N Navajo County COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year 2009-10 This Page Intentionally Left Blank 2 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Introductory section 3 NAVAJO COUNTY BOARD OF SUPERVISORS This Page Intentionally Left Blank Front Row: District 2—Jesse Thompson, District 4—David Tenney, District 1—Jonathan M. Nez Back Row: District 3—J.R. DeSpain, District 5—Jerry Brownlow 4 This Page Intentionally Left Blank 5 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Table of Contents Introductory section Navajo County Board of Supervisors 4 Letter of Transmittal 10 Organization Chart 16 FINANCIAL SECTION Independent Auditor’s Report 20 Management’s Discussion and Analysis (Required Supplementary Information) 22 BASIC FINANCIAL STATEMENTS: Government-Wide Financial Statements: Statement of Net Assets Statement of Activities Fund Financial Statements: 32 33 Balance Sheet - Governmental Funds 34 Reconciliation of the Balance Sheet to the Statement of Net Assets Statement of Revenues, Expenditures, and Changes 35 in Fund Balances - Governmental Funds 36 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 37 Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds 38 Statement of Cash Flows - Proprietary Funds 39 Statement of Fiduciary Net Assets - Fiduciary Funds 40 Statement of Changes in Fiduciary Net Assets - Fiduciary Funds 41 6 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Table of Contents Notes to the Financial Statements: Note 1– Summary of Significant Accounting Policies 42 Note 2– Stewardship, Compliance and Accountability 49 Note 3– Deposits and Investments 50 Note 4– Due From Other Governments 55 Note 5– Capital Assets 56 Note 6– Construction and Other Significant Commitments 57 Note 7– Long-Term Liabilities 58 Note 8– Risk Management 63 Note 9– Operating Leases 65 Note 10– Pensions and Other Postemployment Benefits 66 Note 11– Interfund Balances and Activity 74 Note 12– County Treasurer’s Investment Pool 76 Other Required Supplementary Information: Budgetary Comparison Schedules General Fund 80 Public Works/HURF Fund 83 Flood Control District Fund 84 Notes to Budgetary Comparison Schedules 85 Schedule of Agent Retirement Plans’ Funding Progress 86 Combining and Individual Fund Statements and Schedules: Combining Balance Sheet– Nonmajor Governmental Funds 92 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances– Nonmajor Governmental Funds 7 97 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Table of Contents Budgetary Comparison Schedules: Nonmajor Governmental Funds 100 Special Revenue - Administration 102 Special Revenue - County Attorney 103 Special Revenue - Courts 104 Special Revenue - Environmental and Conservation 105 Special Revenue - Housing 106 Special Revenue - Library District 107 Special Revenue - Probation 108 Special Revenue - Public Defense 109 Special Revenue - Public Health 110 Special Revenue - Recreation 111 Special Revenue - Sheriff’s Office 112 Special Revenue - Special Districts 113 Special Revenue - Workforce Investment Act 114 Capital Projects - Special Districts 115 Debt Service - General Government 116 Debt Service - Jail 117 Debt Service - Special Districts 118 Capital Assets Used in the Operation of Governmental Funds: Comparative Schedules By Source 120 Schedule By Function and Activity 121 Schedule of Changes By Function and Activity 122 Statement of Changes in Assets and Liabilities – Agency Fund 8 123 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Table of Contents STATISTICAL SECTION Financial Trends Net Assets by Component 127 Changes in Net Assets 129 Fund Balances of Governmental Funds 133 Changes in Fund Balances of Governmental Funds 135 Revenue Capacity Assessed Value and Estimated Actual Value of Taxable Property 137 Direct and Overlapping Tax Rates 138 Principal Property Taxpayers 139 Property Tax Levies and Collections 140 Debt Capacity Ratios of Outstanding Debt by Type 141 Legal Debt Margin Information 142 Pledged Revenue Coverage 143 Demographic and Economic Information Demographic and Economic Statistics 144 Employment by Sector/Major Employers 145 Operating Information Full -Time Equivalent Employees by Function 146 Operating Indicators by Function 147 Capital Asset Statistics by Function 148 9 Navajo County ADMINISTRATION James G. Jayne W. James Menlove, CPA County manager Finance Director To the Honorable Board of Supervisors and Citizens of Navajo County, Arizona: We are pleased to provide you the Comprehensive Annual Financial Report (CAFR) for Navajo County for the fiscal year ended June 30, 2010. The CAFR provides in depth information regarding the County’s financial position. Navajo County presents the CAFR prepared in compliance with generally accepted accounting principles and audited using generally accepted auditing standards by the Arizona Office of the Auditor General. This report consists of management’s representations concerning the finances of Navajo County. Consequently, management assumes full responsibility for the completeness and reliability of the information presented in this report. To provide a reasonable basis for making these representations, management of the County has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for preparation of the County’s financial statements in conformity with generally accepted accounting principles (GAAP). Because the cost of internal controls should not exceed the anticipated benefits, the objective of this framework is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. The Arizona Office of the Auditor General has audited the County’s financial statements. The goal of the independent audit was to provide reasonable assurance that the financial statements of the County for the fiscal year ended June 30, 2010 are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded based upon the audit; that there was a reasonable basis for rendering an unqualified opinion that the County’s financial statements for the fiscal year ended June 30, 2010 , are fairly presented in conformity with GAAP. The Independent Auditors report is presented at the beginning of the Financial Section of this report. This report is prepared in accordance with generally accepted accounting principles, in conformance with standards of financial reporting established by the Governmental Accounting Standards Board (GASB), and using the guidelines established by the Government Finance Officers Association of the United States and Canada (GFOA). GAAP requires that management provide an overview and analysis to accompany the basic financial statements, called the Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A immediately follows the Independent Auditors’ Report in the Financial Section of this report. 10 Navajo County ADMINISTRATION James G. Jayne W. James Menlove, CPA County manager Finance Director The Comprehensive Annual Financial Report consists of three sections: Introductory Section which includes the Letter of Transmittal. Financial Section which includes the Independent Auditors’ Report, Management’s Discussion and Analysis, basic financial statements, notes to the financial statements, other required supplementary information, and combining and individual fund statements and schedules. Statistical Section which presents comprehensive statistical data on the County’s financial, economic, and demographic characteristics. NAVAJO COUNTY PROFILE Navajo County was formed on March 21, 1895 and encompasses 9,953 square miles. The diversity of Navajo County is evident not only in it’s population but also in its landscape. Northern Navajo County is home to the Navajo and Hopi Tribes, and is known for scenic attractions such as Monument Valley. The middle part of Navajo County is where the county seat is located, in Holbrook. Holbrook became the county seat in 1871. Southern Navajo County is home to the White Mountain Apache Tribe and many picturesque lakes and forests. The 2009 population of the County was estimated to be 112,975. The principal industries are tourism, coal mining, manufacturing, timber production and ranching. Navajo County’s government consists of an elected Board of Supervisors. There are five districts with one supervisor representing each district. As governed by statute, the Board of Supervisors is responsible for the overall management and approval of the departmental budgets and tax rates. The Board appoints a County Manager and each department is headed by an elected official, appointed official or a department director. Elected offices are statutorily determined and include the Assessor, Clerk of the Superior Court, Constables, County Attorney, Sheriff, Recorder, Superintendent of Schools, Treasurer and the Judiciary. Navajo County provides a full range of services including law enforcement and public safety, judicial and detention services, health services, highway construction/maintenance, education and library services. The financial reporting entity includes all the funds of the primary government and it’s component units. Component units are legally separate entities for which the primary government is financially accountable. Blended component units although legally separate entities, are, in substance part of the County’s operations. Additional information on Navajo County’s blended component units can be found in the notes to the financial statements Note 1. 11 Navajo County ADMINISTRATION James G. Jayne W. James Menlove, CPA County manager Finance Director The Board of Supervisors and the County Manager use the financial policies, budget management policies and strategic priorities to guide the overall development of the budget. On an annual basis, beginning in January the Finance Department, under the direction of the County Manager, meet with all elected officials and department directors and outline the Board’s adopted budget guidelines. Each department must provide revenue and expenditure estimates for the remainder of the current fiscal year and planned revenues and expenditures for the following year. These estimates are used by the budget team to assist in the updating of the five-year financial plan. The final budget must be adopted by the Board of Supervisors on or before the third Monday in August. The tax rate and levy must also be set on or before the third Monday in August. The final Adopted Budget cannot exceed the total of the Tentative Budget. FACTORS AFFECTING NAVAJO COUNTY’S FINANCIAL CONDITION The information presented in the financial statements is best understood when it is considered from the broader perspective of the specific environment within which the County operates. Local Economy. Navajo County has experienced a 15.9% growth in population from 2000 through 2009. The major cities and towns in Navajo County account for a large portion of the overall increase. (information on the 3 tribal lands was not available): Some of the major employers in Navajo County include Catalysts (formerly Abitibi Consolidated) - Snowflake, Arizona Public Service - Joseph City, Burlington Northern Santa Fe Railway Winslow, Summit Healthcare - Show Low, and Northland Pioneer College Holbrook. Major Cities/Communities Show Low Pinetop-Lakeside Taylor Snowflake Winslow Holbrook White Mtn Apache Tribe Hopi Tribe Kayenta, Navajo Nation 1990 5019 2422 2418 3679 8190 4686 10394 7360 4372 2008 12346 4522 4182 5686 9833 5083 N/A N/A N/A % increase 146% 87% 73% 55% 20% 8% The State of Arizona has been struggling to balance budget deficits in Source: Arizona Department of Commerce: http://www.census.gov/ the face of declining revenues. All of Arizona’s counties have been impacted by the reduced revenues at the state and local levels, as well as cost shifts imposed by the state. 12 Navajo County ADMINISTRATION James G. Jayne W. James Menlove, CPA County manager Finance Director Long-Term Financial Planning. In November 2006, Navajo County voters approved Proposition 400 which restated the base year expenditure limitation. The expenditure limit is a constraint on the county’s annual spending that was added to the Arizona Constitution in 1980. The limit is based on the county’s actual 1980 expenditures and is adjusted each year for population growth and inflation. Basically, the service level provided in 1980—the base year—is the benchmark for spending on today’s essential services. Navajo County elected officials agreed that the expenditure limit, based on 1980 service levels, was not sufficient to meet the current demand for basic public services. Proposition 400 allowed the County to restate the base year expenditure limit which allowed for the allocation of resources to:  Public Safety - Increased law enforcement coverage and availability.  Transportation - Additional investment in transportation infrastructure.  Access to Services - Improvement of facilities and satellite offices to provide more accessible government services.  Quality Work Force - Focus on retention of staff, which reduced training and operational costs as employee turnover was greatly reduced. The proactive decision making of the Board of Supervisors has allowed Navajo County to better plan for the long-term financial sustainability of the county. Sound fiscal and budget management policies allow the County to better respond to the economic challenges that we face currently and in the future. Among the current challenges is a significant decline in the three major revenues sources; State Shared Sales Tax, County Sales Tax and General Fund Vehicle License Tax (VLT). Since 2008, State Shared Sales Tax has decreased 18.5%, County Sales Tax by 20% and General Fund VLT by 12.7%. Impact of State Economic Condition. The downturn in the local economy corresponds to economic declines at the state and national levels. As the State of Arizona struggles to balance their budget and reduce expenses the counties have been significantly impacted by the shifting of revenues away from the County while mandating counties to pay for state programs. The uncertainty of these impacts from year to year requires Navajo County to budget conservatively to handle these cost shifts, reductions in program funding and reduced revenue allocations. Navajo County continues to work with State Legislators and the County Supervisors Association to find solutions to the state budget crisis with the least impact to counties. 13 Navajo County ADMINISTRATION James G. Jayne W. James Menlove, CPA County manager Finance Director Additionally Navajo County continues to seek alternate funding sources to increase revenues. Cost analysis is ongoing and the county is seeking to find ways to further reduce spending while continuing to provide for mandated functions with excellent customer service. Economic Outlook. Economists are predicting an end to the recession near the end of 2011, with a very modest recovery during 2012. Arizona was among the states hardest hit by the economic downturn with any recovery lagging behind the recovery on a national level. The weakness in the economy and the uncertainty of the state budget requires continual monitoring and planning for Navajo County. We will continue to address these challenges through the strategic budget planning process in coordination with our Elected Officials and Department Directors. SIGNIFICANT FINANCIAL POLICIES Navajo County has developed a set of fiscal management policies which guide the budget recommendations. These policies consist of: Operating Budget Policy, Capital Budget Policy, Revenue Policy, Reserve Policy, Debt Policy, and the Budget Management Policy. The policies have been developed to:  Provide accountability to the citizens and the Board of Supervisors.  Provide guidelines for long-term financial stability, enhancing the County’s ability to withstand fiscal fluctuations at the national, state and local levels.  Provide an overall financial picture of the County as a whole.  Provide a basis for incorporating long-term policies into day to day operations. AWARDS On June 8th 2010, the Government Finance Officers Association Distinguished Budget Presentation Award was presented to the Board of Supervisors for Fiscal Year 2009. We have submitted our 2010 budget for review and anticipate receiving the award for the second consecutive year. To qualify for the award, the County’s budget will be reviewed and judged as a policy document, a fiscal plan, an operations guide and a communication device. 14 Navajo County ADMINISTRATION James G. Jayne W. James Menlove, CPA County manager Finance Director ACKNOWLEDGMENTS Preparation of this report could only be accomplished through the coordinated efforts of the staff of the Finance Department, the cooperative and willing assistance provided by our Elected Officials and Department Directors and the competent service of the Arizona Office of the Auditor General. We wish to thank the Navajo County Board of Supervisors for their leadership and commitment to Navajo County and our citizens. Respectfully submitted, ___________________________________ ____________________________________ James G. Jayne James Menlove, CPA County Manager Finance Director 15 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Voters NAVAJO COUNTY BOARD OF SUPERVISORS County Attorney County Manager Administration Constable Winslow County Recorder Assistant County Manager Constable Snowflake County Assessor Constable Show Low Clerk of the Court Constable Holbrook Constable Pinetop Constable Kayenta County Sheriff Superintendent of Schools County Treasurer Clerk of the Board of Supervisors Finance Director Public Works Director Human Resources Director Facilities Management Director Information Technology Director Health Director Library District Director Legal Defender Workforce Investment Act Executive Director Public Defender Public Fiduciary North Eastern Arizona Training Center Manager Elections Director 16 Presiding Judge Judicial Branch Superior Court Judge Judicial Branch Superior Court Judge Judicial Branch Superior Court Judge Judicial Branch Court Administrator Superior Court Juvenile Director Judicial Branch Chief Probation Officer Judicial Branch Justice of the Peace Winslow Justice Court Justice of the Peace Holbrook Jjustice Court Justice of the Peace Show Low Justice Court Justice of the Peace Snowflake Justice Court Justice of the Peace Kayenta Justice Court Justice of the Peace Pinetop Justice Court Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Jonathan M. Nez Jesse Thompson J.R. DeSpain District 1 District 2 District 3 David Tenney Jerry Brownlow District 4 District 5 James G. Jayne County Manager E.L. “Dusty” parsons Assistant County Manager Prepared by Navajo County Finance Department James Menlove, Finance Director Mary Jane Springer, Deputy Finance Director 17 Cris Parisot, Senior Accountant This Page Intentionally Left Blank 18 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 FINANCIAL section 19 20 21 Navajo County Finance Department W. James Menlove, CPA FINANCE DIRECTOR Management’s Discussion and Analysis As management of Navajo County, we offer readers of Navajo County’s financial statements this narrative overview and analysis of the financial activities of Navajo County for the fiscal year ended June 30, 2010. We encourage readers to consider the information presented here in conjunction with the financial statements. Financial Highlights  The assets of the County exceeded its liabilities at the close of the current fiscal year by $105.3 million (net assets). Of this amount, $16.2 million (unrestricted net assets) may be used to meet the government’s ongoing obligations to citizens and creditors.  The total decrease in the County’s net assets was $2.5 million in fiscal year 2010.  At the close of fiscal year 2010, the County’s governmental funds reported combined ending fund balances of $41.4 million, an increase of $2.5 million in comparison with the prior year’s balances of $38.9 million. Approximately 97.9 percent of the fund balances, $40.5 million, is unreserved fund balances available for spending at the County’s discretion.  At the end of the current fiscal year, unreserved fund balances for the general fund were $7.4 million, or 20.2 percent, of total general fund expenditures. 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 comprise three components: 1. Government-wide financial statements, 2. Fund financial statements, and 3. Notes to the financial statements. This report also contains other required supplementary information in addition to the basic financial statements. 