717 $ 66,976 The net pension liability was measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. In February 2014, the Arizona Supreme Court affirmed a Superior Court ruling that a 2011 law that changed the mechanism for funding permanent benefit increases was unconstitutional. As a result, for the June 30, 2014, actuarial valuation, the plan changed benefit terms to reflect the prior mechanism for funding permanent benefit increases and revised actuarial assumptions to explicitly value future permanent benefit increases. The County’s proportion of the net pension liability as of June 30, 2013 and 2014 was based on the County’s actual contributions to the plan relative to the total of all participating employers’ actual contributions for the year ended June 30, 2014. The County’s proportion measured as of June 30, 2013 and 2014 was 7.64 percent. Pension expense and deferred outflows/inflows of resources—For the year ended June 30, 2015, the County recognized pension expense for EORP of $19,852 and revenue of $4,658 for the County’s proportionate share of the State’s appropriation to EORP. 91 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) At June 30, 2015, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: EORP Deferred Outflows of Resources Differences between expected and actual experience Changes of assumptions or other inputs Net difference between projected and actual earnings on pension plan investments County contributions subsequent to the measurement date Total $ Deferred Inflows of Resources 225 13,872 $ 972 $ 972 1,502 $ 15,599 The $1,502 reported as deferred outflows of resources related to EORP pensions resulting from County contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to EORP pensions will be recognized in pension expense as follows: Year ending June 30 2016 2017 2018 2019 $ 7,876 5,736 (243) (244) Actuarial assumptions—The significant actuarial assumptions used to measure the total pension liability are as follows: EORP Actuarial valuation date Actuarial cost method Investment rate of return Projected salary increases Inflation Permanent benefit increase Mortality rates June 30, 2014 Entry age normal 7.85% 4.25% 4.0% Included RP-2000 mortality table projected to 2025 with projection scale AA Actuarial assumptions used in the June 30, 2014, valuation were based on the results of an actuarial experience study for the 5-year period ended June 30, 2011. 92 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 10 - Pensions and Other Postemployment Benefits (continued) The long-term expected rate of return on EORP pension plan investments was determined to be 7.85 percent using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: EORP Target Allocation 2% 4% 4% 7% 8% 10% 11% 11% 13% 14% 16% 100% Asset Class Short term investments Absolute return Risk parity Fixed income Real assets GTAA Private equity Real estate Credit opportunities Non-U.S. equity U.S. equity Total Long-Term Expected Real Rate of Return 3.25% 6.75% 6.04% 4.75% 5.96% 5.73% 9.50% 6.50% 8.00% 8.63% 7.60% Discount rate—At June 30, 2014, the discount rate used to measure the EORP total pension liability was 5.67 percent, which was a decrease of 2.18 from the discount rate used as of June 30, 2013. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate, employer contributions will be made at the statutorily set rates, and state contributions will be made as currently required by statute. Based on those assumptions, the pension plan’s fiduciary net position was projected to be insufficient to make all projected future benefit payments of current plan members. Therefore, to determine the total pension liability for the plan, the long-term expected rate of return on pension plan investments of 7.85 percent was applied to periods of projected benefit payments through the year ended June 30, 2030. A municipal bond rate of 4.29 percent obtained from the 20-year Bond Buyer Index, as published by the Federal Reserve as of June 30, 2014, was applied to periods of projected benefit payments after June 30, 2030. Sensitivity of the County’s proportionate share of the EORP net pension liability to changes in the discount rate—The following table presents the County’s proportionate share of the net pension liability calculated using the discount rate of 5.67 percent, as well as what the County’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (4.67 percent) or 1 percentage point higher (6.67 percent) than the current rate: EORP County’s proportionate share of the net pension liability 1% Decrease (4.67%) $ 59,841 Current Discount Rate (5.67%) $ 51,259 1% Increase (6.67%) $ 44,013 Pension Plan Fiduciary Net Position—Detailed information about the pension plan’s fiduciary net position is available in the separately issued EORP financial report. 93 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 11: 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 Cities: Reimbursement for services Other governments: Reimbursement for services Total due from other governments fund based statements $ 103 19,443 $ Other Governmental Funds $ 5,005 10,250 1,280 907 1,469 106 4,890 65 $ 94 8,983 $ Total Governmental Activities 2,689 3,186 20,932 $ Internal Service Funds 19,478 $ $ 2,792 2 27,634 10,252 76 3,732 5,061 $ 78 $ 49,471 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 12: Interfund Transactions A. Interfund Assets/Liabilities Due from / Due to Other Funds are used to record loans or unpaid operating transfers between funds. 48 $ 130 $ 712 46 Regional Wastewater Reclamation vi ce s To ta l In te rn al Se r pr ise En te r O th er $ $ 1 55 813 7,878 18 $ 712 $ 7,990 2,999 131 7,878 Internal Services Total Re 2,951 Capital Projects Other Governmental gi on al W as te w at en ta l G ov er O th er Ca $ nm ts ro je c pi ta lP al G en er Amounts recorded as due from: General er R ec la m at io n Amounts recorded as due to: $ 3,136 $ 24 $ 1 $ 87 25 $ 1 $ 87 130 $ 11,951 B. Transfers Transfers are used to record transactions between individual funds to subsidize their operations and fund debt service payments and capital construction projects. Capital Projects $ en ta l 4,442 341 3,024 4,906 Re O th er $ $ G ov er vi ce D eb ts er Ca $ nm ts ro je c pi ta lP al G en er Amounts recorded as transfers in: General gi on al W as te w at er O th Re er cl En am te at rp io ri s n e In te rn al Se rv ic es To ta l Amounts recorded as transfers out: $ 185 27,707 $ $ 56 Debt Service 11,918 78 18,875 20,728 1,019 Other Governmental 23,034 52 1,569 135 1,000 $ 9,533 207 31,335 2,221 54,839 25,790 Regional Wastewater Reclamation 28,651 28,651 Other Enterprise 11,979 11,979 Internal Service Total 6,117 $ 41,410 6,051 $ 51,253 374 $ 3,024 95 $ 53,057 $ 21,422 12,542 $ 2,075 $ 2,428 $ 174,669 PIMA COUNTY, ARIZONA Notes to Financial Statements June 30, 2015 (in thousands) Note 13: Construction and Other Significant Commitments At June 30, 2015, Pima County had the following major contractual commitments related to Community Services, Facilities Management, General Government, Stadium District, Natural Resources, Parks and Recreation, Regional Wastewater Reclamation and Transportation. Community Services At June 30, 2015, the Pima County Community Services Department had contractual commitments related to service contracts of $5,057. Funding for these expenditures will be provided from reimbursements on intergovernmental grant awards, including federal and state entities. Facilities Management At June 30, 2015, the Pima County Facilities Management Department had construction contractual commitments of $3,554 and other contractual commitments related to service contracts of $4,297. Funding for these expenditures will be provided from general fund revenues and general obligation bonds. General Government At June 30, 2015, Pima County had contractual commitments related to service contracts for the Office of Medical Services of $18,574. Procurement had construction contractual commitments of $10,221. Information Technology had commitments related to service contracts of $7,779. Funding for these expenditures will be provided from general fund revenues, the OEM Radio System special revenue fund and general obligation bonds. Stadium District At June 30, 2015, the Pima County Stadium District had contractual commitments related to service contracts of $8,546. Funding for these expenditures will be provided from general fund revenues and various taxes, such as Hotel/Motel tax revenue. Natural Resources, Parks and Recreation At June 30, 2015, the Pima County Natural Resources, Parks and Recreation Department had construction contractual commitments of $2,199 and other contractual commitments related to service contracts of $14,103. Funding for these expenditures will be provided from general fund revenues. Regional Wastewater Reclamation At June 30, 2015, the Regional Wastewater Reclamation Enterprise fund had construction contractual commitments of $24,596 and other contractual commitments related to service contracts of $14,232. Funding for these expenses will be primarily from Sewer Revenue Bonds and sewer user fees. Transportation At June 30, 2015, the Pima County Transportation Department had construction contractual commitments of $46,857 and other contractual commitments related to service contracts of $21,633. Funding for these expenditures will be primarily provided from Transportation Revenue Bonds, federal grants funding and Highway User Tax Revenue, which is the primary source of revenue for the Transportation Department. Note 14: Deficit Fund Balances/Net Position The Stadium District and Other Grants – Special Revenue Fund had deficit fund balances at June 30, 2015 of $952 and $2,520 respectively. In addition, the Development Services Enterprise Fund had a deficit net position at June 30, 2015 of $3,379. The deficits can be eliminated in the future through normal operations. 96 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, 2015 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: General government Assessor Board of Supervisors Clerk of Superior Court Constables County Administration County Attorney Justice Courts Juvenile Courts Justice & Law Enforcement Public Works (Facilities Management) Recorder Superior Court Superior Court Mandated Services Treasurer Public safety Sheriff Office of Emergency Management & Homeland Security Sanitation Environmental Quality Health Forensic Science Center Welfare County Admin - Welfare Office of Medical Services Culture and recreation County Admin - Culture and recreation Public Works (Parks and Recreation) Education and economic opportunity Community & Economic Development School Superintendent Debt Service - principal - interest Total expenditures Excess of revenues over expenditures 325,729 2,977 141,162 41,971 4,495 281 5,358 521,973 $ Actual Amounts 325,729 2,977 141,162 41,971 4,495 281 5,358 521,973 $ 324,840 2,989 142,459 41,253 3,789 225 6,167 521,722 $ (889) 12 1,297 (718) (706) (56) 809 (251) 8,987 2,026 10,829 1,186 84,870 22,472 8,283 23,286 29,500 18,438 4,325 29,849 1,809 2,570 8,987 2,026 10,829 1,186 84,870 22,472 8,283 23,286 29,500 18,438 4,325 29,849 1,809 2,570 8,193 1,792 11,138 1,217 53,712 22,380 7,977 22,953 32,187 18,007 3,961 29,961 1,484 2,363 794 234 (309) (31) 31,158 92 306 333 (2,687) 431 364 (112) 325 207 136,816 607 136,816 607 138,666 57 (1,850) 550 1,366 1,366 1,290 76 3,603 3,603 3,527 76 57,219 42,147 57,219 42,147 56,415 36,796 804 5,351 18,215 18,215 13,252 17,663 (13,252) 552 11,495 1,504 11,495 1,504 521,402 521,402 10,810 1,464 149 11 497,425 685 40 (149) (11) 23,977 571 571 24,297 23,726 11,500 15 1,694 (526) 12,683 36,409 Other financing sources (uses): Installment note Proceeds from sale of capital assets Transfers in Transfers (out) Total other financing (uses) 7,839 (40,884) (33,045) 7,839 (40,884) (33,045) 11,500 15 9,533 (41,410) (20,362) Net change in fund balances (32,474) (32,474) 3,935 Fund balances at beginning of year Fund balances at end of year Variance with Final Budget 32,474 $ 32,474 $ 97 $ 48,190 52,125 $ 15,716 52,125 PIMA COUNTY, ARIZONA Notes to Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund June 30, 2015 Exhibit B - 1 (in thousands) Note 1- Budgeting and Budgetary Control Arizona Revised Statutes (A.R.S.) requires the County to prepare and adopt a balanced budget annually for each governmental fund. The Board of Supervisors must approve such operating budgets on or before the third Monday in July to allow sufficient time for the legal announcements and hearings required for the adoption of the property tax levy on the third Monday in August. A.R.S. prohibits expenditures or liabilities in excess of the amounts budgeted. Expenditures may not legally exceed appropriations at the department level. In certain instances, transfers of appropriations between departments or from the contingency account to a department may be made upon the Board of Supervisors’ approval. With the exception of the General Fund, Other Special Revenue, and Other Special Revenue – Grants, each fund includes only one department. Note 2 – Expenditures in Excess of Appropriations For the year ended June 30, 2015, expenditures for the following departments in the General Fund exceeded final budget amounts at the department level (the legal level of budgetary control) as follows: Function/Department General government: Clerk of Superior Court Constables Justice & Law Enforcement Superior Court Total general government Excess $ Public safety: Sheriff Total public safety 309 31 2,687 112 3,139 1,850 1,850 Culture and recreation: County Admin - Culture and recreation Total culture and recreation Debt Service - principal - interest Total debt service 13,252 13,252 $ 149 11 160 These expenditures were funded by greater than anticipated revenues and unspent appropriations. 