Comprehensive annual financial report / Maricopa County, Arizona

              Fiscal Year Ended June 30, 2003
Citizens Serving Citizens
Comprehensive Annual Financial Report
Maricopa County
Phoenix, Arizona
For the Fiscal Year
July 1, 2002 to June 30, 2003
Prepared By
Department of Finance
Tom Manos, Chief Financial Officer
INTRODUCTORY SECTION
Table of Contents
Listing of Maricopa County Officials
Organizational Charts
Letter of Transmittal
Citizens Audit Advisory Committee Letter
Certificate of Achievement for Excellence in Financial Reporting
Comprehensive Annual Financial Report
Table of Contents
For the Fiscal Year Ended June 30, 2003
i
Introductory Section
Page
Table of Contents i
Listing of Maricopa County Officials v
Organizational Charts vii
Letter of Transmittal ix
Maricopa County Citizens Audit Advisory Committee Letter xii
Certificate of Achievement for Excellence in Financial Reporting xiii
Financial Section
Independent Auditors’ Report 1
Management’s Discussion and Analysis (MD&A) 3
Basic Financial Statements
Definitions of Government-wide Financial Statements and Listing of Major Funds 21
Government-wide Financial Statements
Statement of Net Assets 23
Statement of Activities 24
Fund Financial Statements
Governmental Funds Financial Statements
Balance Sheet 26
Statement of Revenues, Expenditures, and Changes in Fund Balances 28
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balances of Governmental Funds to the Statement of Activities 30
Proprietary Funds Financial Statements
Statement of Net Assets 32
Statement of Revenues, Expenses, and Changes in Fund Net Assets 34
Statement of Cash Flows 36
Fiduciary Funds Financial Statements
Statement of Fiduciary Net Assets 38
Statement of Changes in Fiduciary Net Assets 39
Basic Financial Statements - Notes 43
Required Supplementary Information
Budgetary Comparison Schedules – General Fund and Major Special Revenue Funds
General Fund 79
General Fund by Department 80
Jail Operations Fund 81
Note to Budgetary Comparison Schedules 82
Table of Contents (Continued)
For the Fiscal Year Ended June 30, 2003
ii
Page
Schedule of Agent Retirement Plans’ Funding Progress 83
Modified Approach for Infrastructure Assets 84
Other Supplementary Information
Budgetary Comparison Schedules - Major Debt Service and Capital Projects Funds
General Obligation Fund – Debt Service Fund 87
Lease Revenue Fund – Debt Service Fund 88
Jail Construction Fund – Capital Projects Fund 89
County Improvement Fund – Capital Projects Fund 90
Schedule of Capital Projects – Budget and Actual All Capital Improvement Projects 91
Combining and Individual Fund Statements and Schedules – Nonmajor Funds
Listing of Nonmajor Governmental Funds 97
Governmental Funds
Combining Balance Sheet 104
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 122
Schedules of Revenues, Expenditures, and Changes in Fund Balances – Budget
and Actual
Special Revenue Funds
Adult Probation Grants Fund 140
Adult Probation Services Fund 141
Animal Control Fund 142
Animal Control Field Services Fund 143
Animal Control Grants Fund 144
Bank One Ballpark Operations Fund 145
CDBG Housing Trust Fund 146
Child Support Automation Fund 147
Child Support Enhancement Fund 148
Children’s Issues Education Fund 149
Clerk of Court EDMS Fund 150
Clerk of Court Fill the Gap Fund 151
Clerk of Court Grants Fund 152
Clerk of Court Spousal Maintenance Enforcement Fund 153
Conciliation Court Special Fund 154
Correctional Health Grants Fund 155
County Attorney Check Enforcement Program Fund 156
County Attorney Criminal Justice Enhancement Fund 157
County Attorney Drug Diversion Fund 158
County Attorney Fill the Gap Fund 159
County Attorney Grants Fund 160
County Attorney Victim Compensation and Assistance Fund 161
County Attorney Victim Compensation and Restitution Fund 162
Table of Contents (Continued)
For the Fiscal Year Ended June 30, 2003
iii
Page
Special Revenue Funds (Continued)
Court Automation Fund 163
Document Retrieval Fund 164
Domestic Relations Education Fund 165
Economic Development Fund 166
Emergency Management Fund 167
Environmental Services Fund 168
Environmental Services Environmental Health Fund 169
Environmental Services Grant Fund 170
Expedited Child Support Fund 171
Flood Control Fund 172
General Government Grants Fund 173
Housing Department Fund 174
Human Services Grants Fund 175
Juror Improvement Fund 176
Justice Court Enhancement Fund 177
Justice Court Grants Fund 178
Justice Court Judicial Enhancement Fund 179
Juvenile Court Grants Fund 180
Juvenile Probation Fund 181
Juvenile Probation Diversion Fees Fund 182
Juvenile Restitution Fund 183
Law Library Fund 184
Legal Defender Fill the Gap Fund 185
Library Fund 186
Library Grants Fund 187
Old Courthouse Fund 188
Palo Verde Fund 189
Parks and Recreation Grants Fund 190
Parks Donations Fund 191
Parks Enhancement Fund 192
Parks Lake Pleasant Fund 193
Parks Souvenir Fund 194
Parks Spur Cross Ranch Fund 195
Planning and Development Fund 196
Planning Project Fees Fund 197
Probate Programs Fund 198
Public Defender Fill the Gap Fund 199
Public Defender Grants Fund 200
Public Defender Training Fund 201
Public Health Fund 202
Public Health Pharmacy Fund 203
Recorder’s Surcharge Fund 204
Research and Reporting Fund 205
RICO Fund 206
Sheriff Donations Fund 207
Sheriff Grants Fund 208
Sheriff Inmate Health Services Fund 209
Sheriff Special Funding Fund 210
Stadium District Fund 211
Table of Contents (Continued)
For the Fiscal Year Ended June 30, 2003
iv
Page
Special Revenue Funds (Continued)
Superior Court Fill the Gap Fund 212
Superior Court Grants Fund 213
Superior Court Judicial Enhancement Fund 214
Superior Court Special Fund 215
Transportation Fund 216
Transportation Grants Fund 217
Victim Location Fund 218
Waste Tire Program Fund 219
Debt Service Funds
Stadium District Fund 220
Capital Projects Funds
Bank One Ballpark Project Reserve Fund 221
Flood Control Capital Projects Fund 222
General Fund County Improvement Fund 223
Intergovernmental Capital Projects Fund 224
Major League Stadium Fund 225
Transportation Capital Projects Fund 226
Nonmajor Enterprise Funds
Listing of Nonmajor Enterprise Funds 229
Combining Statement of Net Assets 230
Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets 231
Combining Statement of Cash Flows 232
Internal Service Funds
Listing of Internal Service Funds 235
Combining Statement of Net Assets 236
Combining Statement of Revenues, Expenses, and Changes in Net Assets 238
Combining Statement of Cash Flows 240
Trust and Agency Funds
Listing of Trust and Agency Funds 245
Combining Statement of Fiduciary Net Assets – Investment Trust Funds 246
Combining Statement of Fiduciary Net Assets – Agency Funds 247
Combining Statement of Changes in Fiduciary Net Assets – Investment Trust Funds 248
Combining Statement of Changes in Assets and Liabilities – Agency Funds 249
Capital Assets Schedules
Capital Assets Used in the Operation of Governmental Funds
Comparative Schedules by Source 253
Schedule by Function and Activity 254
Schedule of Changes by Function and Activity 256
Statistical Section
Listing of Statistical Information 261
v
Maricopa County Officials
BOARD OF SUPERVISORS
Fulton Brock, Chairman, District 1
Don Stapley, District 2
Andrew Kunasek, District 3
Max Wilson, District 4
Mary Rose Garrido Wilcox, District 5
¨¨¨
COUNTY ADMINISTRATIVE OFFICER
David R. Smith
¨¨¨
CHIEF FINANCIAL OFFICER
Tom Manos
vi
Organizational Charts
vii
Board of Supervisors/Board of
Directors for Flood Control,
Library and Stadium Districts
Board of Supervisors/Board of
Directors for Flood Control,
Library and Stadium Districts
Superintendent of
Schools
Superintendent of
Schools CCoonnsstatabbleless ( (2233)) CCoouunntyty A Atttotorrnneeyy AAsssseessssoorr TTreraesausurerrer RReeccoorrddeerr
Clerk of the Board
Deputy County Administrator
S.T.A.R. Call Center Elections
Maricopa County Citizens
Legal Defender
Indigent Representation
Contract Counsel
Public Defender Maricopa Integrated Health System
Deputy County
Administrator
Management & Budget
Human Resources
Research & Reporting
General Government
Health Care Mandates
Chief Health Services
Officer
Regional Development
Services Officer
Finance
Risk Management
Materials Management
Recreation Services
Library District
Public Fiduciary
Planning & Development
Community
Development
Public Health
Human Services
Medical Examiner
Correctional Health
Animal Control Services
Transportation
Flood Control District
Emergency
Management
Facilities Management
Equipment Services
Office of the C.I.O
Telecommunications
Office of Communications
Elected/Court
Officials
Elected/Court
Officials Appointed
Housing
County Administrative Officer
Internal Audit
Information Technology
Officer
Chief Community
Services Officer
Chief Financial
Officer
Legal Advocacy Integrated Criminal Justice
Information Systems
SShheerirfifff CClelerrkk o off C Coouurrtt
E-Government
Technology
Infrastructure Technology
Center
Customer Support Center
Capital Facilities Dev.
Planning &
Development
Environmental Services
Solid Waste
Stadium District
Real Estate
Organizational Charts (Continued)
viii
Arizona Judicial Branch in Maricopa County
TTrriaial lC Coouurrtst,s ,M Maarricicooppaa C Coouunntyty
JJuuvveenniliele C Coouurrtt
CClelerrkk o of ft hthee S Suuppeerrioiorr C Coouurrtt
Superior Court Judges and
Commissioners
Superior Court Judges and
Commissioners
Juvenile Court Center Adult Probation Superior Court
Administration
Justice Court
Administration
MMaarricicooppaa C Coouunntyty J Juustsitcicee C Coouurrtsts
Maricopa County
County Administrative Office
ix
301 West Jefferson Street
10th Floor
Phoenix, AZ 85003-2143
Phone: 602-506-3571
Fax: 602-506-3328
www.maricopa.gov December 19, 2003
The Honorable Board of Supervisors
Maricopa County
County Administration Building
301 W. Jefferson Street
Phoenix, AZ 85003
It is our pleasure to submit to you the Comprehensive Annual Financial Report of
Maricopa County for the year ended June 30, 2003. This report has been prepared in
conformity with U.S. generally accepted accounting principles (GAAP) as prescribed in
pronouncements of the Governmental Accounting Standards Board (GASB).
Responsibility for both the accuracy of the data and the completeness and fairness of
the presentation, including all disclosures, rests with the management of Maricopa
County. We believe the data, as presented, is accurate in all material aspects and
shown in a manner designed to present fairly the financial position and results of
operations.
Internal Controls
The management of Maricopa County is responsible for establishing and maintaining a
system of internal control. Internal accounting controls are designed to provide
reasonable, but not absolute assurance regarding: 1) the safeguarding of assets
against loss from unauthorized use or disposition; and 2) the reliability of financial
records for preparing financial statements and maintaining accountability for assets.
The concept of reasonable assurance recognizes that: 1) the cost of a control should
not exceed the benefits likely to be derived; and 2) the evaluation of costs and benefits
requires estimates and judgments by management.
All internal control evaluations occur within the above framework. We believe that
Maricopa County’s accounting controls adequately safeguard assets and provide
reasonable assurance that financial transactions are properly recorded.
Independent Audit
State law requires the State Auditor General to conduct financial audits of the accounts
and records of County and State agencies. The examination is conducted in
accordance with U.S. generally accepted governmental auditing standards, and the
Independent Auditors’ Report is presented as the first component of the financial
section of this report.
x
Single Audit
Maricopa County receives both federal and state financial assistance and is responsible for
maintaining effective internal control over compliance with applicable laws and regulations related to
those programs. Management and the accounting staff periodically evaluate these internal controls.
