CITIZENS FINANCIAL
CONDITION REPORT
MARICOPA COUNTY
FISCAL YEAR ENDED JUNE 30, 2012
February 13, 2013

Maricopa County Shows Consistent
Fiscal Strength in FY 2012
Financial Highlights

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

In This Issue
Message From County Auditor...... 2
Maricopa County Profile ................ 3
Economic Trends ........................... 4
General Fund Key Indicators ........ 5
Liquidity & Long Term Debt .......... 7
Revenues & Expenditures ............ 8
Property Taxes .............................. 11
Cash & Investments ...................... 12
County Wide Operations ………... 13
Retirement Plans …….. ............... 14
Population & Unemployment …… 16
Methodology & Sources .............. 17
PAFR Award ................................. 18

Our Fiscal Year (FY) 2012 Citizens Financial Condition
Report highlights the financial strength of the County’s
General Fund within the context of the financial
challenges currently facing national and local
economies.
Report highlights include:
FY 2012 governmental fund revenues fell below
expenditures.
The General Fund unrestricted fund balance has
declined steadily over the past five years. In
relation to operating revenues, the FY 2012
balance was still at an acceptable level.
Key County financial indicators compared favorably
to national benchmarks.
County net assets, an indicator of long-term
financial health, increased slightly.
State retirement plans covering County employees
saw funding deficits continue to increase, bringing
funding levels to their lowest point in years.

About the Financial Condition Report
The FY 2012 edition of the Maricopa County Citizens
Financial Condition Report is based primarily on the
County’s FY 2012 Comprehensive Annual Financial
Report issued December 2012 by the Department of
Finance.
This work provides information, trends, and
comparisons on County financial topics including:
Revenues and Expenditures
Cash and Investments
Liquidity and Long Term Debt

MESSAGE FROM THE COUNTY AUDITOR
February 13, 2013
Andrew Kunasek, Chairman, Board of Supervisors
Denny Barney, Supervisor, District I
Steve Chucri, Supervisor, District II
Max Wilson, Supervisor, District IV
Mary Rose Wilcox, Supervisor, District V
We have completed the Fiscal Year (FY) 2012 edition of the Maricopa
County Citizens Financial Condition Report based primarily on the County’s
FY 2012 Comprehensive Annual Financial Report issued in December 2012.
This work, which is part of our Board-approved audit plan, provides important
information on current and historical County financial trends.
For FY 2012, we again highlight the financial strength of the County’s General Fund. While national and local
economies encountered financial challenges, the County (due to conservative fiscal policies) acted to
maintain strong reserves. As a result, the General Fund’s unrestricted fund balance meets the governmental
experts’ recommended reserve level. This reserve level allows the County to keep long term debt low and
utilize “pay-as-you-go” capital financing. Key financial indicators compared favorably to national benchmarks.
In addition, we provide updated information on the State pension plans covering County employees. Public
pension funds are experiencing fiscal challenges due to recent investment losses, high benefit payments,
actuarial methods used in longevity projections, and insufficient employee and employer contribution rates.
We would like to commend the Board of Supervisors and County leadership for the conservative fiscal
policies that have led to the County’s strong financial condition highlighted throughout this report.
Sincerely,

Ross L. Tate
County Auditor

The County Auditor reports directly to the Maricopa County Board of Supervisors, with an advisory
reporting relationship to the Citizen’s Audit Advisory Committee.
The Mission of the Internal Audit Department is to provide objective information on the County’s system
of internal controls to the Board of Supervisors so they can make informed decisions and
protect the interests of County citizens.
Project Team Members
Eve Murillo, CPA, MBA, CFE, ITIL, Deputy County Auditor
Stella Fusaro, CIA, CGAP, CFE, CLEA, Audit Supervisor
Richard Chard, CPA

Maricopa County Internal Audit

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FY 2012 Citizens Financial Condition Report

MARICOPA COUNTY PROFILE
Maricopa County

District 2

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.

District 4
District 3

District 1

Don Stapley, Dist. 2

Denny Barney, Dist. 1

Steve Chucri, Dist. 2

Maricopa
County

Andrew Kunasek, Dist. 3

Max Wilson, Dist. 4

Mary Rose Wilcox, Dist. 5

2012

Fulton Brock, Dist. 1

District 5

2013

Board of Supervisors

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.