98 PIMA COUNTY, ARIZONA Schedule of the County’s Proportionate Share of the Net Pension Liability Cost-Sharing Pension Plans June 30, 2015 (in thousands) Arizona State Retirement System County’s proportion of the net pension liability County’s proportionate share of the net pension liability County’s covered-employee payroll County’s proportionate share of the net pension liability as a percentage of its covered-employee payroll Plan fiduciary net position as a percentage of the total pension liability $ $ 69.49% Corrections Officer Retirement Plan—Administrative Office of the Courts County’s proportion of the net pension liability County’s proportionate share of the net pension liability County’s covered-employee payroll County’s proportionate share of the net pension liability as a percentage of its covered-employee payroll Plan fiduciary net position as a percentage of the total pension liability $ $ 99 Reporting Fiscal Year (Measurement Date) 2015 2014 through (2014) 2006 12.43% Information 27,888 not available 13,344 209.0% 58.59% Elected Officials Retirement Plan County’s proportion of the net pension liability County’s proportionate share of the net pension liability State’s proportionate share of the net pension liability associated with the County Total County’s covered-employee payroll County’s proportionate share of the net pension liability as a percentage of its covered-employee payroll Plan fiduciary net position as a percentage of the total pension liability Reporting Fiscal Year (Measurement Date) 2015 2014 through (2014) 2006 2.56% Information 379,139 not available 230,597 164.4% $ $ $ $ Reporting Fiscal Year (Measurement Date) 2015 2014 through (2014) 2006 7.64% Information 51,259 not available 15,717 66,976 6,974 735.0% 31.91% B-2 PIMA COUNTY, ARIZONA Schedule of Changes in the County’s Net Pension Liability and Related Ratios Agent Pension Plans June 30, 2015 B-2 (in thousands) Public Safety Personnel Retirement System - Sheriff Total pension liability Service cost Interest on the total pension liability Changes of benefit terms Differences between expected and actual experience in the measurement of the pension liability Changes of assumptions or other inputs Benefit payments, including refunds of employee contributions Net change in total pension liability Total pension liability—beginning Total pension liability—ending (a) Plan fiduciary net position Contributions—employer Contributions—employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Net change in plan fiduciary net position Plan fiduciary net position—beginning Plan fiduciary net position—ending (b) County’s net pension liability —ending (a) – (b) $ $ $ $ $ 184,979 43.05% $ County’s net pension liability as a percentage of covered-employee payroll 100 34,338 (17,811) 50,807 274,018 324,825 11,691 2,351 17,221 (17,811) (139) (92) 13,221 126,625 139,846 Plan fiduciary net position as a percentage of the total pension liability Covered-employee payroll Reporting Fiscal Year (Measurement Date) 2015 2014 through (2014) 2006 Information 6,346 not available 21,060 7,336 (462) 31,767 582.30% PIMA COUNTY, ARIZONA Schedule of Changes in the County’s Net Pension Liability and Related Ratios Agent Pension Plans June 30, 2015 B-2 (in thousands) Corrections Officer Retirement Plan - Detention Total pension liability Service cost Interest on the total pension liability Changes of benefit terms Differences between expected and actual experience in the measurement of the pension liability Changes of assumptions or other inputs Benefit payments, including refunds of employee contributions Net change in total pension liability Total pension liability—beginning Total pension liability—ending (a) Plan fiduciary net position Contributions—employer Contributions—employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Net change in plan fiduciary net position Plan fiduciary net position—beginning Plan fiduciary net position—ending (b) County’s net pension liability —ending (a) – (b) $ $ $ $ $ 51,973 48.20% $ County’s net pension liability as a percentage of covered-employee payroll 101 10,555 (6,975) 13,905 86,428 100,333 2,970 1,686 6,030 (6,975) (48) 11 3,674 44,686 48,360 Plan fiduciary net position as a percentage of the total pension liability Covered-employee payroll Reporting Fiscal Year (Measurement Date) 2015 2014 through (2014) 2006 Information 2,852 not available 6,623 1,459 (609) 20,051 259.20% PIMA COUNTY, ARIZONA Schedule of County Pension Contributions June 30, 2015 B-2 (in thousands) Arizona State Retirement System Statutorily required contribution County’s contributions in relation to the statutorily required contribution County’s contribution deficiency (excess) County’s covered-employee payroll County’s contributions as a percentage of covered-employee payroll $ 2015 25,218 25,218 $ $ 230,963 10.9% Corrections Officer Retirement Plan—Administrative Office of the Courts Statutorily required contribution County’s contributions in relation to the statutorily required contribution County’s contribution deficiency (excess) County’s covered-employee payroll County’s contributions as a percentage of covered-employee payroll $ 2015 2,062 2,062 $ $ 13,857 14.9% Elected Officials Retirement Plan Statutorily required contribution County’s contributions in relation to the statutorily required contribution County’s contribution deficiency (excess) County’s covered-employee payroll County’s contributions as a percentage of covered-employee payroll $ $ $ Public Safety Personnel Retirement System - Sheriff 102 $ 2015 12,612 12,612 $ $ 10.7% Reporting Fiscal Year 2013 through 2014 2006 $ 1,933 Information not available 1,933 $ $ 13,344 14.5% Reporting Fiscal Year 2013 through 2015 2014 2006 1,502 $ 1,629 Information not available 1,502 1,629 $ 6,433 $ 6,974 23.4% Actuarially determined contribution County’s contributions in relation to the actuarially determined contribution County’s contribution deficiency (excess) County’s covered-employee payroll County’s contributions as a percentage of covered-employee payroll Reporting Fiscal Year 2013 through 2014 2006 $ 24,600 Information not available 24,600 $ $ 230,597 31,443 40.1% 23.4% Reporting Fiscal Year 2013 through 2014 2006 $ 11,691 Information not available 11,691 $ $ 31,767 36.8% PIMA COUNTY, ARIZONA Notes to Pension Plan Schedules June 30, 2015 B-2 (in thousands) Corrections Officer Retirement Plan - Detention Actuarially determined contribution County’s contributions in relation to the actuarially determined contribution County’s contribution deficiency (excess) County’s covered-employee payroll County’s contributions as a percentage of covered-employee payroll $ $ $ Reporting Fiscal Year 2013 through 2015 2014 2006 3,441 $ 2,970 Information not available 3,441 2,970 $ 20,816 $ 20,051 16.5% 14.8% Note 1 – Actuarially Determined Contribution Rates Actuarial determined contribution rates for PSPRS and CORP are calculated as of June 30 two years prior to the end of the fiscal year in which contributions are made. The actuarial methods and assumptions used to establish the contribution requirements are as follows: Actuarial cost method Amortization method Remaining amortization period as of the 2013 actuarial valuation Asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Wage growth Retirement age Mortality Entry age normal Level percent closed for unfunded actuarial accrued liability, open for excess 23 years for unfunded actuarial accrued liability, 20 years for excess 7-year smoothed market value; 20% corridor In the 2013 actuarial valuation, the investment rate of return was decreased from 8.0% to 7.85% In the 2013 actuarial valuation, projected salary increases were decreased from 5.0%–9.0% to 4.5%–8.5% for PSPRS and from 5.0%– 8.25% to 4.5%–7.75% for CORP In the 2013 actuarial valuation, wage growth was decreased from 5.0% to 4.5% for PSPRS and CORP Experience-based table of rates that is specific to the type of eligibility condition. Last updated for the 2012 valuation pursuant to an experience study of the period July 1, 2006 - June 30, 2011. RP-2000 mortality table (adjusted by 105% for both males and females) 103 PIMA COUNTY, ARIZONA Schedule of Agent OPEB Plans’ Funding Progress June 30, 2015 B-2 (in thousands) Health Insurance Premium Benefit Actuarial Valuation Date PSPRS Sheriff 6/30/14 6/30/13 6/30/12 CORP Detention 6/30/14 6/30/13 6/30/12 Actuarial value of assets (a) Unfunded actuarial accrued liability (UAAL) (funding excess) (b) – (a) Actuarial accrued liability (b) Funded ratio (a)/(b) Annual covered payroll (c) UAAL (funding excess) as a percentage of covered payroll (b) – (a)/c) $ 7,549 $ 7,337 7,460 7,325 $ (212) 7,460 7,325 102.9% 0.0% 0.0% $ 31,544 30,768 31,920 (0.7)% 24.3% 23.0% $ 3,248 $ 3,122 3,195 3,161 $ (126) 3,195 3,161 104.0% 0.0% 0.0% $ 19,765 19,665 21,743 (0.6)% 16.3% 14.5% Note 1 – Factors That Affect the Identification of Trends Beginning in fiscal year 2014, PSPRS and CORP established separate funds for pension benefits and health insurance premium benefits. Previously, the plans recorded both pension and health insurance premium contributions in the same Pension Fund. During fiscal year 2014, the plans transferred prior-year health insurance premium benefit contributions that exceeded benefit payments from each plan’s Pension Fund to the new Health Insurance Fund. 104 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 and animal care. 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. Office of Emergency Management’s Radio System Special Revenue Fund – to account for the design, procurement and deployment of a regional public safety voice communications network to serve public and non-profit entities responsible for providing public safety and emergency management services to the Pima County populace. 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. Waste Tire Fund – 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 District (SLDs) Fund – to account for financial activity related to street lighting in unincorporated Pima County. The SLDs are a blended component unit of Pima County. (This page is intentionally blank) 105 PIMA COUNTY, ARIZONA Combining Balance Sheet - Nonmajor Governmental Funds June 30, 2015 (in thousands) Special Revenue Funds Regional OEM Flood Control Transportation Health District Other Other Radio Grants System Assets Cash and cash equivalents Property taxes receivable (net) $ Interest receivable Due from other funds Due from other governments Accounts receivable Inventory Prepaid expenditures Restricted cash equivalents Total assets 7,146 $ 4,356 3 2 27 4,376 154 1,162 33 359 1,311 198 110 6 $ 9,158 638 $ 32,524 $ 5 16 16 24 76 239 762 $ 237 12,839 1,879 1 26 201 20 1,499 1 181 4 $ 12,901 $ 6,342 $ 9,867 $ 33,818 $ 14,976 $ 1,685 $ 3,795 $ 567 $ 734 $ 1,727 $ 3,802 2 790 1,991 1 $ 135 Liabilities, deferred inflows of resources and fund balances Liabilities: Accounts payable Interest payable Employee compensation Due to other funds Due to other governments Deposits and rebates 947 2 3 2 Unearned revenue 822 478 27 2 1,155 217 6 1 5 1,229 978 89 1,389 1,246 4,335 7,564 281 576 61 9,890 70 42 8 Total liabilities 4,757 57 Deferred inflows of resources: Unavailable revenue - intergovernmental Unavailable revenue - property taxes Unavailable revenue - other 133 66 24 461 12 Total deferred inflows of resources 133 642 497 131 9,932 4,890 2,031 1,743 4,466 17,496 281 1,195 6,816 116 4,195 26 8,098 201 24,004 4,824 323 20 58 185 Total liabilities and deferred inflows of resources Fund balances Nonspendable Restricted Committed Assigned Unassigned Total fund balances Total liabilities, deferred inflows of resources and fund balances 1,219 (2,598) 8,011 $ 12,901 4,311 $ 8,124 6,342 $ 106 9,867 29,352 $ 33,818 (2,520) $ 14,976 1,404 $ 1,685 Exhibit C - 1 Special Revenue Funds School Reserve $ Environmental Quality 1,297 $ 155 19 3,111 Waste Tire $ Library District 1,403 2 1 3 80 286 $ Stadium District 7,618 1,096 4 26 3 477 15 $ 705 45 Street Lighting Districts Total Other Governmental Funds $ 164 2 $ 68,276 1,736 36 813 19,478 3,728 1,453 1,017 45 1 88 250 135 7 $ 1,486 $ 3,196 $ 1,690 $ 9,974 $ 481 $ 166 $ 96,582 $ 78 $ 16 $ 255 $ 908 $ 165 1 131 899 $ 12 $ 12,194 3 5,465 3,136 10 5 2,317 54 97 934 1 2 3 2 133 115 1,845 1,198 17 845 120 255 133 15 493 283 562 23,130 115 10,688 1,306 469 862 235 12,463 31 31 12 146 255 2,707 1,433 1,435 750 6,517 7 1,385 12 35,593 2,515 53,155 6,320 3,769 (4,770) 154 1,213 1,665 (2,172) 1,353 $ 1,486 3,050 $ 3,196 1,435 $ 1,690 7,267 $ 9,974 107 (952) $ 481 154 $ 166 60,989 $ 96,582 PIMA COUNTY, ARIZONA Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Governmental Funds For the Year Ended June 30, 2015 (in thousands) Transportation Revenues: Property taxes 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: General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Debt service - principal - interest 1,160 53,422 245 $ 31 608 2,167 5,147 2,228 114 13 1,008 55,466 10,677 20,545 2 52 246 $ 48 79 21,104 7,496 5,048 140 4,710 20,972 14,260 $ 46,646 $ 2,610 7 932 6 57 38,498 47,585 2,673 33,933 1,053 4,915 5,670 642 1,778 23 10,672 207 64 17,206 39,022 21,116 OEM Radio System Other Grants 420 2,620 79 4 Total expenditures 39,022 21,116 14,260 38,132 39,376 1,778 Excess (deficiency) of revenues over (under) expenditures 16,444 (10,439) 6,712 366 8,209 895 Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers (out) 26 3,121 (22,450) 12,758 (684) 1 (10,291) 3 2,146 (4,071) 1,605 (11,302) 1 Total other financing sources (uses) (19,303) 12,074 (10,290) (1,922) (9,697) 1 Net change in fund balances (2,859) 1,635 (3,578) (1,556) (1,488) 896 Fund balances at beginning of year, as restated 10,870 2,626 11,702 30,908 (1,032) 508 Change in inventory Change in prepaids Fund balance at end of year 50 $ 8,011 $ 4,311 $ 108 8,124 $ 29,352 $ (2,520) $ 1,404 Exhibit C - 2 Special Revenue Funds School Reserve Environmental Quality Waste Tire Library District $ $ $ 32,691 Street Lighting Districts $ $ 131 2,138 1,845 $ 1,845 Stadium District Total Other Governmental Funds 1,161 1 13 13 5 2,165 1,166 221 458 557 18 816 $ 34,761 1,521 958 5 2 1 2,486 132 218,426 158 39,006 22,761 39,664 1,113 34,260 207 38,072 22,006 79 4 1,113 2,449 32,898 4,690 1,113 32,898 4,690 158 197,172 53 1,863 (2,204) (26) 21,254 2,180 2,180 2,449 (335) (284) 75 (335) 1,673 (889) 5,509 (2,879) 104 25,790 (53,057) (304) (889) 2,630 (27,163) (251) 974 649 (112) (379) 537 253 2,797 1,686 426 6,293 (1,378) (26) (5,909) 180 66,833 50 15 15 $ 1,353 53,367 5,467 131,119 14,241 5,720 287 8,225 $ 3,050 $ 1,435 $ 7,267 109 $ (952) $ 154 $ 60,989 (This page is intentionally blank) 110 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, 2015 Exhibit C - 3 (in thousands) Budget Revenues: Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ 27,028 3,003 243 481 30,755 Actual $ 23,038 4,728 462 1,276 29,504 Variance $ (3,990) 1,725 219 795 (1,251) Expenditures: Capital outlay 145,816 100,788 45,028 Total expenditures 145,816 100,788 45,028 Deficiency of revenues under expenditures (115,061) (71,284) 43,777 Other financing sources (uses): Face amount of long-term debt issued Transfers in Transfers (out) Total other financing sources 78,681 41,312 (69,824) 50,169 72,025 31,335 (51,253) 52,107 (6,656) (9,977) 18,571 1,938 Net change in fund balance (64,892) (19,177) 45,715 Fund balance at beginning of year Fund balance at end of year $ 129,795 64,903 111 $ 149,012 129,835 $ 19,217 64,932 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Debt Service Fund For the Year Ended June 30, 2015 Exhibit C - 4 (in thousands) Budget Revenues: Property taxes Intergovernmental Investment earnings Miscellaneous Total revenues $ Actual 52,916 53,164 12 181 12 53,369 Expenditures: Debt service - principal - interest - miscellaneous Total expenditures 85,085 29,847 22 114,954 81,705 26,424 863 108,992 3,380 3,423 (841) 5,962 Deficiency of revenues under expenditures (62,038) (55,623) 6,415 5,949 13,685 (15,250) 54,839 (3,024) 56,199 5,949 13,685 (15,250) (7,989) (3,024) (6,629) Other financing sources (uses): Premium on bonds Issuance of refunding debt Payments to escrow agent Transfers in Transfers (out) Total other financing sources $ 62,828 62,828 Net change in fund balance Fund balance at beginning of year Fund balance at end of year 52,916 Variance 790 $ 3,641 4,431 112 $ 576 $ 7,848 8,424 248 12 181 12 453 (214) $ 4,207 3,993 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, 2015 Exhibit C - 5 (in thousands) Budget Revenues: Licenses and permits Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ Actual 1,119 49,323 172 80 284 50,978 $ Variance 1,160 53,422 245 31 608 55,466 $ 41 4,099 73 (49) 324 4,488 Expenditures: Highways and streets Total expenditures 39,182 39,182 39,022 39,022 160 160 Excess of revenues over expenditures 11,796 16,444 4,648 Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers (out) Total other financing uses 5,121 (25,043) (19,922) 26 3,121 (22,450) (19,303) 26 (2,000) 2,593 619 (8,126) (2,859) 5,267 Net change in fund balance Fund balance at beginning of year Fund balance at end of year $ 10,120 1,994 113 $ 10,870 8,011 $ 750 6,017 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Health - Special Revenue Fund For the Year Ended June 30, 2015 Exhibit C - 6 (in thousands) Budget Revenues: Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Total revenues $ Actual 580 10,387 2,167 5,147 2,228 114 13 1,008 10,677 Expenditures: Health 21,923 21,116 807 Total expenditures 21,923 21,116 807 (11,536) (10,439) 1,097 12,418 (1,383) 11,035 12,758 (684) 12,074 340 699 1,039 1,635 2,136 2,626 50 671 50 Deficiency of revenues under expenditures Other financing sources (uses): Transfers in Transfers (out) Total other financing sources 2,211 4,515 2,956 125 Net change in fund balance (501) Fund balance at beginning of year Change in inventory Fund balance at end of year $ Variance 1,955 $ 1,454 114 $ 4,311 $ $ (44) 632 (728) (11) 13 428 290 2,857 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Regional Flood Control District - Special Revenue Fund For the Year Ended June 30, 2015 Exhibit C- 7 (in thousands) Budget Revenues: Property taxes Licenses and permits Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ Expenditures: Flood Control Total expenditures Excess of revenues over expenditures Other financing sources (uses): Transfers in Transfers (out) Total other financing uses Net change in fund balance Fund balance at beginning of year Fund balance at end of year $ Actual 20,470 1 40 3,070 35 55 23,671 $ Variance 20,545 2 52 246 48 79 20,972 $ 75 1 12 (2,824) 13 24 (2,699) 16,971 16,971 14,260 14,260 2,711 2,711 6,700 6,712 12 (10,424) (10,424) 1 (10,291) (10,290) 1 133 134 (3,724) (3,578) 146 7,390 3,666 115 $ 11,702 8,124 $ 4,312 4,458 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, 2015 Exhibit C - 8 (in thousands) Budget Revenues: Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Total revenues $ 23,980 7,392 2,739 240 6,701 41,052 Expenditures: General government Public safety Health Culture and recreation Education and economic opportunity Debt service - principal - interest Total expenditures $ 43,233 5,014 31 936 3,247 (11,409) Other financing sources (uses): Proceeds from sale of capital assets Transfers in Transfers (out) Total other financing uses Net change in fund balance Variance 21,104 7,496 5,048 140 4,710 38,498 $ 33,933 1,053 23 420 2,620 79 4 38,132 52,461 Excess (deficiency) of revenues over (under) expenditures (2,876) 104 2,309 (100) (1,991) (2,554) 9,300 3,961 8 516 627 (79) (4) 14,329 366 11,775 1,861 (2,809) (948) 3 2,146 (4,071) (1,922) 3 285 (1,262) (974) (12,357) (1,556) 10,801 25,557 30,908 5,351 Fund balance at beginning of year Fund balance at end of year Actual $ 13,200 116 $ 29,352 $ 16,152 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Other Grants - Special Revenue Fund For the Year Ended June 30, 2015 Exhibit C - 9 (in thousands) Budget Revenues: Intergovernmental Investment earnings Miscellaneous Total revenues $ Expenditures: County Administration Clerk of the Superior Court Community Development Community Services County Attorney Elections Environmental Quality Finance Flood Control Health Justice Court Juvenile Court Office of Emergency Management Office of Medical Services Office of Sustainability and Conservation Natural Resources, Parks and Recreation Recorder Sheriff Superior Court Transportation Total expenditures Actual 67,788 9 1,593 69,390 46,646 7 932 47,585 $ 14 Other financing sources (uses): Transfers in Transfers (out) Total other financing uses 91 90 8,698 923 5,460 51,614 829 14 96 9,842 65 964 1,255 207 14 64 67 4,320 920 642 39,376 17,776 8,209 (9,567) 1,512 (19,172) (17,660) 1,605 (11,302) (9,697) 93 7,870 7,963 (1,488) (1,604) Net change in fund balance 4,374 12,832 2,857 116 $ (21,142) (2) (661) (21,805) (14) 35 1,166 1,247 (188) 61 (17) 11 30 44 81 202 435 (90) (14) 27 23 4,378 3 4,818 12,238 35 5,540 14,079 2,669 61 812 25 126 9,886 146 1,166 1,690 117 Excess of revenues over expenditures Fund balance at beginning of year Fund balance at end of year $ Variance 3,949 4,065 117 $ (1,032) (2,520) $ (4,981) (6,585) PIMA COUNTY, ARIZONA Exhibit C - 10 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Office of Emergency Management's Radio System - Special Revenue Fund For the Year Ended June 30, 2015 (in thousands) Budget Revenues: Charges for services Investment earnings Miscellaneous Total revenues $ Expenditures: Public safety Total expenditures Actual 2,579 31 2,610 2,610 6 57 2,673 2,437 2,437 1,778 1,778 659 659 173 895 722 1 1 1 1 896 723 Excess of revenues over expenditures $ Other financing sources: Transfers in Total other financing sources Net change in fund balance Fund balance at beginning of year Fund balance at end of year Variance 173 318 491 $ 118 $ 508 1,404 $ $ 31 6 26 63 190 913 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, 2015 Exhibit C - 11 (in thousands) Budget Revenues: Intergovernmental Total revenues $ Expenditures: School Reserve grants Total expenditures Actual 2,150 2,150 $ 2,150 2,150 Variance 1,845 1,845 $ 2,180 2,180 (305) (305) (30) (30) Deficiency of revenues under expenditures (335) (335) Net change in fund balance (335) (335) Fund balance at beginning of year Change in prepaid expenditures Fund balance at end of year 1,869 $ 1,869 119 1,673 15 $ 1,353 (196) 15 $ (516) 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, 2015 Exhibit C - 12 (in thousands) Budget Revenues: Licenses and permits Intergovernmental Fines and forfeits Investment earnings Miscellaneous Total revenues $ Actual 2,366 16 $ Variance 2,138 $ (228) (16) 1 (2) (5) (250) 15 18 2,415 1 13 13 2,165 Expenditures: Environmental Quality 3,467 2,449 1,018 Total expenditures 3,467 2,449 1,018 Deficiency of revenues under expenditures (1,052) (284) 768 649 (51) 598 649 (112) 537 (61) (61) (454) 253 707 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 988 534 $ 120 $ 2,797 3,050 $ 1,809 2,516 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Waste Tire - Special Revenue Fund For the Year Ended June 30, 2015 Exhibit C - 13 (in thousands) Budget Revenues: Intergovernmental Investment earnings Total revenues $ Expenditures: Sanitation Total expenditures Actual 1,100 8 1,108 $ 1,223 1,223 Excess (deficiency) of revenues over (under) expenditures (115) Other financing sources (uses): Proceeds from sale of capital assets Transfers (out) Total other financing uses Net change in fund balance Fund balance at beginning of year Fund balance at end of year (115) $ 1,100 985 121 $ Variance 1,161 5 1,166 $ 61 (3) 58 1,113 1,113 110 110 53 168 75 (379) (304) 75 (379) (304) (251) (136) 1,686 1,435 $ 586 450 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, 2015 Exhibit C - 14 (in thousands) Budget Revenues: Property taxes Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Total revenues $ Expenditures: Culture and recreation Total expenditures Excess (deficiency) of revenues over (under) expenditures Actual 32,667 655 $ Variance 600 50 510 34,482 32,691 221 458 557 18 816 34,761 37,773 37,773 32,898 32,898 4,875 4,875 (3,291) 1,863 5,154 Other financing uses : Transfers (out) Total other financing uses (1,061) (1,061) (889) (889) Net change in fund balance (4,352) 974 Fund balance at beginning of year Fund balance at end of year 4,527 175 $ 122 $ 6,293 7,267 $ 24 (434) 458 (43) (32) 306 279 172 172 5,326 $ 1,766 7,092 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, 2015 Exhibit C - 15 (in thousands) Budget Revenues: Intergovernmental Charges for services Investment earnings Miscellaneous Total revenues $ Actual 2,656 1,521 958 5 2 2,486 5,253 5,253 4,690 4,690 563 563 Deficiency of revenues under expenditures (2,597) (2,204) 393 Other financing sources (uses): Transfers in Transfers (out) Total other financing sources 5,721 (2,867) 2,854 5,509 (2,879) 2,630 (212) (12) (224) Expenditures: Culture and recreation Total expenditures 1,590 1,045 21 Net change in fund balance 257 Fund balance at beginning of year Fund balance at end of year $ Variance 426 (1,756) $ (1,499) 123 $ 169 (1,378) $ (952) (69) (87) (16) 2 (170) 378 $ 547 PIMA COUNTY, ARIZONA Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Street Lighting Districts For the Year Ended June 30, 2015 Exhibit C - 16 (in thousands) Budget Revenues: Property taxes Investment earnings Total revenues $ Actual 130 $ Variance 130 131 1 132 Expenditures: General government Total expenditures 173 173 158 158 15 15 Deficiency of revenues under expenditures (43) (26) 17 Net change in fund balance (43) (26) 17 180 180 Fund balance at beginning of year Fund balance at end of year $ (43) 124 $ 154 $ $ 1 1 2 197 Combining Statements and Other Schedules Other (Nonmajor) Enterprise Funds Other (Nonmajor) Enterprise Funds Development Services – to account for the operations of providing zoning permits, enforcing ordinances in compliance with state statutes, and administering uniform building codes. Parking Garages – to account for the management and operation of seven public parking garages located in downtown Tucson. PIMA COUNTY, ARIZONA Combining Statement of Net Position Nonmajor Enterprise Funds June 30, 2015 Exhibit C - 17 (in thousands) Development Services Assets Current assets: Cash and cash equivalents Interest receivable Due from other governments Accounts receivable Prepaid expense Total current assets Noncurrent assets: Capital assets: Land Buildings and improvements Equipment Construction in progress Less accumulated depreciation Total capital assets (net of accumulated depreciation) Total noncurrent assets $ Parking Garages 3,264 2 $ 238 23 3,527 $ 6,243 4 6 304 26 6,583 1,768 27,608 1,580 3 (10,111) 20,848 20,848 20,848 20,848 3,527 23,904 27,431 745 745 34 34 779 779 (309) Deferred outflows of resources Deferred outflows related to pensions Total deferred outflows of resources 2,979 2 6 66 3 3,056 1,768 27,608 1,271 3 (9,802) 309 Total assets Total Nonmajor Enterprise Funds Liabilities Current liabilities: Accounts payable Employee compensation Due to other funds Total current liabilities Noncurrent liabilities: Compensated absences payable Net pension liability Total noncurrent liabilities 78 249 1 328 317 16 333 395 265 1 661 451 5,849 6,300 10 264 274 461 6,113 6,574 Total liabilities 6,628 607 7,235 Deferred inflows of