22 Navajo County Finance Department W. James Menlove, CPA FINANCE DIRECTOR Government-wide financial statements The government-wide financial statements are designed to provide readers with a broad overview of the County’s finances in a manner similar to a private sector business. One of the most important questions asked about the County’s finances is, ―Is the County as a whole better off or worse as a result of this year’s activities?‖ The Statement of Net Assets and the Statement of Activities report information about the County as a whole and about its activities in a way that helps answer this question. These statements include all nonfiduciary assets and liabilities using the accrual basis of accounting. The Statement of Net Assets presents information on all of the County’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the County is improving or deteriorating. In addition to this change, other nonfinancial factors will need to be considered. The Statement of Activities presents information showing how net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Therefore, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods, such as revenues pertaining to uncollected taxes and expenses pertaining to earned but unused vacation leave. All of the County’s basic services are considered to be governmental activities, including general government, public safety, highways and streets, health and welfare, culture and recreation, education, environmental and conservation, and urban redevelopment and housing. Sales taxes, property taxes, intergovernmental revenues, and user fees finance most of these activities. The government-wide financial statements can be found on pages 32 through 33 of this report. 23 Navajo County Finance Department W. James Menlove, CPA FINANCE DIRECTOR Fund financial statements The fund financial statements provide detailed information about the most significant county funds— not the County as a whole. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Some funds are required to be established by state law or by bond covenants. However, the Board of Supervisors established many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money. All of the County’s funds can be divided into three categories: governmental, proprietary and fiduciary. Governmental funds—Most of the County’s basic services are reported in governmental funds, which focus on near-term inflows and outflows of spendable resources and the balances of spendable resources available at year-end. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the County’s operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the County’s programs. 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 the governmental funds with similar information presented for the governmental activities in the government-wide financial statements. Reconciliations between governmental activities as reported in the Statement of Net Assets and the Statement of Activities and the governmental funds as reported in the fund financial statements are provided to facilitate this comparison. The County maintains numerous individual governmental funds. Information is presented separately in the governmental funds balance sheets and in the governmental funds statements of revenues, expenditures, and changes in fund balances for the General Fund, Public Works/HURF Fund, and the Flood Control District Fund, which are considered major funds. Data from the other governmental funds is combined into a single aggregated presentation. The governmental fund financial statements can be found on pages 34 through 37 of this report. Proprietary funds—The County uses one type of proprietary fund, an internal service fund, to account for self-insured employee benefits provided to county departments on a cost-reimbursement basis. At the beginning of the year, the County transferred the assets and liabilities of the internal 24 Navajo County Finance Department W. James Menlove, CPA FINANCE DIRECTOR service fund to the General Fund because the County terminated the self-insured employee benefits trust when it joined a pooled trust to provide these benefits. The proprietary fund financial statements can be found on pages 38 and 39 of this report. Also, see Note 8 - Risk management for more information. Fiduciary funds—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 funds financial statements can be found on pages 40 through 41 of this report. Notes to the financial statements—The notes to the financial statements provide additional information that is essential to fully understand the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 42 through 77 of this report. Required supplementary information—In addition to the basic financial statements and accompanying notes, the report presents required supplementary information on the County’s budgeting and budgetary control and the County’s progress in funding its obligation to provide pension benefits to its employees. Other required supplementary information can be found on pages 80 through 88 of this report. Other information—The combining statements in connection with nonmajor governmental funds are presented immediately following the required supplementary information. Combining and individual fund statements and schedules including statistical information can be found on pages 89 through 148 of this report. Government-wide Financial Analysis Net Assets Net assets may serve over time as a useful indicator of a County’s financial position. The following table reflects the condensed Statement of Net Assets of the County as of June 30, 2010, compared to the prior year. 25 Navajo County Finance Department W. James Menlove, CPA FINANCE DIRECTOR Governmental Activities 2010 2009 Current and other assets Capital assets Total assets Other liabilities Long-term liabilities outstanding Total liabilities Net Assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets $ 45,374,572 78,655,616 124,030,188 $ 44,391,020 82,838,534 127,229,554 3,410,645 15,339,191 18,749,836 3,345,524 16,107,326 19,452,850 66,038,408 23,034,928 16,207,016 $105,280,352 73,728,006 19,040,878 15,007,820 $107,776,704 The County’s net assets from governmental activities at the end of the fiscal year were $105.3 million. The decrease of $2.5 million is primarily due to a net reduction in capital assets. A large portion of the County’s net assets, 62.7 percent ($66.0 million), reflects its investment in capital assets net of accumulated depreciation and related debt. The County uses these assets to provide services to citizens and, therefore, they are not available for future spending. 21.9 percent of the County’s net assets ($23.0 million) are subject to external restrictions on how they may be used. The County’s restricted net assets increased by 21.0 percent ($4.0 million) in the current fiscal year due to revenues exceeding expenditures in the Public Works/HURF and Flood Control District Funds in the current fiscal year. The remaining balance of the County’s net assets, 15.4 percent ($16.2 million), is unrestricted and may be used to meet the County’s ongoing obligations to citizens and creditors without constraints established by debt covenants or other legal requirements. 26 Navajo County Finance Department W. James Menlove, CPA FINANCE DIRECTOR Change in Net Assets The Statement of Activities presents information on how the County’s net assets changed during the most current fiscal year. The following table reflects the condensed Statement of Activities of the County for the fiscal year 2010 compared to the prior year: Governmental Activities 2010 2009 Program revenues: Charges for services Operating grants and contributions Capital grants and contributions Total program revenues General revenues: Property taxes Sales taxes State shared revenues Grants and contributions not restricted to specific programs Investment earnings Gain on disposal of capital assets Miscellaneous Transfers Total general revenues and transfers Total revenues $ 4,303,509 13,539,596 15,637,667 33,480,772 $ 4,360,848 15,300,801 12,393,158 32,054,807 12,494,737 5,480,598 10,728,725 10,933,578 6,330,588 12,017,517 4,902,289 322,748 115,237 1,273,310 (380,236) 34,937,408 68,418,180 6,444,858 750,742 23,895 1,466,751 37,967,929 70,022,736 Governmental Activities 2010 Program expenses: General government Public safety Highways and streets Health and welfare Culture and recreation Education Environmental and conservation Urban redevelopment and housing Interest on long-term debt Total program expenses Change in net assets Net assets, beginning Net assets, ending $ 22,647,297 17,566,896 13,057,318 9,366,578 747,065 6,307,885 237,032 307,208 677,253 70,914,532 (2,496,352) 107,776,704 $105,280,352 2009 $ 19,392,043 19,182,119 14,058,305 7,219,915 510,035 5,723,104 231,225 594,260 66,911,006 3,111,730 104,664,974 $107,776,704 Overall revenues decreased by 2.3 percent and program expenses increased by 6.0 percent in the current fiscal year. 27 Navajo County Finance Department W. James Menlove, CPA FINANCE DIRECTOR Operating grants and contributions decreased by $1.8 million, or 11.5 percent, in the current year due to a decrease in general fund state government grants. Capital grants and contributions increased by $3.2 million, or 26.2 percent, in the current year due to construction of the Lone Pine Dam Bridge and an intergovernmental agreement with the Navajo Nation for construction of road yard facilities. Property taxes increased by $1.6 million, or 14.3 percent, due to the increase in assessed valuation and increase in levy as allowed by statute. Local sales taxes decreased by $0.8 million, or 13.4 percent, due to the poor economic conditions. State shared revenues decreased by $1.3 million, or 10.7 percent, in the current year due to the recession and general economic downturn in the national and state economies. Grants and contributions not restricted to specific programs decreased by $1.5 million, or 23.9 percent, in the current year due to a decrease in federal grant revenues. General government expenses increased by $3.3 million, or 16.8 percent, in the current fiscal year due to the County discontinuing the self-funded health insurance trust and participating in the Arizona Public Employers Health Pool in the current year. Health and welfare expenses increased by $2.1 million, or 29.7 percent, in the current fiscal year due to the construction of a Public Health Services District facility in the southern part of the county. Financial Analysis of the County’s Funds The County reported three major funds for this fiscal year: the General Fund, Public Works/HURF Fund, and the Flood Control District Fund. At year-end, the County’s governmental funds reported combined fund balances of $41.4 million, which is an increase of $2.5 million from last year or a change of 6.4 percent. Of the total, $40.5 million constitutes unreserved fund balances. Revenues for governmental functions overall decreased by $1.8 million from last year, a decrease of 2.6 percent, and expenditures for governmental functions decreased by about $8.8 million from last year, a decrease of 11.7 percent in the current fiscal year. Governmental function revenues exceeded expenditures by $1.1 million in the current fiscal year. 28 Navajo County Finance Department W. James Menlove, CPA FINANCE DIRECTOR The General Fund is the County’s primary operating fund. At the end of the current fiscal year, the unreserved fund balances of the General Fund totaled $7.4 million. Unreserved fund balances represents 20.2 percent of total General Fund expenditures. This ratio indicates a strong fund balance position in comparison to expenditures. The General Fund’s unreserved fund balances decreased by $.1 million from last year, a decrease of 1.8 percent in the current fiscal year. The primary factor for the decrease was due to declining economic conditions. The Public Works/HURF Fund’s fund balances increased by $4.9 million from last year, an increase of 65.4 percent in the current fiscal year. The primary factor for the increase was due to the delay of certain capital improvement projects. The Flood Control District Fund’s fund balance increased by $1.7 million from last year, or 24.0 percent, in the current fiscal year. The primary factor for the increase was due to revenues exceeding expenditures. The County is accumulating financial resources for the future rehabilitation of the Winslow levy and other planned flood control projects. General Fund Budgetary Highlights For the General Fund, actual revenues were less than the original and final budget amounts by $.3 million while the actual expenditures were $11.1 million less than the amount budgeted. The budget variance for expenditures in the General Fund was primarily due to conservative budgeting practices and reduced spending due to declining economic conditions. Capital Assets and Debt Administration Capital Assets During the current fiscal year, the net book value of capital assets being depreciated decreased by $4.3 million. Additional information on capital assets can be found in Notes 5 and 6 on pages 56 and 57 of this report. 29 Navajo County Finance Department W. James Menlove, CPA FINANCE DIRECTOR Debt Administration At the end of the current fiscal year, the County had total long-term liabilities outstanding of $15.3 million, which included certificates of participation outstanding of $5.0 million that financed the construction of jail facilities and $6.3 million in revenue bonds that financed the acquisition, construction, and improvements of county buildings and facilities. Included in long-term liabilities is $1.5 million of special assessment debt with governmental commitment and $2.5 million for the future payment of compensated absences for unused employee vacation and sick leave. The remainder of the long-term liabilities consists of capital leases, and estimated landfill closure and post-closure care costs. There were no significant changes to the County’s credit ratings or debt limitations during the current fiscal year. Additional information on long-term debt can be found in Note 7 on pages 58 through 62 of this report. Economic Factors and Next Year’s Budget There has been a significant downturn in the national and state economy beginning in the latter part of 2008. Certain economists are predicting an end to the recession at the end of 2011 with a very modest recovery during 2012. The County remains in a strong financial position and has adequate cash reserves. The County continues to closely monitor revenues and applicable economic indicators to ensure that the County remains fiscally strong. The County continues to budget conservatively for revenue estimates and other factors affecting the County. Requests for Information This financial report is designed to provide a general overview of the County’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Navajo County Finance Department, P.O. Box 668, 100 Code Talker Drive, Holbrook, AZ 86025. 30 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Basic financial statements 31 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Statement of Net Assets Governmental Activities Assets Cash and investments Cash and investments held by trustee Receivables (net of allowance for uncollectibles): Property taxes Accrued interest Due from other governments Inventories Prepaid items Restricted assets: $ 37,853,647 1,276,107 764,062 50,785 4,202,087 528,878 45,569 Cash and investments held by trustee Capital assets, not being depreciated Capital assets, being depreciated, net Total assets 653,437 12,104,757 66,550,859 124,030,188 Liabilities Accounts payable Accrued payroll and employee benefits Due to other governments Noncurrent liabilities Due within 1 year Due in more than 1 year Total liabilities 2,321,277 1,069,944 19,424 2,836,470 12,502,721 18,749,836 Net Assets Invested in capital assets, net of related debt Restricted for: Highways and streets Public safety Debt service Capital projects Unrestricted Total net assets See accompanying notes to financial statements 32 66,038,408 $ 12,132,684 8,575,954 1,924,862 401,428 16,207,016 105,280,352 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Statement of Activities Functions/Programs Primary government: Governmental activities: General government Public safety Highways and streets Health and welfare Culture and recreation Education Environmental and conservation Urban redevelopment and housing Interest on long-term debt Total governmental activities Expenses $22,647,297 17,566,896 13,057,318 9,366,578 747,065 6,307,885 237,032 307,208 677,253 $70,914,532 Program Revenues Operating Capital Charges for Grants and Grants and Services Contributions Contributions $3,531,064 517,702 39,249 215,494 $1,735,327 3,290,457 $4,303,509 $13,539,596 $15,637,667 1,803,890 122,207 6,086,494 195,574 305,647 General revenues: Taxes: Property taxes, levied for general purpose Property taxes, levied for flood control Property taxes, levied for public health district Property taxes, levied for library district Property taxes, levied for white mountain lake recreation district Property taxes, levied for special districts General county sales tax Shared revenues - state sales tax Shared revenues - state vehicle license tax Grants and contributions not restricted to specific programs Investment earnings Gain on disposal of capital assets Miscellaneous Transfers Total general revenues and transfers Change in net assets Net assets, July 1, 2009 Net assets, June 30, 2010 See accompanying notes to financial statements 33 $15,637,667 Net (Expense) Revenue and Changes in Net Assets ($17,380,906) (13,758,737) 2,619,598 (7,347,194) (624,858) (221,391) (41,458) (1,561) (677,253) ($37,433,760) $6,464,630 2,742,387 2,148,297 547,247 154,333 437,843 5,480,598 8,732,190 1,996,535 4,902,289 322,748 115,237 1,273,310 (380,236) 34,937,408 (2,496,352) 107,776,704 $105,280,352 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Balance Sheet Governmental Funds Assets Cash and investments Cash and investments held by trustee Receivables: Property taxes Accrued interest Due from other funds Due from other governments Inventories Prepaid items Restricted assets: Cash and investments held by trustee Total assets Liabilities and Fund Balances Liabilities: Accounts payable Accrued payroll and employee benefits Due to other governments Due to other funds Deferred revenues Total liabilities Fund balances: Reserved for inventories Reserved for capital projects Unreserved, reported in: General Fund Special revenue funds Capital projects funds Debt service funds Total fund balances Total liabilities and fund balances General Public Works/ Flood Control Other Governmental Total Governmental Fund HURF Fund District Fund Funds Funds $4,338,628 325,096 $12,011,967 339,455 7,370 2,426,916 1,822,446 14,459 274,479 970,639 528,878 $8,839,545 $12,663,507 951,011 $37,853,647 1,276,107 189,026 10,285 235,581 18,671 256,992 1,409,002 45,569 764,062 50,785 2,958,387 4,202,087 528,878 45,569 $9,259,911 $13,800,422 $9,038,856 653,437 $16,233,770 653,437 $48,332,959 $545,855 693,559 19,424 6,001 252,986 1,517,825 $1,236,837 132,000 $20,088 7,749 274,479 135,678 437,994 $518,497 236,636 2,677,907 184,992 3,618,032 $2,321,277 1,069,944 19,424 2,958,387 573,656 6,942,688 1,368,837 528,878 528,878 325,096 325,096 7,416,990 7,742,086 $9,259,911 11,902,707 8,600,862 12,431,585 $13,800,422 8,600,862 $9,038,856 See accompanying notes to financial statements 34 10,614,544 76,332 1,924,862 12,615,738 $16,233,770 7,416,990 31,118,113 76,332 1,924,862 41,390,271 $48,332,959 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Reconciliation of the Balance Sheet to the Statement of Net Assets Governmental Funds Fund balances—total governmental funds $ 41,390,271 Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets used in governmental activites are not financial resources and therefore, are not reported in the funds. 78,655,616 Some receivables are not available to pay for current-period expenditures and therefore, are deferred in the funds. 