The 2012 Board of Supervisors, pictured above, were in
office during the period covered by this Financial
Condition Report.
Denny Barney (District 1) and Steve Chucri (District 2),
pictured at left, were elected and began their terms of
office in January 2013.

Population (Source: U.S. Census Bureau Reports)

History (Source: Maricopa County website)

Maricopa County is home to 3.9 million people,
the 4th largest population in the nation after Los
Angeles County (CA), Cook County (Chicago,
IL), and Harris County (Houston, TX).

Established in 1871, Maricopa was the fifth
county to be formed in what was then the
Arizona Territory.
Size (Source: Maricopa County FY 2012 CAFR and Budget)
At 9,225 square miles, Maricopa County is
larger than several states, including Connecticut,
Delaware, Hawaii, Massachusetts, New
Hampshire, New Jersey, and Rhode Island.

Maricopa County Internal Audit

Although population growth has slowed in recent
years, Maricopa County still continues to add
new citizens at a healthy pace. From 2010 to
2011, the County’s population grew by 63
thousand (2012 data unavailable).
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FY 2012 Citizens Financial Condition Report

ECONOMIC TRENDS
Sales Tax Begins to Trend Upward
In FY 2012 the County saw an increase in
two of its major revenue sources (state
shared sales tax and jail excise tax). This
increased total revenues over the prior
year, but under levels experienced in FY
2008 and FY 2009.

Total State Shared Sales, Vehicle License, and Jail Excise Tax
(in millions)
$748

$647

$598

$619

$640

Dollar & Percentage Decline from FY 2008
Jail Excise:

$ 20 million (14%)

Vehicle License:

$ 27 million (18%)

State Shared Sales: $ 61 million (13%)
SOURCE: “Tax Revenues by Source” (Statistical Section Maricopa County CAFRs)
(Vehicle License Tax includes General and Transportation Fund amounts )

Total decline:

$108 million (14%)

Assessed Property Valuation Has Declined in Recent Years
Assessed value in billions

Property taxes assessed (billed) are derived from a
combination of tax rates and assessed property
valuations. Any changes in these factors has a
direct impact on property tax revenue. Property tax
valuations have declined approximately $19 billion
from 2009 to 2012.
Page 11 of this report highlights the impact of lower
property valuations on tax revenues.
SOURCE: Maricopa County Annual Business Strategies—FY 2012 Adopted Budget

Budgeted Staffing Levels Remain Flat
Conservative budget strategies kept the
County financially healthy despite Arizona’s
economic challenges. The County
maintained a hiring freeze for non-critical
positions, and budgeted staffing levels
remained steady from the prior fiscal year.
However, total budgeted staffing levels have
dropped approximately 9% from FY 2008.

SOURCE: Maricopa County CAFRs & U.S. Census Bureau Reports
Maricopa County Internal Audit

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FY 2012 Citizens Financial Condition Report

GENERAL FUND KEY INDICATORS
General Fund Spendable Fund Balance Decreased
(in millions)

SOURCE: “Governmental Funds Balance Sheet” (Maricopa County CAFRs)

The General Fund is the primary operating fund used for all amounts not required to be accounted for in other funds.
General Fund balance is classified as either:
Nonspendable – amounts not in spendable form, such as inventory, or amounts that legally must remain intact
Spendable:
Restricted – amounts restricted for a specific purpose by laws, regulations, grants, or contractual agreements
Committed – amounts limited for specific purposes by formal Board of Supervisor action such as capital projects
Assigned – amounts intended to be used for specific purposes, but are neither restricted or committed
Unassigned – remaining balance not assigned to other categories and without spending constraints

Source: Governmental Accounting Standards Board (GASB 54)