As part of the government’s single audit, tests are made to determine the adequacy of the internal
controls, including that portion related to federal and state financial assistance programs, and
County compliance with applicable laws and regulations. The Federal Single Audit Report is issued
separately from this report.
Expenditure Limitation
On June 30, 1980, Arizona voters approved general propositions amending the Arizona Constitution
to establish expenditure and revenue limitations for local governments. The purpose of the
expenditure limitation is to control expenditures and to limit future increases in spending to
adjustments for inflation, deflation and population growth of the County. The Constitution also limits
the amount of revenues that may be generated from property taxes. A two-percent plus new
construction annual increase is the maximum allowed by law unless special voter approval is
obtained.
The Reporting Entity
The financial reporting entity includes all the funds of the primary government (Maricopa County), as
well as its 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 primary government’s operations and are included as part of the
primary government. Accordingly, the Maricopa County Flood Control District, Stadium District,
Library District and various improvement districts are reported as part of the governmental funds of
the primary government.
There are various school districts, irrigation districts, and fire districts within Maricopa County
governed by independently elected boards. The financial statements of such districts are not
included in this report except to reflect amounts held in a fiduciary capacity by the County Treasurer.
The reporting entity is further described in the Notes to the Financial Statements (Note 1 - Summary
of Significant Accounting Policies).
Cash Management and Investment
The Maricopa County Treasurer is responsible for investing cash from the county, schools, and
special districts. The Arizona Revised Statutes for investment of public monies provides guidance
to the Treasurer. The investment practice is to minimize credit and market risks while maintaining a
competitive yield on its portfolio. The effective annual yield on investments for fiscal year 2003 was
2.54%. Interest earned by County funds is apportioned quarterly based on the average daily cash
balance.
xi
Risk Management
The County is exposed to various risks of loss related to general and auto liability, property,
aviation liability, medical malpractice, and workers compensation. The County is self-insured for
the first $5,000,000 per occurrence of general and auto liability, $5,000,000 per occurrence of
medical malpractice, and $1,000,000 per occurrence of workers’ compensation. Coverage in
excess of these respective amounts is provided through the purchase of commercial insurance.
The County has not had any claims that have exceeded the commercial coverage in the last three
years. Maricopa County has a safety program that promotes employee safety on the job and
focuses on risk control techniques designed to minimize accident-related losses. In addition to the
safety program’s preventative measures, the Risk Management Department investigates every
claim and arbitrates each loss in order to minimize the County’s liability exposure.
Awards
The Government Finance Officers Association of the United States and Canada (GFOA) awarded
a Certificate of Achievement for Excellence in Financial Reporting to Maricopa County, Arizona for
its comprehensive annual financial report for the fiscal year ended June 30, 2002. This was the
fourteenth consecutive year that the government has achieved this prestigious award. In order to
be awarded a Certificate of Achievement, a government must publish an easily readable and
efficiently organized comprehensive annual financial report. This report must satisfy both U.S.
generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report continues to meet the Certificate of Achievement Program’s
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
Acknowledgment
The preparation of this report could not be accomplished without the efficient and dedicated
services of the Department of Finance staff, the assistance of administrative personnel in the
various departments, and the competent service of the State Auditor General’s Office. We
appreciate all of those who assisted in and contributed to the preparation of this report. We also
wish to express our sincere appreciation to the Board of Supervisors for their support in planning
and overseeing the financial operations of the County in a responsible and progressive manner.
Respectfully submitted,
David R. Smith Tom Manos
County Administrative Officer Chief Financial Officer
Maricopa County
Citizens Audit Advisory Committee
xii
June 30, 2003
The Honorable Maricopa County Board of Supervisors
The Maricopa County Citizens Audit Advisory Committee has prepared this letter for inclusion
in the county’s Comprehensive Annual Financial Report (CAFR) according to the committee’s
charter. Described herein are the committee’s composition, responsibilities, and an account of
how the responsibilities were discharged.
Composition of the Committee
The membership of the committee shall consist of five voting members and three non-voting
members. The voting members shall be board of supervisor appointees from the public and
shall serve two-year terms. The non-voting members shall be the county’s chief financial
officer, the county attorney, the auditor general, or their designees. The chairman of the board
of supervisors shall appoint a committee chairman from the voting members. The committee
chairman shall serve a one-year term.
Responsibilities of the Committee
The committee’s primary function is to assist the board of supervisors in fulfilling its oversight
responsibilities. The committee accomplishes this function by reviewing the county’s financial
information, the established systems of internal controls, and the audit process. The
committee also suggests areas requiring audit emphasis. Specific duties of the committee are
described in the committee charter.
Accomplishments of the Committee (Fiscal Year 2002-2003)
The Citizens Audit Advisory Committee:
·  Reviewed the county’s internal and external audit activities and management’s responses
thereto.
·  Reviewed the county's annual financial statements and the auditor general’s audit report.
·  Enhanced the communication between the internal and external auditors.
·  Met 7 times during the fiscal year, although the charter requires only four meetings.
Respectfully,
Chairman Ralph W. Lamoreaux, CPA
301 West Jefferson Street
Suite 1090
Phoenix, AZ 85003-2143
Ralph W. Lamoreaux,
CPA
Jill J. Rissi, MPA
Vincent J. Harder, CPA
Richard J. Lozar
CPA
Jill J. Rissi, MPA
Vincent J. Harder, CPA
Richard Lozar
xiii
xiv
FINANCIAL SECTION
Independent Auditors' Report
Management's Discussion and Analysis (MD&A)
Basic Financial Statements
Basic Financial Statements - Notes
Required Supplementary Information
Budgetary Comparison Schedules-General Fund and Major
Special Revenue Funds
Note to Budgetary Comparison Schedules
Schedule of Agent Retirement Plans' Funding Progress
Modified Approach for Infrastructure Assets
Other Supplementary Information
Budgetary Comparison Schedules-Major Debt Service and
Capital Projects Funds
Combining and Individual Fund Statements and Schedules
Nonmajor Governmental Funds
Nonmajor Enterprise Funds
Internal Service Funds
Trust and Agency Funds
Capital Assets Schedules
2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553 -0333 • FAX (602) 553-0051
DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
WILLIAM THOMSON
DEPUTY AUDITOR GENERAL
Independent Auditors' Report
Members of the Arizona State Legislature
The Board of Supervisors of
Maricopa County, Arizona
We have audited the accompanying financial statements of the governmental activities, business-type
activities, each major fund, and aggregate remaining fund information of Maricopa County as of and for
the year ended June 30, 2003, as listed in the table of contents, which collectively comprise the County’s
basic financial statements. These financial statements are the responsibility of the County’s management.
Our responsibility is to express opinions on these financial statements based on our audit. We did not
audit the financial statements of the Maricopa County Stadium District, which represents 14 percent of the
assets, 16 percent of the liabilities, and 1 percent of the revenues and expenses of the County’s
governmental activities on the government-wide financial statements. The District represents
approximately 1 percent of the assets, liabilities, revenues and other financing sources, and expenditures
and other financing uses of the aggregate remaining fund information reported on the fund statements.
Those financial statements were audited by other auditors whose report thereon has been furnished to us,
and our opinion, insofar as it relates to the amounts included for the Maricopa County Stadium District, is
based solely on the report of the other auditors.
We conducted our audit in accordance with U.S. generally accepted auditing standards and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that
our audit and the report of the other auditors provide a reasonable basis for our opinions.
In our opinion, based on our audit and the report of the other auditors, the financial statements referred to
above present fairly, in all material respects, the respective financial position of the governmental activities,
business-type activities, each major fund, and aggregate remaining fund information of Maricopa County
as of June 30, 2003, and the respective changes in financial position and cash flows, where applicable,
thereof for the year then ended in conformity with U.S. generally accepted accounting principles.
As described in Notes 3 and 16, the County determined that certain costs previously included in its
environmental liability should be expensed during the period incurred, which is considered a correction of
a mistake in the application of an accounting principle. In addition, as described in Notes 3 and 10, the
County increased its capitalization threshold for capital assets of its major enterprise funds and the Non-
AHCCCS Health Plans Fund (nonmajor enterprise fund), which is considered a change in the application
of an accounting principle.
The Management’s Discussion and Analysis on pages 3 through 17, the Budgetary Comparison
Schedules on pages 79 through 82, the Schedule of Agent Retirement Plans’ Funding Progress on page
83, and the Modified Approach for Infrastructure Assets on page 84 are not a required part of the basic
financial statements but are supplementary information required by the Governmental Accounting
Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplementary
information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the County’s basic financial statements. The other supplementary information, combining and
individual fund statements and schedules, and capital assets schedules listed in the table of contents are
presented for purposes of additional analysis and are not a required part of the basic financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
The information included in the introductory and statistical sections listed in the table of contents has not
been subjected to the auditing procedures applied in our audit of the basic financial statements and,
accordingly, we express no opinion on such information.
In accordance with Government Auditing Standards, we will also issue our report on our consideration of
the County’s internal control over financial reporting and our tests of its compliance with certain provisions
of laws, regulations, contracts, and grants at a future date. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in conjunction with this
report in considering the results of our audit.
Debbie Davenport
Auditor General
December 19, 2003
Maricopa County
Management’s Discussion and Analysis
3
This discussion and analysis is intended to be an easily readable analysis of Maricopa County’s (County)
financial activities based on currently known facts, decisions or conditions. This analysis focuses on
current year activities and should be read in conjunction with the Transmittal Letter that begins on Page ix
and with the County’s basic financial statements following this section.
Financial Highlights
·  At June 30, 2003, the assets of the County (primary government) exceeded liabilities by $2.3 billion
(net assets). Of this amount, $447.6 million (unrestricted net assets) may be used to meet ongoing
obligations to citizens and creditors, $278.3 million is restricted for specific purposes (restricted net
assets), and $1.6 billion is invested in capital assets, net of related debt.
·  The County’s total net assets as reported in the Statement of Activities increased by $288.6 million, a
14.1 percent increase in net assets over the prior period. Of this amount, $286.8 million is attributable
to governmental activities and $1.8 million is attributable to business-type activities.
·  The net assets for the business-type activities at June 30, 2003, increased by $1.8 million. However,
the proprietary funds, which mainly consist of the Maricopa County Integrated Health System (Medical
Center, Maricopa Health Plan, ALTCS, and Non-AHCCCS), showed a loss before transfers of $14.7
million. The increase in net assets is attributable to the net transfers of more than $16.5 million.
·  At June 30, 2003, the County’s long-term liabilities (noncurrent liabilities due within one year and more
than one year) related to governmental activities for bonds, loans, and other liabilities were $291.3
million. This is a reduction of $40.4 million from the restated prior fiscal year balance. See the Notes
to the Financial Statements Note 3 – Beginning Balances Restated and Note 16 – Risk Management
for details pertaining to this restatement. The reduction in long-term liabilities for governmental
activities is mainly due to the payments made on the County’s general obligation bonds and lease
revenue bonds. General obligation bonds, lease revenue bonds and Stadium District revenue bonds
represent 64.6 percent of the governmental activities long-term liabilities. The final payments on the
general obligation bonds, lease revenue bonds and Stadium District revenue bonds are due in fiscal
years 2005, 2016, and 2019, respectively.
·  The County’s governmental activities program revenues increased by approximately $58.6 million, or
13.8 percent, from the previous fiscal year.
·  The County’s business-type activities program revenues increased by approximately $52.9 million, or
7.4 percent, from the previous fiscal year.
·  At June 30, 2003, the governmental funds reported combined fund balances of $676 million, or an
increase in fund balance of $2.5 million over the prior fiscal year. Approximately 95.8 percent of the
combined fund balances or $647.5 million is available to meet the County’s current and future needs
(unreserved fund balance).
·  At June 30, 2003, unreserved fund balance for the General Fund increased by 16 percent to $288.8
million; approximately 50 percent of total General Fund expenditures. In accordance with Arizona
Revised Statutes (A.R.S.), this entire amount is budgeted to be spent in the next fiscal year. A.R.S.
§42-17151 requires that total estimated sources of revenue must equal the total estimated
expenditures in the budget for the current fiscal year. In addition, A.R.S. §42-17102 stipulates that the
estimated expenditures may include an amount for unanticipated contingencies or emergencies.