573,656 Some liabilities, including bonds and certificates of participation payable, are not due and payable in the current period and therefore are not reported in the funds. Net assets of governmental activities (15,339,191) $ See accompanying notes to financial statements 35 105,280,352 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds General Fund Revenues: Property taxes Licenses and permits Fines and forfreits Intergovernmental Charges for services Investment earnings Special assessments Contributions Miscellaneous Total revenues Expenditures: Current: General government Public safety Highways and streets Health and welfare Culture and recreation Education Environmental and conservation Urban redevelopment and housing Debt service: Principal Interest and other charges Capital outlay Public Works/ HURF Fund $6,397,385 454,494 1,087,357 20,545,394 1,012,452 76,000 $15,032,384 39,249 81,289 519,338 235,037 30,092,420 15,387,959 Flood Control District Fund $2,742,386 18,130,072 12,226,372 66,694 2,809,080 817,477 9,888,985 3,271,809 323,717 Other Governmental Funds Total Governmental Funds $3,154,537 165,169 249,245 14,074,675 1,295,544 98,764 133,181 31,141 518,936 $12,294,308 619,663 1,336,602 49,652,453 2,347,245 322,747 133,181 31,141 1,273,311 19,721,192 68,010,651 3,531,680 3,794,278 198,844 6,034,991 740,591 5,815,346 237,032 307,208 21,661,752 16,838,127 10,087,829 9,306,800 740,591 6,139,063 237,032 307,208 858,416 677,253 858,416 677,253 81,675 81,675 Total expenditures 34,033,645 9,888,985 817,477 22,195,639 66,935,746 Excess (deficiency) of revenues over expenditures (3,941,225) 5,498,974 1,991,603 (2,474,447) 1,074,905 95,036 3,873,834 (2,718,933) 20,201 142,240 (787,506) (327,996) 4,032,407 (2,955,167) 115,237 8,048,481 (6,789,602) 1,249,937 (625,065) (327,996) 1,077,240 1,374,116 (2,691,288) 4,873,909 1,663,607 (1,397,207) 2,449,021 10,433,374 7,516,396 6,937,255 14,012,945 38,899,970 Other financing sources (uses): Sale of capital assets Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances, July 1, 2009 Increase in reserve for inventories Fund balances, June 30, 2010 41,280 $7,742,086 $12,431,585 41,280 $8,600,862 See accompanying notes to financial statements 36 $12,615,738 $41,390,271 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities Governmental Funds Net change in fund balances—total governmental funds Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlay Depreciation expense $ 2,449,021 1,768,636 (5,421,547) (3,652,911) Collections of revenues in governmental funds exceeded revenues reported in the Statement of Activities (462,762) Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Assets. Repayment of debt principal is an expenditure in the governmental funds but the repayment reduces long-term liabilities in the Statement of Net Assets. Principal repaid 858,416 Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for transactions that are not normally paid with expendable available resources. In the Statement of Activities, however, which is presented on the accrual basis of accounting, expenses are reported regardless of when the financial resources are available. Increase in compensated absences Decrease in landfill closure and post-closure care costs Some cash outlalys, such as purchases of inventories, are reported as expenditures in the governmental funds when purchased. In the Statement of Activities, however, they are reported as expenses when consumed. Increase in inventories Net transfers of the internal service funds assets and liabilities are reported in the governmental funds to record the close-out of the fund during the year. Change in net assets of governmental activities (91,005) 724 (90,281) 41,280 (1,639,115) $ (2,496,352) See accompanying notes to financial statements 37 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Statement of Revenues, Expenditures, and Changes in Fund Net Assets Proprietary Funds Governmental Activities Internal Service Fund Transfers in (out): Transfers in Transfers out Net transfers out $ Decrease in net assets 550,000 (2,189,115) (1,639,115) (1,639,115) Net Assets, July 1, 2009 1,639,115 Net Assets, June 30, 2010 $ See accompanying notes to financial statements 38 - N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Statement of Cash Flows Proprietary Funds Governmental Activities Internal Service Fund Cash flows from noncapital financing activities: Cash transfers to other funds Net cash used by noncapital financing activities Net decrease in cash and cash equivalents $ Cash and cash equivalents, July 1, 2009 Cash and cash equivalents, June 30, 2010 (2,187,577) (2,187,577) (2,187,577) 2,187,577 - Schedule of Noncash Investing, Capital and Noncapital Activities Transfer out of accrued interest to General Fund Accrued interest transferred to General Fund Claims payable transferred to General Fund Transfer of claims payable to General Fund Net total See accompanying notes to financial statements 39 $ 1,538 (1,538) 550,000 (550,000) - Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Statement of Fiduciary Net Assets Fiduciary Funds Investment Trust Funds Assets Cash and investments Interest receivable Total assets $ 105,297,219 167,670 $ 105,464,889 Liabilities Due to other governments Deposits held for others Total liabilities Agency Funds $ $ $ $ Net Assets Held in trust for investment trust particpants $ 105,464,889 See accompanying notes to financial statements 40 4,434,108 20,876 4,454,984 3,717,744 737,240 4,454,984 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Statement of Changes in Fiduciary Net Assets Fiduciary Funds Investment Trust Funds Additions: Contributions from participants $ Net investment income 245,347,579 778,759 Total additions 246,126,338 Deductions: Distributions to participants 228,602,614 Change in net assets 17,523,724 Net assets, July 1, 2009 87,941,165 Net assets, June 30, 2010 $ See accompanying notes to financial statements 41 105,464,889 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Note 1 - Summary of Significant Accounting Policies The accounting policies of Navajo County conform to generally accepted accounting principles applicable to governmental units adopted by the Governmental Accounting Standards Board (GASB). For the year ended June 30, 2010, the County implemented the provision of GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets. GASB Statement No. 51 establishes accounting and financial reporting requirements for intangible assets. The implementation of this Statement did not have a material effect on the County’s financial statements. A. Reporting Entity The County is a general purpose local government that is governed by a separately elected board of five county 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 in substance part of the County’s operations. Therefore, data from these units is combined with data of the primary government. Discretely presented component units, on the other hand, are reported in a separate column in the government-wide financial statements to emphasize they are legally separate from the County. Each blended component unit discussed below has a June 30 year-end. The County has no discretely presented component units. 42 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements The following table describes the County’s component units: Component Unit Description; Criteria for Inclusion Reporting Method For Separate Financial Statements Navajo County Flood Control District A tax-levying district that provides flood control systems; the County’s Board of Supervisors serves as the board of directors Blended Not available Navajo County Library District A tax-levying district that provides and maintains library services for the County’s residents; the County’s Board of Supervisors serves as the board of directors Blended Not available Navajo County Health District A tax-levying district that provides health services for the County’s residents; the County’s Board of Supervisors serves as the board of directors Blended Not available White Mountain Lake Recreation District A tax-levying district that provides for recreational services for the White Mountain Lake Community; the County’s Board of Supervisors serves as the board of directors Blended Not available Navajo County Municipal Property Corporation A nonprofit corporation that assists in the acquisition of tangible real and personal property; exists only to serve the County Blended Not available Navajo County Special Assessment Districts Legally separate entities that provide improvements to various properties within the County; the County’s Board of Supervisors serves as the board of directors Blended Not available 43 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements The Navajo County Municipal Property Corporation was formed to finance the construction of the Navajo County Jail Facility. Because the County’s Board of Supervisors serves as the Board of Directors for this corporation, it is reported as a blended component unit of the County. The Corporation issued certificates of participation that evidenced undivided proportionate interests in rent payments to be made under a lease agreement, with an option to purchase, between Navajo County and the Corporation. Since this debt is in substance the County’s obligation, these liabilities and resulting assets are reported in the government-wide statement of net assets. 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 usefulness of the information. Government-wide statements—Provide information about the primary government (the County) and its component units. The statements include a statement of net assets and a statement of activities. These statements report the financial activities of the overall government, except for fiduciary activities. Governmental activities generally are financed through taxes and intergovernmental revenues. A statement of activities presents a comparison between direct expenses and program revenues for each function of the County’s governmental 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 allocates indirect expenses to the Public Works/HURF and Flood Control District funds. Program revenues include:  charges to customers or applicants for goods, services, or privileges provided,  operating grants and contributions, and  capital grants and contributions, including special assessments. 44 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Revenues that are not classified as program revenues, including internally dedicated resources and all taxes, 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 and fiduciary fund categories. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as other governmental funds. Fiduciary funds are aggregated and reported by fund type. 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 Public Works/HURF Fund is used to account for road construction and maintenance of major and nonmajor regional roads, and is funded by highway user revenues and vehicle license taxes. The Flood Control District Fund is used to provide flood control facilities and regulates floodplains and drainage to prevent flooding of property in Navajo County and is funded by secondary property taxes. The County reports the following fund types: The internal service fund accounts for self-insured employee benefits provided to county departments on a cost-reimbursement basis. The investment trust funds account for pooled assets held and invested by the County Treasurer on behalf of other governmental entities. The agency funds account for assets held by the County in a fiduciary capacity or as an agent for individuals, private organizations, the State and various local governments. 45 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements C. Basis of Accounting The government-wide, proprietary fund, and fiduciary fund financial statements are presented using the economic resources measurement focus, with the exception of agency funds, and the accrual basis of accounting. The agency funds are custodial in nature and do not have a measurement focus. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Property taxes are recognized as revenue in the year for which they are levied. Grants and donations are recognized as revenue as soon as all eligibility requirements the provider imposed have been met. 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 considers all revenues reported in the governmental funds to be available if the revenues are collected within 60 days after year-end. The County’s major revenue sources that are susceptible to accrual are property taxes, intergovernmental, and charges for services. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, compensated absences, and landfill closure and postclosure care costs, 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. Under the terms of grant agreements, the County funds certain programs by a combination of grants and general revenues. Therefore, when program expenses are incurred, there are both restricted and unrestricted net assets available to finance the program. The County applies grant resources to such programs before using general revenues. The County’s internal service fund follows FASB Statements and Interpretations issued on or before November 30, 1989, Accounting Principles Board Opinions, and Accounting Research Bulletins, unless those pronouncements conflict with GASB pronouncements. The County has chosen the option not to follow FASB Statements and Interpretations issued after November 30, 1989. 46 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements D. Cash and Investments For the purposes of its statement of cash flows, the County considers cash on hand, demand deposits, cash on deposit with the County Treasurer, and only those highly liquid investments with a maturity of 3 months or less when purchased to be cash equivalents. 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 time of purchase are stated at amortized cost. All other investments are stated at cost, which approximates fair value. E. Inventories The County accounts for its inventories in the governmental funds using the purchase method. Inventories of the governmental funds consist of expendable supplies held for consumption and are recorded as expenditures at the time of purchase. Amounts on hand at year-end are shown on the balance sheet as an asset for informational purposes only and are offset by a fund balance reserve to indicate that they do not constitute ―available spendable resources.‖ These inventories are stated at cost using the first-in, first-out method. Inventories in the government-wide financial statements are recorded as assets when purchased and expensed when consumed. These inventories are stated at cost using the first-in, first-out 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. 47 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements G. Capital Assets Capital assets are reported at actual cost or estimated historical cost if historical records are not available. Donated assets are reported at estimated fair value at the time received. Capitalization thresholds (the dollar values above which asset acquisitions are added to the capital asset accounts), depreciation methods, and estimated useful lives of capital assets reported in the government-wide statements are as follows: Capitalization Threshold $10,000 Depreciation Method N/A Estimated Useful Life N/A Buildings and improvements 10,000 Straight-line 15-40 years Machinery and equipment 5,000 10,000 Straight-line 3-7 years Straight-line 35 years Land Infrastructure H. Investment Earnings Investment earnings is composed of interest and dividends. I. Compensated Absences Compensated absences payable consists of unused annual and sick leave. Employees may accumulate up to 488 hours during a calendar year (depending on years of service) with a maximum carryforward of 320 hours as of December 31 of each year. Upon termination of employment, all unused vacation benefits up to a maximum of 320 hours (488 upon retirement) are paid to the employee. Employees may accumulate an unlimited number of sick leave hours. Generally, sick leave benefits provide for ordinary sick pay and are cumulative. Upon retirement or death, employees who have accumulated 301 hours or more of unused sick leave and have 5 or more years of continuous service will receive a partial sick leave payment, not to exceed $5,000, based on the number of years of continuous service. Accordingly, annual and vested sick leave benefits are accrued as a liability in the government-wide 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. 48 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Note 2 - Stewardship, Compliance, and Accountability Deficit fund balances—At June 30, 2010, the following funds reported deficit fund balances, which violate state statutes. The following funds had fund deficits in excess of $20,000: Fund Governmental Funds: Special Revenue: Housing Workforce Investment Capital Projects: Deficit $72,047 193,764 General Government Debt Service: Special Districts 122,528 107,644 These fund deficits resulted either from operations or a carryover deficit from prior years, but are expected to be corrected through normal operations or through general fund operating transfers in future years. 49 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Note 3 - Deposits and Investments 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; interest earning investments such as savings accounts, certificates of deposit, and repurchase agreements in eligible depositories; and specified commercial paper, bonds, debentures, and notes issued by corporations organized and doing business in the United States. In addition, the County Treasurer may invest trust funds in fixed income securities of corporations doing business in the United States or District of Columbia. Credit risk Statutes have the following requirements for credit risk: 1. Commercial paper must be rated P1 by Moody’s investors service or A1 or better by Standard and Poor’s rating service. 2. Corporate bonds, debentures, and notes must be rated A or better by Moody’s investors service or Standard and Poor’s rating service. 3. Fixed income securities must carry one of the two highest ratings by Moody’s investors service and Standard and Poor’s rating service. If only one of the above-mentioned services rates the security, it must carry the highest rating of that service. Custodial credit risk Statutes require collateral for demand deposit, certificates of deposit, and repurchase agreements at 101 percent of all deposits not covered by federal depository insurance. 50 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Concentration of credit risk Statutes do not include any requirements for concentration of credit risk. Interest rate risk Statutes require that public monies invested in securities and deposits have a maximum maturity of 5 years and that public operating fund monies invested in securities and deposits have a maximum maturity of 3 years. Investments in repurchase agreements must have a maximum maturity of 180 days. Foreign currency risk Statutes do not allow foreign investments. Deposits—At June 30, 2010, the carrying amount of the County’s deposits was $63,358,846, which primarily consisted of money market and savings accounts, and the bank balance was $62,379,715. The County’s formal policy is to follow collateralization requirements set forth in A.R.S. §35-323 as described above. In November 2008, the FDIC’s Board of Directors established a program called the Temporary Liquidity Guarantee Program (TLGP). This program was designed to assist in the stabilization of the nation’s financial system. Under the Transaction Account Guarantee (TAG) program, a component of the TLGP, the FDIC guarantees all funds held in qualifying noninterest-bearing transaction accounts at participating insured depository institutions. Effective June 22, 2010, an amendment to 12 CFR 370, in part, extended the TAG program until December 31, 2010. 