General Fund Spendable Fund Balance
Spendable does not imply there are no constraints on funds.
The General Fund spendable fund balance represents
restricted, committed, assigned, and unassigned amounts
available to meet current and future needs. $19 million of the
$302 million General Fund balance is nonspendable.
The spendable balance decreased by 31% to $283 million in FY
2012. While revenues stayed relatively flat in comparison with
FY 2011, budgeted pay-as-you-go financing for capital assets
and transfers to capital funds were largely responsible for the
decrease. Of the total spendable fund balance, 13% was
unassigned and 56% was committed to budget stabilization as
authorized by the Board of Supervisors. According to the Office
of Management and Budget, all but the unassigned category
($35.6 million) was budgeted to be spent in FY 2013.
Maricopa County Internal Audit

5

Chase Field, Downtown Phoenix
FY 2012 Citizens Financial Condition Report

GENERAL FUND KEY INDICATORS
General Fund Spendable Fund Balance as a Percent of Revenues
For many years, Maricopa County’s General Fund has maintained a strong spendable fund balance in
relation to revenues, as compared to national benchmark averages (see page 17 for a list of benchmark
counties). The graph below reflects the FY 2012 spendable fund balance (total of restricted, committed,
assigned, and unassigned amounts).

Fund Balance Compares Favorably with Benchmarks

SOURCE: “Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund

Credit rating agencies review the stability of the spendable fund balance when assessing credit
worthiness. Fitch and Standard & Poor’s AAA ratings for the County’s general obligation bonds are the
highest ratings possible. They denote the lowest expectation of default and extremely strong capacity to
meet financial commitments. Maricopa County’s strong General Fund spendable fund balance, when
compared to revenues, could lower the County’s cost of borrowing money.
General Obligation Bonds Credit Ratings
(Source: FY 2012 CAFR)

Fitch

AAA (April 2011)

Standard & Poor’s

AAA (March 2011)

General Fund Operating Reserves
The Government Finance Officers Association (GFOA) recommends that governments have an
unrestricted (committed, assigned, and unassigned) fund balance to cover at least two months of general
fund operating revenues or general fund operating expenditures in the event of drastic revenue shortfalls.
Although the General Fund unrestricted fund balance has declined steadily over the past five years, in
relation to operating revenues, the total unrestricted balance was still within a range recommended by
GFOA as a best practice. However, the County’s Office of Management and Budget reported that at the
end of FY 2012, the committed and assigned amounts ($247 million) were re-appropriated in the FY 2013
budget and therefore were not available as reserves.
Maricopa County Internal Audit

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FY 2012 Citizens Financial Condition Report

LIQUIDITY & LONG TERM DEBT
Liquidity Decreased in Accordance With Planned Expenditures
General Fund Liquidity Ratio
19.3

20.0
16.1

The liquidity ratio, which
compares assets to liabilities, is a
measure of the County’s ability to
pay current obligations.

14.8

15.0
10.7

Maricopa County continues to
maintain a healthy liquidity ratio
of almost $4 to $1. This means
that $3.60 is available in cash for
every $1 in current liabilities.

10.0
5.0

3.6
2.6

2.0

0.0

1.7

Maricopa

2.2

2.1

Planned long-term capital
expenditures were paid in FY
2012 without incurring long term
debt.

Avg of Benchmark Counties

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

Long Term Debt Per Person Is Low Compared With Benchmark Counties
Maricopa County has 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. The FY 2012 County long-term debt was
$84 per person. Comparisons are difficult because entities may offer different services that are
included in their debt (such as airports, schools, and hospitals), and may report debt in different funds.
$1,800

$1,566

$1,600
$1,400

$1,102

$1,200
$901

$1,000
$800

$643 $652
$571 $584

$600
$313

$400
$200

$716

$378

$84

$0

SOURCE: Maricopa County LTD for Governmental Activities “Note 14— Long Term Liabilities”
(Benchmark CAFRs & Internal Audit Analysis)
Maricopa County Internal Audit

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FY 2012 Citizens Financial Condition Report

REVENUES & EXPENDITURES
Sources of County Funds
Most of the County’s Governmental
Fund revenues come from intergovernmental sources (45%) and taxes
(39%). Intergovernmental revenues
are received from federal, state, and
other local governments in the form of
shared revenues, grants, and payments in lieu of taxes. Countygenerated tax revenues such as
property, jail excise, and other small
tax sources, accounted for 39% of the
County’s total governmental revenue.