resources Deferred inflows related to pensions Total deferred inflows of resources 1,023 1,023 46 46 1,069 1,069 Net position Net investment in capital assets Unrestricted Total net position 20,848 2,437 (3,379) $ (3,379) $ 125 23,285 20,848 (942) $ 19,906 PIMA COUNTY, ARIZONA Combining Statement of Revenues, Expenses and Changes in Fund Net Position Nonmajor Enterprise Fund For the Year Ended June 30, 2015 Exhibit C - 18 (in thousands) Development Services Operating revenues: Charges for services Other $ 6,324 38 Total net operating revenues Operating expenses: Employee compensation Operating supplies and services Repair and maintenance General and administrative Consultants and professional services Depreciation Total operating expenses Total Nonmajor Enterprise Funds Parking Garages $ 2,271 5 $ 8,595 43 6,362 2,276 8,638 4,879 37 21 1,589 362 343 33 83 1,119 15 221 1,814 5,222 70 104 2,708 377 221 8,702 6,888 Operating income (loss) (526) 462 (64) Nonoperating revenues: Investment earnings 15 14 29 15 14 29 (511) 476 (35) Total nonoperating revenues Income (loss) before transfers Transfers in Transfers (out) Change in net position Net position at beginning of year, as restated Net position at end of year $ (71) 11,979 (2,004) 11,979 (2,075) (582) 10,451 9,869 (2,797) 12,834 10,037 (3,379) 126 $ 23,285 $ 19,906 PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Nonmajor Enterprise Funds For the Year Ended June 30, 2015 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 6,221 (151) (1,924) (4,851) Parking Garages $ (705) 2,268 (1,289) (5) (339) Total Nonmajor Enterprise Funds $ 635 8,489 (1,440) (1,929) (5,190) (70) Cash flows from noncapital financing activities: Cash transfers out to other funds (71) (2,004) (2,075) Net cash used for noncapital financing activities (71) (2,004) (2,075) 11,979 (11,979) 11,979 (11,979) Cash flows from capital and related financing activities: Transfers received for capital acquisition Purchase of capital assets Net cash used for capital and related financing activities Cash flows from investing activities: Interest received on cash and investments 17 17 34 Net cash provided by investing activities 17 17 34 Net decrease in cash and cash equivalents (759) Cash and cash equivalents at beginning of year 4,023 Cash and cash equivalents at end of year $ (continued) 127 3,264 $ (1,352) (2,111) 4,331 8,354 2,979 $ 6,243 PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Nonmajor Enterprise Funds For the Year Ended June 30, 2015 Exhibit C - 19.1 (in thousands) (continued) Reconciliation of operating income (loss) to net cash provided by (used for) operating activities Development Services $ (526) Operating income (loss) Parking Garages $ 462 Total Nonmajor Enterprise Funds $ (64) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization 221 221 Changes in assets and deferred outflows of resources: Decrease (increase) in assets: Accounts receivable Prepaid expenses Decrease in deferred outflows of resources: Pension plans (141) (7) (8) 1 (149) (6) (364) (17) (381) Changes in liabilities and deferred inflows of resources: Increase (decrease) in liabilities: Accounts payable Due to other funds Net pension liability Other liabilities Increase in deferred inflows of resources: Pension plans (60) 1 (637) 6 (44) (104) 1 (667) 10 Net cash provided by (used for) operating activities (30) 4 1,023 $ (705) 46 $ 635 1,069 $ Noncash investing, capital, and noncapital financing activities during the year ended June 30, 2015: Development Services Fund retired fully depreciated capital assets with an original cost of $330. 128 (70) 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, general liability, environmental liability, and property damage as well as acquiring coverage for other risks. Fleet Services – to account for the acquisition, operation, and maintenance of fleet services equipment provided to County departments. Health Benefit Trust Fund – to account for health care and health-related benefits. The Fund is responsible for collecting employer and employee premiums through payroll deductions, and for the payment of claims. The premiums collected include amounts paid for medical, dental, vision, shortterm disability and life insurance coverages. Other Internal Service – to account for the provision of printing, technology infrastructure, telecommunication services, and procurement of software and hardware resources utilized by County departments. PIMA COUNTY, ARIZONA Combining Statement of Net Position Internal Service Funds June 30, 2015 Exhibit C - 20 (in thousands) SelfInsurance Trust 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 Noncurrent assets: Loan receivable Capital assets: Land Buildings and improvements Equipment Less accumulated depreciation Construction in progress Total capital assets (net) Total noncurrent assets $ 23,918 6 18 76 28 440 21 24,507 $ 27,155 9 47 Total Internal Service Funds Other Internal Service $ 2,329 29,540 4,665 3 25 2 18 265 2,882 7,860 $ 10,000 224 8,295 (6,211) 3,091 5,399 5,399 449 18,969 49,250 (23,955) 3,347 48,060 58,060 454 10,454 18,745 40,787 (17,581) 256 42,207 42,207 71,986 66,714 29,540 13,259 181,499 226 226 447 447 120 120 303 303 1,096 1,096 527 80 47 1,654 170 129 43 40 1,718 141 4,028 434 87 4 168 (163) 4 4,234 Net position Net investment in capital assets Restricted for: Healthcare Unrestricted 374 2,622 7,510 1,828 62 246 11,624 8,697 1,774 22,157 4,608 3,784 4,370 6,406 15,567 1,859 3,510 3,756 52 10,000 4 38 943 11,037 111 2,378 2,489 471 10,000 11,628 8,735 8,605 39,439 29,667 5,584 15,407 4,348 55,006 310 310 614 614 165 165 416 416 1,505 1,505 454 42,207 5,399 48,060 14,088 63,936 14,088 41,781 $ 116,269 24 130 78 2,611 705 3,622 123,439 10,000 449 Deferred inflows of resources Deferred inflows related to pensions Total deferred inflows of resources Total net position $ 719 61,532 Deferred outflows of resources Deferred outflows related to pensions Total deferred outflows of resources Total liabilities Fleet Services 236 Total assets Liabilities Current liabilities: Accounts payable Employee compensation Due to other funds Due to other governments Current portion reported but unpaid losses Current portion incurred but not reported losses Total current liabilities Noncurrent liabilities: Compensated absences payable Loan payable Reported but unpaid losses Incurred but not reported losses Net pension liability Total noncurrent liabilities 60,531 6 40 Health Benefit Trust 42,235 18,756 $ 60,963 129 3,399 $ 14,088 $ 8,798 $ 126,084 PIMA COUNTY, ARIZONA Combining Statement of Revenues, Expenses and Changes in Fund Net Position Internal Service Funds For the Year Ended June 30, 2015 Exhibit C - 21 (in thousands) SelfInsurance Trust Operating revenues: Charges for services Other $ Total operating revenues Health Benefit Trust Fleet Services 17,138 58 $ 17,196 20,631 106 $ 61,874 2,158 Other Internal Service $ Total Internal Service Funds 5,905 104 $ 105,548 2,426 20,737 64,032 6,009 107,974 3,101 6,465 834 4 46,123 5,281 1,392 1,930 1,630 56,570 21 2,947 276 1,038 458 8,300 7,933 8,437 45,653 10,335 7,012 1,568 4,743 4,749 90,430 (2,291) 17,544 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 2,068 338 (470) 3,935 918 361 734 2 7,886 1,098 1,755 931 35 4,289 17,674 Operating income (loss) 9,310 3,063 7,462 Nonoperating revenues: Investment earnings Gain on disposal of capital assets 531 27 149 16 73 14 767 43 Total nonoperating revenues 558 165 73 14 810 9,868 3,228 7,535 Income (loss) before transfers Capital contributions Transfers in Transfers (out) Net position at beginning of year, as restated Net position at end of year 146 6,333 (2,177) (29) Change in net position $ 2,936 (2,277) 18,354 6,209 (222) 146 12,542 (2,428) 9,839 7,530 7,535 3,710 28,614 32,396 53,433 6,553 5,088 97,470 8,798 $ 126,084 42,235 130 $ 60,963 $ 14,088 $ PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2015 Exhibit C - 22 (in thousands) SelfInsurance Trust 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 $ 17,164 58 (4,927) (1,588) (6,514) (1,413) Net cash provided by (used for) operating activities 2,780 Cash flows from noncapital financing activities: Cash transfers in from other funds Cash transfers out to other funds Loans with other funds Fleet Services $20,631 167 (9,444) (2,644) (3,084) 5,626 Health Benefit Trust Other Internal Service $62,392 2,158 (8,997) (640) (48,623) (804) $ 5,905 94 (6,854) (639) 5,486 (1,960) Total Internal Service Funds $ 106,092 2,477 (30,222) (5,511) (55,137) (7,261) (3,454) 10,438 (29) 5,959 (2,177) 24 (47) 11 6,209 (222) (25) 12,121 (2,417) (1) Net cash provided by (used for) noncapital financing activities (29) 3,806 (36) 5,962 9,703 Cash flows from capital and related financing activities: Proceeds from sale of capital assets Purchase of capital assets 173 (3) 197 (10,524) (937) 370 (11,464) Net cash provided by (used for) capital and related financing activities 170 (10,327) (937) (11,094) Cash flows from investing activities: Interest received on cash and investments 571 153 77 14 815 Net cash provided by investing activities 571 153 77 14 815 5,527 1,585 9,862 Net increase (decrease) in cash and cash equivalents 3,492 Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 57,039 24,660 21,628 3,080 106,407 $ 60,531 $23,918 $27,155 $ 4,665 $ 116,269 (continued) 131 (742) PIMA COUNTY, ARIZONA Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2015 Exhibit C - 22.1 (in thousands) (continued) Reconciliation of operating income (loss) to net cash provided by (used for) operating activities Operating income (loss) SelfInsurance Trust $ 9,310 Fleet Services $ 3,063 2 4,289 Health Benefit Trust $ 7,462 Other Internal Service $ (2,291) Total Internal Service Funds $ 17,544 Adjustments to reconcile operating income to net cash provided by (used for) operating activities: Depreciation and amortization Changes in assets and deferred outflows of resources: Decrease (increase) in assets: Accounts receivable Due from other governments Inventory Prepaid expenses Decrease in deferred outflows of resources: Pension plans 27 Changes in liabilities and deferred inflows of resources: Increase (decrease) in liabilities: Accounts payable Due to other governments Reported but unpaid losses Incurred but not reported losses Net pension liability Other liabilities Increase in deferred inflows of resources: Pension plans Net cash provided by (used for) operating activities 518 364 (4) 65 90 (20) (111) (218) (59) (1,878) 4 (4) 39 (5,263) (1,721) (193) 16 2,780 614 $ 5,626 165 $ 5,486 4,749 (8) (2) (78) (2,813) 533 63 12 (2,469) (147) (535) 1,310 (222) (2,278) (103) 7 (382) 3 310 $ 458 $ (259) (40) (533) 4 (5,485) (3,999) (937) (14) 416 1,505 (3,454) $ 10,438 Noncash investing, capital, and financing activities during the year ended June 30, 2015: Self-Insurance Trust Fund had an exchange of unequal sized parcels of land. The parcel obtained in the exchange was valued at $271. The parcel given up had a value of $417. Fleet Services Fund received capital contributions with a value of $146 from General Government. Fleet Services Fund received a transfer in of capital assets from Regional Wastewater Reclamation with a net book value of $374. Fleet Services Fund sold capital assets with a net book value of $180 and donated a capital asset with a net book value of $1. 132 Combining Statements and Other Schedules Fiduciary Funds PIMA COUNTY, ARIZONA Combining Statement of Fiduciary Net Position Investment Trust Funds June 30, 2015 Exhibit C - 23 (in thousands) Treasurer's Investment Pool Assets Cash and cash equivalents Interest receivable $ 100,481 62 Total assets Total Investment Trust Funds Individual Investment Accounts $ 100,543 128,788 $ 128,788 229,269 62 229,331 Liabilities Total liabilities Net Position Held in trust for pool participants $ 100,543 133 $ 128,788 $ 229,331 PIMA COUNTY, ARIZONA Combining Statement of Changes in Fiduciary Net Position Investment Trust Funds For the Year Ended June 30, 2015 Exhibit C - 24 (in thousands) Treasurer's Investment Pool Total Investment Trust Funds Individual Investment Accounts Additions Contributions from participants Total contributions $ Investment earnings: Total investment earnings 2,108,825 2,108,825 $ 159,826 159,826 $ 2,268,651 2,268,651 572 572 8 8 580 580 2,109,397 159,834 2,269,231 Deductions Distributions to participants 2,084,553 99,999 2,184,552 Total deductions 2,084,553 99,999 2,184,552 24,844 59,835 84,679 75,699 68,953 144,652 Total additions Change in net position Net position held in trust July 1, 2014 Net position held in trust June 30, 2015 $ 134 100,543 $ 128,788 $ 229,331 PIMA COUNTY, ARIZONA Combining Statement of Fiduciary Net Position Agency Funds June 30, 2015 Exhibit C - 25 (in thousands) Payroll Clearing Assets Cash and cash equivalents Due from other governments Total assets $ 104 $ 104 Liabilities Employee compensation Due to other governments Deposits and rebates Total liabilities Treasurer's Clearing 3,977 163 4,140 Other $ 64,568 Total $ 64,568 68,649 163 68,812 40,181 24,387 104 40,181 28,527 104 4,140 $ 104 135 $ 4,140 $ 64,568 $ 68,812 PIMA COUNTY, ARIZONA Combining Statement of Changes in Fiduciary Net Position Agency Funds For the Year Ended June 30, 2015 Exhibit C - 26 (in thousands) Payroll Clearing Assets Cash and cash equivalents Total assets Balance 6/30/2014 $ Liabilities Employee compensation Total liabilities Additions 115 115 $ 615,913 615,913 Balance 6/30/2015 Deductions $ 615,924 615,924 $ 104 104 115 115 615,913 615,913 615,924 615,924 104 104 Treasurer's Clearing Assets Cash and cash equivalents Due from other governments Total assets 2,518 1,174 3,692 2,001,239 2,001,239 1,999,780 1,011 2,000,791 3,977 163 4,140 Liabilities Due to other governments Deposits and rebates Total liabilities 3,692 3,692 1,113,076 888,163 2,001,239 1,113,076 887,715 2,000,791 4,140 4,140 Other Assets Cash and cash equivalents Total assets 66,257 66,257 223,330 223,330 225,019 225,019 64,568 64,568 Liabilities Due to other governments Deposits and rebates Total liabilities 37,894 28,363 66,257 171,532 51,798 223,330 169,245 55,774 225,019 40,181 24,387 64,568 Totals - All Agency Funds Assets Cash and cash equivalents Due from other governments Total assets 68,890 1,174 70,064 2,840,482 2,840,482 2,840,723 1,011 2,841,734 68,649 163 68,812 Liabilities Employee compensation Due to other governments Deposits and rebates Total liabilities 115 37,894 32,055 70,064 615,913 1,284,608 939,961 2,840,482 615,924 1,282,321 943,489 2,841,734 104 40,181 28,527 68,812 $ 136 $ $ $ PIMA COUNTY Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2015 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. 