CITIZENS FINANCIAL
CONDITION REPORT
MARICOPA COUNTY
JANUARY 2010

Financial Highlights
Our Fiscal Year (FY) 2009 Citizens Financial Condition
Report highlights the financial strength of the County’s
General Fund within the context of population growth that
led the nation and severe financial challenges facing the
national and local economy.
Here are some of the report highlights:
• Conservative fiscal policies have guided spending

and ensured that expenditures did not exceed
revenues.

Maricopa County Internal Audit
301 W. Jefferson, Suite 660
Phoenix, AZ 85003
(602) 506-1585
www.maricopa.gov/internal_audit

In This Issue
Maricopa County Basics ............... 2

• The General Fund unreserved fund balance

remained healthy.
• Key County financial indicators compared very

favorably to national benchmarks.
• County net assets, an indicator of whether the

County’s long term financial health is improving,
continued to increase.
• Funding for the County’s primary employee

retirement plan decreased slightly.

Economic Outlook ......................... 3
General Fund Key Indicators ........ 4
Liquidity & Long Term Debt .......... 5
Revenues & Expenditures ............. 6
Revenues—Budget to Actual ........ 8
Property Taxes ............................... 9
Cash & Investments ....................... 10
Net Assets ...................................... 11

About the Financial Condition Report
The FY 2009 edition of the Maricopa County Citizens
Financial Condition Report is based primarily on the
County’s FY 2009 Comprehensive Annual Financial
Report issued December 2009 by the Department of
Finance.
This work, which is part of our approved audit plan,
provides information, trends, and comparisons on County
financial topics including the following:

Retirement Plans (ASRS) .............. 12

• Revenues and Expenditures

Population and Unemployment .... 14

• Cash and Investments

Methodology & Sources ................ 15

• Long Term Debt and Liquidity

MARICOPA COUNTY BASICS
Maricopa County
Maricopa County is located in the south-central
area of the State of Arizona. Approximately 60%
of the state’s total population resides within the
County, which includes the cities of Phoenix,
Mesa, Tempe, Glendale, and Scottsdale.
State of Arizona

Maricopa County operates under a five member
elected Board of Supervisors representing five
districts divided geographically and by
population to include a mix of urban and rural
constituencies.

Maricopa
County

Board of Supervisors

Fulton Brock
District

Don Stapley
District

Andrew Kunasek
District

Max Wilson
District

Mary Rose Wilcox
District

1

2

3

4

5

Financial (Source: Maricopa County FY09 CAFR)

Population (Source: Maricopa County CAFR & U.S. Census Bureau)

As of June 30, 2009, the elected County Treasurer
held $3.6 billion in cash and investments on behalf
of the County, special districts, and school districts.

Maricopa County is home to 4 million people, the
4th largest population in the nation after Los Angeles
County (California), Cook County (Chicago, Illinois),
and Harris County (Houston, Texas).

The County received $1.8 billion in revenue during
FY 2009.

The County’s population grew by 882,449 from July
2000 to July 2008, the biggest population increase in
the nation (2009 data unavailable).

The unreserved General Fund balance exceeded
$410 million in FY 2009, down $102 million from the
previous year, but still higher than fiscal years 2000
to 2004.
History

Size (Source: Maricopa County CAFR & FY10 Adopted Budget)
At 9,224 square miles, Maricopa County is larger than
several states, including Connecticut, Delaware,
Hawaii, Massachusetts, New Hampshire, New Jersey,
Rhode Island, as well as the District of Colombia.

(Source: Maricopa County website)

Established in 1871, Maricopa was the fifth county
to be formed in what was then the Arizona Territory.
Maricopa County Internal Audit

2

FY 2009 Citizens Financial Condition Report

ECONOMIC OUTLOOK
County Revenue Sources Decreased
$900

Since FY 2007, three of the four major County
revenue sources, state shared sales, vehicle
license, and jail excise taxes, have experienced
significant declines. Shown below are dollar
and percentage declines since FY 2007.

(Revenues in millions)
$779

$748

$145

$647

$138

$600

$117

$153

$149
$135

$481

$461

$300

$395

Jail Excise:

$ 29 million

20%

Vehicle License:

$ 18 million

12%

State Shared Sales: $ 85 million

18%

Total decline:

$‐

$132 million

FY07
FY08
FY09
SOURCE: “Tax Revenues by Source” (Statistical Section Maricopa County CAFR)

$600
$50
$40

$400

Assessed Value
Budget Estimates
$200

$30
$20
$10
$‐

$‐
FY07

FY08

FY10

FY09

Gen Prop Tax

FY11

Assessed value in billions

With the current decline in Maricopa County
housing values, property tax revenues could
also see declines starting in FY 2011 if tax
rates are not increased.