51 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Investments—The County’s investments at June 30, 2010, were as follows: Investment Type Amount U.S. agency securities $60,481,830 Repurchase agreements 15,686,278 Corporate bonds 5,000,000 Bank notes 3,000,000 U.S. Treasury money market funds 1,934,544 $86,102,652 Credit risk—The County’s formal policy is to limit its portfolio to investments with the top rating issued by nationally recognized statistical rating organizations. As of June 30, 2010, credit risk for the County’s investments was as follows: Investment Type Rating Rating Agency U.S. agency securities AAA Standard and Poor’s $36,785,760 U.S. agency securities AAAe Standard and Poor’s 23,696,070 Repurchase agreements Aaa Moody’s 15,686,278 Corporate bonds AAA Standard and Poor’s 5,000,000 Bank notes AAA Standard and Poor’s 3,000,000 AAAm Standard and Poor’s 1,934,544 U.S. Treasury money market funds Amount $86,102,652 Custodial credit risk—For an investment, custodial credit 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’s formal policy stipulates that securities that are held in a custody or safekeeping account must be held under the name of Navajo County or Navajo County Treasurer. At June 30, 2010, the County had $1,934,544 of U.S. Treasury money market funds that were uninsured and held by the counterparty not in the County’s name and $15,686,278 of repurchase agreements (secured by federal agency securities) that were uninsured and held by the counterparty’s trust department or agent not in the County’s name. 52 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Concentration of credit risk—The County’s formal policy stipulates that the County will diversify the investment portfolio by limiting investments to avoid overconcentration in securities from a specific issuer, excluding obligations issued or guaranteed by the United States or any of the senior debt of its agencies or sponsored agencies. The County had investments at June 30, 2010, of 5 percent or more in Federal Home Loan Bank, Federal National Mortgage Association (including repurchase agreements), Federal Home Loan Mortgage Corporation, and General Electric Capital Corporation bond. These investments were 37.57 percent, 34.99 percent, 15.91 percent and 5.81 percent, respectively, of the County’s total investments. Interest rate risk—The County’s formal policy is to purchase a combination of short-, medium-, and long-term investments such that maturities occur evenly over time as necessary to provide the cash flow needed for operations. At June 30, 2010, the County had the following investments in debt securities: Investment Type Amount U.S. agency securities Weighted Average Maturity (In Years) $60,481,830 1.953 15,686,278 .003 Corporate bonds 5,000,000 .523 Bank notes 3,000,000 1.923 U.S. Treasury money market funds 1,934,544 .003 Repurchase agreements $86,102,652 53 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements At June 30, 2010, $23,758,931 of the investments in U.S agency securities and $3,000,000 of investments in bank notes were considered to be highly sensitive to interest rate changes: U.S. agency step-up securities – On specified dates, the issuer can call the security. If the security is not called, the interest rate is increased by a specified amount. Prevailing interest rates may increase faster than the increase in the coupon interest rate. $ 23,758,931 Bank note floating rate security – The coupon rate is tied to the London Interbank Offered Rate plus a fixed basis point amount which resets quarterly. The issuer can call the security on a specified date, or if the security is not called, the interest rate is reset at a specified amount. Prevailing interest rates may increase faster than the increase in the coupon interest rate. 3,000,000 Total $ 26,758,931 54 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements A reconciliation of cash, deposits, and investments to amounts shown on the Statements of Net Assets follows: Cash, deposits, and investments: Cash on hand $ 53,020 Amount of deposits 63,358,846 Amount of investments 86,102,652 Total $ 149,514,518 Investment Governmental Trust Agency Activities Funds Funds Cash and investments Cash and investments held by trustee Restricted assets—cash and investments held by trustee Total Note 4 - $37,853,647 $105,297,219 $4,434,108 Total $147,584,974 1,276,107 1,276,107 653,437 653,437 $39,783,191 $105,297,219 $4,434,108 $149,514,518 Due from Other Governments Amounts due from other governments at June 30, 2010, include $957,586 in state and county sales taxes, $410,931 in vehicle license taxes from the State of Arizona, $703,804 in state-shared revenue from highway user taxes, and $2,129,766 in various grants from the state and federal governments. 55 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Note 5 - Capital Assets Capital asset activity for the year ended June 30, 2010, was as follows: Balance July 1, 2009 Increases Decreases Balance June 30, 2010 Governmental activities: Capital assets not being depreciated: Land 5,439,671 $ 6,524,469 2,721,938 2,611,321 6,635,086 11,964,140 2,751,938 2,611,321 12,104,757 Buildings and improvements 32,353,226 11,456 - 32,364,682 Infrastructure 73,042,113 1,065,396 930,675 73,176,834 Machinery and equipment 25,283,610 551,167 841,817 24,992,960 130,678,949 1,628,019 1,772,492 130,534,476 Buildings and improvements 12,842,016 971,815 - 13,813,831 Infrastructure 27,906,846 2,318,644 400,668 29,824,822 Machinery and equipment 19,055,693 2,131,088 841,817 20,344,964 Total 59,804,555 5,421,547 1,242,485 63,983,617 Total capital assets being depreciated, net 70,874,394 (3,793,528) 530,007 66,550,859 $ 82,838,534 $(1,041,590) $3,141,328 $ 78,655,616 Construction in progress Total capital assets not being depreciated $ 30,000 $ - $ 5,469,671 Capital assets being depreciated: Total Less accumulated depreciation for: Governmental activities capital assets, net 56 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Depreciation expense was charged to functions as follows: Governmental activities: General government Public safety Highways and streets Health and welfare Culture and recreation Education Total governmental activities depreciation expense Note 6 - $ 977,546 1,129,236 2,965,295 101,123 6,474 241,873 $5,421,547 Construction and Other Significant Commitments The County had major contractual commitments related to various capital projects at June 30, 2010, for the construction of roads and bridges. At June 30, 2010, the County had spent $6,635,086 on these projects and had remaining contractual commitments with contractors of $4,763,487. These projects are being primarily financed from revenue sources of the Public Works/HURF and Flood Control District Funds and revenue bond monies. 57 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Note 7 - Long-Term Liabilities The following schedule details the County’s long-term liability and obligation activity for the year ended June 30, 2010: Balance Balance Due within July 1, 2009 Additions Reductions June 30, 2010 1 year Governmental activities Revenue bonds payable $6,600,000 $ - $ 335,000 $ 6,265,000 $ 350,000 Certificates of participation payable 5,340,000 - 310,000 5,030,000 330,000 Special assessment debt with governmental commitment 1,702,213 - 185,106 1,517,107 180,117 Capital leases payable 53,687 - 28,310 25,377 25,377 Landfill closure and postclosure care costs payable 11,591 - 724 10,867 724 2,399,835 2,029,677 1,938,672 2,490,840 1,950,252 $16,107,326 $2,029,677 $2,797,812 Compensated absences payable Total governmental activities long-term liabilities $15,339,191 $2,836,470 Revenue bonds—The County has issued revenue bonds that are generally callable with interest payable semiannually. The bonds were issued to acquire a new regional county service center in Show Low, to construct a new county administrative building in Heber-Overgaard, and to make improvements to the water facility and electrical system at the county complex. 58 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Revenue bonds outstanding at June 30, 2010, were as follows: Description Original Amount Maturity Ranges Interest Rates Navajo County Pledged Revenue Obligations, Series 2008 $6,600,000 2011 – 2024 3.50 – 4.00% Outstanding Principal $6,265,000 The following schedule details debt service requirements to maturity for the County’s revenue bonds payable at June 30, 2010: Governmental Activities Principal Interest Year ending June 30 2011 $ 350,000 $ 228,585 2012 370,000 215,985 2013 380,000 202,860 2014 385,000 189,473 2015 405,000 175,648 2016-20 2,255,000 648,615 2021-24 2,120,000 177,528 Total $6,265,000 $1,838,694 The County has pledged a portion of its general county sales tax revenues toward the payment of debt related to revenue bonds outstanding at June 30, 2010. At June 30, 2010, pledged revenues totaled $8,103,694, consisting of $6,265,000 for principal and $1,838,694 for interest. The amount of $575,573, or 7.10 percent of total pledged revenues, was required to cover current-year debt service. Future principal and interest payments are expected to require less than 4% of pledged sales tax revenues. Future pledged revenues required to pay all remaining debt service for revenue bonds through final maturity at July 1, 2024, is $8,103,694. 59 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Certificates of participation—The County has issued certificates of participation (COPs) that are generally noncallable with interest payable semiannually to finance the construction of jail facilities. The original amount of certificates issued in prior years was $7,320,000. Certificates outstanding at June 30, 2010, were as follows: Description Navajo County, Arizona Municipal Property Corporation Jail Facility COPs, Series 2000 Original Amount Maturity Ranges Interest Rates Outstanding Principal $7,320,000 2010 – 2021 5.00 – 6.25% $5,030,000 The following schedule details debt service requirements to maturity for the County’s certificates of participation payable at June 30, 2010: Governmental Activities Principal Interest Year ending June 30 2011 $ 330,000 $ 298,031 2012 355,000 278,100 2013 375,000 256,200 2014 400,000 232,950 2015 425,000 208,200 2,530,000 606,319 2021 615,000 19,219 Total $5,030,000 $1,899,019 2016-20 60 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Special assessment debt with governmental commitment—Special assessment bonds are payable from assessments collected from property owners benefited by the respective improvements. The special assessment districts pledged these assessments to repay the principal amount of $ 2,103,874 in special assessment bonds. The proceeds were used to finance the construction or improvement of roads, water and wastewater systems, and community facilities. Total principal and interest remaining to be paid on these bonds is $1,893,804, payable through July 2019. At June 30, 2010, pledged revenues totaled $1,893,804, consisting of $1,517,107 for principal and $376,697 for interest. The amount of $255,735, or 13.5 percent of total pledged revenues, was required to cover current-year debt service. Future principal and interest payments are expected to require 100 percent of pledged special assessment revenues. Future pledged revenues required to pay all remaining debt service for special assessment debt through final maturity at July 1, 2019, is $1,893,804. While there is no legal obligation for the County to further secure the special assessment bonds of the districts below, the County has made a moral commitment to take steps necessary to prevent default. Special assessment bonds currently outstanding for governmental activities are as follows: Description Amount of Issue Interest Rates Maturity Ranges Sutter Drive $ 245,750 5.50% 2011-2016 184,124 6.17% 2011-2017 88,638 1,150,000 5.40% 2011-2017 825,000 524,000 5.75% 2011-2019 480,525 Scott's Pine Tract A Shumway Road Bucking Horse Total $2,103,874 Outstanding at June 30, 2010 $ 122,944 $1,517,107 61 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Annual debt service requirements to maturity for the special assessment debt with governmental commitment are as follows: Governmental Activities Principal Year ending June 30 2011 Interest $ 180,117 $ 83,934 2012 178,154 73,890 2013 186,154 63,994 2014 198,154 53,656 2015 216,154 42,663 2016-20 558,374 58,560 $1,517,107 $376,697 Total Compensated absences—Compensated absences are paid from various funds in the same proportion that those funds pay payroll costs. During fiscal year 2010, the County paid for compensated absences as follows: 65 percent from the General Fund, 12 percent from the Public Works/HURF Fund, 1 percent from the Flood Control District Fund, and 22 percent from the Other Governmental Funds. 62 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Note 8 - Risk Management Public entity risk pools—The County is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters; but was unable to obtain insurance at a cost it considered to be economically justifiable. Therefore, the County joined and is covered by two public entity risk pools: the Arizona Counties Property and Casualty Pool and the Arizona Counties Workers’ Compensation Pool, which are described below. The Arizona Counties Property and Casualty Pool is a public entity risk pool currently composed of 11 member counties. The pool provides member counties catastrophic loss coverage for risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters; and provides risk management services. Such coverage includes all defense costs as well as the amount of any judgment or settlement. The County is responsible for paying a premium based on its exposure in relation to the exposure of the other participants and a deductible of $10,000 per occurrence for property claims and $50,000 per occurrence for liability claims. The County is also responsible for any payments in excess of the maximum coverage of $300 million per occurrence for property claims and $15 million per occurrence for liability claims. However, lower limits apply to certain categories of losses. A county must participate in the pool at least 3 years after becoming a member; however, it may withdraw after the initial 3-year period. If the pool were to become insolvent, the County would be assessed an additional contribution. The Arizona Counties Workers’ Compensation Pool is a public entity risk pool currently composed of 11 member counties. The pool provides member counties with workers’ compensation coverage, as required by law, and risk management services. The County is responsible for paying a premium, based on an experience-rating formula, that allocates pool expenditures and liabilities among the members. The Arizona Counties Property and Casualty Pool and the Arizona Counties Workers’ Compensation Pool receive independent audits annually and an audit by the Arizona Department of Insurance every 5 years. Both pools accrue liabilities for losses that have been incurred but not reported. These liabilities are determined annually based on an independent actuarial valuation. 63 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements June 30, 2010 On July 1, 2009, the County terminated the Navajo County Employee Benefit Trust (NCEBT), which had been created to provide and administer a self-insured program for employee health benefits. On that date, the County transferred the assets and liabilities of the NCEBT, which was accounted for as an internal service fund, to the General Fund as provided by A.R.S. §11-981. The County paid the NCEBT’s liabilities for reported but unpaid claims and for claims incurred but not reported prior to July 1, 2009, from the General Fund. These claims were paid as of June 30, 2010. Also on July 1, 2009, Navajo County joined the Public Employers Health Pool (APEHP), formerly Verde Valley Employee Benefit Pool, pursuant to A.R.S §11-952.01. APEHP is a consortium of participating local governments that provides medical and dental insurance coverage to its participants’ employees. In addition, APEHP is self-funded through an agreement with participating members and APEHP administers the plan. The members’ employee and employer contributions are paid to the pool to pay benefits and administrative expenses. If the County withdraws from APEHP, it is responsible for its proportionate share of any claims’ run out costs, including claims reported but not settled, claims incurred but not reported, and administrative costs. If the APEHP were to terminate, the County would be responsible for its proportionate share of any pool deficit. 64 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Note 9 - Operating Leases The County leases office space and land under the provisions of various long-term lease agreements classified as operating leases for accounting purposes. Rental expenditures under the terms of the operating leases were $94,088 for the year ended June 30, 2010. The operating leases have remaining noncancelable terms from 1 to 15 years and provide renewal options. The future minimum payments required under the operating leases at June 30, 2010, were as follows: Governmental Activities Year ending June 30 2011 $ 71,426 2012 39,137 2013 31,486 2014 31,486 2015 31,486 2016 – 2020 123,000 2021 – 2025 123,000 Total minimum lease payments 65 $451,021 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Note 10 - Pensions and Other Postemployment Benefits Plan Descriptions—The County contributes to the four plans described below. Benefits are established by state statute and the plans generally provide retirement, long-term disability, and health insurance premium benefits, including death and survivor benefits. The retirement benefits are generally paid at a percentage, based on years of service, of the retirees’ average compensation. Long-term disability benefits vary by circumstance, but generally pay a percentage of the employee’s monthly compensation. Health insurance premium benefits are generally paid as a fixed dollar amount per month towards the retiree’s healthcare insurance premiums, in amounts based on whether the benefit is for the retiree or for the retiree and his or her dependents. The Arizona State Retirement System (ASRS) administers a cost-sharing, multipleemployer defined benefit pension plan; a cost-sharing, multiple-employer defined benefit health insurance premium plan; and a cost-sharing, multiple-employer defined benefit long-term disability plan that covers employees of the State of Arizona and employees of participating political subdivisions and school districts. The ASRS is governed by the Arizona State Retirement System Board according to the provisions of A.R.S. Title 38, Chapter 5, Article 2. The Public Safety Personnel Retirement System (PSPRS) administers an agent multiple-employer defined benefit pension plan and an agent multiple-employer defined benefit health insurance premium plan that covers public safety personnel who are regularly assigned hazardous duty as employees of the State of Arizona and participating political subdivisions. The PSPRS, acting as a common investment and administrative agent, is governed by a five-member board, known as The Fund Manager, and participating local boards according to the provisions of A.R.S. Title 38, Chapter 5, Article 4. The Corrections Officer Retirement Plan (CORP) administers an agent multipleemployer defined benefit pension plan and an agent multiple-employer defined benefit health insurance premium plan that covers state, county, and local correction officers; dispatchers; and probation, surveillance, and juvenile detention officers. The CORP is governed by The Fund Manager of PSPRS and participating local boards according to the provisions of A.R.S. Title 38, Chapter 5, Article 6. 66 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements The Elected Officials Retirement Plan (EORP) administers a cost-sharing, multipleemployer defined benefit pension plan and a cost-sharing, multiple-employer defined benefit health insurance premium plan that covers State of Arizona and county elected officials and judges, and elected officials of participating cities. The EORP is governed by The Fund Manager of PSPRS according to the provisions of A.R.S. Title 38, Chapter 5, Article 3. Because the health insurance premium plan benefit of the EORP is not established as a formal trust, the EORP is reported in accordance with GASB Statement No. 45 as an agent multiple-employer defined benefit plan. Accordingly, the disclosures that follow reflect the EORP as if it were an agent multiple-employer defined benefit plan. Each plan issues a publicly available financial report that includes its financial statements and required supplementary information. A report may be obtained by writing or calling the applicable plan. ASRS PSPRS, CORP, and EORP 3300 North Central Avenue 3010 East Camelback Road, Suite 200 P.O. Box 33910 Phoenix, AZ 85016-4416 Phoenix, AZ 85067-3910 (602) 255-5575 (602) 240-2000 or 1-800-621-3778 Funding Policy—The Arizona State Legislature establishes and may amend active plan members’ and the County’s contribution rates for the ASRS, PSPRS, CORP, and EORP. Cost-sharing plans—For the year ended June 30, 2010, active ASRS members were required by statute to contribute at the actuarially determined rate of 9.4 percent (9.0 percent for retirement and 0.4 percent long-term disability) of the members’ annual covered payroll and the County was required by statute to contribute at the actuarially determined rate of 9.4 percent (8.34 percent for retirement, 0.66 percent for health insurance premium, and 0.4 percent for long-term disability) of the members’ annual covered payroll. 