Maricopa County
Management’s Discussion and Analysis
4
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the County’s basic financial
statements. The County’s basic financial statements comprise three components 1) Government-wide
financial statements; 2) Fund financial statements; and 3) Notes to the basic financial statements.
Required Supplementary Information is included in addition to the basic financial statements. In addition,
the comprehensive annual financial report includes the budget comparison schedules for the major Debt
Service and Capital Projects Funds beginning on page 87. The Combining and Individual Fund
Statements and Schedules – Nonmajor Funds begin on page 104.
Government-wide Financial Statements are designed to provide readers with a broad overview of the
County finances, in a manner similar to private-sector businesses.
·  The Statement of Net Assets presents information on all County 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.
·  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. Thus, revenues and expenses
are reported in this statement for some items that will result in cash flows in future fiscal periods (e.g.,
uncollected taxes and earned but unused vacation leave).
Both of these government-wide financial statements distinguish functions of the County that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are
intended to recover all or a portion of their costs through user fees and charges (business-type activities).
The governmental activities of the County include general government; public safety; highways and
streets; health, welfare and sanitation; culture and recreation; education; and interest on long-term debt.
The business-type activities of the County include the Medical Center, Arizona Health Care Cost
Containment System (AHCCCS) Plan, Arizona Long-Term Care System (ALTCS) Plan, and other
business-type activities (Non-AHCCCS Health Plans and Solid Waste).
Component units are included in our basic financial statements and consist of legally separate entities for
which the County is financially accountable and that have substantially the same board as the County or
provide services entirely to the County. The blended component units included are the Maricopa County
Flood Control District, Maricopa County Library District, Maricopa County Public Finance Corporation,
Maricopa County Special Assessment Districts, Maricopa County Stadium District, and the Maricopa
County Street Lighting Districts. The County has no discretely presented component units.
The Government-wide Financial Statements can be found on pages 23-25 of this report.
Fund Financial Statements are groupings of related accounts that are used to maintain control over
resources that have been segregated for specific activities or objectives. The County, like other state and
local governments, uses fund accounting to ensure and demonstrate finance-related legal compliance. All
of the funds of the County can be divided into three categories: governmental funds, proprietary funds and
fiduciary funds.
·  Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental funds financial statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available
at the end of the fiscal year. Such information may be useful in evaluating a county’s near-term
financing requirements. Governmental funds include the general, special revenue, debt service, and
capital projects funds.
Maricopa County
Management’s Discussion and Analysis
5
·  Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By
doing so, readers may better understand the long-term impact of the government’s near-term
financing decisions. Both the governmental funds Balance Sheet and the governmental funds
Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The County reports six major governmental funds. Information is presented separately in the
governmental funds Balance Sheet and in the governmental funds Statement of Revenues,
Expenditures, and Changes in Fund Balances for the General, Jail Operations, General Obligation,
Lease Revenue, Jail Construction and County Improvement funds.
Data from the other governmental funds (nonmajor) are combined into a single, aggregated
presentation. Individual fund data for each of these nonmajor governmental funds is provided in the
form of combining statements, which begin on page 104 of this report.
The governmental funds financial statements can be found on pages 26-29 of this report.
·  Proprietary funds are maintained two ways. Enterprise funds are used to report the same functions
presented as business-type activities in the government-wide financial statements. The County uses
enterprise funds to account for the Medical Center, Maricopa Health Plan, Arizona Long-Term Care
System (ALTCS), and the Non-AHCCCS Health Plans – these four components comprise the
Maricopa Integrated Health System - and Solid Waste operations. Internal service funds are an
accounting device used to accumulate and allocate costs internally among the County’s various
functions. The County uses internal service funds to account for its equipment services,
telecommunications, reprographics, risk management, employee benefits trust and sheriff warehouse
functions. Because these services predominantly benefit governmental rather than business-type
functions, they have been included within governmental activities in the government-wide financial
statements.
Fund financial statements for the proprietary funds provide the same type of information as the
government-wide financial statements, only in more detail. The Medical Center, Maricopa Health Plan
and Arizona Long-Term Care System (ALTCS) operations are considered to be major funds of the
County. Data from the other enterprise funds are combined into a single, aggregated presentation.
The County’s internal service funds are combined into a single, aggregated presentation in the
proprietary funds financial statements. Individual fund data for each of these nonmajor enterprise and
internal service funds is provided in the form of combining statements, which begin on page 230 of
this report.
The proprietary funds financial statements can be found on pages 32-37 of this report.
·  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 own programs. The accounting
used for fiduciary funds is much like that used for proprietary funds.
The fiduciary funds financial statements can be found on pages 38-39 of this report.
Notes to the Financial Statements provide additional information that is essential to a full understanding
of the data provided in the government-wide and fund financial statements. The notes can be found on
pages 44-76 of this report.
Maricopa County
Management’s Discussion and Analysis
6
Required Supplementary Information is presented concerning the County’s General Fund and Jail
Operations Fund. A budgetary comparison schedule has been provided for both of these funds to
demonstrate compliance with budget and additional information is provided by the Notes to Budgetary
Comparison Schedules. Also presented is the schedule of funding progress for the County’s two agent
retirement plans and infrastructure assets reported using the modified approach. Required supplementary
information can be found on pages 79-84 of this report.
Other Supplementary Information follows the Required Supplementary Information. Budgetary
comparison schedules for the major Debt Service and Capital Projects Funds begin on page 87 of this
report. The combining and individual fund statements and schedules referred to earlier provide
information for nonmajor governmental funds and enterprise funds as well as the County’s internal service
funds, investment trust funds and agency funds. Combining and individual fund statements and schedules
for nonmajor funds begin on page 104 of this report.
Government-wide Financial Analysis
This year is the second fiscal year that the County applied Governmental Accounting Standards Board
(GASB) Statement No. 34. As prior year comparative data is available, a comparative analysis of
government-wide data will be presented.
Net Assets
As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position.
The following table reflects the condensed Statement of Net Assets of the County for June 30, 2003
compared to the prior year.
Statement of Net Assets
As of June 30
(in millions)
Governmental Business-type
Activities Activities Total
2003 2002* 2003 2002* 2003 2002 % Chg P/Y
Current and other assets $ 874.3 $ 877.2 $ 144.5 $ 134.0 $1,018.8 $1,011.2 .8%
Capital assets 1,760.4 1,528.8 107.0 114.2 1,867.4 1,643.0 13.7
Total assets 2,634.7 2,406.0 251.5 248.2 2,886.2 2,654.2 8.7
Current and other liabilities 202.7 224.8 90.1 88.3 292.8 313.1 (6.5)
Long-term liabilities 227.4 263.4 35.3 35.6 262.7 299.0 (12.1)
Total liabilities 430.1 488.2 125.4 123.9 555.5 612.1 (9.2)
Net assets
Invested in capital assets,
net of related debt 1,529.1 1,259.2 75.7 81.1 1,604.8 1,340.3 19.7
Restricted 234.3 322.0 44.0 53.7 278.3 375.7 (25.9)
Unrestricted 441.2 336.6 6.4 (10.5) 447.6 326.1 37.3
Total net assets $2,204.6 $1,917.8 $ 126.1 $ 124.3 $2,330.7 $2,042.1 14.1
* The governmental activities and business-type activities net assets for fiscal year 2002 were restated (see Notes 3, 10, 12 and 16
to the financial statements for clarification).
The governmental activities total net assets at June 30, 2003, increased from the restated fiscal year 2002
balance by $286.8 or 15 percent due primarily to an increase in capital assets. The majority of the
increase in total assets and net assets is attributable to the ongoing construction in the Jail Construction
Fund. The Jail Construction Fund expended over $171.3 million in capital outlay for the fiscal year ended
June 30, 2003. A large portion of the remaining increase can be attributed to the capital projects of the
Flood Control District and the Transportation Department that were expended through the Flood Control
Capital Projects Fund and the Transportation Capital Projects Fund – see pages 138 and 139 of the
nonmajor governmental funds combining statements.
Maricopa County
Management’s Discussion and Analysis
7
The governmental activities total liabilities at June 30, 2003, experienced a decrease from the restated
fiscal year 2002 balance of $58.1 million. Sixty-two percent of this decrease is related to the long-term
liabilities, specifically those related to debt service (general obligation bonds, lease revenue bonds,
certificates of participation, and capital leases).
The business-type activities total assets, liabilities and net assets experienced minimal changes from prior
year. The County continues its efforts to address the vision and strategic goals of the Medical Center
operations as well as the Maricopa Integrated Health System (MIHS) as a whole. A significant event to
note for the Maricopa Integrated Health System is that on November 4, 2003, the voters of Maricopa
County approved proposition 414. The proposition will allow for the transition of the Maricopa Integrated
Health System to a taxpayer-supported Health Care District with a separately elected Board of Directors.
See the Notes to the Financial Statements that begin on page 44; Note 21 – Subsequent Events.
At June 30, 2003, the County’s combined governmental activities and business-type activities assets
exceeded liabilities by $2.3 billion. Total net assets increased over the prior period by $288.6 million or
14.1 percent. The governmental activities comprise 99.4 percent of the increase from prior year. This
increase can be attributed to the significant increase in the County’s capital assets, and the reduction of
the County’s long-term liabilities, as discussed previously.
Net assets consist of three components. By far the largest portion - $1.6 billion or 68.9 percent - of the
County’s net assets reflects the investment in capital assets (e.g., land, buildings, machinery and
equipment, infrastructure and construction in progress), less any related debt used to acquire those
assets that is still outstanding. The governmental activities comprise 95.3 percent of this component of
net assets. The County uses these capital assets to provide services to its citizens; consequently, these
assets are not available for future spending. Although the County’s investment in its capital assets is
reported net of related debt, it should be noted that the resources needed to repay this debt must be
provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities. This component of net assets for governmental activities increased by $269.9 million due to the
County’s investment in its capital assets, particularly the construction related to the adult and juvenile
facilities that were approved by the voters in 1998.
The second component from the County’s total net assets, $278.3 million or approximately 11.9 percent,
represents resources that are subject to external restrictions on how they may be used. The
governmental activities comprise 84.2 percent of this component of net assets. This component
decreased by approximately $87.7 million from the prior period primarily due to the decrease of funds
restricted for capital projects – mainly adult and juvenile facilities monies used for construction payments.
The final component consists of unrestricted net assets, $447.6 million or 19.2 percent, and may be used
to meet the government’s ongoing obligations. The governmental activities comprise 98.6 percent of this
component. Unrestricted net assets for governmental activities increased from fiscal year 2002 by $104.6
million, or 31.1 percent, predominantly from the General Fund by $39.8 million and nonmajor
governmental funds by $49.7 million as fiscal year 2003 revenues exceeded expenditures in these funds.
Changes in Net Assets
As discussed previously, the County’s total net assets of $2.3 billion increased by $288.6 million as
reported in the Statement of Activities. Of this amount, $286.8 million, or 99.4 percent, is attributable to
governmental activities, and $1.8 million is related to business-type activities. The increase in total net
assets for governmental activities resulted primarily from an increase in net capital assets due to
significant capital projects during the fiscal year. The net assets invested in capital assets increased for
the amount of current year capital expenditures and will decrease in future years as the capital assets are
depreciated over their useful lives.