Property Tax Revenues Increased
Gen. property tax in millions

Property tax revenues continued to increase
during the current recession, offsetting the
other revenue declines shown above.
However, there is a two year lag between the
time property values are assessed and the
County Assessor’s valuations used to set the
tax rate.

FY12

Primary Assessed Value

SOURCE: “Tax Revenues by Source” (Statistical Section Maricopa County CAFR) & OMB Budget Documents

Staffing Levels Down
County Population

Staffing

(In millions)

(In thousands)

4.2

4.1 million

4.0

Budget
Estimates

3.8

15

14

Conservative budget strategies
kept the County financially
healthy despite Arizona’s
economic turmoil. To offset
revenue declines, the County:
• Implemented a hiring freeze

13,471
thousand

$300

$301
$279
$220

$200

and reduced staffing (left)

3.6
3.4

Capital Outlay Slowed

• Canceled or delayed most
13

capital improvements (right)

$100

3.2
3.0

$‐

12
FY07

FY08

FY09

FY07

FY10

FY09

SOURCE: Maricopa County CAFRs

SOURCE: Maricopa County CAFR & FY10 Adopted Budget
Maricopa County Internal Audit

FY08

3

FY 2009 Citizens Financial Condition Report

GENERAL FUND KEY INDICATORS
Unreserved General Fund Balance Remains Healthy
$600

(in millions)

$500

$410
$400
$300
$200

$154

The Unreserved General Fund
Balance
The Unreserved General Fund
Balance represents funds available
to meet current and future financial
needs. A significant portion is
designated for various purposes
including covering the self-insured
benefit program and smoothing
fluctuations in tax cash collection
cycles.

$100

During FY 2009 the unreserved
fund balance fell $102 million
(nearly 20%). This decrease is
primarily due to transfers into the
SOURCE: “Governmental Funds Balance Sheet” (Maricopa County CAFRs)
General Improvements Fund and
payments made to reduce outstanding debt levels. Conservative budget strategies and revenue estimates
have resulted in a healthy fund balance. However, weaknesses in the local economy may further reduce the
fund balance if revenues continue to decrease.
$‐

General Fund Balance as a Percent of Revenues
For over ten years, Maricopa County’s General Fund has maintained a healthy fund balance in relation to
revenues, and surpassed the national benchmark average (see page 15 for a list of benchmark counties).
This graph reflects the
availability of financial reserves
to meet unforeseen needs.

Fund Balance Compares Well to Benchmarks
50%
45%

Credit rating agencies review
the health of a government’s
unreserved fund balance when
assessing credit worthiness.
Maricopa County’s high
percentage of unreserved
General Fund balance, when
compared to revenues, could
lower the County’s cost of
borrowing money.

40%

38%

35%
30%
25%

23%

20%

14%

15%

16%
10%
5%

Maricopa County

Avg of 10 Benchmark Counties

SOURCE: “Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund
Balances Governmental Funds” (Maricopa & Benchmark County CAFRs)

Maricopa County Internal Audit

4

FY 2009 Citizens Financial Condition Report

LIQUIDITY & LONG TERM DEBT
General Fund Liquidity Increased

Liquidity Ratio
1 6 .1

15.0

1 3 .4

12.0
9.0
6.0
2 .0

2 .7

3.0
0.0

M arico p a

The liquidity ratio is a measure of
the County’s ability to pay current
obligations, comparing assets
with liabilities.
Maricopa County continues to
significantly outperform the
national benchmark average with
a liquidity ratio of almost 16-to-1.
This means that there are ample
funds, $15.80 available in cash,
to pay every $1 in current
liabilities.

A v g o f 10 B en ch m ark Co u n ties

SOURCE: Audit Analysis of “Governmental Funds Balance Sheet” (Maricopa & Benchmark CAFRs)

Long Term Debt
Maricopa County has extremely low debt levels compared to the national benchmark average. The
County’s low debt is the result of a conservative “pay as you go” policy. In FY 2009, the County’s long
term debt was less than $100 per person.