(in millions)

SOURCE: “Statement of Revenues, Expenditures, & Changes in Fund Balances
Governmental Funds” (Maricopa County FY 2012 CAFR)

Expenditures Exceed Revenues As Planned

State Budget Crisis Impact
Due to the State budget crisis in recent
years, the State shifted costs and reduced revenue streams to counties. In
the past three fiscal years, Maricopa
County paid over $74 million in
mandated cash contributions to the
State. However, with the State’s FY
2013 budget, some cash transfer
demands from the State have been
eliminated or reversed. Highlights
include:

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

In FY 2012, governmental revenues increased by $5.9
million to $1.82 billion; however, expenditures increased by
$31.7 million to $1.88 billion. The increase in expenditures
includes an increase in total Arizona Long Term Care System (ALTCS) contributions of $35.9 million due to reduced
federal subsidies. In addition, the County spent $52.7 million to complete the Criminal Court Tower Project. Other
significant expenditure changes included public safety
($46.9 increase), transportation ($44.5 decrease) and
sanitation ($53.8 million increase).
SOURCE: FY 2012 CAFR Management’s Discussion and Analysis
Maricopa County Internal Audit

8

Contributions that cost $26.4 million in FY 2012 will no longer be
required.
A law that required the County to
house inmates sentenced to less
than one year has been reversed.
The State will continue to require
the County to pay 100% of Judges
salaries (about $9 million) and certain prisoner costs (about $4 million) that were shifted from the
State.
SOURCE: County Financial System & Annual Budget
Strategies and Office of Management and Budget

FY 2012 Citizens Financial Condition Report

REVENUES & EXPENDITURES
Changes in Expenditures by Category

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

Public Safety and Health, Welfare and Sanitation Expenditures Increase
The increase in public safety is primarily attributed to an increased mandated payment to the State for
$26.4 million, 90% of which was paid by public safety departments. The increase also reflects $10.4
million that was previously paid by general government. The increase in health, welfare, and sanitation is
primarily due to an increase in the total ALTCS contributions of $35.9 million. Capital outlay included
$52.7 million to complete the Criminal Court Tower Project, a decrease from the prior year capital outlay.
SOURCE: 2012 CAFR Management’s Discussion and Analysis

Expenditures Per Person

Expenditures Per Person Remain Low

Expenditures per person increased
in FY 2012 due to critical capital
outlay expenditures.
However, FY 2012 expenditures per
person of $484 were approximately
$4 dollars (1%) below the County’s
five-year average of $488 per
person and $28 below expenditures
per person in FY 2008.

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

Maricopa County Internal Audit

9

Governmental Funds are comprised of
general, special revenue (legally
restricted for specified purposes), debt
service (restricted for the repayment of
debt), and capital project funds
(restricted for capital activities).

FY 2012 Citizens Financial Condition Report

REVENUES & EXPENDITURES
Uses of County Funds
About 70% of FY 2012
Governmental Fund expenditures
were for public safety (46%) and
health and welfare (23%), with the
remaining amount for capital outlay
(15%), general government (9%),
highways (3%), and other uses
(2%). 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.

Expenditures By Function (in millions)
Debt Service
(1%) $26
Education (1%)
$13
Capital Outlay
Culture &
(15%) $279
Recreation (2%)
$31
Health, Welfare
& Sanitation
(23%) $435

General
Government
(9%) $169

Public Safety
(46%) $873

Highways &
Streets (3%)
$49
SOURCE: “Statement of Revenues, Expenditures, & Changes in Fund Balances
Governmental Funds” (Maricopa County FY 2012 CAFR)

Expenditures Per Citizen—By Function
In FY 2012, the County spent $484 per citizen for all services.
Approximately $225 per citizen was spent on public safety,
followed by health, welfare and sanitation at $112. Capital outlay
accounted for $72 and general government $44. The remaining
functions accounted for $31.