Maricopa County
Management’s Discussion and Analysis
8
The following table reflects the condensed Statement of Activities of the County for the fiscal year 2003
compared to the prior year and indicates the changes in net assets for Governmental and Business-type
Activities:
Statement of Activities
For the Fiscal Year Ended June 30, 2003
(in millions)
Governmental Business-type
Activities Activities Total
2003 2002* 2003 2002* 2003 2002 % Chg P/Y
Revenues:
Program revenues:
Charges for services $ 135.2 $ 141.9 $ 760.9 $ 708.6 $ 896.1 $ 850.5 5.4%
Operating grants and contributions 304.9 281.2 6.9 6.3 311.8 287.5 8.5
Capital grants and contributions 44.3 2.7 44.3 2.7 1,540.7
General revenues:
Taxes 915.0 879.9 915.0 879.9 4.0
Other 21.3 48.7 2.6 8.3 23.9 57.0 (58.1)
Total Revenues 1,420.7 1,354.4 770.4 723.2 2,191.1 2,077.6 5.5
Expenses:
General government 181.3 124.5 181.3 124.5 45.6
Public safety 506.6 490.9 506.6 490.9 3.2
Health, welfare and sanitation 335.6 304.2 335.6 304.2 10.3
Other 107.2 106.2 107.2 106.2 .9
Medical Center 366.4 340.6 366.4 340.6 7.6
AHCCCS 109.1 93.2 109.1 93.2 17.1
ALTCS 233.0 241.6 233.0 241.6 (3.6)
Other business-type activities 76.6 67.4 76.6 67.4 13.6
Total Expenses 1,130.7 1,025.8 785.1 742.8 1,915.8 1,768.6 8.3
Excess (deficiency) before gain (loss) on
disposal of capital assets and transfers 290.0 328.6 (14.7) (19.6) 275.3 309.0 (10.9)
Gain (loss) on disposal of capital assets 13.3 (8.8) (.1) 13.3 (8.9) (249.4)
Transfers (16.5) (25.8) 16.5 25.8 0.0
Change in net assets 286.8 294.0 1.8 6.1 288.6 300.1 (3.8)
Net assets – beginning 1,917.8 1,623.8 124.3 118.2 2,042.1 1,742.0 17.2
Net assets – ending $2,204.6 $1,917.8 $ 126.1 $ 124.3 $2,330.7 $2,042.1 14.1
* The Governmental Activities and Business-type Activities net assets for fiscal year 2002 were restated (see Notes 3, 10, 12 and
16 to the financial statements for clarification). In addition, in fiscal year 2002, Governmental Activities general revenue taxes of
$78.2 million for highway user revenue monies were reclassified to program revenue operating grants and contributions to be
consistent with fiscal year 2003 reporting.
Maricopa County
Management’s Discussion and Analysis
9
Governmental Activities
The functions of the County that are principally supported by taxes and intergovernmental revenues
(governmental activities) include general government; public safety; highways and streets; health, welfare
and sanitation; culture and recreation; and education. The functions of highways and streets, culture and
recreation, and education are shown above as other expenses. The County’s total net assets increased
by $288.6 million during the current fiscal year. Governmental activities of the County contributed $286.8
million or 99.4 percent to this increase. The majority of this increase is attributable to the following.
One of the main differences a reader will see between the governmental funds reported in the fund
financial statements and the statement of activities is that governmental funds in the fund financial
statements 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 expenditures exceeded depreciation expense in the current period by $282 million. Additionally,
capital grants and contributions increased significantly (by approximately $41.6 million) over the prior
period in part due to land and streets (infrastructure assets) donated to the Transportation Department
that relate to new home and community developments.
Total governmental activities expenses increased by $104.9 million, or 10.2 percent, over the prior period
resulting in an offsetting decrease in net assets. The largest increases are from general government and
health, welfare and sanitation. General government increases are comprised of the General Government,
Elections, and Facilities Management Departments. Health, welfare and sanitation increases are largely
from the Health Care Mandates Department.
For the most part, revenues and expenses grew 5.5 percent and 8.3 percent, respectively, in line with the
budget that had anticipated a slower than normal economy.
Business-Type Activities
As discussed earlier, the business-type activities of the County include the Medical Center, Arizona Health
Care Cost Containment System (AHCCCS) Plan, Arizona Long-Term Care System (ALTCS) Plan, the
Non-AHCCCS Health Plans – these four components are the Maricopa Integrated Health System - and
Solid Waste. Business-type activities increased the County’s net assets by only $1.8 million, accounting
for less than 1 percent of the total growth in the County’s net assets. The change in net assets is a
significant indicator to the profitability of the County’s business-type activities. The Maricopa Integrated
Health System makes up 93.9 percent of the net assets of the business-type activities. The increase in
revenues and expenses from the prior year are directly related, 6.5 percent revenue and 5.7 percent
expense. These increases can be tied to the increase in the demand for service and the cost of providing
such service. The Maricopa Integrated Health System contributes only a small percent to the increase in
net assets even though it comprises approximately 35.1 percent and 40.9 percent of the County’s
revenues and expenses, respectively.
The County continues its efforts to address the vision and strategic goals of the Medical Center operations
as well as the Maricopa Integrated Health System as a whole.
Financial Analysis of the County’s Funds
As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements.
Governmental Funds. Governmental activities are contained in the general, special revenue, debt
service, and capital projects funds. The focus of the County’s governmental funds is to provide
information on near-term inflows, outflows, and balances of spendable resources. Such information is
useful in assessing the County’s financing requirements. In particular, unreserved fund balance may
serve as a useful measure of a government’s net resources available for spending at the end of the fiscal
year.
Maricopa County
Management’s Discussion and Analysis
10
As of June 30, 2003, the governmental funds reported combined fund balances of $676 million and an
increase in fund balance of $2.5 million over the prior fiscal year. Approximately 95.8 percent of the
combined fund balances or $647.5 million is available to meet the County’s current and future needs
(unreserved fund balance). The remaining fund balance is reserved for inventories, capital lease
expenditures and debt service.
The following funds are the County’s major governmental funds:
The General Fund is the County’s primary operating fund. At the end of the current fiscal year,
unreserved fund balance of the General Fund was $288.8 million, while total fund balance reached
$292.6. This represents an increase in unreserved fund balance from prior year of $39.8 million, or more
than 16 percent. This increase can be attributed to significant savings in the General Fund for general
government and health, welfare and sanitation expenditures. The savings are due to lower than
anticipated payouts for hospital pre-AHCCCS claims settlements as well as a reduction in the match
required to the State for its Disproportionate Share Program. In addition, spending from contingency
funds was less than anticipated in the General Government Department. As a measure of the General
Fund’s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to the
total fund expenditures. Unreserved fund balance represents 50 percent of the total fiscal year 2003
General Fund expenditures, while total fund balance represents 50.6 percent of that same amount. These
ratios indicate a strong fund balance position in comparison to expenditures.
The Jail Operations Fund is a special revenue fund that was established under the authority of
propositions 400 and 401, which were passed in the General Election of November 3, 1998. These
propositions authorized a temporary 1/5 of one-cent sales tax to be used for the construction and
operation of adult and juvenile detention facilities. The Jail Operations Fund accounts for the operation of
the jail facilities, while the Jail Construction Fund (discussed below) accounts for the costs related to the
construction of the new facilities. The voters approved the extension of the 1/5 of one-cent sales tax in
the General Election of November 5, 2002 (see Jail Construction Fund). At the end of the current fiscal
year, total fund balance of the Jail Operations Fund was $33.8 million, of which nearly 99 percent is
unreserved. This was an increase in total fund balance of $6.6 million, or 24.3%, from the prior fiscal
year. Although the fund had more expenditures than revenues by $16.2 million, the increase in fund
balance can be partially attributed to a net increase in transfers of $22.7 million (in part from an increase in
transfers in for maintenance of effort of $9.9 million. The amount to be transferred for any given year is
determined through the budget planning process and tied to jail tax collection projections and construction
schedules.
The General Obligation Fund is a debt service fund that accounts for debt service on all various purpose
general obligation bonds. Funding is provided by the County’s secondary property tax revenues, which
may be used only for debt service. At the end of the current fiscal year, total fund balance of the General
Obligation Fund was $722,346 and was considered reserved. The goal with the General Obligation Fund
is to set the secondary tax rate to cover the debt service for the period as closely as possible without
building excess fund balance or experiencing a cash deficit. Fund balance at June 30, 2002, was
$773,917, so fund balance decreased by $51,571, which is reasonable and within the County’s fiscal
policy.
The Lease Revenue Fund is a debt service fund that accounts for the debt service on the Lease Revenue
Bonds, Series 2001. Funding is provided by transfers from the General Fund. At the end of the current
fiscal year, unreserved fund balance of the Lease Revenue Fund was $81.7 million, while total fund
balance was $94.6 million. The fund balance in this fund is sufficient to satisfy the debt service on the
Lease Revenue Bonds, Series 2001 and each year the fund balance will be reduced by the annual debt
service payment until the debt is satisfied.
The Jail Construction Fund is a capital projects fund that accounts for the proceeds related to construction
associated with the temporary 1/5 of one-cent sales tax approved by the voters in the General Election on
November 3, 1998 (see Jail Operations Fund). At the end of the current fiscal year, total fund balance of
Maricopa County
Management’s Discussion and Analysis
11
the Jail Construction Fund was $10 million, all of which was unreserved. There was a decrease in fund
balance for the period of approximately $73.2 million, which is similar to the decrease in the prior period of
approximately $70.2 million. The reason for the decrease is that the fund had a large fund balance due to
the transfers in from jail tax monies collected prior to the start of construction. The strategy taken during
the budget process was to spend down the fund balance and fund construction as it takes place during
fiscal year 2004.
The County Improvement Fund is a capital projects fund that accounts for capital projects funded through
the issuance of the Lease Revenue Bonds. At the end of the current fiscal year, unreserved fund balance
of the County Improvement Fund was $49.1 million, all of which is unreserved. The fund balance
decreased approximately $6.2 million from the prior period and this is attributable to the spend down of
proceeds for budgeted capital projects. The County’s goal is to fully spend down these proceeds by fiscal
year 2006.
The following table presents the amount of all governmental funds revenues from various sources as well
as increases or decreases from the prior year.
Revenues Classified by Source
Governmental Funds
(in millions)
2003 2002 (adjusted) * Increase/(Decrease)
Revenues by Source Amount
Percent
of Total Amount
Percent
of Total Amount % Chg P/Y
Taxes $ 474.9 34% $ 446.6 33% $ 28.3 6.3%
Intergovernmental 745.7 53 733.5 54 12.2 1.7
Other 174.5 13 175.1 13 (.6) (.3)
Totals $ 1,395.1 100% $ 1,355.2 100% $ 39.9 2.9
* Jail tax and Stadium District surcharge revenue were reclassified from intergovernmental and charges for services (other),
respectively, to tax revenue to be consistent with fiscal year 2003 reporting.
During fiscal year 2003, the County experienced an increase in governmental revenues from the previous
year of $39.9 million, a 2.9 percent increase. This increase is somewhat lower than the increase between
fiscal year 2002 and the prior year of 5 percent. During fiscal year 2003, taxes increased primarily from
property taxes even though the tax levy was the same as in fiscal year 2002. However, the assessed
values increased along with an increase in population, resulting in an increase in property tax revenue.
Intergovernmental revenue from sales tax, vehicle license tax and highway user fuel tax increased
although modestly due to the ongoing slow economy.
The following table presents the amount of all governmental funds expenditures by function compared to
prior year amounts.
Expenditures by Function
Governmental Funds
(in millions)
2003 2002 Increase/(Decrease)
Expenditures by Function Amount
Percent
of Total Amount
Percent
of Total Amount % Chg P/Y
General government $ 114.2 8% $ 99.3 8% $ 14.9 15.0%
Public safety 493.4 36 481.8 36 11.6 2.4
Health, welfare and sanitation 331.8 24 311.5 23 20.3 6.5
Capital outlay 315.6 23 294.0 22 21.6 7.3
Other 125.4 9 140.6 11 (15.2) (10.8)
Totals $ 1,380.4 100% $ 1,327.2 100% $ 53.2 4.0
Maricopa County
Management’s Discussion and Analysis
12
Expenditures for governmental fund types for fiscal year 2003 increased by $53.2 million or 4 percent from
the prior year. The percentage increase in expenditures between fiscal year 2002 and the prior year was
more than twice as high at 9.6 percent. The lower increase in expenditures is attributable to budget
controls necessary due to the slow economy during the period. The increase in fiscal year 2003 of $53.2
million is primarily attributable to expenditures related to general government, health, welfare and
sanitation, and capital outlay.
General government expenditures increased for fiscal year 2003 in the General Government Department
($8.8 million), Elections Department ($4.2 million) and the Facilities Management Department ($2.2
million). The General Government Department increase in expenditures was due to the purchase and
implementation of a Human Resources payroll system that will be completed in December 2003. The
Elections Department increase was due to the primary and general elections held.