Long Term Debt Per Person Is Low Compared to Benchmarks
$1,500

$1,372

$1,200

$900

$650

$630

$674

$717

$750

$761

$600

$362

$384

$444

$300

$91
$0

SOURCE: Maricopa County LTD for Governmental Activities “Note 13— “Long Term Liabilities” and Benchmark CAFRs

Maricopa County Internal Audit

5

FY 2009 Citizens Financial Condition Report

REVENUES & EXPENDITURES
Intergovernmental
(State Shared Sales tax,
Vehicle License tax, Grants)

County Generated Taxes
(Property tax, Jail Excise tax,
& other small tax sources)

Sources of County Funds (in millions)
The majority of the County’s Governmental Fund
revenues come from intergovernmental sources
(43%) and taxes (38%).

$784

$687

43%

38%

Intergovernmental revenues are funds received from
federal, state and other local government sources in
the form of shared revenues, grants, and payments Fines, Forfeits,
& Special Assessments
in lieu of taxes.

5%

10%

$170
Charges for Service

$42 (2%)

County generated tax revenues such as property, jail
$95
Licenses & Permits
Miscellaneous
$41
(2%)
excise, and other small tax sources, accounted for
nearly 38% of the County’s total governmental
SOURCE: “Statement of Revenues, Expenditures, & Changes in Fund
Balances Governmental Funds” (Maricopa County CAFR)
revenue.

Expenditures Reduced to Match Revenues
(in millions)

Revenues
Expenditures

$2,015

$2,000
$1,873

$1,853

$1,919
$1,841

$1,819 $1,815

$1,646

$1,500

$1,000
FY06

FY07

FY08

FY09

SOURCE: “Statement of Revenues, Expenditures, & Changes in Fund Balances
Governmental Funds” (Maricopa County CAFRs)

Uses of County Funds (in millions)

Highway &
Streets

Over 70% of FY 2009 Governmental Fund
expenditures were for public safety (49%) and health
and welfare (22%), with the remaining used for
general government (10%), capital outlay (12%),
highways (3%), and other uses (4%). General
Government consists of a broad range of legally
mandated services including elections, property
assessment, revenue and expenditure accountability,
and legal representation for the County.

$54, 3%

General
Govt.

In FY 2009, Governmental Fund
revenues decreased by $99.6 million,
or 5%, to $1.8 billion.
Much of this revenue decrease was
due to a decrease in jail excise tax
revenues of $21 million and in
distributions from the State of Arizona
for shared sales tax of $66 million.
However, additional property tax
revenues of $33 million helped offset
some of these revenue decreases.
To match revenue decreases, the
County reduced expenditures by more
than $25 million (discussed in more
detail on page 7).
Other

Public Safety

$71, 4%

$896

49%

10%
12%

22%

$177

Capital Outlay
$220

Health, Welfare, &
Sanitation
$397

SOURCE: “Statement of Revenues, Expenditures, & Changes in Fund Balances Governmental Funds” (Maricopa County CAFR)

Maricopa County Internal Audit

6

FY 2009 Citizens Financial Condition Report

EXPENDITURES
Public Safety Expenditures Increased (FY 2007—FY 2009)
(in millions)
$900
FY07

FY08

FY09

$600

$300

$0
Public Safety

Health, Welfare and
Sanitation

Capital Outlay

General Government

Highway & Streets

Other

SOURCE: “Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds” (Maricopa County CAFR)

Changes in Expenditures by Category
Since FY 2007, Governmental Fund expenditures decreased by $58 million (3%). Significant decreases were
capital outlay, decreasing $81 million (27%), and health, welfare, and sanitation, decreasing $65 million
(14%). The capital outlay decrease is due to the completion of some capital projects and a capital purchasing
freeze. The health, welfare, and sanitation decreases were due to the elimination of the disproportionate
share revenue, which now goes directly to the Maricopa County Special Health Care District, a separate legal
entity. These revenues were previously passed through the County to compensate the special health care
district for treatment of low income populations. Increases in public safety expenditures offset some of the
decreases, public safety increases are due to court and justice related personnel and salary increases
occurring in FY 2008 and one-time payments to help the State as part of its 2009 budget balancing initiatives.