67 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements The County’s contributions for the current and 2 preceding years, all of which were equal to the required contributions, were as follows: Health Benefit Long-Term Retirement Fund Supplement Fund Disability Fund 2010 $1,506,523 $119,282 $72,330 2009 1,478,102 177,573 92,498 2008 1,402,691 182,620 87,106 Year ended June 30 Agent plans—For the year ended June 30, 2010, active PSPRS members were required by statute to contribute 7.65 percent of the members’ annual covered payroll and the County was required to contribute 21.11 percent, the aggregate of which is the actuarially required amount. The health insurance premium portion of the contribution rate was actuarially set at 0.81 percent of covered payroll. Active CORP members were required by statute to contribute 8.41 percent of the members’ annual covered payroll. In addition, the County was required to contribute 6.96 percent. The aggregate of the members’ and the County’s contributions is the actuarially required amount. The health insurance premium portion of the contribution rate was actuarially set at 0.53 percent of covered payroll. Active EORP members were required by statute to contribute 7.00 percent of the members’ annual covered payroll; and the County was required to remit a designated portion of certain court fees plus additional contributions at the actuarially determined rate of 14.25 percent of the members’ annual covered payroll. The health insurance premium portion of the contribution rate was actuarially set at 1.89 percent of covered payroll. Actuarial methods and assumptions—The contribution requirements for the year ended June 30, 2010, were established by the June 30, 2008, actuarial valuations, and those actuarial valuations were based on the following actuarial methods and assumptions. 68 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the funded status of the plans and the annual required contributions are subject to continual revision as actual results are compared to past expectations and new estimates are made. The required schedule of funding progress presented as required supplementary information provides multiyear trend information that shows whether the actuarial value of the plans’ assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. Projections of benefits are based on 1) the plans as understood by the County and plans’ members and include the types of benefits in force at the valuation date, and 2) the pattern of sharing benefit costs between the County and plans’ members to that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. The significant actuarial methods and assumptions used are the same for all plans and related benefits (unless noted), and the actuarial methods and assumptions used to establish the fiscal year 2010 contribution requirements, are as follows: Actuarial valuation date June 30, 2008 Actuarial cost method Projected unit credit Amortization method Level percent closed for unfunded actuarial accrued liability, open for excess 28 years for unfunded actuarial accrued liability, 20 years for excess Smoothed market value Remaining amortization period Asset valuation method Actuarial assumptions: Investment rate of return 8.50% Projected salary increases 5.50%-8.50% for PSPRS and CORP; 5.00% for EORP 5.50% for PSPRS and CORP; 5.00% for EORP includes inflation at 69 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Annual Pension/OPEB Cost—The County’s pension/OPEB cost for the agent plans for the year ended June 30, 2010, and related information follows: PSPRS Pension Annual pension/ OPEB costs Contributions made CORP Health Insurance Pension EORP Health Insurance Pension Health Insurance $413,594 $16,032 $122,623 $10,107 $193,294 $29,557 413,594 16,032 122,623 10,107 193,294 29,557 Trend Information—Annual pension and OPEB cost information for the current and 2 preceding years follows for each of the agent plans. 70 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Plan Year Ended June 30 Annual Pension/ OPEB Cost Percentage of Annual Cost Contributed Net Pension/OPEB Obligation PSPRS Pension Health insurance 2010 2010 $413,594 16,032 100% 100% $0 0 Pension Health insurance 2009 2009 475,483 18,618 100% 100% 0 0 Pension 2008 334,908 100% 0 Health insurance 2008 11,838 100% 0 Pension 2010 122,623 100% 0 Health insurance 2010 10,107 100% 0 Pension 2009 108,232 100% 0 Health insurance 2009 9,207 100% 0 Pension 2008 68,860 100% 0 Health insurance 2008 8,514 100% 0 Pension 2010 193,294 100% 0 Health insurance 2010 29,557 100% 0 Pension 2009 252,214 100% 0 Health insurance 2009 14,585 100% 0 Pension 2008 178,061 100% 0 Health insurance 2008 15,858 100% 0 CORP EORP 71 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Funded Status—The funded status of the plans as of the most recent valuation date, June 30, 2010, along with the actuarial assumptions and methods used in those valuations follow. The EORP, by statute, is a cost-sharing plan. However, because of its statutory construction, in accordance with GASB Statement No. 43, paragraphs 5 and 41, the EORP is reported for such purposes as an agent multiple-employer plan. The Fund Manager obtains an actuarial valuation for the EORP on its statutory basis as a cost-sharing plan and, therefore, actuarial information for the County, as a participating government, is not available. PSPRS Pension CORP Health Insurance Pension Health Insurance Actuarial accrued liability (a) $11,424,640 $265,433 $2,580,501 $113,737 Actuarial value of assets (b) 6,141,516 - 2,789,103 - Unfunded actuarial accrued liability (funding excess) (a) – (b) 5,283,124 265,433 (208,602) 113,737 Funded ratio (b)/(a) 53.8% 0.0% 108.1% 0.0% Covered payroll (c) $2,056,308 $2,056,308 $1,700,382 $1,700,382 256.9% 12.9% (12.3%) 6.7% Unfunded actuarial accrued liability (funding excess) as a percentage of covered payroll ([(a) - (b)]/(c)) 72 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements The actuarial methods and assumptions used are the same for all plans and related benefits, and for the most recent valuation date, are as follows: Actuarial valuation date June 30, 2010 Actuarial cost method Projected unit credit Amortization method Remaining amortization period Level percent closed for unfunded actuarial accrued liability, open for excess 26 years for underfunded, 20 years for overfunded Asset valuation method 7-year smoothed market value Actuarial assumptions: Investment rate of return 8.50% Projected salary increases 5.5–8.5% for PSPRS and CORP; 5.00% for EORP includes inflation at 5.50% for PSPRS and CORP; 5.00% for EORP 73 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Note 11 - Interfund Balances and Activity Interfund receivables and payables—Interfund balances at June 30, 2010, were as follows: Payable to Payable from Public Works/ HURF Fund General Fund Other Governmental Funds General Fund - - Flood Control District Fund - $274,479 Other Governmental Funds Total $2,426,916 $2,426,916 $274,479 $ 6,001 Total $ 6,001 - 274,479 250,991 2,677,907 $256,992 $2,958,387 The interfund balances resulted from time lags between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. All interfund balances are expected to be paid in one year. 74 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Interfund transfers—Interfund transfers for the year ended June 30, 2010, were as follows: Transfers to Transfer from General Fund Public Works/HURF Fund Flood Control District Fund Other Governmental Funds Internal Service Fund Total General Fund - Public Works/HURF Fund $ Other Governmental Funds Internal Service Fund Total 5,000 $1,783,697 $ 550,000 $ 2,338,697 $ 787,506 - - - 787,506 190,756 137,240 - - 327,996 706,457 - 2,248,710 - 2,955,167 2,189,115 $3,873,834 $142,240 $4,032,407 $550,000 2,189,115 $8,598,481 In addition to the above interfund transfers, the general fund transferred $380,236 to the agency funds to correctly report balances held in an agency capacity. Further, transfers between the general fund and internal service fund were for the closeout of the internal service fund during the year. Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments are due, and (3) use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. 75 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Note 12 - 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 Treasurer has a fiduciary responsibility to administer those and the County’s monies under his stewardship. The Treasurer invests, on a pool basis, all idle monies not specifically invested for a fund or program. In addition, the Treasurer determines the fair value of those pooled investments annually at June 30. The County Treasurer’s investment pool is not registered with the Securities and Exchange Commission as an investment company, and there is no regulatory oversight of its operations. The pool’s structure 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 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, except for $1,636,416 in deposits and $1,929,544 of investments in U.S. Treasury money market funds. Therefore, the deposit and investment risks of the Treasurer’s investment pool are substantially the same as the County’s deposit and investment risks. See Note 3 for disclosure of the County’s deposit and investment risks. Details of each major investment classification follow: 76 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Notes to Financial Statements Interest Investment Type Rates Maturities Amount $60,481,830 1.125% - 3.75% 07/10 – 06/15 $60,481,830 15,686,278 .10% 07/10 15,686,278 Corporate bonds 5,000,000 1.625% 01/11 5,000,000 Bank notes 3,000,000 Variable 06/12 3,000,000 .02% N/A U.S. agency securities Principal Repurchase agreements U.S. Treasury money market funds 5,000 5,000 A condensed statement of the investment pool’s net assets and changes in net assets follows: Statement of Net Assets Assets $146,134,869 Liabilities 4,454,984 Net assets $141,679,885 Net assets held in trust for: Internal participants $ 36,214,996 External participants 105,464,889 Total net assets held in trust $141,679,885 Statement of Changes in Net Assets Total additions $366,074,117 Total deductions 356,860,473 Net increase 9,213,644 Net assets held in trust: July 1, 2009 132,466,241 June 30, 2010 $141,679,885 77 This Page Intentionally Left Blank 78 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 OTHER Required supplementary information 79 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Required Supplementary Information Budgetary Comparison Schedule General Fund Original and Final Budgeted Amounts Revenues: Property taxes Licenses and permits Fines and forfeits Intergovernmental Charges for services Investment earnings Miscellaneous $ Total revenues 6,317,367 589,821 921,800 21,056,585 802,701 124,282 620,488 Actual Amounts $ 6,397,385 454,494 1,087,357 20,545,394 1,012,452 76,000 519,338 Variance with Final Budget $ 80,018 (135,327) 165,557 (511,191) 209,751 (48,282) (101,150) 30,433,044 30,092,420 (340,624) 2,808,074 1,950,946 632,162 539,246 274,487 201,383 1,279,006 1,120,048 448,466 17,515 1,903,854 393,517 2,272,528 2,773,135 1,090,356 1,302,297 334,869 307,666 378,674 287,204 340,811 104,227 26,629 2,275,796 1,710,928 294,120 435,071 211,093 176,344 1,178,060 730,462 421,748 9,693 1,541,156 378,195 2,193,109 2,713,390 804,601 1,116,734 329,513 308,868 372,915 280,262 330,501 106,896 25,525 532,278 240,018 338,042 104,175 63,394 25,039 100,946 389,586 26,718 7,822 362,698 15,322 79,419 59,745 285,755 185,563 5,356 (1,202) 5,759 6,942 10,310 (2,669) 1,104 Expenditures: General government Board of Supervisors/Administration Buildings and Grounds Elections Planning and Zoning Recorder Voter Registration Assessor Information Technology Treasurer Personnel Commission County-wide Legal Defender County Attorney Superior Court Public Defender Clerk of the Court Holbrook Justice Court Winslow Justice Court Snowflake Justice Court Show Low Justice Court Pinetop Justice Court Kayenta Justice Court Kayenta Constable See accompanying note to budgetary comparison schedule. 80 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Required Supplementary Information Budgetary Comparison Schedule General Fund (Continued) Original and Final Budgeted Amounts Pinetop Constable Snowflake Constable Holbrook Constable Winslow Constable Show Low Constable $ Total general government 46,913 28,672 26,671 28,976 47,425 Actual Amounts $ 51,186 28,686 26,447 31,529 47,244 Variance with Final Budget $ (4,273) (14) 224 (2,553) 181 20,965,757 18,130,072 2,835,685 1,072,529 455,308 587,219 6,832,252 6,093,401 1,052,456 410,905 529,997 5,370,488 4,862,526 20,073 44,403 57,222 1,461,764 1,230,875 15,040,709 12,226,372 2,814,337 447,795 3,398,400 389,820 2,881,989 57,975 516,411 3,846,195 3,271,809 574,386 Education School Superintendent 327,592 323,717 3,875 Capital outlay Capital outlay Construction projects 500,000 500,000 80,143 1,532 419,857 498,468 1,000,000 81,675 918,325 Public safety Juvenile Detention Juvenile Probation Adult Probation Jail Operations Sheriff Total public safety Health and welfare Public Fiduciary Indigent Health Total health and welfare Total capital outlay See accompanying note to budgetary comparison schedule. 81 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Required Supplementary Information Budgetary Comparison Schedule General Fund (Continued) Original and Final Budgeted Amounts Contingency $ Total expenditures Excess (deficiency) of revenues over expenditures 4,000,000 $ $ 4,000,000 11,146,608 (14,747,209) (3,941,225) 10,805,984 Transfers in Transfers out 95,036 95,036 5,491,534 (2,595,249) 3,873,834 (2,718,933) (1,617,700) (123,684) 2,896,285 1,249,937 (1,646,348) (11,850,924) (2,691,288) 9,159,636 11,850,924 10,433,374 (1,417,550) Total other financing sources and uses Fund balances, July 1, 2009 34,033,645 - Net change in fund balances Variance with Final Budget 45,180,253 Other financing sources (uses): Sale of capital assets Fund balances, June 30, 2010 Actual Amounts $ - $ 7,742,086 See accompanying note to budgetary comparison schedule. 82 $ 7,742,086 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Required Supplementary Information Budgetary Comparison Schedule Public Works/HURF Fund Original and Final Budgeted Amounts Revenues: Intergovernmental Charges for services Investment earnings Miscellaneous $ Total revenues Actual Amounts 13,179,750 201,000 216,000 $ 15,032,384 39,249 81,289 235,037 Variance with Final Budget $ 1,852,634 39,249 (119,711) 19,037 13,596,750 15,387,959 1,791,209 18,080,565 9,888,985 8,191,580 Total expenditures 18,080,565 9,888,985 8,191,580 Excess (deficiency) of revenues over expenditures (4,483,815) 5,498,974 9,982,789 Expenditures: Highways and streets Other financing sources (uses): Sale of capital assets Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances, July 1, 2009 Increase in reserve for inventories Fund balances, June 30, 2010 $ (787,506) 20,201 142,240 (787,506) 20,201 142,240 - (787,506) (625,065) 162,441 (5,271,321) 4,873,909 10,145,230 5,271,321 - 7,516,396 41,280 2,245,075 41,280 - $ 12,431,585 See accompanying note to budgetary comparison schedule. 83 $ 12,431,585 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Required Supplementary Information Budgetary Comparison Schedule Flood Control District Fund Original and Revenues: Property taxes Investment earnings Final Budgeted Actual Variance with Amounts Amounts Final Budget $ 2,695,827 154,753 Total revenues $ 2,742,386 66,694 $ 46,559 (88,059) 2,850,580 2,809,080 (41,500) 7,426,697 817,477 6,609,220 7,426,697 817,477 6,609,220 1,991,603 6,567,720 Expenditures: Public safety Total expenditures Excess (deficiency) of revenues over expenditures (4,576,117) Other financing sources (uses): Transfers out Total other financing sources and uses Net change in fund balances Fund balances, July 1, 2009 Fund balances, June 30, 2010 $ (190,756) (327,996) (137,240) (190,756) (327,996) (137,240) (4,766,873) 1,663,607 6,430,480 4,766,873 6,937,255 2,170,382 - $ 8,600,862 See accompanying note to budgetary comparison schedule. 84 $ 8,600,862 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Note 1 - Budgeting and Budgetary Control 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, each fund includes only one department. 85 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Required Supplementary Information Schedule of Agent Retirement Plans’ Funding Progress Public Safety Personnel Retirement System Unfunded Actuarial Liability as Value of Actuarial Funding Annual Percentage Plan Accrued (Liability) Funded Covered of Covered Actuarial Assets Liability Excess Ratio Payroll Payroll Valuation Date (a) (b) (a-b) (a/b) (c) ([a-b]/c) $6,141,516 $11,424,640 $(5,283,124) 53.8 $2,056,308 256.9% - 265,433 (265,433) 0.0 2,056,308 12.9 6,326,218 10,930,809 (4,604,591) 57.9 2,098,902 219.4 - 272,996 (272,996) 0.0 2,098,902 13.0 5,911,599 9,957,770 (4,046,171) 59.4 2,033,947 198.9 - 372,652 (372,652) 0.0 2,033,947 18.3 Pension 6/30/10 Health Insurance 6/30/10 Pension 6/30/09 Health Insurance 6/30/09 Pension 6/30/08 Health Insurance 6/30/08 86 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Required Supplementary Information Schedule of Agent Retirement Plans’ Funding Progress Corrections Officer Retirement Plan Actuarial Unfunded Value of Actuarial Funding Annual Liability as Plan Accrued (Liability) Funded Covered Percentage Actuarial Assets Liability Excess Ratio Payroll of Covered Valuation Date (a) (b) (a-b) (a/b) (c) Payroll Pension 6/30/10 $2,789,103 $2,580,501 $208,602 108.1% $1,700,382 N/A - 113,737 (113,737) 0.0 1,700,382 6.7% 2,583,339 2,363,977 219,362 109.3 $1,955,474 N/A - 115,931 (115,931) 0.0 1,955,474 5.9 2,100,462 1,948,603 151,859 107.8 1,743,730 N/A - 80,646 (80,646) 0.0 1,743,730 4.6 Health Insurance 6/30/10 Pension 6/30/09 Health Insurance 6/30/09 Pension 6/30/08 Health Insurance 6/30/08 87 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Required Supplementary Information Schedule of Agent Retirement Plans’ Funding Progress Note 1 - Actuarial Information Available The EORP, by statute, is a cost-sharing plan. However, because of its statutory construction, in accordance with GASB Statement No. 43, paragraphs 5 and 41, the EORP is reported for such purposes as an agent multiple-employer plan. The Fund Manager obtains an actuarial valuation for the EORP on its statutory basis as a costsharing plan and, therefore, actuarial information for the County, as a participating government, is not available. 88 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Nonmajor Governmental Funds Special Revenue Funds Administration Accounts for administration of a variety of programs including the Assessor, Recorder and Treasurer surcharges, election services and certain emergency service functions. Funding sources include service related surcharges, federal and state grant funds, fees and local government contributions. County Attorney Accounts for various programs administered by the County Attorney including Victim's Rights, Assistance and Restitution, Child Support Enforcement, Anti-Racketeering, High-Intensity Drug Trafficking Area and Bad Check. Funding sources include statutory fees and other surcharges related to criminal prosecution, federal and state grants and other user fees. Courts Accounts for the processing of criminal cases as well as court enhancement and record retention improvement funds. Funding sources include statutory fees and other surcharges related to the courts. Environmental and Conservation Accounts for forest health programs. Funding is provided by federal grants. Housing Accounts for housing and community development programs. Funding is provided by federal Community Development Block Grants. Library District Accounts for support services and materials provided to the County's community libraries. Funding sources include federal and state grants and a secondary property tax levy. Probation Accounts for Adult and Juvenile Probation programs and services provided in coordination with the State's Superior Court System. Funding sources include state grants and fees paid by probationers. 