137 53,384 21,353 8,372 77,088 48,379 5,464 53,748 1,495,175 1,227,387 $ 63,014 16,734 9,554 125,947 38,628 9,985 57,101 1,571,913 1,250,950 574 35,480 38,628 9,985 10,845 572,462 438 48,379 5,464 15,284 535,822 476,950 466,257 $ 46,256 999,451 $ 38,464 959,353 774,000 63,014 16,734 8,980 90,467 $ 53,384 21,353 7,934 77,088 761,130 2007 21,349 45,385 74,424 5,883 9,017 69,327 $ 1,815,529 78,080 71,618 17,390 14,403 118,847 5,956 13,732 110,175 $ 1,717,367 1,512,064 819 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 2009 1,365,246 791 37,925 5,956 13,732 56,397 $ 597,623 482,822 53,778 $ 1,119,744 71,618 17,390 13,612 80,922 $ 882,424 2008 64,991 1,599,361 25,749 13,454 69,562 16,110 19,348 179,880 $ 1,988,455 $ 13,454 11,623 16,110 15,943 29,914 637,584 64,446 1,711,558 32,906 12,567 84,617 17,161 27,636 198,054 $ 2,148,945 $ 12,567 24,236 17,161 23,562 33,448 686,499 575,525 60,381 4,074 164,606 $ 1,462,446 57,939 3,405 149,966 $ 1,350,871 550,540 64,446 32,906 $ 1,136,033 Fiscal Year 2011 64,991 25,749 $ 1,048,821 2010 103,592 1,809,788 66,470 703,698 32,322 22,538 61,904 18,449 1,360 223,785 $ 2,273,738 $ 22,538 31,680 18,449 564,561 30,224 1,360 157,315 $ 1,570,040 103,592 32,322 $ 1,245,227 2012 $ $ $ $ 27,033 29,100 52,694 17,785 1,163 247,377 2,315,577 100,423 1,840,002 101,759 723,430 29,100 42,841 17,785 531,945 9,853 1,163 145,618 1,592,147 100,423 27,033 1,308,057 2013 $ $ $ $ 10,988 31,615 89,605 18,820 3,591 201,939 2,359,818 61,936 1,941,324 117,425 777,448 31,615 22,720 18,820 586,868 66,885 3,591 84,514 1,582,370 61,936 10,988 1,354,456 2014 $ $ $ $ 8,039 36,683 72,592 19,419 28,610 (420,117) 1,783,858 60,285 1,978,347 87,010 743,443 36,683 7,980 19,419 592,351 64,612 28,610 (507,127) 1,040,415 60,285 8,039 1,385,996 2015 Exhibit D - 1 Note: Due to the implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, in fiscal year 2015, net position for the year ended June 30, 2014 was restated, however this change was not reflected in this schedule. Source: Pima County Finance & Risk Management Special Revenue Highways and streets Debt service Capital projects Regional Wastewater Healthcare Unrestricted (deficit) Total primary government net position $ $ Business-type activities Net investment in capital assets Restricted for: Debt service Capital projects Regional Wastewater Healthcare Unrestricted Total business-type activities net position Primary government Net investment in capital assets Restricted for: Facilities, justice, library, tax stabilization and community development $ $ Governmental activities Net investment in capital assets Restricted for: Special revenue Highways and streets Debt service Capital projects Healthcare Unrestricted (deficit) Total governmental activities net position 2006 (in thousands) (accrual basis of accounting) PIMA COUNTY, ARIZONA Net Position by component Last Ten Fiscal Years 138 $ 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 Source: Pima County Finance & Risk Management $ $ Business-type activities: Regional Wastewater Reclamation Pima Health System & Services Development Services Parking Garages Total business-type activities expenses Total primary government expenses Expenses Governmental activities: General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Amortization-unallocated Interest on long-term debt Total governmental activities expenses 2,991 698 139,324 15,085 221,307 1,797 314 133,113 12,188 217,422 98,222 261,859 15,400 1,579 377,060 1,099,776 223,266 148,831 92,985 9,623 33,800 97,154 55,482 42,483 168 18,924 722,716 26,663 9,797 11,732 4,747 10,270 $ $ $ 2007 26,033 8,136 21,617 4,531 9,693 82,701 256,583 14,422 1,479 355,185 1,002,494 208,293 132,583 70,392 7,258 32,043 103,085 34,510 39,517 165 19,463 647,309 2006 239,399 165,715 88,488 9,658 36,977 106,546 60,616 47,296 138 22,860 777,693 $ 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 $ 2008 $ $ $ 2,754 691 131,361 68,535 259,782 26,283 10,386 4,616 4,668 10,488 105,139 224,959 9,992 1,696 341,786 1,070,809 212,196 149,253 79,251 7,434 31,541 115,513 60,520 46,770 (235) 26,780 729,023 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 1,025,317 218,504 145,697 68,691 6,669 33,086 87,107 61,642 52,023 428 26,403 700,250 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 1,041,252 218,843 146,395 73,348 6,208 36,475 90,521 67,063 56,626 (2,625) 26,078 718,932 Fiscal Year 2011 (in thousands) (accrual basis of accounting) PIMA COUNTY, ARIZONA Changes in Net Position Last Ten Fiscal Years $ $ $ 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 1,988 185,447 919,472 223,005 150,349 69,183 7,224 47,248 94,409 61,900 55,126 805 24,776 734,025 2012 $ $ $ 28,910 10,238 6,511 3,577 12,495 320 2,865 1,544 116,121 59,298 241,879 $ 27,355 14,846 6,307 31 13,259 80 2,548 430 113,129 54,583 232,568 6,796 1,877 153,790 922,503 7,231 1,825 153,141 910,959 230,742 188,782 93,675 4,252 36,085 93,224 63,961 35,756 (5,758) 27,994 768,713 145,117 $ $ 2014 144,085 233,984 166,476 80,087 6,409 36,540 95,428 65,341 49,924 (286) 23,915 757,818 2013 $ $ $ (continued) 12,894 200 3,144 577 126,862 42,570 233,240 27,974 12,883 6,136 6,888 1,814 193,586 973,479 184,884 259,734 188,189 85,618 (4,882) 38,219 93,524 62,981 35,051 (6,237) 27,696 779,893 2015 Exhibit D - 2 139 513,688 63,863 47,073 110,936 Total primary government Change in net position: Governmental activities Business-type activities Total primary government Source: Pima County Finance & Risk Management 3,849 1,348 14,607 134 19,938 Business-type activities: Investment earnings Miscellaneous Capital contributions Transfers Total business-type activities $ 316,170 6,856 1,808 103,158 25,894 7,975 5,683 12,942 12,828 247 323 (134) 493,750 General revenues and other changes in net position 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 Transfers Total governmental activities 104,501 253,748 17,140 1,485 4,997 449 382,320 599,742 (429,887) 27,135 (402,752) $ 2006 Net (expense) revenue Governmental activities Business-type activities Total governmental activities net expense 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) $ $ 39,804 11,423 51,227 43,711 25,868 69,579 572,137 (113) 7,894 (721) 6,311 547,524 6,721 1,286 5,510 1,522 113 564,243 721 541,213 (520,532) 17,974 (502,558) 106,448 291,980 8,992 1,720 4,806 22,952 436,898 694,059 377,810 8,176 1,952 103,171 27,166 7,748 6,365 16,326 15,416 $ $ 2008 343,525 8,715 1,884 106,985 26,967 9,468 5,149 16,439 16,309 5,051 (501,409) 5,112 (496,297) 106,266 257,142 11,239 1,548 5,174 803 382,172 603,479 2007 $ $ 91,392 6,770 98,162 561,047 (4,005) 414 2,025 2,394 139,734 33,191 172,925 570,659 (538) 3,582 1,236 2,884 538 567,077 1,140 4,005 560,633 (427,343) 29,609 (397,734) 127,889 205,176 5,886 1,985 4,421 9,319 354,676 627,583 416,500 5,688 1,515 84,767 24,203 4,081 7,940 5,266 16,579 $ $ 2010 393,255 6,591 1,534 89,177 25,869 5,741 6,123 5,875 21,323 (469,241) 6,356 (462,885) 105,162 216,108 5,654 1,676 4,626 14,916 348,142 607,924 2009 (in thousands) (accrual basis of accounting) $ $ 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 Fiscal Year 2011 PIMA COUNTY, ARIZONA Changes in Net Position Last Ten Fiscal Years $ $ 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 $ $ 22,107 24,865 46,972 546,973 7,330 8,927 1,017 580 (7,330) 538,046 383,508 6,076 1,524 97,685 22,043 3,207 7,439 2,627 21,267 (515,939) 15,938 (500,001) $ (9,777) 54,018 44,241 545,804 16,715 19,436 1,237 1,484 (16,715) 526,368 378,032 6,262 1,509 101,605 23,899 5,035 6,976 2,955 16,810 (536,145) 34,582 (501,563) 6,807 188,372 420,940 3,914 169,079 410,958 171,650 7,553 2,362 $ 2014 6,519 2,073 156,573 2013 $ $ 27,487 12,080 39,567 592,725 17,133 18,585 903 549 (17,133) 574,140 423,538 6,155 1,536 105,522 24,976 4,562 6,164 1,931 16,889 (546,653) (6,505) (553,158) 6,324 2,271 35 5,854 187,081 420,321 172,597 2015 Exhibit D - 2 140 84,472 162,423 Nonspendable 1 Restricted Committed Assigned Unassigned Debt service: Assigned Total other governmental funds $ $ 173,100 89,328 69,773 13,999 57,560 8,889 48,671 2007 $ $ 247,188 152,643 77,451 17,094 70,389 5,415 64,974 2008 $ $ 252,081 126,821 86,121 39,139 40,166 4,363 35,803 2009 $ $ 18 124,830 1,487 52 (227) 40,868 264,729 2,011 82,957 15,305 3,221 (5,793) 3,093 73,837 81,541 4,089 522 2010 $ $ (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 2,720 333 157,688 7,234 $ $ 2012 12 112,668 6,639 2,011 94,567 37,978 4,368 (9,180) 357 73,547 77,555 3,315 336 Fiscal Year 2011 $ $ (83) 25,640 322,024 187,855 6,958 1,939 76,570 7,746 23,784 (8,385) 158 56,526 60,532 3,848 2013 Due to implementation of GASB 54 in FY 2009-10 categories regarding fund balances have been redefined. See Note 1, page 53 for details. See Note 4, page 60 for purpose details. Source: Pima County Finance & Risk Management 1 Note: 66,167 11,784 51,575 5,152 46,423 Nonspendable 1 Restricted Committed Assigned Unassigned Capital projects funds $ $ All other governmental funds Reserved Unreserved, reported in: Special revenue funds Nonspendable 1 Restricted Committed Assigned Unassigned Total General Fund General Fund Reserved Unreserved 2006 (in thousands) (modified accrual basis of accounting) PIMA COUNTY, ARIZONA Fund Balance - Governmental Funds Last Ten Fiscal Years $ $ (80) 7,848 223,714 145,256 3,836 1,894 60,984 6,308 4,204 (6,536) 181 42,731 48,190 5,278 2014 $ $ (57) 8,424 199,248 126,827 3,065 2,515 53,155 6,320 3,769 (4,770) 194 47,878 52,125 4,053 2015 Exhibit D - 3 141 Source: Pima County Finance & Risk Management Debt service as a percentage of noncapital expend 10.90% (38,009) (177) Net change in fund balances 9,168 Change in reserves - net 231 416 4,836 59,948 (56,263) Total other financing sources (uses) Issuance of refunding debts Premium on bonds Payments to escrow agents Capital leases/Installment notes Proceeds from sale of capital assets Face amount of long-term debt Transfers in Transfers (out) 9.88% 16,368 (211) 148,576 1,426 146,320 86,089 (86,688) 1,429 (131,997) (47,000) Other financing sources (uses): Deficiency of revenues under expenditures 893,332 222,434 132,930 42,683 6,766 32,311 97,168 45,197 38,474 202,659 53,733 18,965 12 761,335 348,700 521 7,132 303,392 63,508 6,550 13,988 17,544 761,343 $ $ Total expenditures 714,343 321,474 215 7,452 291,059 63,582 6,014 11,382 13,165 203,881 121,229 39,394 6,271 30,038 103,034 28,561 37,918 121,007 50,547 19,448 15 $ $ 2007 General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Capital outlay Debt service - principal - interest - miscellaneous Expenditures Total revenues Taxes Special assessments Licenses and permits Intergovernmental Charges for services Fines and forfeits Investment earnings Miscellaneous Revenues 2006 $ $ 10.43% 86,917 (55) 178,017 312 27 175,000 128,406 (127,692) 1,964 (91,045) 895,147 237,640 149,475 43,741 8,310 34,352 106,607 50,509 42,286 139,539 59,719 22,639 330 804,102 381,862 556 7,710 312,634 58,890 6,480 14,218 21,752 2008 $ $ 15.88% (25,330) (55) 115,818 876 109,400 171,186 (166,319) 675 (141,093) 926,378 222,309 144,617 38,132 6,666 31,626 115,481 51,657 42,299 146,334 100,384 26,849 24 785,285 396,241 441 6,989 292,236 55,346 6,283 5,335 22,414 2009 $ $ 15.24% 54,028 128,066 1,118 125,000 98,800 (98,355) 31,955 1,909 (32,361) (74,038) 892,685 221,144 136,744 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 $ $ 13.54% 15,460 70 83,043 59 75,000 109,715 (105,007) 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 Fiscal Year 2011 (in thousands) (modified accrual basis of accounting) $ $ PIMA COUNTY, ARIZONA Changes in Fund Balances - Governmental Funds Last Ten Fiscal Years 13.35% 33,710 (27) 112,348 30,745 7,349 (33,013) 894 1,938 78,425 141,924 (115,914) (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 $ $ 11.67% (13,053) 129,769 51,280 11,959 (55,423) 764 31 130,175 113,227 (122,244) (142,822) 931,935 238,582 152,373 35,866 5,328 35,581 95,339 55,691 44,299 174,976 68,342 23,904 1,654 789,113 8,371 301,223 53,521 9,904 2,282 22,182 391,630 2013 $ $ 16.44% (110,424) 59,464 8,805 9,488 (10,131) 239 360 78,160 162,683 (190,140) (169,888) 941,753 247,507 157,572 37,772 2,521 35,357 93,193 56,745 34,196 135,746 113,337 26,777 1,030 771,865 8,275 292,082 57,826 8,652 1,737 17,464 385,829 2014 $ $ 13.51% (20,575) 60,781 13,685 5,949 (15,250) 11,500 119 72,025 121,497 (148,744) (81,356) 904,377 256,331 161,484 39,664 2,403 37,787 93,418 68,987 34,280 100,788 81,933 26,439 863 823,021 8,456 296,628 60,222 9,509 1,155 15,680 431,371 2015 Exhibit D - 4 (This page is intentionally blank) 142 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. 