Expenditures Per Person Are Relatively Low

Expenditures Per Person

(adjusted for inflation)
$1,049

$1,026
$1,000

$600
$483

$441

$200
FY02

FY03
FY04
FY05
Benchmark Average

FY06
FY07
Maricopa County

FY08

FY09

SOURCE: Audit Analysis of “Changes in Fund Balances, Governmental Funds” &
“Population statistics” ( Statistical Section Maricopa County & Benchmark CAFRs)
Maricopa County Internal Audit

7

Similar to the national
benchmark average, Maricopa
County governmental
expenditures per person have
remained consistent over the
past eight years.
For FY 2009, Maricopa County’s
$441 expenditures per person
were $25 dollars, or 5.4%, below
the County’s eight year average
of $466 per person.

FY 2009 Citizens Financial Condition Report

REVENUES—BUDGET TO ACTUAL
Sales Tax Revenues Fall Short of Budget
$45

State Share Sales Tax—Budget Variance

$50

(in millions)
$22

$25

Sales tax revenues can be difficult to
predict, as they are subject to volatile
economic forces.

$23

$6
$5
‐$15

$(5)

$(11)

$(16)

‐$35

$(36)

‐$55

$(64)

‐$75

FY 2009 actual sales tax revenues fell
below budgeted amounts by $64 million
despite a modest budget projection for a
7.7% decrease. The average increase
over the previous ten years was 6.1%

SOURCE: “Tax Revenues by Source” (Statistical Section Maricopa County CAFR) &
FY09 Adopted Budget

Vehicle License Taxes Fall Short of Budget
$15
$10

$6

Vehicle License Tax (VLT) revenues can
be difficult to predict since citizens can pay
the tax for one or two years. VLT revenues
have suffered as a result of the economic
downturn.

$7

$6

$5

Vehicle License Tax—Budget Variance

$13

(in millions)
$5

$(.07)

$2

$(4)

$0
‐$5
‐$10
$(12)

‐$15

SOURCE: “Tax Revenues by Source” (Statistical Section Maricopa County CAFR) &
FY09 Adopted Budget

Property Taxes Approach Budget Estimates

$15

(in millions)
$10
$10

$11

$5
$5

$0
$(.6)

‐$10

$(.6)

$(3)

$(8)

SOURCE: “Tax Revenues by Source” (Statistical Section Maricopa County CAFR) &
FY09 Adopted Budget
Maricopa County Internal Audit

Property Tax—Budget Variance
Property tax revenues are typically more
predictable, and are therefore easier to
budget, than state-shared sales and
vehicle license taxes.

$9

$7

‐$5

In FY 2009, actual VLT revenues fell short
of the original budget by nearly $12 million,
or 8.4%, despite the conservative
projection of a 3.5% decrease from FY
2008 totals. The average increase over the
previous ten years was 8.3%.

8

Despite a history of conservative
budgeting, revenue shortfalls outpaced
budget estimates since FY 2006. In both
FYs 2008 and 2009, actual property tax
revenues fell short of budget by
approximately $650 thousand (less than
0.1%).
FY 2009 Citizens Financial Condition Report

PROPERTY TAXES
Property taxes are major source of revenue for local governments in Maricopa County. The total FY 2009
allocation of property taxes for Maricopa County, school districts, cities, and towns was $4.2 billion.

Use of Property Tax Dollars
Cities/Towns/Special
Districts

Maricopa County

$820 Million

$558 Million

19%

See below for how the typical Maricopa
County property tax dollar is spent:

13%
68%

Schools &
Education
$2,903 Million

SOURCE: Department of Finance Property Tax Levy Reports

Tax Rates Lowered as Assessed Values Rise

Schools

$ 0.68

Cities and Towns

$ 0.14

County

$ 0.13

Special Districts

$ 0.06

Total

$ 1.00
2.0%

Assessed Property Values (in billions)
County Direct Property Tax Rate

$60

$60

The Maricopa County Board of Supervisors have
lowered property tax rates every year since
FY 2004. Even with lower tax rates, increases in
assessed property values resulted in property
taxes remaining a reliable source of revenue
during the economic downturn. However, as
shown on page three, assessed values are
projected to decline, placing downward pressure
on future property tax revenues.

$40

$58

1.5%
1.5%

$20

$27
1.2%

$‐

1.0%
2004

2005

2006

2007

2008

2009

SOURCE: “Assessed Value & Estimated Market Value of Taxable Property” (Statistical Section Maricopa County CAFR)

Property Tax Delinquency Rate Increased

5%
4.5%

Unpaid property taxes for Maricopa County reached
their highest level since 1995 when the delinquency
rate was 4.6%. However, Maricopa County’s
FY 2009 delinquency rate of 4.2% is below the
benchmark average of 4.5%.