Capital Outlay
$72

Animal Care & Control Facility

Debt Service
$7

General
Government
$44

Education $3
Culture &
Recreation
$8
Health,
Welfare &
Sanitation
$112

Equipment Services
(Fleet and Heavy Equipment Needs of
General Government, Public Safety, and
Other County Services)

Maricopa County Internal Audit

$484 per
person

Public Safety
$225

Highways &
Streets $13
SOURCE: “Statement of Revenues, Expenditures, & Changes in Fund Balances
Governmental Funds” (Maricopa County FY2012 CAFR)

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FY 2012 Citizens Financial Condition Report

PROPERTY TAXES
Most Property Tax Dollars Go to Schools
Property taxes are a major source of revenue for local
governments in Maricopa County. The total FY 2012 allocation
of property taxes for Maricopa County, school districts, cities
and towns, and special districts, was $3.6 billion.

For every $1 in property tax
revenue, the County only received
14 cents

$0.7 billion
$0.5 billion

How the typical Maricopa County FY
2012 property tax dollar was spent:
Schools
$ 0.67
Cities and Towns
0.12
County Controlled
0.14
Special Districts
0.07
Total
$ 1.00

$2.4 billion

SOURCE: Department of Finance Property Tax Levy Reports

Average Homeowner Assessed Valuation and Property Tax Bill Decreases
The Maricopa County portion of the average homeowners property tax bill remained the same from
FY 2011 and decreased almost 12% from FY 2010. The decrease is due to a decline in assessed
property values. From FY 2010 to FY 2012, the median residential value fell by $67,500 (35%).
Average Homeowner Property Value
Average Homeowner Property Tax (County Portion)

2010

2011

2012

$192,000

$148,800

$124,500

$

208

$

183

$

183

SOURCE: OMB FY 2012 Property Tax Adoption Presentation

Property Values and Taxes
Have Declined

Total Assessed Property Valuations (in billions)
General Property Taxes Billed (im millions)

$70

Property taxes billed declined
$14 million from the prior year.

$60

Significantly lower property
values impacted tax revenues.

$40

Tax rate increases have
reduced the impact of lower
property assessments on
property tax revenues.

$20

$50

$58 billion

$600

$58 billion
$50 billion

$50 billion

$550

$39 billion
$500

$30

$492 million

$492 million
$478 million

$463 million

$450

$10
$-

$430 million

$400

FY08
(1.30%)
Tax Rate

FY09
(1.20%)

FY10
(1.16%)

FY11
(1.24%)

FY12
(1.47%)

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

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FY 2012 Citizens Financial Condition Report

CASH & INVESTMENTS
Cash and Investments Decreased Slightly
Cash and Investments

(in billions)
$4.0

$3.9

$3.6

$3.7

FY09

FY10

$3.9

The County Treasurer pools
deposits for the County,
school districts, and special
districts. Total cash and
investments held by the
Treasurer has had little
fluctuation over recent years.

$3.6

$3.0
$2.0

$1.0
$FY08

FY11

FY12

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

Investment Returns Remain Low
8%

Investment Strategy and Returns

6%

Cash is invested under a strategy giving highest
priority to:
4.1%

4%

3.1%

2.6%
2%

4.5%

2.4%

Safety of principal
Sufficient liquidity to meet County obligations

3.0%

Return on investment

1.7%
1.2% 1.0%

Investment returns fell to .06% in FY 2012 due to
historically low interest yields. U.S. Government
securities are the County’s primary investments.

0.6%

0%
FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12

SOURCE: Maricopa County Treasurer

Most Cash Is Non-County

County General Fund
(6%)$202 Million

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 58% of the total
funds held with the Treasurer.

Non-County
Funds (58%)
$2.1 Billion

County Funds: $1.5 billion, or 42% of the $3.6
billion held by the Treasurer as of June 30,
2012, were County funds.

Other
County
Funds (36%)
$1.3 Billion

SOURCE: “Balance Sheet”“Note 7—Deposit and Investments” (Maricopa County FY 2012 CAFR), & Internal Audit Analysis

Maricopa County Internal Audit

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FY 2012 Citizens Financial Condition Report

COUNTY WIDE OPERATIONS
As of June 30, 2012, the County’s assets exceeded
liabilities by almost $4.6 billion (net assets). The
increase in total net assets over time indicates the
County’s financial condition improved. Total net assets
increased 21% from FY 2008 to FY 2012.