143 $ 2,001,137 2,204,072 2,358,259 2,568,203 2,473,320 2,436,692 2,514,310 2,375,969 2,308,924 2,230,175 $ 4,076,600 4,689,972 5,352,916 5,853,947 5,889,572 5,332,608 5,036,810 4,701,881 4,752,612 4,952,757 Residential Property $ 359,662 428,486 493,055 525,779 536,958 500,836 472,558 429,967 407,857 385,043 Vacant Land $ 29,803 30,802 35,442 37,783 39,797 39,984 50,260 51,312 49,090 52,386 Other $ 6,467,202 7,353,332 8,239,672 8,985,712 8,939,647 8,310,120 8,073,938 7,559,129 7,518,482 7,620,361 Taxable Assessed Value 5.3406 5.0674 4.6702 4.5917 4.6798 4.8491 4.8520 5.1309 5.7639 5.9632 Total Direct Tax Rate $ 56,437,790 64,347,659 73,122,499 80,593,121 82,348,215 78,036,208 76,085,641 73,262,703 74,402,882 76,489,654 Estimated Limited Value 11.46% 11.43% 11.27% 11.15% 10.86% 10.65% 10.61% 10.32% 10.11% 9.96% Assessed Value as a Percentage of Limited Value Exhibit D - 5 Source: Pima County Finance & Risk Management Notes: Property in Pima County is assessed annually with values being set by either the County Assessor or the Arizona Department of Revenue. The values are the basis for Primary Taxes and annual changes therein are restricted by the State Constitution. Assessment ratios are set by the legislature for individual property types. The taxable assessed value is arrived at by multiplying an assessment ratio that has varied from ten percent for residential property to twenty-five percent for commercial property. Tax rates are per $100 of assessed value. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Tax Year Commercial Property (in thousands) PIMA COUNTY, ARIZONA Taxable Assessed Value and Estimated Actual Value of Property Last Ten Tax Years 144 1.2515 1.1845 1.1355 1.0770 1.0848 1.1094 1.1741 1.2933 1.3344 1.3689 District Community College 1.2257 1.1321 0.9601 0.9344 0.9550 1.1621 1.2639 1.4304 1.4606 1.5960 Tucson City of 0.2383 0.2258 0.2143 0.2035 0.1999 2.6603 2.7640 2.9776 0.2528 0.2528 Tucson City of South 9.6038 10.1900 12.0787 12.3345 District Street Lighting 0.1200 0.1000 0.1000 0.1000 0.1000 0.1000 0.1000 0.1400 0.1400 0.1400 12.9000 12.9000 19.3500 19.3500 19.3500 19.3500 19.3500 19.3500 19.3500 19.3500 District2 District2 District Silverbell Irrigation 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 3.0000 60.0000 65.0000 66.0000 66.0000 66.0000 66.0000 66.0000 69.0000 69.0000 72.0000 District2 CortaroMarana Irrigation 0.5000 0.5000 0.5000 0.5000 0.5000 District3 Mobile Home Relocation 0.0415 0.0383 0.0411 0.0406 0.0430 0.0418 0.0447 0.0456 0.0472 0.0467 Assistance Fire District 2.8000 2.8000 2.8000 2.8000 2.8000 2.8000 2.8000 2.8000 2.8000 2.8000 District 0.3000 0.3000 0.3000 0.3000 0.3000 0.3000 0.3000 0.3000 0.3000 0.3000 District Gladden Farms Vanderbilt Farms Community Community Facilities Facilities 5.3406 5.0674 4.6702 4.5917 4.6798 4.8491 4.8520 5.1309 5.7639 5.9632 Total 3.3000 3.3000 3.3000 3.3000 3.3000 3.3000 3.3000 3.3000 3.3000 District Quail Creek Community Facilities 0.3000 0.3000 0.3000 0.3000 0.3000 0.3000 Facilities District Gladden Farms Phase II Community 0.3000 0.3000 0.3000 0.3000 0.3000 0.3000 District Saguaro Springs Community Facilities Exhibit D - 6 Mobile Home Relocation levy applies only to unsecured mobile homes. Irrigation Districts' tax rates shown are levied on a per acre basis. The Pima County Flood Control District tax levy applies only to real property. Source: Pima County Finance & Risk Management 3 2 1 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. The Towns of Marana, Oro Valley and Sahuarita do not currently levy a property tax. The Tucson Business Improvement District levy (on a per-business basis) is not shown. 0.0000 0.0000 0.0000 0.3306 0.3564 0.4259 0.4717 0.5123 0.5089 0.5054 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Education Arizona Assistance Tax Year State of Overlapping Rates Flowing Wells Irrigation Central AZ Water Conservation 0.3675 0.3975 0.3393 0.2643 0.3100 0.3460 0.3460 0.3753 0.4353 0.5153 District District1 0.3746 0.3446 0.2935 0.2635 0.2635 0.2635 0.2635 0.2635 0.3035 0.3135 County Library Flood Control 0.7150 0.6850 0.6050 0.7100 0.7500 0.7800 0.7800 0.7800 0.7000 0.7000 Secondary County 3.8420 3.6020 3.3913 3.3133 3.3133 3.4178 3.4178 3.6665 4.2779 4.3877 Primary Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 County Tax County Direct Rates (per $100 of assessed value) PIMA COUNTY, ARIZONA Direct and Overlapping Property Tax Rates 145 2.0682 4.8853 5.7696 1.7394 Continental Elementary (#39) Redington Elementary (#44) Altar Valley Elementary (#51) Unorganized1 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 1.4622 5.7451 7.4720 1.7343 4.9021 3.7920 5.9176 5.5360 6.1053 4.5964 4.3682 7.8009 4.8589 6.2665 5.4815 6.5659 2008 1.3726 6.0506 7.6340 1.6122 2.9383 4.5954 5.4230 5.2016 4.9970 4.3158 3.1837 7.0899 4.6112 6.1239 4.9286 6.0701 2009 1.4797 6.2500 7.0689 1.6945 2.9195 3.6883 6.5753 4.8839 4.2154 4.9069 3.3545 6.9680 5.0511 6.0407 4.6995 6.2976 2010 Source: Pima County Finance & Risk Management County Education District; Only applies to those geographical areas within Pima County not part of formal school districting. 1 Notes: 8.4864 6.7428 Catalina Foothills Unified (#16) Empire Elementary (#37) 4.4929 Ajo Unified (#15) 3.7481 5.4806 Tanque Verde Unified (#13) San Fernando Elementary (#35) 9.1529 Sunnyside Unified (#12) 7.7345 6.1193 Amphitheater Unified (#10) Sahuarita Unified (#30) 6.8677 Flowing Wells Unified (#8) 6.7032 5.9117 Marana Unified (#6) Vail Elementary (#20) 7.3857 2006 Tucson Unified (#1) School District (per $100 of assessed value) 1.7682 6.5675 6.7630 2.0258 2.7531 4.8541 5.4067 4.6550 4.2095 5.6740 3.8042 6.9415 5.4033 5.9689 5.2047 6.9480 2011 2.1265 6.2676 6.4355 1.9585 4.8200 1.7027 1.1287 5.7831 6.6341 7.1703 4.8264 3.8882 5.0012 5.0003 5.9226 6.7146 6.0085 7.4319 2013 5.9198 1.5729 1.2484 4.0331 5.5183 5.9120 4.7472 3.5338 4.1538 6.3154 5.5539 5.9778 5.5863 7.3187 2012 PIMA COUNTY, ARIZONA Direct and Overlapping Property Tax Rates - School Districts Last Ten Tax Years 2.1123 6.7381 4.7711 2.6146 2.1687 5.8244 7.2885 7.3000 4.7066 4.8452 5.0329 6.0364 5.8044 6.6135 6.2288 7.5094 2014 2.0977 7.6184 4.5901 2.6512 1.7677 5.9538 7.2847 7.0189 4.9985 4.5540 5.3069 3.9987 5.6725 6.6292 6.3370 7.3425 2015 Exhibit D - 6a 146 4 3 55,176 62,846 Phelps Dodge Corporation - Sierrita Mine Southwest Gas Corporation 0.3% 19,087 Northwest Hospital LLC Source: Pima County Assessor's Office Arizona Department of Revenue Secondary Assessed Valuation for Tax Year 1 Notes: Total Top Ten $ 459,465 9 15,504 Westin La Paloma $6,869,955 6.7% 0.2% 0.3% 6 21,665 ASARCO Mining Raytheon 0.3% 0.0% 5 22,858 Arizona Portland Cement 0.2% - 8 17,068 Starr Pass Resort Developments LLC DND Neffson Co. (Tucson Mall) 7 0.0% 10 14,806 Trico Electric Co-Op Inc. 0.2% 1.3% 2 87,093 QWEST Corporation ASARCO LLC - Mission Mine 0.0% 0.9% 0.8% 2.1% Value Percent of Total Assessed - Unisource/Tucson Electric Power Co. 1 Value1 Rank $ 143,362 Taxpayer Estimated Assessed 2006 $ 553,281 15,959 58,987 - 23,468 15,280 19,897 - 18,044 94,300 - 62,919 93,656 $ 150,771 Value1 Estimated Assessed 9 5 6 10 7 8 2 4 3 1 Rank 2007 $8,220,396 6.7% 0.2% 0.7% 0.0% 0.3% 0.2% 0.2% 0.0% 0.2% 1.1% 0.0% 0.8% 1.1% 1.8% Value Percent of Total Assessed $ 618,100 - 33,833 44,047 23,593 15,889 21,013 - 18,816 87,000 - 63,698 156,780 $ 153,431 Value1 Estimated Assessed (in thousands) 6 5 7 10 8 9 3 4 1 2 Rank 2008 PIMA COUNTY, ARIZONA Principal Property Taxpayers Last Ten Fiscal Years $9,594,862 6.4% 0.0% 0.4% 0.5% 0.2% 0.2% 0.2% 0.0% 0.2% 0.9% 0.0% 0.7% 1.6% 1.6% Value Percent of Total Assessed $ 667,355 - - 63,572 27,561 19,384 18,888 - 21,029 74,646 20,042 64,775 198,694 $ 158,764 Value1 Estimated Assessed 5 6 9 10 7 3 8 4 1 2 Rank 2009 $9,860,981 6.8% 0.0% 0.0% 0.6% 0.3% 0.2% 0.2% 0.0% 0.2% 0.8% 0.2% 0.7% 2.0% 1.6% Value Percent of Total Assessed $ 492,722 - - - 16,635 16,582 17,715 17,097 21,208 55,076 28,878 65,879 89,289 $ 164,363 Value1 Estimated Assessed 9 10 7 8 6 4 5 3 2 1 Rank 2010 (continued) $9,342,561 5.3% 0.0% 0.0% 0.0% 0.2% 0.2% 0.2% 0.2% 0.2% 0.6% 0.3% 0.7% 1.0% 1.8% Value Percent of Total Assessed Exhibit D - 7 147 Taxpayer 58,585 51,942 ASARCO, LLC Qwest Corporation Secondary Assessed Valuation for Tax Year Source: Pima County Assessor's Office Arizona Department of Revenue 1 Notes: $ 532,828 17,519 Target Corporation Total Top Ten - 16,153 JW Marriott Starr Pass Resort Verizon Wireless 21,217 Trico Electric Co-Op, Inc. - 17,931 DND Neffson Co. (Tucson Mall) Raytheon Company 17,390 Northwest Hospital, LLC - 64,533 Southwest Gas Corporation Wal-Mart Stores, Inc. 99,048 $ 168,510 Value1 Estimated Assessed Phelps Dodge Corporation Unisource/Tucson Electric Power Co. (continued) 8 10 6 7 9 5 4 3 2 1 Rank 2011 $8,448,282 6.3% 0.2% 0.0% 0.2% 0.3% 0.0% 0.2% 0.2% 0.0% 0.6% 0.7% 0.8% 1.2% 2.0% Value Percent of Total Assessed $ 608,128 - 14,291 - 22,133 - 17,998 17,723 15,581 53,225 83,778 61,718 142,419 $ 179,262 Value1 Estimated Assessed 10 6 7 8 9 5 3 4 2 1 Rank 2012 $8,171,212 7.4% 0.0% 0.2% 0.0% 0.3% 0.0% 0.2% 0.2% 0.2% 0.7% 1.0% 0.8% 1.7% 2.2% Value Percent of Total Assessed Value1 Estimated Assessed $ 598,339 - 12,884 - 21,713 - 16,030 16,980 16,923 40,386 74,101 61,669 136,947 $ 200,706 (in thousands) 10 6 9 7 8 5 3 4 2 1 Rank 2013 PIMA COUNTY, ARIZONA Principal Property Taxpayers Last Ten Fiscal Years $7,623,691 7.8% 0.0% 0.2% 0.0% 0.3% 0.0% 0.2% 0.2% 0.2% 0.5% 1.0% 0.8% 1.8% 2.6% Value Percent of Total Assessed $ 543,261 - - 12,298 21,845 - 16,037 16,982 19,366 38,035 55,322 66,789 95,186 $ 201,401 Value1 Estimated Assessed 10 6 9 8 7 5 4 3 2 1 Rank 2014 $ 7,579,899 7.2% 0.0% 0.0% 0.2% 0.3% 0.0% 0.2% 0.2% 0.3% 0.5% 0.7% 0.9% 1.3% 2.7% Value Percent of Total Assessed $ 530,942 - - - 14,131 14,703 15,695 17,058 18,494 37,877 48,496 70,297 93,847 $ 200,344 Value1 Estimated Assessed 10 9 8 7 6 5 4 3 2 1 Rank 2015 $ 7,906,190 6.7% 0.0% 0.0% 0.0% 0.2% 0.2% 0.2% 0.2% 0.2% 0.5% 0.6% 0.9% 1.2% 2.5% Value Percent of Total Assessed Exhibit D - 7 148 Tax Levy $ 302,127 330,240 362,535 379,674 402,062 402,532 383,709 370,922 368,313 411,484 Fiscal Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 (Adjusted) $ 301,836 329,918 361,913 379,314 401,956 402,148 383,709 370,922 368,313 411,484 Real Property Tax Levy Amount $ 292,019 318,520 348,741 363,624 384,983 383,978 369,100 357,556 355,338 397,670 Levy 96.65% 96.45% 96.20% 95.77% 95.75% 95.39% 96.19% 96.40% 96.48% 96.64% Percent of Original 1 $ Years 9,756 11,298 12,946 15,416 16,679 16,295 13,041 12,072 11,920 Collections in Subsequent Represents the difference between the adjusted levy and collected to June 30, 2015. Amounts collected are on a cash basis rather than the modified accrual basis used in the financial statements. Corrections $ (291) (322) (622) (360) (106) (384) Tax Roll Source: Pima County Finance & Risk Management Pima County Treasurer's Office 2 1 Note: Original Real Property End of Tax Fiscal Year Collected to June 30, (in thousands) PIMA COUNTY, ARIZONA Real Property Tax Levies and Collections Last Ten Fiscal Years Amount $ 301,775 329,818 361,687 379,040 401,662 400,273 382,141 369,628 367,258 397,670 Levy 99.98% 99.97% 99.94% 99.93% 99.93% 99.53% 99.59% 99.65% 99.71% 96.64% Percent of Adjusted June 30, 20151 Collected to Receivable2 $ 61 100 226 274 294 1,875 1,568 1,294 1,055 13,814 Delinquent Taxes 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 2005-06 Primary 2005-06 Secondary $ Net Assessed Limited and Full Cash Ratio of Net Assessed to Value Value1 Full Cash Value 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% 2012-13 Primary 2012-13 Secondary 8,073,938 8,171,212 76,085,641 77,731,086 10.61% 10.51% 2013-14 Primary 2013-14 Secondary 7,559,129 7,623,691 73,262,703 74,590,067 10.32% 10.22% 2014-15 Primary 2014-15 Secondary 7,518,482 7,579,899 74,402,882 75,389,155 10.11% 10.05% Notes: 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. Source: Pima County Finance & Risk Management 149 PIMA COUNTY, ARIZONA Comparative Net Valuations and Tax Rates Exhibit D - 10 (per $100 assessed value) (in thousands) Jurisdiction State of Arizona FY 2014-15 (Tax Year 2014) Valuation Rate $ 7,518,482 Pima County General Fund - Primary Debt Service - Secondary Free Library - Secondary 0 FY 2015-16 (Tax Year 2015) Valuation Rate $ 7,620,361 0 7,518,482 7,579,899 7,522,894 4.2779 0.7000 0.4353 7,620,361 7,620,361 7,620,361 4.3877 0.7000 0.5153 7,518,482 4.2779 1.1353 5.4132 7,620,361 4.3877 1.2153 5.6030 Education Assistance 7,518,482 0.5089 7,620,361 0.5054 Flood Control District - Secondary 6,767,458 0.3035 6,917,201 0.3135 Fire District Assistance - Secondary 7,518,482 0.0472 7,620,361 0.0467 Pima Community College District Primary Secondary Total 7,518,482 0 1.3344 0 1.3344 7,620,361 0 1.3689 0 1.3689 7,522,894 0.1400 7,620,361 0.1400 3,100,675 3,131,952 0.4829 0.9777 1.4606 3,123,670 3,123,670 0.5326 1.0634 1.5960 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 21,180 0 0.2528 0 0.2528 20,334 0 0.2528 0 0.2528 18,330 2.1123 18,270 2.0977 3,001,654 3,028,699 6.8021 0.7073 7.5094 3,026,615 3,026,615 6.5217 0.8208 7.3425 Source: Pima County Finance & Risk Management (continued) 150 PIMA COUNTY, ARIZONA Comparative Net Valuations and Tax Rates Exhibit D - 10 (per $100 assessed value) (in thousands) (continued) Jurisdiction Marana Unified (District #6) Primary Secondary Total FY 2014-15 (Tax Year 2014) Valuation Rate $ 710,743 716,727 4.3493 1.8795 6.2288 Flowing Wells Unified (District #8) Primary Secondary Total 186,862 188,539 Amphitheater Unified (District #10) Primary Secondary Total FY 2015-16 (Tax Year 2015) Valuation Rate 736,011 736,011 4.4563 1.8807 6.3370 4.4165 2.1970 6.6135 183,908 183,908 4.3164 2.3128 6.6292 1,376,502 1,388,632 4.3674 1.4370 5.8044 1,403,631 1,403,631 4.2501 1.4224 5.6725 Sunnyside Unified (District #12) Primary Secondary Total 407,058 411,216 3.4565 2.5799 6.0364 405,451 405,451 2.7746 1.2241 3.9987 Tanque Verde Unified (District #13) Primary Secondary Total 168,681 169,220 3.8926 1.1403 5.0329 173,314 173,314 3.7233 1.5836 5.3069 19,274 19,423 4.8452 0 4.8452 18,506 18,506 4.5540 0 4.5540 Catalina Foothills Unified (District #16) Primary Secondary Total 555,678 558,433 3.1273 1.5793 4.7066 572,819 572,819 3.4551 1.5434 4.9985 Vail Elementary (District #20) Primary Secondary Total 417,721 420,342 4.8751 2.4249 7.3000 429,134 429,134 4.5425 2.4764 7.0189 Ajo Unified (District #15) Primary Secondary Total Source: Pima County Finance & Risk Management $ (continued) 151 PIMA COUNTY, ARIZONA Comparative Net Valuations and Tax Rates Exhibit D - 10 (per $100 assessed value) (in thousands) (continued) Jurisdiction Sahuarita Unified (District #30) Primary Secondary Total FY 2014-15 (Tax Year 2014) Valuation Rate $ 310,071 311,158 FY 2015-16 (Tax Year 2015) Valuation Rate 4.2988 2.9897 7.2885 $ 299,027 299,027 4.6088 2.6759 7.2847 San Fernando Elementary (District #35) Primary Secondary Total 1,288 1,293 5.8244 0 5.8244 1,260 1,260 5.9538 0 5.9538 Empire Elementary (District #37) Primary Secondary Total 7,661 7,713 2.1687 0 2.1687 7,673 7,673 1.7677 0 1.7677 304,353 307,027 2.2575 0.3571 2.6146 312,442 312,442 2.1799 0.4713 2.6512 1,046 1,046 0 0 0 2,108 2,108 0 0 0 1,405 1,453 4.7711 0 4.7711 1,327 1,327 4.5901 0 4.5901 30,178 30,503 5.8245 0.9136 6.7381 28,867 28,867 6.1119 1.5065 7.6184 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 Source: Pima County Finance & Risk Management 152 PIMA COUNTY, ARIZONA Historical Collections - Hotel Excise Tax Car Rental Surcharge and Recreational Vehicle Tax Last Ten Fiscal Years Exhibit D - 11 (in thousands) Fiscal Hotel Excise Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Tax1 $ 5,212 7,796 6,901 5,628 5,637 5,887 6,626 6,286 6,276 6,105 Car Rental Recreational Vehicle Surcharges2 $ 1,589 1,357 1,732 1,389 1,521 1,538 1,464 1,399 1,390 1,384 Tax3 $ Notes: 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 153 214 210 222 159 181 165 146 136 122 137 PIMA COUNTY, ARIZONA Streets and Highways Revenue Last Ten Fiscal Years Exhibit D - 12 (in thousands) Fiscal Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Highway User Revenue Amount $ 56,937 58,638 57,847 53,907 50,535 50,460 44,890 47,449 49,212 53,212 $ Source: Pima County Finance and Risk Management Department 154 43,292 44,607 44,060 41,210 38,739 38,974 33,665 36,860 37,500 40,762 Vehicle License Tax $ 13,645 14,031 13,787 12,697 11,796 11,486 11,225 10,589 11,712 12,450 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 installment notes payable, and purchase agreements, are provided to comply with debt disclosure requirements. 155 231,918 290,150 349,542 388,032 420,261 455,856 461,557 467,368 416,006 391,298 Fiscal Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 $ 2,230 1,470 725 725 Control Bonds $ 127,000 136,541 149,801 139,683 142,226 131,375 141,536 128,604 133,081 118,770 Transportation Revenue Bonds $ Government $ 530,644 664,089 845,872 878,680 1,058,962 1,046,919 1,248,820 1,431,672 1,405,771 1,350,118 Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 31,731 81,612 74,554 72,638 48,235 39,772 134,494 149,703 177,771 Total Primary $ $ Income 1.66% 1.97% 2.39% 2.61% 3.13% 2.98% 3.43% 3.88% 3.70% 3.45% Percentage of Personal 26,426 24,736 23,223 21,327 19,387 17,775 16,431 298 Capital Leases Personal income and population statistics are based on calendar year. Prior years' statistics updated based on current data. Source: Pima County Finance & Risk Management UA Economic and Business Research Center, Eller College of Management 1 1 Personal 5,739 3,714 1,000 Income $ 31,951,109 33,641,312 35,320,737 33,713,976 33,883,172 35,132,468 36,412,855 36,935,363 38,025,100 39,106,000 $ Certificates of Transportation Participation Loans Fiscal 911 Special Assessment Bonds Notes: Details regarding outstanding debt can be found in Note 7 to the Financial Statements, pages 65-74. $ G General enera Obligation Bonds Governmental Activities (in thousands) $ at July 11 959,474 977,258 984,032 984,274 981,168 986,081 990,380 996,046 1,007,162 1,022,079 Population 605 640 11,912 Installment Note Payable Debt per Capita $ 553 681 860 893 1,079 1,062 1,261 1,437 1,396 1,321 $ 51,710 94,356 163,701 183,389 166,935 184,782 171,022 155,514 138,431 120,361 Sewer Revenue Bonds $ 165,000 176,849 379,418 510,975 540,288 510,763 $ 80,148 76,111 70,426 64,489 66,210 27,390 23,719 21,169 19,680 18,145 Regional Wastewater Loans Payable $ 4,562 5,280 5,842 6,481 6,305 4,657 15,365 12,645 7,942 1,098 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 $ 530,644 664,089 845,872 878,680 1,058,962 1,046,919 1,248,820 1,431,672 1,405,771 1,350,118 Total Primary Government Exhibit D - 13 156 Bond Debt $ 231,918 290,150 349,542 388,032 420,261 455,856 461,557 467,368 416,006 391,298 Fiscal Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Bond Debt $ 2,230 1,470 725 725 Principal $ 5,571 7,431 10,241 10,523 11,396 27,904 22,602 22,900 5,326 6,037 Debt Service Funds Available for Bond Debt $ 228,577 284,189 340,026 378,234 408,865 427,952 438,955 444,468 410,680 385,261 Net General $ Source: Pima County Finance & Risk Management UA Economic and Business Research Center, Eller College of Management Debt per Capita is shown in actual dollars and not in thousands. Population statistics are based on calendar year. Prior years' statistics updated to reflect current data. 2 1 Notes: Details regarding outstanding debt can be found in Note 7 to the Financial Statements, pages 65-74. General Obligation Flood Control General Obligation (in thousands) Value 6,050,950 6,869,955 8,220,396 9,594,862 9,860,981 9,342,561 8,448,282 8,171,212 7,623,691 7,579,899 Secondary Net Assessed Value 3.78% 4.14% 4.14% 3.94% 4.15% 4.58% 5.20% 5.44% 5.39% 5.08% Percent Net General Bond Debt to Assessed PIMA COUNTY, ARIZONA Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita Last Ten Fiscal Years at July 1 959,474 977,258 984,032 984,274 981,168 986,081 990,380 996,046 1,007,162 1,022,079 1 Population per Capita2 $ 238 291 346 384 417 434 443 447 408 377 Net General Bond Debt Exhibit D - 14 157 1,146,388 1,107,662 1,137,114 1,213,050 1,302,802 1,335,431 1,284,219 1,311,417 1,193,238 1,501,691 $ 6,050,950 6,869,955 8,220,396 9,594,862 9,860,981 9,342,561 8,448,282 8,171,212 7,623,691 7,579,899 Value Secondary Net Assessed 18.95% 16.12% 13.83% 12.64% 13.21% 14.29% 15.20% 16.05% 15.65% 19.81% Value Percentage of Assessed 959,474 977,258 984,032 984,274 981,168 986,081 990,380 996,046 1,007,162 1,022,079 at July 1 1 Population 1,195 1,133 1,156 1,232 1,328 1,353 1,297 1,317 1,185 1,469 per Capita2 Debt Debt per Capita is shown in actual dollars and not in thousands. Population statistics are based on calendar year. Prior year data updated to reflect new source. Source: Pima County Finance & Risk Management UA Economic and Business Research Center, Eller College of Management 2 1 Notes: 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. $ Debt Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Total Overlapping Fiscal (dollar 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, 2015 Exhibit D - 15 (in thousands) Debt Outstanding Governmental Unit Amount Overlapping Debt repaid with property tax: School Districts $ 588,445 City of Tucson 213,495 Total overlapping Debt repaid with property tax Direct: Pima County* $ $ 391,298 Total direct 588,445 213,495 $ 801,940 $ 391,298 $ 391,298 $ 177,771 Other Debt: Certificates of participation $ 177,771 Installment note payable Transportation bonds 11,912 11,912 118,770 118,770 Total other debt $ 308,453 Total direct and overlapping debt $ 1,501,691 Notes: 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. *Excludes improvement districts. Source: Pima County Finance & Risk Management City of Tucson Finance Department Pima Community College District Finance Office 158 159 24.87% 27.38% 748,334 $ $ 27.42% 894,965 338,094 (10,241) 348,335 1,233,059 2008 8,220,396 $ $ 26.15% 1,062,907 376,322 (10,523) 386,845 1,439,229 2009 9,594,862 $ $ Source: Pima County Finance & Risk Management 27.49% 1,072,548 406,599 (11,396) 417,995 1,479,147 2010 9,860,981 Please see Note 7 to the Financial Statements, pages 74 for additional details on calculation of the legal debt margin for the current year. Total net debt applicable to the limit as a percentage of debt limit. 681,904 Legal debt margin 282,159 (7,431) (5,571) 1,030,493 2007 6,869,955 289,590 $ $ 231,310 907,643 2006 6,050,950 225,739 $ $ 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 Full Cash Net Assessed Value (dollar amounts in thousands) $ $ 30.32% 976,538 424,846 (27,904) 452,750 1,401,384 2011 9,342,561 PIMA COUNTY, ARIZONA Legal Debt Margin Last Ten Fiscal Years $ 34.21% 833,699 433,543 (22,602) 456,145 1,267,242 2012 $ 8,448,282 $ 35.39% 791,892 433,790 (22,900) 456,690 1,225,682 2013 $ 8,171,212 $ 35.15% 741,605 401,949 (5,326) 407,275 1,143,554 2014 $ 7,623,691 $ $ 33.24% 759,087 377,898 (6,037) 383,935 1,136,985 2015 7,579,899 Exhibit D - 16 160 Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 78,326 87,834 117,962 189,426 232,395 219,052 Principal $ 10,053 13,957 13,325 14,187 16,952 17,110 20,895 29,759 37,025 41,026 Interest $ 5,619 6,340 7,221 9,469 9,838 17,047 21,658 28,243 30,386 30,306 Debt Service6 Total $ 15,672 20,297 20,546 23,656 26,790 34,157 42,553 58,002 67,411 71,332 4,5 Ratio 3.09 1.69 1.50 1.39 2.92 2.57 2.77 3.27 3.45 3.07 Coverage Exhibit D - 17a Debt service requirements include principal and interest payable during the Bond Fiscal Year. Per the bond resolution, Bond Fiscal Year is defined as 7/2/20XX to 7/1/20XX. For fiscal year 2009-2010, a new Debt Coverage calculation was implemented. Sewer revenue debt rate covenants require minimum coverage of 120%. Pledged revenues defined by BOS Resolution 2010-50. 20,163 11,260 32,806 99,491 128,735 121,426 $ 3 $ Pledged Revenues (unrestricted) Balances of Prior Fiscal Year Excludes grants, depreciation, interest expense and amortization. Includes sewer connection fees. Source: Pima County Finance & Risk Management 6 5 4 3 2 1 Notes: Available Net Revenue $ 48,456 34,362 30,743 32,801 58,163 76,574 85,156 89,935 103,660 97,626 Expense2 $ 57,371 69,597 78,521 73,186 69,904 74,638 73,241 73,577 77,893 84,492 Revenues $ 105,827 103,959 109,264 105,987 128,067 151,212 158,397 163,512 181,553 182,118 Fiscal 1 Less: Operating Sewer User Plus: Ending cash (dollar amounts in thousands) PIMA COUNTY, ARIZONA Regional Wastewater Reclamation Pledged Sewer Revenue Debt Coverage Last Ten Fiscal Years 161 $ 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 $ 39,336 42,639 43,490 38,082 34,214 34,552 33,335 35,041 37,295 39,022 Operating Expense $ 22,608 22,142 21,519 20,809 20,683 18,159 13,499 14,833 13,702 16,444 Available Net Revenue $ 11,435 11,745 12,365 15,145 10,530 11,015 12,055 12,425 13,685 13,210 $ Debt Service requirements include principal and interest payable in the 12 months following each fiscal year. Source: Pima County Finance & Risk Management 1 5,257 5,659 6,147 6,203 5,709 5,244 5,537 4,969 5,197 4,711 Debt Service1 Principal Interest Notes: Details regarding outstanding debt can be found in Note 7 to the Financial Statements, pages 68-69. Operating expenditures do not include interest, depreciation or amortization. 61,944 64,781 65,009 58,891 54,897 52,711 46,834 49,874 50,997 55,466 Transportation Revenue Fiscal Year Less: (dollar amounts in thousands) PIMA COUNTY, ARIZONA Transportation Revenue Bonds - Pledged Revenue Bond Coverage Last Ten Fiscal Years 1.35 1.27 1.16 0.97 1.27 1.12 0.77 0.85 0.73 0.92 Coverage Ratio Exhibit D - 17b 162 $ $ 3,118 3,015 21 82 FY 06-07 $ $ 6,002 5,920 82 FY 07-08 $ $ 3,158 3,027 131 FY 08-09 $ $ 3,118 3,007 111 FY 09-10 $ $ 3,041 3,004 37 FY 10-11 $ $ 3,004 3,004 FY 11-12 $ $ 3,725 298 3,427 FY 12-13 $ $ Funds derived from a sale/leaseback of the County's Adult Corrections Facility provided funding for construction of Kino Veteran's Memorial Sportspark & Tucson Electric Park Stadium. Source: Pima County Finance & Risk Management 1 Notes: Jail Sheriff - Equipment Solid Waste - Equipment County Administration - Culture & Recreation 1 Clerk of Superior Court - Equipment Function/Department (dollar amounts in thousands) PIMA COUNTY, ARIZONA Lease, Lease-Purchase, Installment Note Payable and Purchase Agreements Scheduled Payments 458 160 298 FY 13-14 $ $ 244 160 84 FY 14-15 $ $ 3,625 3,869 160 84 FY 15-16 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 (dollar amounts in thousands) Fiscal Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Principal 48,672 50,940 56,459 96,751 83,565 72,525 78,390 67,885 112,835 81,705 Interest 18,147 17,672 19,757 24,322 24,097 23,945 24,762 23,903 26,758 26,424 Total Debt Service 66,819 68,612 76,216 121,073 107,662 96,470 103,152 91,788 139,593 108,129 Total General Expenditures* 640,336 689,968 755,413 780,044 730,379 730,278 767,261 756,959 806,007 803,590 Ratio of Debt Service To General Expenditures 10.4% 9.9% 10.1% 15.5% 14.7% 13.2% 13.4% 12.1% 17.3% 13.5% *Includes General, Special Revenue and Debt Service Funds, while excluding Capital Projects Fund. Source: Pima County Finance & Risk Management 163 (This page is intentionally blank) 164 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 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Population 959,474 977,258 984,032 984,274 981,168 986,081 990,380 996,046 1,007,162 1,022,079 Per Capita Personal Income Personal Income $ 31,951,109 33,641,312 35,320,737 33,713,976 33,883,172 35,132,468 36,412,855 36,935,363 38,025,100 39,106,000 $ Exhibit D - 20 Unemployment Rate 33,301 34,424 35,894 34,253 34,534 35,628 36,767 37,082 37,755 38,261 Sources: Arizona Department of Administration, Office of Employment & Population Statistics UA Economic and Business Research Center, Eller College of Management Bureau of Labor Statistics 165 3.9% 3.6% 5.7% 9.0% 9.4% 8.4% 7.4% 7.0% 6.4% 5.5% 166 6,954 80,908 Total 443,300 18.2% 0.9% 79,899 4,900 5,848 10 8 Fort Huachuca is located in Cochise County but is listed here due to its role as a large regional employer. 