4%

Uncollected property taxes negatively impacted the
County’s operating revenues; over $23 million in
levied property taxes were not collected in FY 2009.

1%

3.6%

4.2%
2.6%

3%
3.2%
2%

2.4%
Maricopa County
Delinquency Rate
Benchmark Average

0%

SOURCE: “Property Tax Levies and Collections” (Statistical Section Maricopa County & Benchmark CAFRs)
Maricopa County Internal Audit

9

FY 2009 Citizens Financial Condition Report

CASH & INVESTMENTS
Cash and Investments Decreased Slightly
$4.0

Cash and Investments

(in billions)

$3.9

$3.7

$3.0

$3.6

$3.1
$2.7

$2.0

$2.2
$1.0

Total cash and investments held
by the Treasurer decreased to
$3.6 billion in FY 2009. This
decrease is most likely due to
decreasing revenue streams as a
result of the economic downturn
facing the State and local
governments.

$‐
FY04

FY05

FY06

FY07

FY09

FY08

SOURCE: “Note 6—Deposit and Investments “(Maricopa County CAFRs)

Investment Strategy and Returns

Investment Returns Fall

8%

The County Treasurer pools deposits for the County,
school districts, and special districts. Cash is
invested under a strategy giving highest priority to:

6.17%
6%

4.69%

5.27%

4.08%

4.45%

4%

3.13%

2.60%

2%

3.00%

2.42%
1.71%

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

Safety of principal

•

Sufficient liquidity to meet County needs

•

Return on investment

Investment returns fell to 3% in FY 2009 due to poor
bond market earnings. Bonds are one of the
County’s primary investments.

0%
FY00

•

FY09

SOURCE: Maricopa County Treasurer

Non‐County Funds

Fund Ownership

County General Fund
$309 Million

$2.2 Billion

9%

Non County Funds: Arizona Statutes require
community colleges, school districts, and other
local governments to deposit certain public
monies with the County Treasurer. These
deposits represent 61% of the total funds held
with the Treasurer.

61%
30%

County Funds: $1.4 billion, or 39% of the $3.6
billion held by the Treasurer as of June 30,
2009 were County funds.

$1.1 Billion

SOURCE: “Balance Sheet” &
“Note 6—Deposit and Investments” (Maricopa County CAFR)

Maricopa County Internal Audit

10

Other County
Funds

FY 2009 Citizens Financial Condition Report

NET ASSETS
As of June 30 2009, the County’s assets exceeded liabilities by more than $4 billion (net assets). The
increase in total net assets over time indicates the County’s financial condition is improving. Total net assets
increased 35% from FY 2005 to FY 2009.

Total Net Assets Continued to Increase
$4

(in billions)
$ 3 .8

$3

$ 4 .0

$ 3 .6

$ 3 .3
$ 3 .0

$2

$1

$0
FY0 5

FY0 6

FY0 7

FY0 8

FY0 9

SOURCE: “Statement of Net Assets” (Maricopa County CAFRs)

Net Asset Composition
Net assets have three components:
(1) Investments in capital assets, net of related debt (such as land, building, machinery, and equipment)
(2) Restricted net assets (assets that are subject to external restrictions on how they may be used)
(3) Unrestricted net assets (assets not subject to external restrictions on how they may be used)
Just under 67% of County FY 2009 net assets are invested in capital assets (net of related debt), 14% are
restricted (primarily for public safety and highways and streets functions), and 19% are unrestricted (can be
used to meet the County’s ongoing obligations).