89 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Nonmajor Governmental Funds Special Revenue Funds Public Defense Accounts for the public defense of criminal cases including public defense enhancement funds. Funding sources include statutory fees and other surcharges related to public defense. Public Health Accounts for a variety of health service and education programs including Bio-Terrorism, Women, Infants and Children (WIC), Nutrition, Tobacco, Dental and contagious diseases. Funding sources include a secondary property tax levy, federal and state grants, appropriations, fees and private party contributions. Recreation Accounts for operating costs of the White Mountain Lake Recreation District. Funding sources are fees and secondary property taxes assessed the benefiting property owners within the district boundaries. Sheriff's Office Accounts for various jail and law enforcement programs including Jail Enhancement, Drug Enforcement, Anti-Racketeering, High-Intensity Drug Trafficking Area and Boating Safety. Funding sources include federal and state grants. Special Districts Accounts for operating costs for the Silver Creek, Bucking Horse, Victory Heights, Hilltop Drive, Mountain View and North Whistle Stop Loop County Road Improvement Districts. Funding sources are secondary property taxes assessed the benefiting property owners within the district boundaries. Superintendent of Schools Accounts for educational services and programs including the Rainbow Accommodation School, juvenile detention Hope School, Special Services Consortium and unincorporated school district territory. Funding sources include federal and state grants and charges for services from local school districts. Workforce Investment Act (WIA) Accounts for administration of the federal Workforce Investment Act (WIA) program. Funding is from federal grants. 90 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Nonmajor Governmental Funds Capital Projects Funds General Government Accounts for construction of County buildings and improvements to existing facilities. Public Health Accounts for construction of the South County Public Health building. Special Districts Accounts for construction costs of the Shumway Road and Roan Circle County Road Improvement Districts. Funding sources are from developer contributions and secondary property taxes assessed the benefiting property owners within the district boundaries. Debt Service Funds General Government Account for the accumulation of resources for payment of principal and interest on the 2000 Series Certificates of Participation jail construction bonds and the 2008 Series Revenue Bonds for acquisition of property and buildings at the Heber and Show Low complexes and for water and electrical upgrades at the Holbrook complex. Funding for debt service payments is annual appropriations Jail Accounts for the accumulation of resources for the payment of principal and interest on bonds and other debt instruments of the 2000 Series Certificates of Participation jail construction bonds. Funding for debt service payments is annual appropriations Special Districts Accounts for the accumulation of resources for the payment of principal and interest on bonds and other debt instruments of the Sutter Drive, Madison Lane, Scott's Pine Meadow, Shumway Road, Bucking Horse, Wild Cat Way, Beaver Dam and North Whistle Stop Loop County Road Improvement Districts. Funding sources are secondary property taxes assessed the benefiting property owners within the district boundaries. 91 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Combining Balance Sheet Nonmajor Governmental Funds Special Revenue County Attorney Courts Administration Assets Cash and investments Cash and investments held by trustee Receivables: Property taxes Accrued interest Other Due from other funds Due from other governments Prepaid items Restricted assets: Cash and investments held by trustee Total assets Liabilities and fund balance Liabilities: Accounts payable Accrued payroll & employee benefits Due to other funds Deferred revenues Total liabilities Fund balances: Unreserved, reported in Special revenue funds Capital projects funds Debt service funds Total fund balances(deficits) Total liabilities and fund balances Environmental and Conservation $ 1,819,183 - $ 1,470,570 - $ 1,347,167 - 2,122 12,060 30,950 - 1,691 4,147 149,610 - 1,637 190,672 - $ 1,864,315 $ 1,626,018 $ 1,539,476 $ $ $ $ $ 107,658 3,535 273,152 384,345 1,479,970 1,479,970 $ 1,864,315 92 38,216 43,092 382,699 464,007 1,162,011 1,162,011 $ 1,626,018 36,906 23,232 290,046 350,184 1,189,292 1,189,292 $ 1,539,476 $ 175,581 207 15,000 - $ 190,788 18,708 26,554 45,262 145,526 145,526 190,788 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Combining Balance Sheet Nonmajor Governmental Funds (Continued) Special Revenue Library District Probation Public Defense 2,855 - $ 371,828 - $ 675,376 - $ 475,895 - 3 244,955 - 33,448 442 4,132 18,070 - 553 - 131,619 3,269 1,533 183,568 - $ 247,813 $ 427,920 829 37,226 $ 713,431 $ 476,448 $ 1,150,542 $ $ $ $ Housing Assets Cash and investments Cash and investments held by trustee Receivables: Property taxes Accrued interest Other Due from other funds Due from other governments Prepaid items Restricted assets: Cash and investments held by trustee Total assets Liabilities and fund balance Liabilities: Accounts payable Accrued payroll & employee benefits Due to other funds Deferred revenues Total liabilities Fund balances: Unreserved, reported in Special revenue funds Capital projects funds Debt service funds Total fund balances(deficits) Total liabilities and fund balances $ 319,860 319,860 (72,047) (72,047) $ 247,813 26,176 7,811 66,531 24,545 125,063 72,099 68,067 41,523 181,689 302,857 302,857 $ 427,920 531,742 531,742 $ 713,431 93 13,537 930 6,594 21,061 455,387 455,387 $ 476,448 Public Health $ 830,553 - 52,694 79,569 270,466 96,710 499,439 651,103 651,103 $ 1,150,542 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Combining Balance Sheet Nonmajor Governmental Funds (Continued) Sheriff's Office Recreation Assets Cash and investments Cash and investments held by trustee Receivables: Property taxes Accrued interest Other Due from other funds Due from other governments Prepaid items Restricted assets: Cash and investments held by trustee Total assets Liabilities and fund balance Liabilities: Accounts payable Accrued payroll & employee benefits Due to other funds Deferred revenues Total liabilities Fund balances: Unreserved, reported in Special revenue funds Capital projects funds Debt service funds Total fund balances(deficits) Total liabilities and fund balances $ Special Revenue Special Districts Superintendent of Schools 85,083 - $ 864,319 - $ 732,245 - $ 2,922,206 - 37,691 107 - 2,533 2,260 31,607 - 6,061 852 - 3,391 735,242 45,569 $ 122,881 $ 900,719 $ 739,158 $ 3,706,408 $ 12,181 31,677 43,858 $ 100,168 3,289 196,869 300,326 $ $ 79,023 79,023 $ 122,881 600,393 600,393 $ 900,719 604,971 604,971 $ 739,158 94 1,201 127,627 5,359 134,187 28,328 28,328 3,678,080 3,678,080 $ 3,706,408 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Combining Balance Sheet Nonmajor Governmental Funds (Continued) Special Revenue Workforce Investment Act Assets Cash and investments Cash and investments held by trustee Receivables: Property taxes Accrued interest Other Due from other funds Due from other governments Prepaid items Restricted assets: Cash and investments held by trustee Total assets Liabilities and fund balance Liabilities: Accounts payable Accrued payroll & employee benefits Due to other funds Deferred revenues Total liabilities Fund balances: Unreserved, reported in Special revenue funds Capital projects funds Debt service funds Total fund balances(deficits) Total liabilities and fund balances $ $ $ $ 191,035 - Capital Projects General Public Government Health $ - $ Special Districts - $ 215,872 - 222 4,962 - - - 251 - 196,219 - - $ 216,123 - $ - 198,860 198,860 $ 216,123 10,625 7,111 372,247 389,983 (193,764) (193,764) 196,219 95 $ $ $ 122,528 122,528 (122,528) (122,528) - $ $ $ 17,263 17,263 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Combining Balance Sheet Nonmajor Governmental Funds (Continued) Total Debt Service General Government Assets Cash and investments Cash and investments held by trustee Receivables: Property taxes Accrued interest Other Due from other funds Due from other governments Prepaid items Restricted assets: Cash and investments held by trustee Total assets Liabilities and fund balance Liabilities: Accounts payable Accrued payroll & employee benefits Due to other funds Deferred revenues Total liabilities Fund balances: Unreserved, reported in Special revenue funds Capital projects funds Debt service funds Total fund balances(deficits) Total liabilities and fund balances $ $ $ $ Special Districts Jail 467,355 $ 427,561 483,656 $ 56,178 - 12,663,507 951,011 26,762 65 - 235,581 18,671 256,992 1,409,002 45,569 - 83,005 653,437 $ 16,233,770 163,948 26,701 190,649 518,497 236,636 2,677,907 184,992 3,618,032 (107,644) (107,644) $ 83,005 10,614,544 76,332 1,924,862 12,615,738 $ 16,233,770 - 497 - 467,355 653,437 $ 1,565,151 $ $ $ - 467,355 467,355 467,355 96 - 1,565,151 1,565,151 $ 1,565,151 Nonmajor Governmental Funds Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds Special Revenue County Attorney Courts Administration Revenues: Property taxes Licenses and permits Fines and forfeits Intergovernmental Charges for services Investment earnings Special assessments Contributions Miscellaneous Total revenues $ Expenditures: General government Public safety Highways and streets Health and welfare Culture and recreation Education Environmental and conservation Urban redevelopment and housing Debt Service Principal Interest and other charges Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Special assessment bonds issued Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficits), July 1, 2009 Fund balances (deficits), June 30, 2010 $ 1,194,271 203,412 8,868 57,752 1,464,303 $ 191,875 1,497,632 69,510 3,604 133,934 1,896,555 $ 445,680 554,732 10,276 9,491 1,020,179 Environmental and Conservation $ 195,574 1,064 18,941 215,579 430,625 53,634 645,715 - 1,945,698 - 898,972 - 237,032 - 1,129,974 1,945,698 898,972 237,032 334,329 (49,143) 121,207 (21,453) 18,000 (95,647) (77,647) 1,164 (1,164) - 195,656 (204,327) (8,671) (226,070) (226,070) 256,682 (49,143) 112,536 (247,523) 1,223,288 1,211,154 1,076,756 1,479,970 $ 1,162,011 $ 1,189,292 97 393,049 $ 145,526 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds (Continued) Special Revenue Library District Probation Housing Revenues: Property taxes Licenses and permits Fines and forfeits Intergovernmental Charges for services Investment earnings Special assessments Contributions Miscellaneous Total revenues $ Expenditures: General government Public safety Highways and streets Health and welfare Culture and recreation Education Environmental and conservation Urban redevelopment and housing Debt Service Principal Interest and other charges Total expenditures Excess (deficiency) of revenues over expenditures $ $ 131,359 29,455 3,929 58 164,801 133,857 - 307,208 586,121 2,543,334 133,857 99,298 92,552 30,944 (104,528) (104,528) 18,108 (5,169) 12,939 (5,230) (70,486) $ 238 2,261,711 368,712 5,041 184 2,635,886 2,543,334 - (1,561) Fund balances (deficits), July 1, 2009 $ 586,121 - - Net change in fund balances 547,247 122,207 2,557 13,408 685,419 307,208 (1,561) Other financing sources (uses): Special assessment bonds issued Transfers in Transfers out Total other financing sources (uses) Fund balances (deficits), June 30, 2010 305,647 305,647 Public Defense (72,047) 98 308,087 $ 302,857 $ (968) (968) 105,491 29,976 426,251 425,411 531,742 $ 455,387 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds (Continued) Public Health Revenues: Property taxes Licenses and permits Fines and forfeits Intergovernmental Charges for services Investment earnings Special assessments Contributions Miscellaneous Total revenues $ 2,148,295 165,169 1,499,862 50,325 22,009 31,141 8,009 3,924,810 Expenditures: General government Public safety Highways and streets Health and welfare Culture and recreation Education Environmental and conservation Urban redevelopment and housing Debt Service Principal Interest and other charges Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Special assessment bonds issued Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficits), July 1, 2009 Fund balances (deficits), June 30, 2010 Special Revenue Sheriff's Recreation Office $ $ 57,132 1,028,746 19,398 5,137 40,100 1,150,513 $ 106,286 2,365 122,249 71,570 302,470 3,680,591 - 154,470 - 1,197,310 - 160,733 - 3,680,591 154,470 28,310 2,519 1,228,139 160,733 244,219 997 (77,626) 141,737 211,175 (2,229,576) (2,018,401) - 10,326 (812) 9,514 85,280 (85,280) - (1,774,182) 997 (68,112) 141,737 668,505 463,234 600,393 $ 604,971 2,425,285 $ 154,333 759 375 155,467 Special Districts 651,103 99 78,026 $ 79,023 $ Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds (Continued) Revenues: Property taxes Licenses and permits Fines and forfeits Intergovernmental Charges for services Investment earnings Special assessments Contributions Miscellaneous Total revenues Special Revenue Superintendent Workforce of Schools Investment Act Capital Projects General Public Government Health $ $ Expenditures: General government Public safety Highways and streets Health and welfare Culture and recreation Education Environmental and conservation Urban redevelopment and housing Debt Service Principal Interest and other charges Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Special assessment bonds issued Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficits), July 1, 2009 Fund balances (deficits), June 30, 2010 $ 5,119,099 25,405 160,066 5,304,570 $ 272,887 2,200 275,087 - $ - 5,169,631 - 424,580 - 122,528 - 1,929,820 - 5,169,631 424,580 122,528 1,929,820 134,939 (149,493) (122,528) (1,929,820) - 1,626 (1,626) - 134,939 (149,493) 3,543,141 (44,271) 3,678,080 100 $ (193,764) - 1,929,820 1,929,820 (122,528) - $ (122,528) $ - N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds (Continued) Total Revenues: Property taxes Licenses and permits Fines and forfeits Intergovernmental Charges for services Investment earnings Special assessments Contributions Miscellaneous Total revenues Capital Projects Special Districts General Government $ $ Expenditures: General government Public safety Highways and streets Health and welfare Culture and recreation Education Environmental and conservation Urban redevelopment and housing Debt Service Principal Interest and other charges Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficits), July 1, 2009 Fund balances (deficits), June 30, 2010 $ Debt Service 2,293 2,293 - Special Districts Jail $ Nonmajor Governmental Funds 4,919 4,919 $ 198,376 538 10,932 2,848 212,694 $ 3,154,537 165,169 249,245 14,074,675 1,295,544 98,764 133,181 31,141 518,936 19,721,192 - - - 38,111 - 3,531,680 3,794,278 198,844 6,034,991 740,591 5,815,346 237,032 307,208 - 335,000 246,314 581,314 310,000 319,541 629,541 185,106 108,879 332,096 858,416 677,253 22,195,639 2,293 (581,314) (624,622) (119,402) (2,474,447) - 1,171,252 1,171,252 390,000 390,000 - 4,032,407 (2,955,167) 1,077,240 2,293 589,938 (234,622) (119,402) (1,397,207) 196,567 (122,583) 1,799,773 11,758 14,012,945 467,355 $ 1,565,151 $ (107,644) $ 12,615,738 198,860 $ 101 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Special Revenue - Administration Original and Final Budgeted Amounts Revenues: Intergovernmental Charges for services Investment earnings $ Actual Amounts 4,808,971 198,797 - Miscellaneous $ 1,194,271 203,412 8,868 Variance with Final Budget $ (3,614,700) 4,615 8,868 111,500 57,752 (53,748) 5,119,268 1,464,303 (3,654,965) General government Public safety 5,562,847 10,654 430,625 53,634 5,132,222 (42,980) Education 2,210,350 645,715 1,564,635 7,783,851 1,129,974 6,653,877 334,329 2,998,912 18,000 18,000 - (18,000) (95,647) (77,647) (77,647) (77,647) Total revenues Expenditures: Total expenditures Excess (deficiency) of revenues over expenditures (2,664,583) Other financing sources (uses): Transfers in Transfers out Total other financing sources and uses - Net change in fund balances (2,664,583) Fund balances, July 1, 2009 Fund balances, June 30, 2010 256,682 2,664,583 $ - 102 2,921,265 1,223,288 $ 1,479,970 (1,441,295) $ 1,479,970 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Special Revenue - County Attorney Original and Final Budgeted Amounts Revenues: Fines and forfeits Intergovernmental Charges for services Investment earnings $ Miscellaneous Total revenues 190,000 1,687,315 30,050 5,000 Actual Amounts $ 191,875 1,497,632 69,510 3,604 21,700 133,934 1,934,065 1,896,555 3,206,874 3,206,874 1,945,698 1,945,698 Variance with Final Budget $ 1,875 (189,683) 39,460 (1,396) 112,234 (37,510) Expenditures: General government Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources and uses Net change in fund balances Fund balances, July 1, 2009 Fund balances, June 30, 2010 $ 103 (1,272,809) (49,143) 550,040 (403,157) 146,883 1,164 (1,164) - (1,125,926) (49,143) 1,125,926 - $ 1,211,154 1,162,011 1,261,176 1,261,176 1,223,666 (548,876) 401,993 (146,883) 1,076,783 $ 85,228 1,162,011 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Special Revenue - Courts Original and Final Budgeted Amounts Revenues: Intergovernmental Charges for services Investment earnings Miscellaneous $ Actual Amounts 500,866 389,939 2,400 - $ 445,680 554,732 10,276 9,491 Variance with Final Budget $ (55,186) 164,793 7,876 9,491 Total revenues 893,205 1,020,179 126,974 Expenditures: General government 1,956,501 898,972 1,057,529 1,956,501 898,972 1,057,529 (1,063,296) 121,207 1,184,503 Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources and uses 600,000 (800,000) (200,000) Net change in fund balances (1,263,296) Fund balances, July 1, 2009 Fund balances, June 30, 2010 195,656 (204,327) (8,671) 112,536 1,263,296 $ - 104 (404,344) 595,673 191,329 1,375,832 1,076,756 $ 1,189,292 (186,540) $ 1,189,292 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Special Revenue - Environmental and Conservation Original and Final Budgeted Amounts Revenues: Intergovernmental Investment earnings Miscellaneous Total revenues $ Expenditures: Environmental and conservation Total expenditures Actual Amounts 173,276 6,724 180,000 $ 195,574 1,064 18,941 215,579 421,338 421,338 237,032 237,032 Variance with Final Budget $ 22,298 (5,660) 18,941 35,579 184,306 184,306 - Excess (deficiency) of revenues over expenditures (241,338) (21,453) 219,885 (229,670) (226,070) 3,600 Total other financing sources and uses (229,670) (226,070) 3,600 Net change in fund balances (471,008) (247,523) 223,485 471,008 393,049 (77,959) - $ 145,526 Other financing sources (uses): Transfers out Fund balances, July 1, 2009 Fund balances, June 30, 2010 $ 105 $ 145,526 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Special Revenue - Housing Original and Final Budgeted Amounts Revenues: Intergovernmental Total revenues $ 70,734 70,734 Actual Amounts $ 305,647 305,647 Variance with Final Budget $ 234,913 234,913 Expenditures: Urban redevelopment and housing Total expenditures 276 307,208 (306,932) 276 307,208 (306,932) Excess (deficiency) of revenues over expenditures Net change in fund balances Fund balances, July 1, 2009 Fund balances, June 30, 2010 70,458 (1,561) (72,019) - 70,458 (1,561) (72,019) (70,458) - $ 106 $ (70,486) (72,047) $ (28) (72,047) Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Special Revenue - Library District Original and Final Budgeted Amounts Revenues: Property taxes Intergovernmental Investment earnings Miscellaneous $ Total revenues Expenditures: Culture and recreation Total expenditures 550,284 157,421 2,700 13,725 Actual Amounts $ 547,247 122,207 2,557 13,408 Variance with Final Budget $ (3,037) (35,214) (143) (317) 724,130 685,419 (38,711) 953,077 586,121 366,956 953,077 586,121 366,956 - (228,947) 99,298 328,245 (104,528) (104,528) (104,528) (104,528) - (333,475) (5,230) 328,245 Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers out Total other financing sources and uses Net change in fund balances Fund balances, July 1, 2009 Fund balances, June 30, 2010 $ 107 333,475 - $ 308,087 302,857 $ (25,388) 