The increase in health, welfare and sanitation of $20.3 million represents a 6.5 percent increase over the
prior year. The majority of the increase is attributable to an increase in the Health Care Mandates activity
within the General Fund. Although Health Care Mandates were well below budget, there was an increase
in payments of nearly 18 percent. This increase is due to payouts for hospital pre-AHCCCS claims
settlements and the State’s increase for the Disproportionate Share Program.
Capital outlay increased $21.6 million to $315.6 million, or 7.3 percent, during fiscal year 2003. An
increase of $16.3 million for the construction of the adult and juvenile facilities occurred in the Jail
Construction Fund. The increase is in line with the County’s strategic vision and Five-Year Capital
Projects Plan.
Proprietary funds. The County’s proprietary funds (enterprise funds) provide the same information found
in the government-wide financial statements (business-type activities), but in more detail. Internal Service
Funds, although proprietary funds, are not included in the following section.
The following funds are the County’s major enterprise funds:
The Medical Center Fund provides quality, cost competitive health care and health professional education
to assure the health security of individuals, families, and the community. During fiscal year 2003, the Fund
had an operating loss of $29.4 million, which is 29 percent less than the prior year. The reduction in
operating loss resulted from a 10 percent patient population growth and rate increases for health care
services. Fiscal year 2003 transfers from other County funds to subsidize the Medical Center decreased
46 percent from the prior year.
The Maricopa Health Plan (MHP) Fund is an ambulatory health care plan operated by Maricopa Managed
Care System (MMCS). MMCS contracts with the Arizona Health Care Cost Containment System
(AHCCCS), which provides monthly capitation revenues based on Maricopa County Health Plan
enrollment. The MHP Fund had a $6.7 million operating income for fiscal year 2003 consistent with the
prior year. During fiscal year 2003, the Fund transferred $6.3 million to subsidize other MIHS funds. The
Fund’s fiscal year-end net assets balance increased 6.4 percent from the prior year-end.
The Arizona Long-Term Care System (ALTCS) Fund is a managed care, long-term care plan operated by
Maricopa Managed Care Systems (MMCS). Chronically ill and physically disabled patients receive
medical services as a result of an annual contract with the Arizona Health Care Cost Containment System
(AHCCCS). The ALTCS Fund had a $7.1 million operating income for fiscal year 2003. However, this
amount was down 33.7 percent from the prior year due to the membership in the ALTCS Plan decreasing
by 6 percent during the fiscal year. During the fiscal year, the County transferred $15.5 million from the
Fund to subsidize other MIHS funds for indigent health care costs. As a result of this transfer, the Fund’s
net assets at fiscal year-end decreased 20.8 percent from the prior year-end.
Maricopa County
Management’s Discussion and Analysis
13
The following table shows actual revenues, expenses and results of operations for the current fiscal year
for all proprietary funds (enterprise funds).
Statement of Revenues, Expenses and Changes in Fund Net Assets
Proprietary Funds
(in millions)
Increase/(Decrease)
2003 2002 Amount % Chg P/Y
Operating revenues $ 760.9 $ 710.6 $ 50.3 7.1%
Operating expenses 782.4 737.6 44.8 6.1
Operating income (loss) (21.5) (27.0) 5.5 (20.4)
Nonoperating revenues (expenses), net 6.8 7.4 (.6) (8.1)
Income (loss) before transfers (14.7) (19.6) 4.9 (25.0)
Transfers, net 16.5 25.7 (9.2) (35.8)
Change in net assets $ 1.8 $ 6.1 $ (4.3) (70.5)
At June 30, 2003, the net assets for the proprietary funds (business-type activities) increased by $1.8
million. The Maricopa Integrated Health System makes up 93.9 percent of the net assets of the business-type
activities. As discussed previously, the Maricopa Integrated Health System contributes only a small
percent to the increase in net assets even though it comprises approximately 35.1 percent and 40.9
percent of the County’s revenues and expenses, respectively.
The net loss before transfers for the proprietary funds of $14.7 million resulted primarily from a net loss of
more than $26.4 million from the Medical Center Fund, which is offset in part by the income in the other
major funds of almost $11.6 million. The Medical Center Fund received transfers of over $36 million. Of
these transfers, the General Fund funded $32 million (of which $15,540,587 was transferred from ALTCS
to the General Fund and from the General Fund to the Medical Center) and $3.8 million was funded from
the Maricopa Health Plan Fund. Some of the factors that impact the Medical Center’s operations are the
costs of pharmaceuticals, medical supplies and equipment that continue to rise and the challenge of
providing services to the indigent.
General Fund Budgetary Highlights
The difference between the original budget and the final amended budget for the General Fund resulted in
a $5 million decrease to both revenues and expenditures. The decrease was due to a mid-year
appropriation adjustment that decreased sales tax revenue budgeted in intergovernmental revenues and
reduced expenditures accordingly by approximately $5 million since collections were determined not to be
in line with original budget projections.
Significant favorable expenditure variances in total for the General Government Department (general
government function) and the Health Care Mandates Department (health, welfare and sanitation function)
caused about a $40 million increase in the fund balance for the General Fund. The savings for health,
welfare and sanitation expenditures were due to lower than anticipated payouts for hospital pre-AHCCCS
claims settlements as well as a reduction in the match required to the State for its Disproportionate Share
Program. In addition, spending from contingency funds was less than anticipated in the General
Government Department.
Maricopa County
Management’s Discussion and Analysis
14
Capital Assets and Long-Term Liabilities
Capital Assets
The County’s investment in capital assets for its governmental and business-type activities as of June 30,
2003, amounted to $1.9 billion (net of accumulated depreciation). This investment in capital assets
includes land, buildings, infrastructure, machinery and equipment, and construction in progress. The total
increase of $224.4 million in the County’s investment in capital assets for the current period was 13.7
percent.
The most significant impact on the increase in capital assets for the fiscal year ended June 30, 2003, was
the ongoing construction of the adult and juvenile detention facilities. For these facilities, current year
expenditures of $171.3 million were added to construction in progress and buildings. The Transportation
Department and the Flood Control District provided additional contributions to capital assets including
land, construction in progress and completed infrastructure of $36.8 million and $32.7 million, respectively.
Capital assets also had deductions during the fiscal year 2003 from disposals and infrastructure
annexations of approximately $73 million.
Capital assets for the governmental and business-type activities are presented below (in millions) to
illustrate changes from the prior year:
Governmental Activities Business-type Activities Total
2003 2002 2003 2002 * 2003 2002 % Chg P/Y
Land $ 237.2 $ 177.4 $ 2.9 $ 2.9 $ 240.1 $ 180.3 33.2%
Infrastructure 413.2 357.0 413.2 357.0 15.7
Buildings (net of accumulated
depreciation) 611.5 571.6 63.0 47.5 674.5 619.1 8.9
Machinery and equipment (net
of accumulated depreciation) 51.4 57.8 33.7 38.1 85.1 95.9 (11.3)
Construction in progress 447.1 365.0 7.4 25.7 454.5 390.7 16.3
Totals $ 1,760.4 $ 1,528.8 $ 107.0 $ 114.2 $ 1,867.4 $ 1,643.0 13.7
* Business-type Activities were restated as a result of the restatement of the capitalization threshold. See Note 10 for additional
information.
The County reported infrastructure assets acquired during fiscal years 2002 and 2003 in the government-wide
financial statements, as required by GASB Statement No. 34. Infrastructure additions are reported in
capital outlay expenditures within the Transportation Capital Projects Fund and the Flood Control Capital
Projects Fund. GASB Statement No. 34 also requires the retroactive reporting of all infrastructure assets
acquired prior to July 1, 2001, to be reported by the fiscal year ending June 30, 2006. All current and prior
years’ infrastructure assets of the Transportation Department are reported on the government-wide
financial statements. Infrastructure assets acquired prior to July 1, 2001, are reported at estimated
historical cost. Infrastructure assets acquired subsequent to that date are reported at historical cost. For
the Flood Control District, only infrastructure assets acquired in fiscal years 2002 and 2003 are reported
and these assets are reported at historical cost.
The Transportation Department infrastructure assets consist of a roadway system and a bridge system.
Both systems are reported under the modified approach, which means the County will maintain the assets
using an asset management system and will document that the infrastructure assets are being preserved
at the established condition level.
The Flood Control District accounts for the remaining infrastructure assets, which consists of drainage
systems, dams, flood channels and canals. Of the total Flood Control District infrastructure assets
reported on the financial statements, $147,475 represents completed projects as of June 30, 2003, and
will be depreciated starting in fiscal year 2004, as the assets will have been placed in service for one fiscal
year.
Maricopa County
Management’s Discussion and Analysis
15
At June 30, 2003, the County’s infrastructure assets totaled $624.5 million reported on the government-wide
financial statements as infrastructure - $413.2 million, construction in progress - $78.9 million and
land associated with infrastructure assets - $132.4 million. Additional information regarding infrastructure
assets can be found in the Notes to the Financial Statements (Note 1 - Summary of Significant Accounting
Policies and Note 10 - Capital Assets), and in the Required Supplementary Information Modified Approach
for Infrastructure Assets page 84.
Long-Term Liabilities
At June 30, 2003, the County had total long-term liabilities (noncurrent liabilities due within one year and
more than one year) outstanding of $330.8 million, which represents a $43.9 million decrease from the
restated prior year balance of $374.7 million. The restatement was necessary for governmental activities
due to the County’s reassessment of certain significant factors affecting the estimates of claims and
judgments payable related to the County’s environmental liability and indigent medical claims.
Additionally, long-term liabilities for business-type activities were restated as reported and incurred but not
reported claims payable, previously reported as a long-term liability, were reclassified to a current liability
on the government-wide financial statements. See the Notes to the Financial Statements that begin on
page 44; Note 3 – Beginning Balances Restated, Note 12 – Long-Term Liabilities and Note 16 – Risk
Management for further clarification. The majority of the decrease is attributable to debt service payments
made during fiscal year 2003 for the County’s general obligation bonds and lease revenue bonds. The
largest components of long-term liabilities at June 30, 2003, consisted of General Obligation Bonds -
$39,515,000, Lease Revenue Bonds - $109,545,000, Stadium District Revenue Bonds - $57,225,000,
claims and judgments payable - $16,028,940 and reported and incurred but not reported claims -
$43,494,675.
On November 11, 2003, Fitch upgraded the County’s general obligation bond rating to AA+ from AA.
Fitch also upgraded the County’s certificate of participation and lease revenue bond ratings to AA from
AA-. The following has been excerpted from the November 11, 2003, Fitch Press Release:
“The upgrades are based on the imminent transfer of the county's health care delivery system to a
separate voter-approved special health district with its own property tax levy. Although they've
improved recently, the health care system's finances represented a potential fiscal liability to the
county's general fund in the event it should require larger operating subsidies to remain
operational. The upgrades also reflect continued financial improvement despite slower growth in
the county's predominant revenue source, a record of continued economic growth and
diversification, successful fiscal reforms, and the county's very modest debt profile.
Although taxes derived from consumer spending have slowed over the last two fiscal years, the
property tax base has still demonstrated healthy increases. Sound fiscal stewardship has enabled
the county to meet the service delivery demands of a burgeoning populace while accumulating
significant financial resources. These reserves provide the county with vast flexibility to maintain
its modest debt profile by financing its capital needs from available resources.”
General obligation bonds are paid from the secondary property tax levy. At June 30, 2003, net general
obligation debt was $38,792,654 (0.16% of taxable property), while the statutory allowable 6 percent limit
was $1,467,422,837 and the voter approved 15 percent limit was $3,668,557,092. On July 1, 2004, the
County will make its final debt service payment on its general obligation bonds.
Lease revenue bonds applicable to governmental activities are paid from the Lease Revenue Fund (debt
service fund) that was funded in prior years by transfers from the General Fund and is predominantly
unrestricted. At June 30, 2003, the fund balance in the Lease Revenue Fund to pay future liabilities was
$94,597,749. Proceeds from the bonds are currently being used for capital projects.
Maricopa County
Management’s Discussion and Analysis
16
Stadium District revenue bonds are special obligations of the District. The bonds are payable solely from
pledged revenues, consisting of car rental surcharges levied and collected by the Stadium District
pursuant to A.R.S. §48-4234. On June 5, 2002, the Stadium District issued $58,225,000 (par value) of
which $57,225,000 remains outstanding.