Composition of
Net Assets
(in millions)

Restricted
$565.2 Million

67%

14%

Invested in Capital
Assets
$2,704.2 Million

19%
Unrestricted
$776.4 Million

SOURCE: “Statement of Net Assets” (Maricopa County CAFR)

Maricopa County Internal Audit

11

FY 2009 Citizens Financial Condition Report

RETIREMENT PLANS
The County contributes to four retirement plans, as noted in the FY 2009 CAFR (page 65). Because 69% of
County employees (8,983 out of 13,048) contribute to the Arizona State Retirement System (ASRS), these
pages will focus on ASRS.
Funded Status Defined
The most recognized measure of a retirement plan’s health is its funding ratio, derived by dividing the
actuarial value of plan net assets by the present value of accrued liabilities (projected future retirement
payments). A pension plan whose assets equal its liabilities is 100% funded, or fully funded. A plan with
assets that are less than its liabilities is considered to be underfunded.
The dollar difference between plan assets and accrued liabilities is the unfunded actuarial accrued liability
(UAAL), which is a common measure of a pension plan’s financial condition. Methods used to value assets
and liabilities can be complex and vary from plan to plan, making direct comparisons among plans difficult or
impossible. This report shows the funding ratios based on the actuarial value of assets. The amount of
accrued liabilities depends on the assumptions and cost method. Actual calculations are very technical in
nature and are outside the scope of this report. It is noted, however, that ASRS discounts future benefits at
8.0% per year.
Retirement Funding Status
FY 2009 audited dollar figures are not available
yet, but based on audited FY 2008 figures, the
UAAL grew over $500 million, or 9%, to $6 billion.

Retirement Funding Ratio Weakens
DEFICIT:
FY08 $6 Billion
FY09 not available

SURPLUS: FY00 $3.6 Billion

130%

120%

120%

This increase was largely due to a 7.6% and
18.1% loss on investments in FYs 2008 and 2009
and increases in projected future retirement
payments. As a result, the funded status of the
total plan decreased from 82.8% in FY 2007 to
82.2% in FY 2008. ASRS reports 79.3% for
FY 2009.

FULLY FUNDED
(above the line)

110%
100%

UNDERFUNDED
(below the line)

90%
80%
70%

50%
FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09

SOURCE: ASRS CAFRs, annual actuarial reports, ASRS Presentation

Retirement Contributions to ASRS Have Increased
Millions

$43

$46
$42

$40
$32

$30

$30

$26

$11

$11

$12

$10
$‐
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09

Maricopa County Internal Audit

County Contributions
County pension plan contributions
to ASRS decreased 9% from
FY 2008 to FY 2009.
The decrease is attributed to fewer
participants in the plan. From
FY 2008 to FY 2009, participation
decreased 5% from 9,499 to 8,983,
due to a FY 2009 reduction in
force.

$20
$10

79%

60%

According to a 2008 U.S. Government
Accountability Office report on government
pension plans, many experts believe a 80%
funding ratio is sufficient.

$50

82%

12

GRAPH SOURCE: ASRS CAFRs

FY 2009 Citizens Financial Condition Report

RETIREMENT PLANS
Employee Contributions
According to the Government Accountability Office, government employees generally make
contributions to fund pension benefits, unlike private sector employees.

U.S. Contribution Rate Comparison

The Center for Retirement Research at Boston
College said, unlike “the private sector, public
sector defined benefit plans are not financed
entirely by the employer. Employer
contributions as a percent of payroll are
roughly the same in the state and local and
private sectors, and public sector employee
contributions make up for the difference in the
cost of benefits. Public plans tend to rely more
heavily on employee contributions, invest
slightly more aggressively, and be about as
well funded as their private sector
counterparts.”

10%
8%

8%

7%
5%

6%
4%
2%

0%

0%
Public Sector
Employer

Private Sector
Employee

SOURCE: Center for Retirement Research at Boston College, 2008

Ways to Make A Retirement Fund Sustainable
Girard Miller, a nationally known authority on the investment of public funds, states retirement funds
should use the following standards to make public plans sustainable.

ASRS PENSION REPORT CARD
Assuring Proper Funding

Employees should pay half the cost
Employees pay 50%; currently, employees contribute 9% of their
pay, which will rise to 9.6% on July 1, 2010
Public employers should make the required annual contributions
The County funds its required contributions each year
Cost of Living Adjustments (COLAs) must be properly funded
COLAs are only paid if there are “Excess Investment Earnings” in
reserve—the last increase was in 2005; no increases are planned
Pension multipliers should be below 2.5%
ASRS multipliers start at 2% and gradually increase to 2.3%
depending on the number of years worked
Retiree medical benefits must be capped
Medical benefits are set at a monthly amount depending upon
years worked, dependents, and Medicare eligibility

SOURCE: Girard Miller; 2008 ASRS CAFR; Maricopa County CAFR; Arizona Republic
Maricopa County Internal Audit

13

FY 2009 Citizens Financial Condition Report

POPULATION & UNEMPLOYMENT
Maricopa County’s Population is 4th Largest in Nation
12,000,000

Population
Maricopa County has
been ranked the fourth
most populous of all
3,141 counties in the
nation.