302,857 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Special Revenue - Probation Original and Final Budgeted Amounts Revenues: Fines and forfeits Intergovernmental Charges for services Investment earnings $ Miscellaneous Total revenues 2,522,307 378,120 8,400 Actual Amounts $ 238 2,261,711 368,712 5,041 Variance with Final Budget $ 238 (260,596) (9,408) (3,359) 2,600 184 (2,416) 2,911,427 2,635,886 (275,541) 3,507,026 3,507,026 2,543,334 2,543,334 963,692 963,692 92,552 688,151 Expenditures: Public safety Total expenditures Excess (deficiency) of revenues over expenditures (595,599) Other financing sources (uses): Transfers in Transfers out Total other financing sources and uses 4,301 4,301 Net change in fund balances Fund balances, July 1, 2009 Fund balances, June 30, 2010 $ 108 18,108 (5,169) 12,939 13,807 (5,169) 8,638 (591,298) 105,491 696,789 591,298 - 426,251 531,742 (165,047) 531,742 $ $ Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Special Revenue - Public Defense Original and Final Budgeted Amounts Revenues: Intergovernmental Charges for services Investment earnings Miscellaneous $ Actual Amounts 106,041 43,000 7,000 - Total revenues $ 131,359 29,455 3,929 58 Variance with Final Budget $ 25,318 (13,545) (3,071) 58 156,041 164,801 8,760 585,262 585,262 133,857 133,857 451,405 451,405 (429,221) 30,944 460,165 Expenditures: General government Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers out Total other financing sources and uses - Net change in fund balances Fund balances, July 1, 2009 Fund balances, June 30, 2010 $ (429,221) 29,976 429,221 425,411 - 109 (968) (968) $ 455,387 (968) (968) 459,197 (3,810) $ 455,387 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Special Revenue - Public Health Original and Final Budgeted Amounts Revenues: Property taxes Licenses and permits Intergovernmental Charges for services $ Actual Amounts 2,160,416 49,000 1,849,024 45,000 Investment earnings Contributions Miscellaneous Total revenues $ 2,148,295 165,169 1,499,862 50,325 Variance with Final Budget $ (12,121) 116,169 (349,162) 5,325 50,000 22,009 (27,991) 15,000 2,280 4,170,720 31,141 8,009 3,924,810 16,141 5,729 (245,910) 6,454,746 3,680,591 2,774,155 6,454,746 3,680,591 2,774,155 244,219 2,528,245 211,175 - Expenditures: Health and welfare Total expenditures Excess (deficiency) of revenues over expenditures (2,284,026) Other financing sources (uses): Transfers in 211,175 Transfers out Total other financing sources and uses Net change in fund balances Fund balances, July 1, 2009 Fund balances, June 30, 2010 $ (335,996) (2,229,576) (1,893,580) (124,821) (2,018,401) (1,893,580) (2,408,847) (1,774,182) 634,665 2,408,847 2,425,285 16,438 - 110 $ 651,103 $ 651,103 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Special Revenue - Recreation Original and Final Budgeted Amounts Revenues: Property taxes Investment earnings Miscellaneous Total revenues $ Expenditures: Culture and recreation Total expenditures Actual Amounts Variance with Final Budget 139,077 139,077 $ 154,333 759 375 155,467 $ 15,256 759 375 16,390 214,769 154,470 60,299 214,769 154,470 60,299 (75,692) 997 76,689 (75,692) 997 76,689 Excess (deficiency) of revenues over expenditures Net change in fund balances Fund balances, July 1, 2009 Fund balances, June 30, 2010 75,692 - $ 111 $ 78,026 79,023 $ 2,334 79,023 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Special Revenue - Sheriff's Office Original and Final Budgeted Amounts Revenues: Fines and forfeits Intergovernmental Charges for services Investment earnings $ Actual Amounts 1,300,299 300 Miscellaneous Total revenues $ 57,132 1,028,746 19,398 5,137 Variance with Final Budget $ 57,132 (271,553) 19,398 4,837 59,005 40,100 (18,905) 1,359,604 1,150,513 (209,091) 2,059,398 1,197,310 862,088 - 28,310 (28,310) 2,059,398 2,519 1,228,139 (2,519) 831,259 Expenditures: Public safety Debt Service Principal Interest and other charges Total expenditures Excess (deficiency) of revenues over expenditures (699,794) (77,626) 622,168 10,326 10,326 Other financing sources (uses): Transfers in - Transfers out Total other financing sources and uses - Net change in fund balances Fund balances, July 1, 2009 Fund balances, June 30, 2010 $ 112 (812) 9,514 (812) 9,514 (699,794) (68,112) 631,682 699,794 - 668,505 600,393 (31,289) 600,393 $ $ Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Special Revenue - Special Districts Original and Final Budgeted Amounts Revenues: Property taxes Investment earnings Special assessments Miscellaneous $ Total revenues Actual Amounts Variance with Final Budget 44,000 18,800 3,700 441,592 $ 106,286 2,365 122,249 71,570 $ 62,286 (16,435) 118,549 (370,022) 508,092 302,470 (205,622) 958,269 958,269 160,733 160,733 797,536 797,536 (450,177) 141,737 591,914 85,280 (85,280) - 85,280 (85,280) - 141,737 591,914 Expenditures: Highways and streets Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources and uses - Net change in fund balances Fund balances, July 1, 2009 Fund balances, June 30, 2010 (450,177) 450,177 - $ 113 463,234 $ 604,971 $ 13,057 604,971 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Special Revenue - Workforce Investment Act Original and Final Budgeted Amounts Revenues: Intergovernmental Miscellaneous Total revenues $ Actual Amounts 1,075,153 1,075,153 $ Variance with Final Budget 272,887 2,200 275,087 $ (802,266) 2,200 (800,066) Expenditures: Health and welfare Total expenditures 1,109,280 1,109,280 Excess (deficiency) of revenues over expenditures (34,127) Other financing sources (uses): Transfers in Transfers out - Total other financing sources and uses - Net change in fund balances Fund balances, July 1, 2009 Fund balances, June 30, 2010 $ 684,700 684,700 (149,493) (115,366) 1,626 (1,626) 1,626 (1,626) - - (34,127) (149,493) (115,366) 34,127 (44,271) (78,398) - 114 424,580 424,580 $ (193,764) $ (193,764) Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Capital Projects - Special Districts Original and Final Budgeted Amounts Revenues: Investment earnings Miscellaneous Total revenues $ Actual Amounts 17,263 17,263 $ Variance with Final Budget 2,293 2,293 $ 2,293 (17,263) (14,970) Expenditures: Highways and streets Total expenditures 213,472 213,472 - 213,472 213,472 Excess (deficiency) of revenues over expenditures (196,209) 2,293 198,502 Net change in fund balances (196,209) 2,293 198,502 196,209 196,567 358 - $ 198,860 Fund balances, July 1, 2009 Fund balances, June 30, 2010 $ 115 $ 198,860 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Debt Service - General Government Original and Final Budgeted Amounts Revenues: Charges for services Total revenues $ Actual Amounts 500,000 500,000 $ Variance with Final Budget - $ (500,000) (500,000) Expenditures: Debt Service Principal Interest and other charges Total expenditures 335,000 165,000 500,000 335,000 246,314 581,314 (81,314) (81,314) (581,314) (581,314) Excess (deficiency) of revenues over expenditures - Other financing sources (uses): Transfers in - 1,171,252 1,171,252 Total other financing sources and uses - 1,171,252 1,171,252 Net change in fund balances - 589,938 589,938 - (122,583) (122,583) Fund balances, July 1, 2009 Fund balances, June 30, 2010 $ - 116 $ 467,355 $ 467,355 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Debt Service - Jail Original and Final Budgeted Amounts Revenues: Investment earnings Total revenues $ Actual Amounts - $ 4,919 4,919 Variance with Final Budget $ 4,919 4,919 Expenditures: Debt Service Principal Interest and other charges Total expenditures 310,000 327,000 637,000 310,000 319,541 629,541 7,459 7,459 (637,000) (624,622) 12,378 637,000 390,000 (247,000) 637,000 390,000 (247,000) (234,622) (234,622) Excess (deficiency) of revenues over expenditures Other financing sources (uses): Transfers in Total other financing sources and uses Net change in fund balances - Fund balances, July 1, 2009 Fund balances, June 30, 2010 $ - 117 1,799,773 $ 1,565,151 1,799,773 $ 1,565,151 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Budgetary Comparison Schedule Debt Service - Special Districts Original and Final Budgeted Amounts Revenues: Property taxes Investments earnings Special assessments Miscellaneous $ Total revenues Actual Amounts 179,630 190,000 369,630 $ 198,376 538 10,932 2,848 Variance with Final Budget $ 18,746 538 10,932 (187,152) 212,694 (156,936) 38,111 (38,111) Expenditures: Highways and Streets Debt Service Principal Interest and other charges 217,662 163,548 185,106 108,879 32,556 54,669 Total expenditures 381,210 332,096 49,114 Excess (deficiency) of revenues over expenditures (11,580) (119,402) (107,822) Net change in fund balances (11,580) (119,402) (107,822) 11,580 11,758 Fund balances, July 1, 2009 Fund balances, June 30, 2010 $ 118 - $ (107,644) 178 $ (107,644) N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Capital assets used in the operation of governmental funds 119 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Capital Assets Used in the Operation of Governmental Funds Comparative Schedules By Source As of June 30, 2010 and 2009 2010 Governmental funds capital assets: Land Construction in progress Buildings and improvements Infrastructure Machinery and equipment $ Total governmental funds capital assets Investments in governmental funds capital assets by source: General fund Special revenue funds Capital projects funds Total governmental funds capital assets 5,469,671 6,635,086 32,364,682 73,176,834 24,992,960 $ 5,439,671 6,524,469 32,353,226 73,042,113 25,283,610 $ 142,639,233 $ 142,643,089 $ $ 32,557,933 108,053,606 2,027,694 $ 142,639,233 120 2009 32,743,997 109,899,092 - $ 142,643,089 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Capital Assets Used in the Operation of Governmental Funds Schedule by Function and Activity Function General government Land $ Public safety Highways and streets Health and welfare 194,662 Construction in Progress $ 19,064 Buildings and Improvements $ 11,431,253 Total governmental funds capital assets 665,211 $ 4,492,379 $ 16,802,569 794,102 15,965,076 7,773,775 4,298,773 28,861,726 4,801,577 3,036,854 1,170,117 64,737,848 14,033,000 87,779,396 431,692 2,785,066 847,796 854,383 4,918,937 111,530 74,521 186,051 2,838,910 1,239,904 4,090,554 24,992,960 $ 142,639,233 11,740 $ $ Total 30,000 Culture and recreation Education Machinery and Equipment Infrastructure 5,469,671 $ 6,635,086 $ 32,364,682 121 $ 73,176,834 $ Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Capital Assets Used in the Operation of Governmental Funds Schedule of Changes by Function and Activity Function General government Governmental Funds Capital Assets July 1, 2009 $ 16,775,136 Increases $ Governmental Funds Capital Assets June 30, 2010 Decreases 91,645 $ 64,212 $ 16,802,569 Public safety 28,797,727 632,930 568,931 28,861,726 Highways and streets 90,306,828 1,185,926 3,713,358 87,779,396 2,557,889 2,398,360 37,312 4,918,937 186,051 - - 186,051 4,019,458 71,096 - 4,090,554 Health and welfare Culture and recreation Education Total governmental funds capital assets $ 142,643,089 $ 122 4,379,957 $ 4,383,813 $ 142,639,233 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Statement of Changes in Assets and Liabilities Agency Funds Balance July 1, 2009 Additions Deductions Balance June 30, 2010 Assets Cash and investments Interest receivable Total Assets $ 13,124,968 25,327 $ 13,150,295 $ 68,182,081 $ 68,182,081 $ 76,872,941 4,451 $ 76,877,392 $ 4,434,108 20,876 $ 4,454,984 Liabilities Due to other governments Deposits held for other parties Total Liabilities $ 12,514,076 636,219 $ 13,150,295 $ 67,767,357 414,724 $ 68,182,081 $ 76,563,689 313,703 $ 76,877,392 $ 3,717,744 737,240 $ 4,454,984 123 This Page Intentionally Left Blank 124 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Statistical section 125 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Statistical Section This part of the Navajo County comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about Navajo County’s financial health. Contents Financial Trends These schedules contain trend information to help citizens understand how the County’s financial performance and fiscal health have changed over time. Financial trend information can be found on pages 127 through 136 of this report. Revenue Capacity These schedules contain information to assist citizens in understanding the property tax; a significant local revenue source. Revenue capacity information can be found on pages 137 through 140 of this report. Debt Capacity These schedules present information to assist citizens in assessing the affordability of the County’s current levels of outstanding debt and the County’s ability to issue additional debt in the future. Debt capacity information can be found on pages 141 through 143 of this report. Demographic and Economic Information These schedules contain demographic and economic indicators that aid citizens in understanding the environment within which the County’s financial activities are transacted. Demographic and economic information can be found on pages 144 and 145 of this report. Operating Information These schedules contain service and infrastructure data to help citizens understand how the information in the County’s financial report relates to the services the County provides and the activities we perform. Operating information can be found on pages 146 through 148 of this report. Sources: Unless otherwise noted, the information in these schedules is derived from the annual financial reports for the relevant year. 126 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Net Assets by Component Last Eight Fiscal Years (accrual basis of accounting) Fiscal Year Governmental activities: Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets 2003 2004 2005 2006 $ 54,360,439 1,715,242 10,249,740 $ 66,325,421 $ 57,948,043 9,778,365 4,829,001 $ 72,555,409 $ 55,643,023 15,322,958 8,491,241 $ 79,457,222 $ 59,552,340 15,958,946 16,657,154 $ 92,168,440 127 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Net Assets by Component Last Eight Fiscal Years (accrual basis of accounting) Fiscal Year 2007 Governmental activities: Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets $ $ 55,332,385 21,309,950 22,441,546 99,083,881 128 2008 $ 61,704,323 24,374,755 16,119,289 $ 102,198,367 2009 $ $ 73,728,006 19,040,878 15,007,820 107,776,704 2010 $ $ 66,038,408 23,034,928 16,207,016 105,280,352 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) Fiscal Year 2003 Expenses Governmental activities: General government Public safety Highways and streets Sanitation Economic opportunity Health and welfare Culture and recreation Education Environmental and conservation Urban redevelopment and housing Interest on long-term debt Total governmental activities expenses Program Revenues Governmental activities: Charges for services: General government Public Safety Highway and streets Sanitation Health and welfare Culture and recreation Operating grants and contributions: General government Public Safety Highway and streets Health and welfare Culture and recreation Education Environmental and conservation Urban redevelopment and housing Capital grants and contributions: Highway and streets Total governmental activities program revenues Net Revenue (Expense) $ 16,481,849 13,635,116 7,521,368 30,528 4,403,499 660,852 226,269 558,992 43,518,473 2004 2006 15,392,349 11,361,939 9,418,291 25,103 4,241,657 585,971 232,790 540,314 41,798,414 $ 18,389,571 11,659,715 8,434,616 94,595 4,736,700 531,045 263,909 507,110 44,617,261 3,008,100 1,809,061 4,544 40,000 41,475 10,250 3,949,254 525,746 942 (17,003) 29,745 16,548 5,224,551 802,050 (86,267) 70,821 8,942 4,477,711 2,810,667 28,647 92,693 93,599 11,926 8,093,867 3,519,132 7,798,373 1,189,036 401,306 - 5,000 10,663 - 1,718,024 2,917,059 10,997,876 926,755 135,598 - 2,428,758 3,696,730 228,409 1,837,979 145,307 639,532 - 25,915,144 4,520,895 22,715,409 12,567,738 29,059,696 $ (17,603,329) $ (37,277,519) $ (21,901,852) $ (19,413,489) 129 $ 2005 $ 19,479,297 13,099,102 8,851,369 35,887 5,874,892 468,926 289,270 374,442 48,473,185 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) (continued) Fiscal Year 2007 Expenses Governmental activities: General government Public safety Highways and streets Sanitation Economic opportunity Health and welfare Culture and recreation Education Environmental and conservation Urban redevelopment and housing Interest on long-term debt Total governmental activities expenses Program Revenues Governmental activities: Charges for services: General government Public Safety Highway and streets Health and welfare Operating grants and contributions: General government Public Safety Highway and streets Health and welfare Culture and recreation Education Environmental and conservation Urban redevelopment and housing Capital grants and contributions: Highway and streets Total governmental activities program revenues Net Revenue (Expense) $ 19,745,840 14,534,493 10,990,269 18,880 2,162 6,274,590 554,419 4,883,527 179,518 57,183,698 2008 2010 20,503,496 17,570,231 12,960,992 6,809,907 472,151 7,119,026 234,078 5,000 349,677 66,024,558 $ 19,392,043 19,182,119 14,058,305 7,219,915 510,035 5,723,104 231,225 594,260 66,911,006 4,882,461 2,910,947 115,198 95,930 3,746,695 541,256 83,076 77,965 3,473,303 765,083 122,462 3,531,064 517,702 39,249 215,494 2,241,225 3,062,299 184,839 2,227,071 38,313 4,944,866 - 1,851,358 3,063,868 1,751,447 38,102 7,186,346 162,086 - 3,719,202 3,599,091 2,199,624 64,885 5,512,115 205,884 - 1,735,327 3,290,457 1,803,890 122,207 6,086,494 195,574 305,647 12,956,489 33,659,638 12,361,020 30,863,219 12,393,158 32,054,807 15,637,667 33,480,772 (35,161,339) $ (34,856,199) $ (37,433,760) $ (23,524,060) 130 $ 2009 $ $ 22,647,297 17,566,896 13,057,318 9,366,578 747,065 6,307,885 237,032 307,208 677,253 70,914,532 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) (continued) Fiscal Year 2003 General Revenues Governmental activities: Property taxes General county sales tax Shared revenues Payment in lieu of taxes Grants and contributions not restricted to specific programs Investment earnings Fines and forfeits Rent Gain on disposal of capital assets Miscellaneous Total governmental activities general revenues Change in net assets - governmental activities $ 5,877,286 5,256,637 12,625,712 - 2004 $ 793,842 782,429 57,105 746,976 26,139,987 $ 8,536,658 131 5,221,794 5,901,927 13,107,115 - 2005 $ 19,550,932 1,178,509 309,309 324,454 45,594,040 $ 8,316,521 6,402,534 5,205,992 11,362,815 861,599 2006 $ 1,228,182 1,184,173 140,937 408,225 26,794,457 $ 4,892,605 7,973,918 7,260,596 12,781,414 757,594 946,207 909,436 59,167 581,789 31,270,121 $ 11,856,632 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Changes in Net Assets Last Eight Fiscal Years (accrual basis of accounting) (continued) Fiscal Year 2007 General Revenues Governmental activities: Property taxes General county sales tax Shared revenues Payment in lieu of taxes Grants and contributions not restricted to specific programs Investment earnings Fines and forfeits Rent Gain on disposal of capital assets Miscellaneous Transfers Total governmental activities general revenues and transfers Change in net assets - governmental activities $ $ 2009 2010 9,707,389 7,083,165 13,302,354 - $ 10,933,578 6,330,588 12,017,517 - $ 12,494,737 5,480,598 10,728,725 - 1,433,848 1,733,012 104,656 1,016,509 - 3,922,712 1,624,746 11,971 1,207,819 - 6,444,858 750,742 23,895 1,466,751 - 4,902,289 322,748 115,237 1,273,310 (380,236) 33,223,879 36,860,156 37,967,929 8,636,394 6,778,153 13,521,307 - 9,699,819 132 2008 $ $ 1,698,817 $ 3,111,730 34,937,408 $ (2,496,352) Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2001 2002 2003 2004 2005 General fund Reserved Unreserved $ 100,664 (440,326) $ 130,496 1,221,764 $ 84,466 4,512,907 $ 109,411 8,174,226 $ Total general fund $ (339,662) $ 1,352,260 $ 4,597,373 $ 8,283,637 $ 10,510,812 $ 294,530 $ 231,823 $ 335,486 $ 5,742,868 $ All other governmental funds Reserved Unreserved, reported in: Special revenue funds Debt service funds Capital projects funds Total all other governmental funds $ 12,463,399 646,500 5,659,272 8,915,193 1,610,327 4,775,138 19,063,701 $ 15,532,481 133 10,697,618 1,715,242 4,800,163 $ 17,548,509 $ 124,747 10,386,065 6,699,626 7,661,943 2,864,748 5,695,432 3,176,207 16,269,559 $ 15,571,265 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (continued) Fiscal Year 2006 2007 General fund Reserved Unreserved $ 12,379,484 $ Total general fund $ 