Claims and judgments payable of $16 million are estimated long-term liabilities for claims pertaining to
environmental liabilities. As previously stated, the liability for environmental liabilities and indigent health
care claims was restated for governmental activities for the prior year and the restatement resulted in a
decrease in the liability’s beginning balance as of July 1, 2002, of $113.7 million.
Reported and incurred but not reported claims applicable to governmental activities of $43.5 million are
reported in the Risk Management and Employee Benefits Trust funds (internal service funds). The claims
are actuarial estimates for the County’s self-insured portion of future claims for general litigation related to
torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; natural
disasters; and certain health benefits that are paid through the operations of the funds. Additional
information regarding long-term liabilities can be found in the Notes to the Financial Statements (Note 12 –
Long-Term Liabilities and Note 16 – Risk Management).
Economic Factors and Next Year’s Budget and Rates
·  Maricopa County’s economy is improving, but at a modest rate, according to many of the local
economists. “It may take a few months before we are on the upward side of the business cycle,”
according to Elliott D. Pollack & Company, economist for the County. “Now that the war in Iraq is
over and front-page headlines are no longer focused on war terrorism, the economy should begin
expanding again.”
·  The population in Maricopa County continues to increase while local employment is making a
slight comeback and retail sales started to pick up after 2002. The unemployment rate in the
metropolitan Phoenix region for June 2003 was 5.2 percent, which remains below both the state
(5.9%) and national average (6.4%). The growth in spending and economic output is strong
enough to virtually force the business community to increase hiring to meet the demand. Many
corporate firms that are already based here are growing, which is contributing thousands more
jobs. Forecasts show that Arizona’s economy will add more than 82,000 jobs in fiscal year 2004.
·  As reported by the U.S. Census Bureau, Maricopa County was second in the nation in gaining
residents from April 2000 to July 2002. According to a statewide economic study prepared by
Eller College of Business and Public Administration at the University of Arizona, they expect
population to grow at 2.3 percent per year and employment to increase at 2.9 percent.
·  Benefits of Maricopa County that are contributing factors of improving the economy included
quality of life, cost of living, a skilled work force, good universities and a favorable business
climate. Phoenix, a major city within Maricopa County, was ranked 2nd in the 5th annual
“America’s 50 Hottest Cities” report, published in the January 2003 issue of Expansion
Management magazine.
As part of the annual budget planning process, the County’s Office of Management and Budget developed
a financial forecast to assist in both short and long range financial planning. This forecast provides a
conservative estimate of the County’s fiscal condition through the next five years given a realistic
economic forecast, current Board policies and existing laws. The forecast was instrumental in the
determination of the fiscal year 2004 budget and tax rate. It was based on the following assumptions:
·  The Maricopa Integrated Health System (MIHS) will transition to a Special Health Care District.
The voters of Maricopa County approved this district on November 4, 2003.
Maricopa County
Management’s Discussion and Analysis
17
·  The extension of the Jail Excise Tax (propositions 400 and 401) was approved by the voters of
Maricopa County in the November 2002 election. The tax will fund the operation costs of the new
jail and juvenile detention facilities.
Even though the growth and demand for services is high and the economy is somewhat slow, continued
fiscal discipline has allowed for the property rate to be held flat for the fiscal year 2004 budget, versus an
undesirable increase in the tax rate. This is the second year in a row, out of the last four budget years,
that the property tax overall rate has not increased in line with the Board of Supervisor’s County Strategic
Plan to reduce the overall property tax rate for Maricopa County property owners. For fiscal year 2004,
the tax rate was held flat at $1.5448.
In addition, the financial position of the Medical Center continued to decline during fiscal year 2003 and it
is not expected to improve in the upcoming year. Subsidies from the General Fund for cash flow
purposes for fiscal year 2004 are likely to continue. As discussed earlier, a significant event to note for the
Maricopa Integrated Health System is that on November 4, 2003, the voters of Maricopa County approved
proposition 414. This proposition will allow for the transition of the Maricopa Integrated Health System to a
taxpayer-supported Health Care District with a separately elected Board of Directors.
At the end of the fiscal year, unreserved fund balance for the General Fund was $288.8, or 50 percent of
total General Fund expenditures. Unreserved fund balance increased by almost 16 percent from the prior
year. This is due to actual revenues in excess of actual expenditures. In accordance with A.R.S., the
entire amount will be budgeted in the next fiscal year. A.R.S. §42-17151 requires that total estimated
sources of revenue must equal the total estimated expenditures in the budget for the current fiscal year.
The estimated expenditures may include an amount for unanticipated contingencies or emergencies, per
A.R.S. §42-17102.
Request for Information
This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with
a general overview of the County’s finances and to demonstrate the County’s accountability for the money
it receives. If you have any questions about this report or need additional financial information, please
contact Maricopa County Department of Finance, 301 W. Jefferson, Suite 960, Phoenix, AZ 85003, or at
www.maricopa.gov.
18
Financial Section
Basic Financial Statements
Basic Financial Statements
Maricopa County
Definitions of Government-wide Financial Statements and
Listing of Major Funds
21
Government-wide Financial Statements
The Statement of Net Assets presents information on all of Maricopa County’s assets and liabilities, with
the difference between the two reported as net assets.
The Statement of Activities presents information showing how the government’s 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.
The above two statements are presented utilizing the following types of activities:
Governmental Activities – generally are financed through taxes and intergovernmental revenues.
Business-type Activities – are financed in whole or in part by fees charged to external parties.
Major Funds
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.
Special Revenue Funds
Jail Operations Fund – was established under the authority of propositions 400 and 401, which were
passed in the General Election of November 3, 1998. These propositions authorized a temporary 1/5 of
one-cent sales tax to be used for the construction and operation of adult and juvenile detention facilities.
The voters approved the extension of the 1/5 of one-cent sales tax in the General Election on November
5, 2002. The extension shall be levied beginning in the month following the expiration of the previous tax
as approved by the voters in 1998. The Jail Operations Fund accounts for the receipt of tax revenue, jail
operations expenditures, and transfers to the Jail Construction Fund for construction of the adult and
juvenile detention facilities.
Debt Service Funds
General Obligation Fund – accounts for debt service on all various purpose general obligation bonds.
Funding is provided by the County’s secondary property tax revenues, which may be used only for debt
service.
Lease Revenue Fund – accounts for the debt service on the Lease Revenue Bonds, Series 2001.
Funding is provided by transfers from the General Fund.
Capital Projects Funds
Jail Construction Fund – accounts for the proceeds associated with the temporary 1/5 of one-cent sales
tax approved by voters in the General Election on November 3, 1998. The proceeds are for the
construction and operation of adult and juvenile detention facilities. The voters approved the extension of
the 1/5 of one-cent sales tax in the General Election on November 5, 2002. The extension shall be levied
beginning in the month following the expiration of the previous tax as approved by the voters in 1998. The
Jail Construction Fund receives transfers from the Jail Operations Fund for construction of the adult and
juvenile detention facilities.
County Improvement Fund – accounts for capital projects funded through the issuance of the Lease
Revenue Bonds, Series 2001.
Maricopa County
Definitions of Government-wide Financial Statements and
Listing of Major Funds (Continued)
22
Enterprise Funds
Medical Center Fund – provides quality, cost competitive health care and health professional education
to assure the health security of individuals, families, and the community.
Maricopa Health Plan Fund – is an ambulatory health care plan operated by Maricopa Managed Care
Systems (MMCS). MMCS contracts with the Arizona Health Care Cost Containment System (AHCCCS)
which provides monthly capitation revenues based on Maricopa County Health Plan enrollment.
Arizona Long-Term Care System (ALTCS) Fund – is a managed care, long term care plan operated by
Maricopa Managed Care Systems (MMCS). Chronically ill and physically disabled patients receive
medical services as a result of an annual contract with the Arizona Health Care Cost Containment System
(AHCCCS).
Maricopa County
Statement of Net Assets
June 30, 2003
23
PRIMARY GOVERNMENT
GOVERNMENTAL BUSINESS-TYPE
ACTIVITIES ACTIVITIES TOTAL
ASSETS
Cash in bank and on hand $ 13,361,139 $ 500 $ 13,361,639
Cash and investments held by County Treasurer 609,254,885 86,030,766 695,285,651
Receivables (net of allowances for uncollectibles) 14,212,150 70,968,071 85,180,221
Internal balances 47,285,472 (47,285,472)
Due from other governmental units 125,860,981 859,890 126,720,871
Inventories 7,397,054 6,239,319 13,636,373
Prepaids 1,752,545 19,361,191 21,113,736
Deferred costs 4,218,130 4,218,130
Miscellaneous 2,586,828 916,988 3,503,816
Cash and investments held by trustee - restricted 48,412,452 7,409,965 55,822,417
Capital assets:
Land 237,197,018 2,909,679 240,106,697
Buildings 793,585,551 105,281,734 898,867,285
Machinery and equipment 161,950,953 92,723,390 254,674,343
Infrastructure 413,157,611 413,157,611
Construction in progress 447,058,232 7,379,859 454,438,091
(Accumulated depreciation) (292,530,586) (101,278,752) (393,809,338)
Total assets 2,634,760,415 251,517,128 2,886,277,543
LIABILITIES
Accounts payable and other current liabilities 61,698,680 26,080,505 87,779,185
Employee compensation payable 44,921,842 7,860,874 52,782,716
Accrued interest payable 3,791,374 967,765 4,759,139
Medical claims payable 47,885,262 47,885,262
Deferred revenue 18,048,428 18,048,428
Due to other governmental units 9,574,797 3,109,748 12,684,545
Deposits held for other parties 767,410 767,410
Noncurrent liabilities:
Due within one year 63,942,957 4,184,433 68,127,390
Due in more than one year 227,427,895 35,281,698 262,709,593
Total liabilities 430,173,383 125,370,285 555,543,668
NET ASSETS
Invested in capital assets, net of related debt 1,529,060,770 75,738,774 1,604,799,544
Restricted for:
General government 6,323,836 6,323,836
Public safety 85,761,123 85,761,123
Highways and streets 29,657,875 29,657,875
Health, welfare and sanitation 6,132,132 36,587,613 42,719,745
Culture and recreation 15,306,014 15,306,014
Education 867,024 867,024
Capital projects 67,433,897 3,183,671 70,617,568
Debt service 22,554,000 4,226,294 26,780,294
Other purposes 248,513 248,513
Unrestricted 441,241,848 6,410,491 447,652,339
Total net assets $ 2,204,587,032 $ 126,146,843 $ 2,330,733,875
The notes to the financial statements are an integral part of this statement.
Maricopa County
Statement of Activities
For the Fiscal Year Ended June 30, 2003
24
Program Revenues
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
Functions/Programs
Primary government:
Governmental activities:
General government $ 181,265,791 $ 26,357,344 $ 1,253,971 $ 154,255
Public safety 506,600,904 71,880,262 106,337,449
Highways and streets 51,016,886 1,563,228 83,101,971 44,071,461
Health, welfare and sanitation 335,607,743 24,243,241 99,981,028
Culture and recreation 27,488,028 8,461,408 692,387 96,555
Education 17,386,261 2,714,129 13,556,678
Interest on long-term debt 11,446,165
Total governmental activities 1,130,811,778 135,219,612 304,923,484 44,322,271
Business-type activities:
Medical Center 366,425,283 334,310,122 5,688,257
Arizona Health Care Cost Containment System (AHCCCS) Plan 109,142,148 115,846,532
Arizona Long-Term Care System (ALTCS) Plan 232,991,015 240,083,167
Other business-type activities 76,620,753 70,625,061 1,271,175
Total business-type activities 785,179,199 760,864,882 6,959,432
Total primary government $ 1,915,990,977 $ 896,084,494 $ 311,882,916 $ 44,322,271
General revenues:
Taxes:
Property taxes, levied for general purposes
Property taxes, levied for debt service
Share of state sales taxes
Sales tax – Jail construction and operation
Surcharge tax - Stadium District
Vehicle license tax
Grants and contributions not restricted to specific programs
Unrestricted investment earnings
Gain on disposal of capital assets
Miscellaneous
Transfers
Total general revenues and transfers
Change in net assets
Net assets, beginning, as restated
Net assets, ending
The notes to the financial statements are an integral part of this statement.