Debt Used Sparingly at the County

Total Net Assets Continued to Increase
(in billions)
(in billions)

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

Only 11% of the County’s assets are purchased using debt financing, significantly
lower than the benchmark’s FY 2012 average of 44%. The County’s “pay-as-you-go”
capital financing policy reduces the burden
of future payments and helps conservatively
manage the County’s resources.

Net Asset Composition
Net assets have three components:
(1) Invested 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)
Over 71% of the County’s FY 2012 net assets are invested in capital assets (net of related debt), 14%
are restricted (primarily for public safety and highways & streets), and 15% are unrestricted (can be
used to meet the County’s ongoing obligations).

Composition of Net Assets
$698
million
$625 million
$3.2 billion

Copper Dome, State of Arizona
Maricopa County Internal Audit

SOURCE: “Statement of Net Assets” (Maricopa County FY2012 CAFR)
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FY 2012 Citizens Financial Condition Report

RETIREMENT PLANS
The County contributes to four retirement plans, the Arizona State Retirement System (ASRS), the Public
Safety Personnel Retirement System (PSPRS), the Correction Officers Retirement Plan (CORP), and the
Elected Officials Retirement Plan (EORP). This section focuses on the financial health of these plans.
Funded Status Defined
A key measure of a retirement plan’s health is its funding ratio, derived by comparing assets to liabilities.
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 or in a deficit position.

ASRS Retirement Funding Status
The ASRS is the largest retirement plan used by the County, with over 10,000 (71%) County employees
contributing in FY 2012.
Based on the FY 2011 ASRS actuarial report, the plan deficit grew over $590 million, or 6.8%, to $9.3
billion, as of June 30, 2011. The actuarial report for FY 2012 was not available.
This increase was largely due to a delayed recognition of losses that occurred in FYs 2002, 2003, 2008,
and 2009. As a result, the funded status of the total plan decreased from 76.7% in FY 2010 to 75.8% in
FY 2011.

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

ASRS Funding Status

SOURCE: ASRS CAFRs and annual actuarial reports
Maricopa County Internal Audit

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FY 2012 Citizens Financial Condition Report

RETIREMENT PLANS
PSPRS, CORP, EORP Retirement Funding Status
The CORP is the second largest retirement plan used by the County, with over 3,400 (23%) of County
employees contributing, followed by PSPRS with over 600 County participants (4%), and EORP with 220
County participants (2%).
Based on FY 2012 actuarial reports for each plan, the combined plan deficits grew to over $5.2 billion in
FY 2012, a $2.3 million, or 77% increase over FY 2009.
This increase was largely due to the delayed recognition of losses that occurred in prior years, as well as
lower than expected pay increases. At year end, the three plans had over $1.3 billion in unrecognized
losses that are to be realized over a 7-year trend period. In the absence of other gains, contribution
rates will need to increase over the next several years to compensate for these losses.

Funding Status Weakens for All Plans

SOURCE: PSPRS, CORP, and EORP CAFRs and annual Actuarial Reports FY12

Retirement Plan Comparison FY 2012
Funding
Status

Unfunded
Liability

County
Employees

Arizona State Retirement System

75.8%

$9.3 Billion

10,442

10.74%

10.74%

Public Safety Personnel Retirement
System

58.6%

$4.3 Billion

0,640

8.65%

22.68%

Correctional Officers Retirement
Plan

67.8%

$719 Million

3,431

8.41%

9.5%

Elected Officials Retirement Plan

58.4%

$254 Million

0,220

10.0%

32.99%

Retirement Plan

Contribution Rates
Employee
Employer

SOURCE: FY12 PSPRS, CORP, & EORP CAFRs and Actuarial Reports, FY11 ASRS Actuarial and CAFR Reports (Funding & Liability Status)
Maricopa County Internal Audit

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FY 2012 Citizens Financial Condition Report

POPULATION & UNEMPLOYMENT
Maricopa County’s Population is 4th Largest in Nation
Population Rank
Maricopa County has
been ranked the fourth
most populous of all
3,143 counties in the
nation.