12,379,484 $ 16,110,913 $ 10,983,270 $ All other governmental funds Reserved Unreserved, reported in: Special revenue funds Debt service funds Capital projects funds Total all other governmental funds $ 16,110,913 397,700 2008 $ 3,957,781 10,939,695 2009 2,883,159 7,550,215 $ 325,096 7,416,990 $ 14,897,476 $ 10,433,374 $ 7,742,086 $ $ $ 528,878 500,703 $ 2010 679,641 7,581,812 3,443,911 21,439,571 1,995,785 4,791,323 26,620,823 1,777,950 24,543 25,962,952 1,824,003 - 31,118,113 1,924,862 76,332 22,008,993 $ 28,624,379 $ 28,924,019 $ 28,466,596 $ 33,648,185 134 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2001 2002 2003 2004 2005 $ 6,696,898 672,298 731,328 32,679,755 1,478,549 1,673,485 1,753,201 741,263 $ 3,983,078 662,253 980,814 33,877,689 2,123,342 1,098,758 1,704,622 67,168 6,484 461,815 $ 5,325,701 612,942 782,430 38,818,933 4,300,740 793,844 493,133 57,105 65,129 747,477 $ 5,598,844 687,864 768,843 36,512,199 4,505,232 1,178,509 697,839 15,663 324,454 $ 5,944,655 735,239 849,138 35,236,042 4,435,720 1,184,173 541,145 13,624 408,225 46,426,777 44,966,023 51,997,434 50,289,447 49,347,961 14,945,238 9,859,235 8,727,727 619,173 4,648,457 401,020 260,709 9,245,977 16,792,519 10,075,186 11,314,789 30,861 4,167,647 546,011 248,712 250,000 2,055,808 16,285,966 13,357,260 9,457,334 30,528 4,159,855 732,897 226,270 1,495,651 14,942,786 11,457,252 12,281,281 4,301,274 588,911 222,995 903,973 17,519,255 11,656,881 10,462,632 64,518 4,917,449 513,452 252,173 2,284,380 554,020 509,702 547,458 595,597 517,747 558,992 525,549 540,314 718,342 507,110 49,771,258 46,624,588 46,822,500 45,764,335 48,896,192 Excess(deficiency) of revenues over expenditures (3,344,481) (1,658,565) 5,174,934 4,525,112 451,769 Other financing sources (uses) Revenue bonds issued Capital lease agreements Special assessment bonds issued Sale of capital assets Transfers in Transfers out 220,938 2,382,408 (2,382,408) 55,861 216,625 5,255,401 (5,255,401) 3,371,339 (3,371,339) 55,861 309,309 2,791,392 (2,791,392) Revenues Property taxes Licenses and permits Fines and forfeits Intergovernmental Charges for services Investment earnings Special assessments Rents and royalties Contributions Miscellaneous Total revenues Expenditures General government Public safety Highways and streets Sanitation Economic opportunity Health and welfare Culture and recreation Education Environmental and conservation Urban redevelopment and housing Capital outlay Debt service: Principal Interest and other charges Total expenditures Total other financing sources (uses) Net change in fund balances Ratio of total debt service expenditures to non-capital expenditures 220,938 272,486 $ (3,123,543) $ (1,386,079) 2.62% 2.56% 135 - 365,170 $ 5,174,934 $ 4,890,282 2.38% 2.38% 63,086 140,937 3,519,951 (3,519,951) 204,023 $ 655,792 2.63% Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (continued) Fiscal Year Revenues Property taxes Licenses and permits Fines and forfeits Intergovernmental Charges for services Investment earnings Special assessments Contributions Miscellaneous 2006 2007 2008 2009 2010 $ 7,934,263 979,368 990,927 43,263,385 5,544,948 909,436 26,879 604,968 $ 8,673,499 879,866 1,646,183 47,350,129 5,478,487 1,727,733 38,281 990,990 $ 9,581,813 643,032 1,290,001 50,665,504 2,515,958 1,624,746 56,956 1,222,929 $ 10,780,692 513,081 1,563,382 52,104,688 2,284,384 750,741 356,318 25,916 1,466,751 $ 12,294,308 619,663 1,336,602 49,652,453 2,347,245 322,747 133,181 31,141 1,273,311 60,254,174 66,785,168 67,600,939 69,845,953 68,010,651 18,794,253 13,875,071 10,366,859 6,022,260 444,143 274,985 2,118,079 19,975,143 13,759,567 10,681,812 19,424 2,162 6,270,192 562,599 4,893,943 1,990,735 22,871,415 17,525,292 14,792,747 6,813,069 471,342 7,119,291 234,078 5,000 6,238,140 22,160,207 18,403,733 17,778,854 7,074,321 501,738 5,515,147 231,225 3,030,157 21,661,752 16,838,127 10,087,829 9,306,800 740,591 6,139,063 237,032 307,208 81,675 686,012 374,442 421,836 179,518 303,173 349,677 487,701 594,260 858,416 677,253 52,956,104 58,756,931 76,723,224 75,777,343 66,935,746 7,298,070 8,028,237 (9,122,285) (5,931,390) 1,074,905 59,167 2,094,983 (2,094,983) 104,656 3,903,479 (3,653,479) 6,600,000 77,845 11,971 1,845,732 (1,845,732) 6,846 23,895 2,304,012 (2,304,012) 115,237 8,048,481 (6,789,602) Total revenues Expenditures General government Public safety Highways and streets Sanitation Economic opportunity Health and welfare Culture and recreation Education Environmental and conservation Urban redevelopment and housing Capital outlay Debt service: Principal Interest and other charges Total expenditures Excess(deficiency) of revenues over expenditures Other financing sources (uses) Revenue bonds issued Capital lease agreements Sale of capital assets Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Ratio of total debt service expenditures to non-capital expenditures 59,167 354,656 $ 7,357,237 $ 8,382,893 2.09% 1.06% 136 6,689,816 30,741 $ (2,432,469) $ (5,900,649) 0.93% 1.49% 1,374,116 $ 2,449,021 2.30% Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Primary Assessed Value Unattached Personal Property Total Taxable Assessed Value Total Direct Tax Rate ** Estimated Actual Value Assessed Value as a Percentage of Actual Value $ $ 0.9818 $ 4,675,185,409 11.44% 544,634,215 0.9747 4,846,695,667 11.24 14,340,262 563,168,606 1.0814 5,049,758,994 11.15 298,083,506 18,092,250 623,721,601 0.8772 5,453,258,038 11.44 333,976,747 291,305,997 19,312,521 644,595,265 1.0316 5,682,323,267 11.34 2006 365,245,873 300,099,462 18,588,795 683,934,130 1.2600 6,004,911,358 11.39 2007 414,808,401 305,200,210 14,828,110 734,836,721 1.2592 6,464,822,998 11.37 2008 480,365,541 315,601,599 16,347,131 812,314,271 1.2504 7,181,877,591 11.31 2009 563,228,216 328,530,388 16,599,092 908,357,696 1.2238 8,083,048,537 11.24 2010 631,550,018 345,011,622 22,964,880 998,764,550 1.2057 8,941,980,626 11.17 Fiscal Year Residential and Vacant Property Commercial Property 2001 $ 246,889,442 2002 258,323,717 272,095,611 14,214,887 2003 * 279,670,685 267,623,207 2004 307,545,845 2005 $ 260,470,271 $ 18,968,648 534,952,560 Source: Navajo County Assessor * Revised abstract as a result of Rodeo-Chediski fire ** Total Direct Tax Rate contains both primary and secondary tax rates 137 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per $100 of assessed value) County Direct Rates Fiscal Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Primary 0.6381 0.6506 0.6909 0.4772 0.6316 0.6337 0.6229 0.6041 0.5775 0.5594 Fire District 0.1000 0.1000 0.1000 0.1000 0.1000 0.1000 0.1000 0.1000 0.1000 0.1000 Secondary Flood Control Library District District 0.0200 0.2237 0.0200 0.2041 0.0200 0.2041 0.0200 0.2041 0.0200 0.2041 0.0300 0.3000 0.0400 0.3000 0.0500 0.3000 0.0500 0.3000 0.0500 0.3000 *Public Health District 0.0000 0.0000 0.0661 0.0759 0.0759 0.1963 0.1963 0.1963 0.1963 0.1963 Overlapping Rates (1) Fiscal Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 School Equalization 0.5123 0.4974 0.4889 0.4717 0.4560 0.4358 0.0000 0.0000 0.0000 0.3306 School Districts 3.2571-7.9502 3.8095-7.9525 3.8179-7.6519 3.4929-8.0212 3.3400-8.0200 3.3931-8.0200 3.7977-8.0200 3.1373-6.7592 3.6519-7.7773 3.6624-8.3747 Cities 0.4881-0.9501 0.4680-0.9501 0.4500-0.9501 0.5442-0.9501 0.5610-0.9501 0.5324-0.9501 0.5216-0.9134 0.2845-0.8870 0.2845-0.8685 0.2789-0.8550 Other Special Districts 0.1512-1.8913 0.1431-2.2033 0.1249-2.4719 0.1097-2.4287 0.0767-2.4450 0.0967-2.6514 0.0871-2.6347 0.0864-2.7749 0.0785-2.7512 0.0706-2.7326 Source: Navajo County Assessor's Office and Navajo County Finance Department (1) Includes both primary and secondary tax rates. * Navajo County Public Health District tax rate first adopted in FY 2002-2003. 138 Community College District 1.4106 1.4164 1.4542 1.4406 1.5092 1.5200 1.4858 1.4206 1.3382 1.1352 Total Direct 0.9818 0.9747 1.0811 0.8772 1.0316 1.2600 1.2592 1.2504 1.2238 1.2057 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Principal Property Taxpayers Current Year and Six Years Ago 2010 Primary Assessed Value Taxpayer Arizona Public Service Company $ 2004 Percentage of Total Primary Assessed Value Rank Rank Percentage of Total Primary Assessed Value 96,593,064 1 15.49% Primary Assessed Value 107,346,606 1 10.75% PacifiCorp Electric Operations 31,068,621 2 3.11% 32,473,751 2 5.21% Peabody Western Coal Co 16,669,389 3 1.67% 15,712,500 3 2.52% Transwestern Pipeline Co 11,923,788 4 1.19% 7,818,785 6 1.25% El Paso Natural Gas Co 9,163,477 5 0.92% 9,728,496 5 1.56% Catalyst Paper Inc (formerly Abitibi Consolidated) 7,481,324 6 0.75% 6,684,840 7 1.07% Citizens Telecom of White Mountains 6,231,982 7 0.62% 10,589,603 4 1.70% Burlington Northern/Santa Fe Railway 4,483,725 8 0.45% 5,184,182 10 0.83% Navopache Electric Co-Op Inc 3,328,331 9 0.33% 5,430,813 9 0.87% Unisource Energy Corporation 2,821,246 10 0.28% Totals $ Total 2010 Navajo County Assessed Value $ 200,518,489 998,764,550 20.08% $ N/A $ 190,216,034 Total 2010 Navajo County Assessed Value 139 30.50% $ 623,721,601 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Property Tax Levies and Collections Last Ten Fiscal Years Fiscal Year Taxes Levied for the Fiscal Year 2001 $3,337,983 2002 Collected within Fiscal Year Percentage Amount of Levy 3,166,326 94.86% 3,517,245 3,304,881 93.96 2003 3,904,840 3,666,841 2004 2,973,896 2005 $ Total Collections to Date Percentage Amount of Levy 3,336,718 99.96% 210,485 3,515,366 99.95 93.91 235,460 3,902,301 99.93 2,836,571 95.38 135,776 2,972,347 99.95 4,056,255 3,867,955 95.36 185,395 4,053,350 99.93 2006 4,322,597 4,139,945 95.77 179,345 4,319,290 99.92 2007 4,584,560 4,401,681 96.01 176,228 4,577,909 99.85 2008 4,917,541 4,684,181 95.25 222,125 4,906,306 99.77 2009 5,251,608 5,003,706 95.28 223,541 5,227,247 99.54 2010 5,590,696 5,306,931 94.92 - 5,306,931 94.92 Source : $ Collections in Subsequent Years 170,392 $ Taxes levied obtained by Navajo County Board of Supervisors Adopted Budget net of Assessor's corrections. Collections obtained from the Navajo County Treasurer. 1) General Fund Levies and Collections only 140 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Certificates of Participation Special Assessment Bonds - $ 7,115,000 $ 2,889,106 2002 - 6,900,000 2,563,698 50,478 9,514,176 0.57 93.87 2003 - 6,670,000 2,298,150 32,597 9,000,747 0.50 87.20 2004 - 6,430,000 2,191,790 70,198 8,691,988 0.45 82.77 2005 - 6,180,000 1,812,813 61,696 8,054,509 0.38 75.30 2006 - 5,915,000 1,765,055 40,684 7,720,739 0.34 70.83 2007 - 5,915,000 2,950,589 18,848 8,884,437 0.37 80.04 Fiscal Year 2001 Revenue Bonds $ Capital Leases $ - Total Primary Government Percentage of Personal Income (1) Per Capita (1) $ 10,004,106 0.63% $ 101.51 2008 6,600,000 5,635,000 2,442,125 73,520 14,750,645 0.58 131.29 2009 6,600,000 5,340,000 1,702,213 53,687 13,695,900 N/A (2) 121.23 2010 6,265,000 5,030,000 1,517,107 25,377 12,837,484 N/A (2) 119.48 Source: Details regarding the County's outstanding debt can be found in the notes to the financial statements (1) Personal income and population information can be found in the Demographic and Economic Statistics schedule. (2) Personal income was not available for 2010 141 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Legal Debt Margin Information Last Ten Fiscal Years Legal Debt Margin Calculation for Fiscal Year 2010 Assessed value Debt limit (15% of assessed value) Debt applicable to limit: General obligation bonds Less: Amount set aside for repayment of general obligation debt Total net debt applicable to limit Legal debt margin Debit Limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of the debt $ $ 2001 80,242,884 80,242,884 0% $ $ 2002 81,695,132 81,695,132 $ 998,764,550 149,814,683 - $ 149,814,683 Fiscal Year 2003 $ 84,475,291 $ 84,475,291 $ $ 2004 93,558,240 93,558,240 $ $ 2005 96,689,290 96,689,290 0% 0% 0% 0% Debit Limit Total net debt applicable to limit Legal debt margin 2006 $ 102,590,120 $ 102,590,120 2007 $ 110,225,508 $ 110,225,508 Fiscal Year 2008 $ 121,847,141 $ 121,847,141 2009 $ 136,253,654 $ 136,253,654 2010 $ 149,814,683 $ 149,814,683 Total net debt applicable to the limit as a percentage of the debt 0% 0% 0% 0% 0% Source: The legal debt limit of Navajo County is equal to 15% of the County's net secondary assessed valuation, per the Arizona Constitution, Article 9, Section 8. Assessed valuations are provided by the Navajo County Assessor. 142 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Pledged Revenue Coverage Last Ten Fiscal Years 2008 Series Pledged Revenue Obligation Bonds Debt Service Fiscal Year 2008 2009 2010 Fiscal Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 $ $ County Excise Tax 7,083,165 6,330,588 5,480,598 Revenues 24,741,415 26,746,236 29,158,695 32,128,944 39,178,639 43,895,225 49,604,695 57,611,975 50,385,592 44,494,664 State Shared Sales Tax $ 10,915,470 9,844,544 8,732,190 Net Available Revenue $ 17,998,635 16,175,132 14,212,788 Principal $ 335,000 350,000 Interest $ 245,299 235,710 Coverage 27.87% 24.27 2000 Series Jail Facillity Certificates of Participation Debt Service Net Available Less: Expenditures Resources Principal Interest $ 25,081,077 $ (339,662) $ 205,000 $ 430,689 25,393,976 1,352,260 215,000 420,439 24,561,322 4,597,373 230,000 409,420 23,845,307 8,283,637 240,000 397,345 28,667,827 10,510,812 250,000 384,745 31,515,741 12,379,484 265,000 371,245 33,493,782 16,110,913 280,000 360,180 42,714,499 14,897,476 295,000 341,270 39,952,218 10,433,374 310,000 335,392 36,752,578 7,742,086 330,000 310,823 Coverage 2.13% 7.19 13.00 16.56 19.46 25.17 23.41 16.17 12.08 Special Assessment Bonds Debt Service Fiscal Year 2006 2007 2008 2009 2010 Revenues $ 58,425 282,358 320,788 300,706 273,885 Principal $ 28,336 46,360 244,353 127,204 220,337 Interest $ 7,922 50,387 83,396 105,882 94,879 143 Coverage 1.61% 2.92 0.98 1.29 0.87 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Demographic and Economic Statistics Last Ten Calendar Years Fiscal Year Population Personal Income (thousands of dollars) Per Capita Personal Income Unemployment Rate 2001 98,549 1,586,569 $ 16,099 7.7% 2002 101,358 1,682,418 $ 16,599 8.4 2003 103,220 1,807,123 $ 17,507 8.6 2004 105,020 1,933,252 $ 18,408 8.4 2005 106,968 2,120,572 $ 19,824 8.0 2006 109,000 2,260,947 $ 20,743 7.2 2007 110,999 2,405,337 $ 21,670 6.3 2008 112,348 2,540,579 $ 22,613 9.7 2009 112,975 N/A (1) N/A (1) 14.9 2010 107,449 N/A (1) N/A (1) 15.7 Source: Population from 2000 through 2010 was obtained from the U.S. Census Bureau. Income and per capita information for 2001 through 2008 were obtained from the U.S. Department of Commerce, Bureau of Economic Analysis Unit. Unemployment rates for Navajo County, Arizona was obtained from the Arizona Workforce Informer. (1) Personal income and per capita personal income were not available for 2009 and 2010. 144 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Employment by Sector Current and Two Years Ago 2010 1,400 3,475 425 10,125 3,225 525 1,125 1,000 5,125 650 Mining and Construction Educational and Health Services Financial Activities Government Leisure and Hospitality Manufacturing Information Professional & Business Services Trade, Transportation & Utilities Other Services 2008 2,525 3,425 600 10,800 2,975 725 800 1,225 5,725 625 SourcePrepared in cooperation w ith the U.S. Department of Labor, Bureau of Labor Statistics. Arizona Department of Commerce, Strategic Investment and Research. Figures are organized under the North American Industrial Classification System (NAICS). Major Employers Employer Abitibi Consolidated, Inc., (Catalysts) Snowflake APS, Joseph City Bashas', Taylor Burlington Northern Santa Fe Railway, Winslow Holiday Inn, Kayenta Kayenta Boarding B.I.A. School Keams Canyon Indian Hospital Navajo Government Executive Branch Navajo Tribal Utility Authority, Keams Canyon Safeway, Pinetop-Lakeside Summit Healthcare, Show Low Navopache Electric Cooperative, Inc. Northland Pioneer College, Holbrook Peabody Coal Co., Kayenta PFFJ, Inc., Snowflake Pinon Unified School District #4 Tate's Auto Center, Holbrook Wal-Mart SuperCenter, Show Low Western Moulding Co. Inc., Snowflake Employment Type Paper Mills Electric Services Retail Line-Haul Railroad Operation Hotels and Motels Education Medical Government Utilities Retail Hospital Utility Colleges Coal and Mining Pork Production Education Auto Dealer Retail Millwork Sources: Holbrook Chamber of Commerce; Navajo Nation, Division of Economic Development: Pinetop-Lakeside Chamber of Commerce: Show Low Regional Chamber of Commerce; and Snow flake/Taylor Chamber of Commerce. 145 N Navajo County Comprehensive annual financial report Year Ended June 30, 2010 Full-Time Equivalent Employees by Function Last Six Fiscal Years Fiscal Year 2005 Function General government Public safety Highways and streets Health and welfare Culture and recreation Total 2006 2007 2008 2009 2010 254 229 84 46 2 267 226 82 47 3 280 240 84 54 3 297 260 90 60 4 290 256 90 60 4 290 248 81 57 5 615 625 661 711 700 681 Source: Navajo County Adopted Budget 2005 - 2010 146 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Operating Indicators by Function Last Eight Fiscal Years Function General Government Assessor Number of parcels assessed Elections Elections Number voting Planning & Zoning Building permits issued Public Fiduciary Guardianships/conservatorships Public Safety Adult Probation Community service hours Pre-sentence reports written for courts Probationers actively supervised Juvenile Probation Average length of detention (days) Juveniles brought to detention Probationers Community restitution hours Sheriff Inmate population Highways & Streets Public Works Crack sealing (miles) Street resurfacing (miles) Waste Tire Program Waste tires collected Health & Welfare Public Health District Certified copies of birth or death certificates Childhood immunization visits Restaurant inspections and re-inspections Culture & Recreation Library District Number of items circulated Number of library cards issued (by member libraries) Number of prints, media and electronic items Number of items owned by Library District Education School Superintendent Charter schools Charter students District students School districts 2003 2004 2005 2006 Fiscal Year 2007 2008 2009 2010 76,984 78,098 79,096 80,664 83,044 84,824 85,536 85,858 3 40,337 3 8,931 4 46,644 5 13,398 4 43,445 5 23,687 4 51,626 4 21,379 2,657 2,825 3,009 3,674 3,789 3,085 1,837 1,285 92 93 95 97 99 104 103 110 - - 40,493 772 726 34,370 744 868 50,415 678 1,036 51,910 594 1,009 49,198 504 1,008 15 489 228 13,614 18 326 171 11,593 16 351 197 12,160 15 281 166 8,909 15 318 164 9,170 12 338 186 10,504 8 457 199 8,740 10 441 171 8,939 262 327 348 369 385 363 363 361 85 11 44 37 27 82 45 54 9 33 2 52 0 42 47 25 56,775 51,481 48,743 562 3,922 462 3,371 468 5,905 603 5,311 8,608 592 5,685 10,586 593 6,811 7,343 608 6,913 10,299 336 324,809 5,576 167,970 6,414 366,023 5,369 191,636 10,641 366,798 5,571 212,148 13,342 388,090 6,227 234,218 14,800 385,850 5,954 256,108 16,181 435,507 6,071 279,820 18,427 490,226 5,881 305,680 2,951 466,931 6,710 328,228 23,306 8 1,832 19,804 13 8 1,882 21,757 14 8 1,686 21,507 14 8 1,547 21,253 14 6 817 20,948 14 6 818 20,861 14 6 839 20,497 14 7 471 19,913 14 147 Navajo County N Comprehensive annual financial report Year Ended June 30, 2010 Capital Asset Statistics by Function Last Eight Fiscal Years Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 76 76 76 158 158 158 158 158 Divisions 3 3 3 3 4 4 4 4 Justice Courts 6 6 6 6 6 6 6 6 Inmate beds - permanent* - - - - 407 - 433 425 Jail Facilites 1 1 1 1 1 1 1 1 Function General Government Elections Voting Machines Superior Courts Public Safely Sheriff Improvement Districts Flood Warning Sites 30 31 31 31 31 31 31 30 Flood Control District Properties 7 8 8 8 8 8 8 9 Road Improvement Districts 1 0 3 0 2 1 1 1 Highways and Streets Public Works Miles of maintained roads Bridges 719.76 722.98 727.7 738.98 747.83 732.01 737.65 737.65 14 14 14 14 14 14 14 14 - - - - - - - - Heber - Owned 1 1 1 1 1 1 1 1 Show Low - Owned 1 1 1 1 1 1 1 1 Snowflake - Operated 1 1 1 1 1 1 1 1 Holbrook - Owned 1 1 1 1 1 1 1 1 Winslow - Owned 1 1 1 1 1 1 1 1 Pinetop - Owned 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Sanitation Landfill/Environment Transfer Stations Health Health Care Public health facilities Culture and Recreation Parks & Recreation County Parks (Tall Timber, Heber) Library District Facilities operated Education Schools * Inmate Beds - permanent: data not available for all years 148