25
Net (Expense) Revenue and
Changes in Net Assets
Primary Government
Governmental Business-Type
Activities Activities Total
$ (153,500,221) $ $ (153,500,221)
(328,383,193) (328,383,193)
77,719,774 77,719,774
(211,383,474) (211,383,474)
(18,237,678) (18,237,678)
(1,115,454) (1,115,454)
(11,446,165) (11,446,165)
(646,346,411) (646,346,411)
(26,426,904) (26,426,904)
6,704,384 6,704,384
7,092,152 7,092,152
(4,724,517) (4,724,517)
(17,354,885) (17,354,885)
(646,346,411) (17,354,885) (663,701,296)
350,299,114 350,299,114
19,708,786 19,708,786
330,260,143 330,260,143
98,932,138 98,932,138
5,240,032 5,240,032
110,603,659 110,603,659
1,725,495 1,725,495
16,507,950 2,594,524 19,102,474
13,346,055 13,346,055
3,061,600 3,061,600
(16,531,668) 16,531,668
933,153,304 19,126,192 952,279,496
286,806,893 1,771,307 288,578,200
1,917,780,139 124,375,536 2,042,155,675
$ 2,204,587,032 $ 126,146,843 $ 2,330,733,875
Maricopa County
Balance Sheet
Governmental Funds
June 30, 2003
26
JAIL GENERAL
GENERAL OPERATIONS OBLIGATION
ASSETS
Cash in bank and on hand $ 83,443 $ $
Cash and investments held by County Treasurer 182,251,580 17,279,590 20,899,179
Receivables 8,126,115 116,786 545,103
Due from other funds 68,736,718
Due from other governmental units 67,082,759 20,001,645
Inventories 3,585,799 355,283
Miscellaneous 413,405 1,454
Cash and investments held by trustee - restricted 3,287,721
Total assets $ 333,567,540 $ 37,754,758 $ 21,444,282
LIABILITIES AND FUND BALANCES
Liabilities:
Vouchers payable $ 13,467,310 $ 2,164,889 $
Employee compensation payable 5,636,830 1,672,201
Accrued liabilities 928,909 62,115
Due to other funds 15,540,587
Due to other governmental units 3,391
Interest payable 998,675
Bonds payable 19,350,000
Special assessment debt with governmental commitment
Deferred revenue 5,336,769 373,261
Deposits held for other parties
Total liabilities 40,910,405 3,902,596 20,721,936
Fund balances:
Reserved for:
Inventories 3,585,799 355,283
Capital lease expenditures 248,513
Debt service 722,346
Unreserved, reported in:
General fund 288,822,823
Special revenue funds 33,496,879
Capital projects funds
Debt service funds
Total fund balances 292,657,135 33,852,162 722,346
Total liabilities and fund balances $ 333,567,540 $ 37,754,758 $ 21,444,282
Amounts reported for governmental activities in the Statement of Net Assets are different because:
Capital assets used in governmental activities are not financial resources and therefore, are not reported in the funds.
Other assets are not available to pay for current period expenditures and therefore, are deferred in the funds.
Internal service funds are used by management to charge the costs of equipment services, telecommunications, reprographics, risk
management, employee benefits, and the sheriff warehouse to individual funds. The assets and liabilities of the internal service funds
are included in governmental activities in the Statement of Net Assets.
Some long-term liabilities and compensated absences are not due and payable shortly after June 30, 2003, therefore, are not reported in the funds.
Net assets of governmental activities
The notes to the financial statements are an integral part of this statement.
27
OTHER TOTAL
LEASE JAIL COUNTY GOVERNMENTAL GOVERNMENTAL
REVENUE CONSTRUCTION IMPROVEMENT FUNDS FUNDS
$ $ $ $ 12,392,773 $ 12,476,216
81,157,946 23,905,991 49,866,036 196,978,002 572,338,324
218,875 134,415 1,981,476 11,122,770
4,132 68,740,850
38,776,577 125,860,981
1,709,428 5,650,510
1,350,670 1,765,529
29,131,444 15,978,873 48,398,038
$ 110,508,265 $ 23,905,991 $ 50,000,451 $ 269,171,931 $ 846,353,218
$ $ 13,833,867 $ 915,028 $ 24,615,690 $ 54,996,784
45,497 3,368,018 10,722,546
74 1,621,239 2,612,337
4,391,753 19,932,340
9,571,406 9,574,797
2,382,939 15,656 3,397,270
13,527,577 32,877,577
31,643 31,643
29,738,123 35,448,153
767,410 767,410
15,910,516 13,879,364 915,102 74,120,938 170,360,857
1,709,428 5,650,510
248,513
12,923,320 8,908,334 22,554,000
288,822,823
123,114,682 156,611,561
10,026,627 49,085,349 61,318,549 120,430,525
81,674,429 81,674,429
94,597,749 10,026,627 49,085,349 195,050,993 675,992,361
$ 110,508,265 $ 23,905,991 $ 50,000,451 $ 269,171,931
1,758,304,217
20,399,725
(5,814,133)
(244,295,138)
$ 2,204,587,032
Maricopa County
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2003
28
JAIL GENERAL
GENERAL OPERATIONS OBLIGATION
REVENUES
Taxes $ 296,323,891 $ 98,932,138 $ 19,708,786
Licenses and permits 52,000
Intergovernmental 440,832,307 19,129,664
Charges for services 25,932,255 16,228
Fines and forfeits 11,940,885
Special assessments
Miscellaneous 11,678,713 925,522 210,517
Total revenues 786,760,051 119,003,552 19,919,303
EXPENDITURES
Current:
General government 110,396,669
Public safety 237,321,515 131,196,526
Highways and streets
Health, welfare and sanitation 209,451,773
Culture and recreation 1,646,491
Education 1,638,798
Debt service:
Principal 19,350,000
Interest 1,997,350
Capital outlay 17,508,693 4,001,320
Total expenditures 577,963,939 135,197,846 21,347,350
Excess (deficiency) of revenues over expenditures 208,796,112 (16,194,294) (1,428,047)
OTHER FINANCING SOURCES (USES)
Transfers in 15,657,059 120,866,924 1,376,476
Transfers out (190,737,330) (98,138,712)
Capital lease agreements 4,321,656
Total other financing sources (uses) (170,758,615) 22,728,212 1,376,476
Net changes in fund balances 38,037,497 6,533,918 (51,571)
Fund balances (deficit) at beginning of year 254,122,264 27,226,636 773,917
Increase (decrease) in reserve for inventories 497,374 91,608
Fund balances at end of year $ 292,657,135 $ 33,852,162 $ 722,346
The notes to the financial statements are an integral part of this statement.
29
OTHER TOTAL
LEASE JAIL COUNTY GOVERNMENTAL GOVERNMENTAL
REVENUE CONSTRUCTION IMPROVEMENT FUNDS FUNDS
$ $ $ $ 59,911,647 $ 474,876,462
28,140,974 28,192,974
285,735,747 745,697,718
40,551,124 66,499,607
4,385,910 16,326,795
3,625,508 3,625,508
2,657,424 1,082,830 43,344,206 59,899,212
2,657,424 1,082,830 465,695,116 1,395,118,276
3,845,313 114,241,982
124,917,073 493,435,114
44,226,114 44,226,114
122,300,757 331,752,530
17,742,306 19,388,797
15,629,214 17,268,012
13,527,577 1,193,816 34,071,393
4,765,878 3,660,557 10,423,785
171,303,888 7,528,148 115,246,084 315,588,133
18,293,455 171,303,888 7,528,148 448,761,234 1,380,395,860
(15,636,031) (171,303,888) (6,445,318) 16,933,882 14,722,416
98,138,712 224,916 149,765,591 386,029,678
(113,685,304) (402,561,346)
4,321,656
98,138,712 224,916 36,080,287 (12,210,012)
(15,636,031) (73,165,176) (6,220,402) 53,014,169 2,512,404
110,233,780 83,191,803 55,305,751 142,682,121 673,536,272
(645,297) (56,315)
$ 94,597,749 $ 10,026,627 $ 49,085,349 $ 195,050,993 $ 675,992,361
Maricopa County
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds to the
Statement of Activities
For the Fiscal Year Ended June 30, 2003
30
Net change in fund balances – total governmental funds (page 29) $ 2,512,404
Amounts reported for governmental activities in the Statement of Activities pages 24
– 25 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. This is the amount by which
capital outlays exceeded depreciation in the current period. 282,026,016
The net effect of various miscellaneous transactions involving capital assets (i.e.,
sales, trade-ins, and donations) is to decrease net assets. (50,278,733)
Revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the funds. 5,023,615
The issuance of long-term debt (e.g., bonds, leases) provides current financial
resources to governmental funds, while the repayment of the principal of long-term
debt consumes the current financial resources of governmental funds. Neither
transaction, however, has any effect on net assets. Also, governmental funds report
the effect of issuance costs, premiums, discounts, and similar items when debt is first
issued, whereas these amounts are deferred and amortized in the Statement of
Activities. This amount is the net effect of these differences in the treatment of long-term
debt and related items. 38,926,570
Some expenses reported in the Statement of Activities do not require the use of
current financial resources and, therefore, are not reported as expenditures in
governmental funds. 2,903,294
Internal service funds are used by management to charge the costs of equipment
services, telecommunications, reprographics, risk management, employee benefits,
and the sheriff warehouse to individual funds. The net revenue of internal service
funds is reported with governmental activities. 5,693,727
Change in net assets of governmental activities (page 25) $ 286,806,893
The notes to the financial statements are an integral part of this statement.
31
Maricopa County
Statement of Net Assets
Proprietary Funds
June 30, 2003
32
BUSINESS-TYPE ACTIVITIES -
ENTERPRISE FUNDS
MEDICAL MARICOPA
CENTER HEALTH PLAN ALTCS
ASSETS
Current assets:
Cash in bank and on hand $ $ $
Cash and investments held by County Treasurer 18,800,194 50,804,780
Receivables:
Accounts (net of allowances) 50,767,141 9,567,508 8,740,757
Accrued interest 61,696 156,753
Due from other funds 19,352,062
Due from other governmental units 859,890
Inventories 6,239,319
Prepaids 1,391,167 6,173,830 7,122,570
Miscellaneous 913,044
Total current assets 79,522,623 34,603,228 66,824,860
Noncurrent assets:
Restricted:
Cash and investments held by trustee 7,409,965
Capital assets:
Land 1,722,193
Buildings 105,218,172
Machinery and equipment 80,490,874 3,383,336 6,209,834
Construction in progress 7,379,859
Less accumulated depreciation (92,395,670) (3,383,336) (2,796,838)
Total noncurrent assets 109,825,393 3,412,996
Total assets 189,348,016 34,603,228 70,237,856
LIABILITIES
Current liabilities:
Vouchers payable 13,831,938 358,389 760,407
Employee compensation payable 7,847,001
Accrued liabilities 6,757,595 1,548,635 1,026,457
Interest payable 759,841
Due to other funds 47,285,472 6,333,433 15,540,587
Due to other governmental units 3,109,748
Medical claims payable 12,753,478 26,519,089
Accrued interest 207,924
Leases payable (current portion)
Installment purchase agreements (current portion) 534,639
Certificates of participation (current portion) 809,000
Lease revenue bonds payable (current portion) 2,657,423
Liability for reported and incurred but not reported claims (current portion)
Liability for closure and postclosure costs (current portion)
Total current liabilities 83,800,581 20,993,935 43,846,540
Noncurrent liabilities:
Leases payable
Installment purchase agreements 1,815,885
Certificates of participation 9,968,000
Lease revenue bonds payable 15,328,821
Liability for reported and incurred but not reported claims
Liability for postclosure costs
Total noncurrent liabilities 27,112,706
Total liabilities 110,913,287 20,993,935 43,846,540
NET ASSETS
Invested in capital assets, net of related debt 71,301,660 3,412,996
Restricted for debt service 4,226,294
Restricted for construction 3,183,671
Restricted for health care 13,609,293 22,978,320
Restricted for self-insurance
Unrestricted (deficit) (276,896)
Total net assets $ 78,434,729 $ 13,609,293 $ 26,391,316
The notes to the financial statements are an integral part of this statement.