9,862,049

10,000,000
8,000,000

5,294,664

6,000,000

3,984,349

4,000,000

3,954,598

3,010,759

2,000,000
0
Los Angeles
County, CA

Cook County,
IL

Harris County,
TX

Maricopa County, Orange County,
AZ
CA

SOURCE: 2008 U.S. Census Bureau Reports (2008 is the most recent report)

Maricopa County’s Population Growth is Fastest in Nation
Population Growth
In addition to having the
largest numerical increase
in population from July
2007 to July 2008,
Maricopa County’s
population increased by
882,449 people from July
2000 to July 2008, more
than any other county in
the nation.

100,000

89,550
72,153
54,179

50,000

41,338

40,842

0
Maricopa County,
AZ

Harris County,
TX

Los Angeles County, San Diego County,
CA
CA

Tarrant County,
TX

SOURCE: 2008 U.S. Census Bureau Reports

Unemployment Rates Increase
10.0%

Unemployment
Maricopa County ‘s
unemployment rate
continues to remain below
national and Arizona
averages. However, since
2007 the national, Arizona,
and Maricopa County
unemployment rates have
increased significantly. In
2009 Maricopa County’s
unemployment rate was
8%, a 5.1% increase over
2007’s rate of 2.9%.

Maricopa County FY 09 Rate—8%
State of Arizona FY 09 Rate—8.7%

8.0%

United States FY 09 Rate—9.5%
6.0%

4.0%

2.0%
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

SOURCE: “Demographic & Economic Statistics” (Statistical Section, Maricopa County CAFR)
Maricopa County Internal Audit

14

FY 2009 Citizens Financial Condition Report

METHODOLOGY & SOURCES
Definition
Financial Condition is defined as a local government’s ability to finance services on a continuing basis. A
county in good financial condition can sustain existing services to the public, withstand economic downturns,
and meet the demands of changing service needs.
Objective, Scope, and Methodology
The objective of this report is to evaluate Maricopa County’s financial condition using key financial indicators.
Indicators were selected from authoritative sources on evaluating governmental entity financial condition, and
were judged to be the most indicative of a county’s overall financial health.
Our primary information sources were the audited Comprehensive Annual Financial Reports (CAFR) issued
by ten national benchmark counties and Maricopa County. Our analysis did not include component units
(Housing Authority and Sports Commission) and the non-major governmental funds. Below are the
benchmark counties that were used in this report.
National Benchmarks
County

Population

Major Metro Area

¾ Clark

2,006,347

Las Vegas, Nevada

¾ Harris

3,984,349

Houston, Texas

¾ King

1,884,200

Seattle, Washington

¾ Los Angeles
¾ Multnomah

10,393,000
717,880

Los Angeles, California
Portland, Oregon

¾ Orange

3,139,017

Santa Ana/Anaheim, California

¾ Pima

1,048,796

Tucson, Arizona

¾ Salt Lake

1,030,519

Salt Lake City, Utah

¾ San Diego

3,173,407

San Diego, California

¾ Santa Clara

1,857,621

San Jose, California

SOURCE: 2008 & 2009 Benchmark County CAFRs

Other sources include Arizona State Retirement System (ASRS) CAFRs and actuarial reports, the U.S.
Census Bureau, Governmental Accounting Standards Board, the International City/County Managers
Association, Maricopa County’s Strategic Plans (budgetary documents), ASRS investment committee
documents, Arizona State Auditor General Reports, and correspondence with internal and external staff.
Trend analysis is used in this report. Trend analysis involves examining historical data. Adjustments for
inflation were made according to the “U.S. Consumer Price Index—All Items.”
Maricopa County CAFR
Maricopa County’s 2009 CAFR and prior year CAFRs are available by visiting the Maricopa County
Department of Finance website at: http://www.maricopa.gov/Finance/CAFR.aspx.
Cover Photos
Location: Mountain landscape (top right) and saguaro sunset (bottom left) taken at Four Peaks National
Wilderness Area located on the border of Maricopa and Gila Counties by Marcus Reinkensmeyer.

Maricopa County Internal Audit

15

FY 2009 Citizens Financial Condition Report