SOURCE (Top and Middle
Graphs): 2011 Estimated U.S.
Census Bureau Reports

Population Growth

Maricopa County’s Population Growth is Fastest in Nation

Maricopa County added
over 63,000 people from
July 2010 to July 2011,
which was the third
largest numerical gain
among counties.
From April 2000 to July
2011, Maricopa County
gained nearly 800,000
new residents, which was
at the top of numerical
growth among counties.
Unemployment

Maricopa’s Unemployment Rate Beats Arizona and U.S. Rates

Maricopa County’s
unemployment rate has
consistently remained below
national and Arizona rates.
In 2008, the unemployment
rates increased significantly.
In 2012, Maricopa County’s
unemployment rate was
7.3%, continuing a gradual
reversal from Maricopa’s
high rate of 8.6% in 2010
and 2011.
SOURCE: Maricopa County CAFR (Demographic and Economic Statistics)
Maricopa County Internal Audit

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FY 2012 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 judged to be the most indicative of a county’s overall financial health were selected from
authoritative sources.
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 the non-major
governmental funds. Below are the benchmark counties that were used in this report.
National Benchmarks
County

Population

 Clark

1,972,514

Las Vegas

 Harris

4,178,574

Houston

 King
 Los Angeles
 Multnomah

1,942,600
9,960,000
741,925

Seattle
Los Angeles
Portland

 Orange

3,055,792

Santa Ana/Anaheim

 Pima

1,113,749

Tucson

 Salt Lake

1,048,985

Salt Lake City

 San Diego

3,143,429

San Diego

 Santa Clara

1,816,486

San Jose

SOURCE: 2011 Estimates Reported in

Major Metro Area

CAFR Statistical Sections

Other sources included: the Arizona State Retirement System, the Public Safety Personnel Retirement
System, the Correction Officers Retirement Plan, and the Elected Official Retirement Plan CAFRs and
actuarial reports; U.S. Census Bureau; Governmental Accounting Standards Board; International City/County
Managers Association; Government Finance Officers Association; Maricopa County’s Strategic Plans
(budgetary documents); and correspondence with internal and external staff.
Trend analyses are 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 FY 2012 CAFR and prior year CAFRs are available by visiting the Maricopa County
Department of Finance website at: http://www.maricopa.gov/Finance/CAFR.aspx. These CAFRs will provide
additional detail on the content presented in this report.

Maricopa County Internal Audit

17

FY 2012 Citizens Financial Condition Report

PAFR AWARD
Outstanding Achievement Award
The Government Finance Officers Association of
the United States and Canada (GFOA) has given
an Award for Outstanding Achievement in Popular
Annual Financial Reporting to Maricopa County for
its Popular Annual Financial Report (PAFR) for the
fiscal year ended June, 30, 2011. The Award for
Outstanding Achievement in Popular Annual
Financial reporting is a prestigious national award
recognizing conformance with the highest
standards for preparation of state and local
government popular reports.
In order to receive an Award for Outstanding
Achievement in Popular Annual Financial
Reporting, a government unit must publish a
Popular Annual Financial Report, whose contents
conform to program standards of creativity,
presentation, understandability, and reader appeal.
An Award for Outstanding Achievement in Popular
Annual Financial Reporting is valid for a period of
one year only. We believe our current report
continues to conform to the Popular Annual
Financial reporting requirements, and we are
submitting it to GFOA.

Credits
Photography (photos have been cropped and resized for this report)
Front Cover: White Tank Library and Nature Center (Barbra Hart);
Century Plant (Marcus Reinkensmeyer)
Page 5: Chase Field, Downtown Phoenix (Barbra Hart)
Page 10: Animal Care & Control; Equipment Services (Internal Audit
Staff)
Page 13: Dome, State of Arizona Historic Capitol Building (Barbra
Hart)
Immediate Left: Maricopa County Administration Building (Barbra
Hart)

County Administration Building

Maricopa County Internal Audit

Review
We appreciate the review and feedback generously provided by the
Maricopa County Department of Finance, Office of Management and
Budget, County Treasurer, and the retirement systems.
18

FY 2012 Citizens Financial Condition Report