10 Sources: UA Economic and Business Research Center, Eller College of Management Data is obtained from www.tucson.com/star200, a website of the Arizona Daily Star. 1 Notes: Total Work Force 4,123 Phelps Dodge Carondelet Health Network 1.2% 453,500 17.6% 1.1% 1.3% 80,671 5,848 6,701 8 1.2% 1.6% 8,018 5,306 4 9 7 1.6% 7,701 City of Tucson 9,119 5,625 7,290 6 1.8% 10,754 1 1.1% 1.5% 7,419 5 2.2% 12,515 13,098 9 7 1.7% 8,233 3 2.5% 10,535 Fort Huachuca1 6,765 Pima County Government 6 1.9% 9,927 1 2.3% 5,805 7,623 Tucson Unified School District 5 2.2% 11,184 2 Employees 4,980 8,233 Davis-Monthan AFB 4 2.4% 10,354 Rank Percent of Total County Employment Wal-Mart Stores, Inc. 9,742 State of Arizona 2 2.3% Employees 2007 5,840 10,756 Raytheon 3 Rank Percent of Total County Employment Freeport-McMoran Copper 10,282 University of Arizona Employer Employees 2006 8 7 10 9 6 4 5 2 1 3 Rank 2008 459,200 17.6% 1.3% 1.3% 1.3% 1.5% 1.7% 1.7% 2.3% 2.7% 2.3% Percent of Total County Employment PIMA COUNTY, ARIZONA Principal Employers Current Year and Nine Years Ago 77,214 5,635 6,463 6,715 5,987 6,235 7,227 7,509 9,329 11,539 10,575 Employees 10 7 6 9 8 5 4 3 1 2 Rank 2009 486,400 15.9% 1.2% 1.4% 1.2% 1.3% 1.5% 1.5% 1.9% 2.4% 2.2% Percent of Total County Employment 10 4,566 75,882 9 8 5 7 6 4 3 1 2 Rank 5,399 6,236 7,192 6,511 7,012 7,755 8,708 12,140 10,363 Employees 2010 (continued) 488,500 15.6% 0.9% 1.1% 1.5% 1.3% 1.4% 1.6% 1.8% 2.5% 2.1% Percent of Total County Employment Exhibit D - 21 167 8,462 6,709 6,403 5,982 Davis-Monthan AFB Tucson Unified School District Pima County Government UA Healthcare Network 70,546 Fort Huachuca is located in Cochise County but is listed here due to its role as a large regional employer. 485,800 14.3% Sources: UA Economic and Business Research Center, Eller College of Management Data is obtained from www.tucson.com/star200, a website of the Arizona Daily Star. 1 Notes: Total County Work Force otal Total 69,641 15.5% 455,900 77,431 453,200 17.1% 0.8% 3,668 Carondelet Health Network TMC HealthCare 1.0% 4,350 Tohono O'odam Nation 1.6% 1.2% 1.4% 1.3% 1.3% 1.5% 2.0% 1.9% 2.3% 2.4% Percent of Total County Employment 1.0% 5 10 7 8 9 6 3 4 2 1 Rank 2013 4,585 1.0% 10 6,198 4,930 7 City of Tucson 6,198 8 6,225 6,500 6,099 6,076 6,790 9,100 8,807 10,300 10,846 Fort Huachuca 1 1.6% 1.3% 1.2% 1.4% 1.5% 1.9% 2.0% 2.3% 2.3% Employees 7,450 5 9 10 8 6 4 3 2 1 Rank Percent of Total County Employment 7,308 7,300 6,000 5,594 6,170 6,674 8,566 9,061 10,500 10,681 Employees 2012 Wal-Mart Stores, Inc. 1.5% 1.2% 1.3% 1.4% 1.7% 1.8% 2.2% 2.2% Percent of Total County Employment 5,463 5 9 7 6 4 3 1 2 Rank 2011 Freeport-McMoran Copper US Border Patrol 8,866 10,500 Raytheon State of Arizona 10,481 Employer Employees University of Arizona (continued) PIMA COUNTY, ARIZONA Principal Employers Current Year and Nine Years Ago 74,469 3,476 4,350 4,845 5,717 5,200 5,600 4,135 6,329 7,328 6,525 8,933 9,439 9,933 11,047 Employees ` 8 10 9 7 5 6 4 3 2 1 Rank 2014 452,429 16.5% 0.0% 0.8% 1.0% 1.1% 1.1% 1.2% 0.9% 1.4% 1.6% 1.4% 2.0% 2.1% 2.2% 2.4% Percent of Total County Employment 76,063 2,976 3,943 4,350 4,882 5,314 5,400 5,800 6,470 6,542 7,023 7,134 8,335 8,524 9,600 11,235 Employees 10 9 8 7 6 5 4 3 2 1 Rank 2015 467,438 16.3% 0.6% 0.8% 0.9% 1.0% 1.2% 1.2% 1.4% 1.4% 1.5% 1.5% 1.8% 1.8% 2.1% 2.4% Percent of Total County Employment Exhibit D - 21 168 959,474 977,258 984,032 984,274 981,168 986,081 990,380 996,046 1,007,162 1,022,079 Population 446,958 454,854 473,344 486,040 479,879 465,640 459,349 449,958 452,429 467,438 3.9% 3.6% 5.7% 9.0% 9.4% 8.4% 7.4% 7.0% 6.4% 5.5% Total Unemployment Rate 1,600 1,800 1,900 1,700 1,800 1,900 2,100 2,300 2,300 2,300 Mining 28,000 26,600 22,900 16,700 15,100 14,500 14,400 15,400 14,900 15,000 Construction 28,100 27,500 27,200 25,100 24,000 23,400 23,400 23,200 22,700 22,500 Manufacturing EMPLOYMENT 63,000 64,800 63,100 58,600 57,200 58,000 58,000 59,200 60,600 60,700 Transportation & Utilities 17,400 18,000 16,900 17,100 17,200 16,900 16,900 17,300 17,500 17,600 Financial Activities Exhibit D - 22 Sources: UA Economic and Business Research Center, Eller College of Management Bureau of Labor Statistics Notes: All Employment data presented is not seasonally adjusted. Labor Force, Unemployment and Sector Employment for 2015 represent the average through July 2015. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Year Civilian Labor Force PIMA COUNTY, ARIZONA Population and Employment Last Ten Calendar Years 169 289,440 263,910 240,329 190,445 169,780 164,152 145,967 138,263 139,420 141,422 Aircraft Movements 4,227,788 4,374,371 4,395,205 3,669,924 3,709,178 3,676,894 3,649,783 3,308,620 3,239,849 3,181,901 17,179,275 17,857,865 19,491,376 21,648,350 20,483,709 19,746,774 19,971,230 20,352,101 19,713,449 19,657,931 Transportation No. of Air Bus Passengers Ridership Sources: UA Economic and Business Research Center, Eller College of Management Tucson Airport Authority Pima Association of Governments Tucson Association of Realtors, Multiple Listing Service, Inc. Note: Tucson International Airport follows the Federal fiscal calendar. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Fiscal Year 2.18 2.21 2.27 2.46 2.22 2.18 2.15 2.16 2.06 2.06 Riders Per Mile 11,903 6,265 4,171 2,364 2,340 2,400 2,062 3,713 2,040 3,250 Residential Bldg. Permits PIMA COUNTY, ARIZONA Transportation and Real Estate Last Ten Fiscal Years 16,630 13,821 10,718 10,472 12,471 11,545 13,436 13,587 13,379 13,692 Real Estate Multiple Listings $ 4,462,020 3,757,536 2,810,383 2,245,644 2,457,147 2,033,702 2,211,369 2,528,609 2,648,443 2,856,957 Sales Volume (In thousands) Exhibit D - 23 PIMA COUNTY, ARIZONA Economic Indicators by Calendar Year Last Ten Years Exhibit D - 24 (dollar amounts in thousands) Fiscal Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 $ Aggregate Retail Sales1 10,805,508 11,530,620 11,865,697 11,583,359 10,439,448 10,640,207 11,440,377 12,010,672 12,317,085 12,555,553 No. of Dwelling Units Awarded2 11,644 8,522 5,237 3,221 2,129 1,938 2,242 2,841 3,491 3,250 Change in Real Estate Sales Volume 12% -19% -34% -25% 9% -21% 8% 13% 5% 7% Commercial Bank Deposits $ 10,134,000 10,497,000 10,765,000 10,855,000 11,134,000 11,265,000 11,501,822 12,173,345 12,980,645 13,760,260 Notes: 1 Aggregate Retail includes total taxable sales from the following categories: Retail, Restaurant & Bar, Food and Gasoline. 2 Beginning with calendar year 2011, the number of dwelling units awarded includes both single family and multiple family unit structures combined. Sources: UA Economic and Business Research Center, Eller College of Management Tucson Association of Realtors, Multiple Listing Service, Inc. Federal Deposit Insurance Corporation 170 PIMA COUNTY, ARIZONA Population Statistics June 30, 2015 ESTIMATED POPULATION BY AGE Age Group Population 0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+ 63,912 62,481 63,174 71,479 79,641 68,782 63,249 59,394 59,076 56,871 64,742 67,157 64,072 58,107 43,534 76,408 Total 1,022,079 POPULATION PROJECTIONS Year Projected Population 2016 2020 2025 2035 2045 1,037,232 1,100,021 1,172,515 1,312,101 1,447,403 Source: Arizona Department of Administration, Office of Employment & Population Statistics 171 Exhibit D - 25 PIMA COUNTY, ARIZONA Average Annual Jail Population Last Ten Fiscal Years Fiscal Year Average Jail Population 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2,028 2,008 1,913 1,888 1,724 1,640 1,802 2,000 2,061 1,863 Source: Pima County Sheriff's Department, Corrections Bureau 172 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. 173 7,250 Total 6,855 1,187 559 153 3 472 5,668 2,776 1,442 334 41 408 22 466 179 2007 7,093 1,202 563 128 3 508 5,891 2,860 1,560 330 40 404 26 485 186 2008 6,644 1,034 451 73 3 507 5,610 2,684 1,491 311 34 397 29 480 184 6,728 978 422 66 2 488 5,750 2,870 1,488 264 33 422 32 467 174 6,704 970 421 66 2 481 5,734 2,850 1,529 262 23 412 27 461 170 Full-Time Employees (FTE's) as of June 30, 2015 2009 2010 2011 6,470 593 0 59 3 531 5,877 2,473 1,540 274 24 404 377 652 133 2012 5,571 468 0 52 3 413 5,103 2,321 1,468 265 3 174 397 331 144 2013 6,001 501 0 60 3 438 5,500 2,805 1,525 258 31 319 8 442 112 2014 Notes: 1 Variances can 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. Pima Health Systems & Services was subsequently sold and the department closed. 1,461 634 156 3 Total business-type activities Pima Health System & Services1 Development Services Parking Garages 668 5,789 Total governmental activities Business-type activities Regional Wastewater Reclamation 2,911 1,401 526 45 414 23 180 289 2006 Governmental activities General government Public safety Highways and streets Sanitation Health Welfare Culture and recreation Education and economic opportunity Function/Program PIMA COUNTY, ARIZONA Employees by Function Last Ten Fiscal Years 5,782 448 0 56 5 387 5,334 2,832 1,387 248 33 282 7 434 111 2015 Exhibit D - 27 174 3 2 1 $ 99,185,638 $ 16,646,964 2,018,849 3,568,917 76,950,908 1,390,792 6,276,794 488,250 $ 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 N/A 68.5 8,734 3,927 30,204 34,131 33,929 2007 $ 113,810,324 $ 18,619,333 17,591,833 4,673,301 72,925,857 1,429,365 6,874,888 554,339 147 445,137 19,622 160,626 143,611 N/A 67.3 4,452 5,967 41,542 47,509 32,796 2008 $ 106,021,120 $ 59,922,798 14,336,536 9,028,251 22,733,535 1,425,235 7,409,820 516,780 149 403,887 25,756 103,407 58,879 N/A 67.8 1,477 6,422 49,817 56,239 33,571 2009 For fiscal year 2010-11 there were no Spring Training games in Tucson Sidewinders attendance 7/08 through 9/08; beginning in fiscal year 2008-09, the team is no longer in Tucson MGD: Millions of Gallons per Day Notes: Total Completed Capital Projects Land Buildings Improvements Infrastructure Library Volumes in collection Total volumes borrowed Number of cardholders 135 391,295 17,218 Parks & Recreation Athletic field permits issued Community center admissions Volunteer hours 66.4 8,325 155,377 171,179 N/A 1 3,170 27,846 31,016 30,686 Cultural and Recreational2,3 Spring training attendance Sidewinders attendance Soccer attendance Avg. daily sewage treated (MGD) New connections Wastewater Traffic violations/citations Criminal Civil Total violations/citations Sheriff Physical arrests Program: 2006 $ 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 N/A N/A 65.4 1,950 6,417 41,800 48,217 27,946 2010 5,655,264 57,876,009 6,366,258 24,259,854 1,414,928 7,199,809 452,400 161 339,550 12,168 N/A N/A N/A 62.7 1,412 4,304 32,270 36,574 24,108 2011 $ 94,157,385 $ PIMA COUNTY, ARIZONA Operating Indicators by Program Last Ten Fiscal Years $ 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 20,850 N/A 36,001 62.3 1,355 4,205 32,445 36,650 24,841 2012 6,947 33,313,996 12,837,873 13,291,580 $ 59,450,396 $ 1,257,821 6,098,216 405,419 263 306,841 8,213 21,944 N/A 21,942 60.9 1,856 4,291 33,837 38,128 25,451 2013 4,335,540 8,595,432 20,436,143 108,053,960 $ 141,421,075 $ 1,193,357 4,521,039 405,507 326 327,257 11,366 N/A N/A 36,723 60.2 1,804 5,691 34,466 40,157 24,394 2014 $ 163,451,150 $ 10,746,469 107,899,620 3,763,811 41,041,250 1,139,730 5,484,961 379,631 280 318,524 12,108 N/A N/A 41,259 60.3 1,427 8,743 30,656 39,399 21,233 2015 Exhibit D - 28 175 138 3,314 17 1,235 32,948 49 12 13 $ 18 3,668 36,616 67 25 N/A 92.45 3,464 2,932 41 84 16 9 9 10,840 139 1,150,950 1,801 7 4 302 2007 9 757 37,373 76 26 N/A 90.00 3,492 2,991 41 90 17 11 9 10,999 140 $ 1,321,034 1,893 7 4 324 2008 6 5 4 $ 5 14,753 52,126 81 26 N/A 91.50 3,462 2,881 38 85 17 8 9 11,053 140 1,257,087 1,893 7 4 323 2009 9 5,390 57,516 90 26 N/A 94.26 3,472 2,881 38 85 17 8 9 11,966 140 1,893 7 4 361 2010 On July 1, 2006, the Pima County Library District assumed control of the operations of all County libraries. On Jan. 3, 2012 capacity was reduced when the Town of Marana obtained ownership of the Marana Wastewater Treatment Facility. Regional Flood Control District maintained acreage only. No soil cement bank protection projects in 2012 and 2013. Pothole repair figures were unavailable in FY 2009-10. Annexation by other jurisdictions resulted in a decrease of Transportation (Streets and Highways). 3 2 1 Notes: Open Space Acquisitions Properties added Acres Cumulative acreage Total properties Libraries6 County City 87.45 Wastewater Sanitary sewers (miles) Treatment capacity (MGD)5 2,885 36 78 14 9 9 10,622 Parks & Recreation Urban parks (acres) Playgrounds Baseball/softball diamonds Soccer/football fields Community centers Swimming pools / Splashpads Flood plain / drainage way (acres)4 Bank protection (miles)3 Flood Control 1,798 964,051 $ Streets (miles)1 6 5 303 2006 Pothole repair2 Transportation (streets and highways) Sheriff Stations Zone offices Patrol units Program: $ 7 4 355 2011 4 275 57,791 94 26 N/A 97.76 3,476 2,898 39 86 18 11 10 12,027 141 2,822,770 1,892 PIMA COUNTY, ARIZONA Capital Assets & Infrastructure by Program Last Ten Fiscal Years $ 6 595 58,386 100 26 N/A 97.06 3,440 3,012 40 86 18 11 10 13,210 1,493,531 1,897 7 4 358 2012 1 1,416 59,802 101 26 N/A 97.04 3,448 3,143 40 87 18 11 10 13,645 $ 1,462,810 1,905 7 2 305 2013 3 823 60,625 104 27 N/A 95.04 3,462 3,147 41 89 20 11 10 16,538 175 $ 1,767,246 1,854 7 2 354 2014 $ 2 389 61,014 106 27 N/A 95.03 3,466 3,489 38 91 21 11 10 16,806 195 2,715,481 1,854 7 2 371 2015 Exhibit D - 29 (This page is intentionally blank) 176