33
GOVERNMENTAL
OTHER ACTIVITIES -
ENTERPRISE INTERNAL SERVICE
FUNDS TOTALS FUNDS
$ 500 $ 500 $ 884,923
16,425,792 86,030,766 36,916,561
1,626,708 70,702,114
47,508 265,957 99,692
2,521,958 21,874,020
859,890
6,239,319 1,746,544
4,673,624 19,361,191 1,752,545
3,944 916,988 821,299
25,300,034 206,250,745 42,221,564
7,409,965 14,414
1,187,486 2,909,679
63,562 105,281,734 323,649
2,639,346 92,723,390 5,362,806
7,379,859
(2,702,908) (101,278,752) (3,571,893)
1,187,486 114,425,875 2,128,976
26,487,520 320,676,620 44,350,540
901,313 15,852,047 3,756,373
13,873 7,860,874 578,755
895,771 10,228,458 338,169
759,841
69,159,492 1,523,038
3,109,748
8,612,695 47,885,262
207,924
123,148
534,639
63,375 872,375
2,657,423
16,819,635
119,996 119,996
10,607,023 159,248,079 23,139,118
350,515
1,815,885
99,993 10,067,993
15,328,821
26,675,040
8,068,999 8,068,999
8,168,992 35,281,698 27,025,555
18,776,015 194,529,777 50,164,673
1,024,118 75,738,774 1,640,899
4,226,294
3,183,671
36,587,613
(9,622,187)
6,687,387 6,410,491 2,167,155
$ 7,711,505 $ 126,146,843 $ (5,814,133)
Maricopa County
Statement of Revenues, Expenses, and Changes in Fund Net Assets
Proprietary Funds
For the Fiscal Year Ended June 30, 2003
34
BUSINESS-TYPE ACTIVITIES -
ENTERPRISE FUNDS
MEDICAL MARICOPA
CENTER HEALTH PLAN ALTCS
OPERATING REVENUES
Net patient service revenue $ 306,974,222 $ $
Charges for services 20,094,148 115,846,532 240,083,167
Miscellaneous 7,241,752
Total operating revenues 334,310,122 115,846,532 240,083,167
OPERATING EXPENSES
Personal services 156,456,778 4,003,110 12,642,905
Supplies 50,087,558 880,593 1,220,212
Medical services 25,001,527 103,346,055 215,831,416
Other services 26,611,793 38,451 219,691
Legal
Insurance 57,875
Leases and rentals 2,482,053 90,654 780,907
Repairs and maintenance 5,271,230
Travel and transportation
Utilities 4,159,343
Provision for doubtful accounts 56,179,229
Indigent patient direct write-offs 21,386,311
Depreciation 13,888,691 7,539 438,635
Miscellaneous 2,085,529 775,746 1,857,249
Total operating expenses 363,667,917 109,142,148 232,991,015
Operating income (loss) (29,357,795) 6,704,384 7,092,152
NONOPERATING REVENUES (EXPENSES)
Grant revenues 5,688,257
Investment income 36,355 446,020 1,578,045
Interest expense (2,757,366)
Loss on disposal of capital assets
Total nonoperating revenues (expenses) 2,967,246 446,020 1,578,045
Income (loss) before contributions and transfers (26,390,549) 7,150,404 8,670,197
Capital contributions
Transfers in 36,040,262
Transfers out (759,693) (6,333,433) (15,540,587)
Change in net assets 8,890,020 816,971 (6,870,390)
Total net assets (deficit) – beginning, as restated 69,544,709 12,792,322 33,261,706
Total net assets (deficit) – ending $ 78,434,729 $ 13,609,293 $ 26,391,316
The notes to the financial statements are an integral part of this statement.
35
GOVERNMENTAL
OTHER ACTIVITIES -
ENTERPRISE INTERNAL SERVICE
FUNDS TOTALS FUNDS
$ $ 306,974,222 $
70,574,419 446,598,266 63,925,589
50,642 7,292,394 492,975
70,625,061 760,864,882 64,418,564
3,305,075 176,407,868 6,826,904
534,934 52,723,297 8,861,562
69,998,699 414,177,697
1,069,150 27,939,085 2,971,828
177,481 177,481 4,708,769
823,517 881,392 24,975,242
147,444 3,501,058 1,675,306
5,271,230 2,385,516
429 429 64,191
10,063 4,169,406 4,999,477
56,179,229
21,386,311
73,866 14,408,731 666,681
468,719 5,187,243
76,609,377 782,410,457 58,135,476
(5,984,316) (21,545,575) 6,283,088
1,271,175 6,959,432
534,104 2,594,524 718,643
(11,376) (2,768,742) (62,012)
(350,212)
1,793,903 6,785,214 306,419
(4,190,413) (14,760,361) 6,589,507
23,550
3,208,421 39,248,683
(83,302) (22,717,015) (919,330)
(1,065,294) 1,771,307 5,693,727
8,776,799 124,375,536 (11,507,860)
$ 7,711,505 $ 126,146,843 $ (5,814,133)
Maricopa County
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2003
36
BUSINESS-TYPE ACTIVITIES -
ENTERPRISE FUNDS
MEDICAL MARICOPA
CENTER HEALTH PLAN ALTCS
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from contractors, patients and other payors $ 256,454,101 $ 113,012,175 $ 235,107,869
Charges for services
Other receipts
Payments for goods and services (105,291,697) (112,556,254) (229,153,724)
Payments for personal services (155,450,963) (4,003,110) (12,642,905)
Net cash provided by (used for) operating activities (4,288,559) (3,547,189) (6,688,760)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Advances from General Fund 47,285,472
Grant receipts 6,828,859
Cash transfers from other funds 18,546,823
Cash transfers to other funds (759,693)
Interest payments (1,485,221)
Loan payments to General Fund (56,905,273)
Net cash provided by (used for) noncapital financing activities 13,510,967
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Purchase of capital assets (5,496,546) (1,708,512)
Capital lease payments
Certificates of participation payments (769,000)
Lease revenue bond payments (2,513,756)
Installment purchase contract payments (493,433)
Interest payments on long-term debt (879,853)
Proceeds from capital lease
Proceeds from sale of capital assets
Net cash used for capital and related financing activities (10,152,588) (1,708,512)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest and dividends 36,355 471,770 2,041,618
Net cash provided by investing activities 36,355 471,770 2,041,618
Net increase (decrease) in cash and cash equivalents (893,825) (3,075,419) (6,355,654)
Cash and cash equivalents, July 1, 2002 8,303,790 21,875,613 57,160,434
Cash and cash equivalents, June 30, 2003 $ 7,409,965 $ 18,800,194 $ 50,804,780
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY
(USED FOR) OPERATING ACTIVITIES
Operating income (loss) $ (29,357,795) $ 6,704,384 $ 7,092,152
Adjustments to reconcile operating income (loss) to net cash
provided by (used for) operating activities
Depreciation expense 13,888,691 7,539 438,635
Provision for doubtful accounts 56,179,229
Indigent patient direct write-offs 21,386,311
Liability for reported and incurred but not reported claims – noncurrent
Net change in liability for postclosure costs - noncurrent
Changes in assets and liabilities:
Accounts receivable (78,106,021) (2,834,357) (4,975,298)
Due from other funds 250,000
Inventories 197,602
Prepaids 1,773,366 (5,106,709) (7,122,570)
Miscellaneous (146,199)
Vouchers payable 1,369,352 79,571 (1,659,698)
Employee compensation payable 1,005,815
Accrued liabilities 4,936,390 (1,011,722) 159,758
Due to other governmental units 2,334,700
Medical claims payable (1,385,895) (621,739)
Liability for reported and incurred but not reported claims – current
Liability for closure and postclosure costs - current
Net cash provided by (used for) operating activities $ (4,288,559) $ (3,547,189) $ (6,688,760)
SCHEDULE OF NONCASH INVESTING, CAPITAL AND NONCAPITAL FINANCING ACTIVITIES
Allowance for uncollectible accounts $ 52,288,299 $ $
Accounts receivable write-offs (52,288,299)
Buildings constructed 19,121,135
Construction in progress completed (19,121,135)
Accumulated depreciation from disposed capital assets
Machinery and equipment disposed
Loss on disposal of capital assets
Proceeds from sale of capital assets
Capital asset acquired through trade-in
Building acquired 28,613
Machinery and equipment acquired 873,657
Vouchers payable (666,128)
Installment purchase contracts payable (236,142)
Accumulated depreciation transferred to County-wide capital assets
Transfer out capital assets to County-wide capital assets
Capital assets transferred to County-wide capital assets
Capital contributions
Accumulated depreciation transferred from County-wide capital assets
Capital assets transferred from County-wide capital assets
Due from other County funds 19,352,062
Transfers from other County funds (19,352,062)
Transfers to other County funds 6,333,433 15,540,587
Due to other County funds (6,333,433) (15,540,587)
Deletion of buildings due to change in capitalization policy (404,893)
Deletion of machinery and equipment due to change in capitalization policy (10,311,277) (1,582,446) (769,187)
Deletion of accumulated depreciation due to change in capitalization policy 8,405,789 1,582,446 714,214
Restatement of July 1, 2002, net assets for change in capitalization policy 2,310,381 54,973
The notes to the financial statements are an integral part of this statement.
37
GOVERNMENTAL
OTHER ACTIVITIES -
ENTERPRISE INTERNAL SERVICE
FUNDS TOTALS FUNDS
$ $ 604,574,145 $
69,391,998 69,391,998 63,156,738
50,642 50,642 546,922
(78,270,746) (525,272,421) (52,242,709)
(3,303,947) (175,400,925) (6,772,449)
(12,132,053) (26,656,561) 4,688,502
47,285,472 1,523,038
1,271,175 8,100,034
686,463 19,233,286
(83,302) (842,995)
(1,485,221) (54,886)
(56,905,273) (1,556,050)
1,874,336 15,385,303 (87,898)
(7,205,058) (1,478,172)
(65,147)
(59,151) (828,151)
(2,513,756)
(493,433)
(11,376) (891,229) (7,126)
440,000
21,610
(70,527) (11,931,627) (1,088,835)
717,245 3,266,988 806,807
717,245 3,266,988 806,807
(9,610,999) (19,935,897) 4,318,576
26,037,291 113,377,128 33,497,322
$ 16,426,292 $ 93,441,231 $ 37,815,898
$ (5,984,316) $ (21,545,575) $ 6,283,088
73,866 14,408,731 666,681
56,179,229
21,386,311
(3,552,899)
3,607,793 3,607,793
(1,182,421) (87,098,097)
250,000
197,602 (133,420)
(4,673,624) (15,129,537) 749,738
(146,199) (821,299)
(568,757) (779,532) (3,237,186)
1,128 1,006,943 54,455
463,333 4,547,759 103,233
2,334,700
(333,117) (2,340,751)
4,576,111
(3,535,938) (3,535,938)
$ (12,132,053) $ (26,656,561) $ 4,688,502
$ $ 52,288,299 $
(52,288,299)
19,121,135
(19,121,135)
138,231 138,231 706,827
(138,231) (138,231) (1,080,049)
350,212
21,610
1,400
28,613
873,657
(666,128)
(236,142)
141,032
919,330
(1,060,362)
(23,550)
(47,231)
70,781
2,521,958 21,874,020
(2,521,958) (21,874,020)
21,874,020
(21,874,020)
(404,893)
(50,273) (12,713,183)
50,273 10,752,722
2,365,354
Maricopa County
Statement of Fiduciary Net Assets
Fiduciary Funds
June 30, 2003
38
INVESTMENT AGENCY
TRUST FUNDS FUNDS
Assets
Cash in bank and on hand $ $ 28,996,193
Cash and investments held by County Treasurer 1,293,482,059 52,820,831
Receivables 1,293,981
Accrued interest receivable 3,488,376
Total assets 1,296,970,435 83,111,005
Liabilities
Due to other governmental units 4,600,250
Deposits held for other parties 78,510,755
Total liabilities $ 83,111,005
Net Assets
Held in trust for investment participants $ 1,296,970,435
The notes to the financial statements are an integral part of this statement.
Maricopa County
Statement of Changes in Fiduciary Net Assets
Fiduciary Funds
For the Fiscal Year Ended June 30, 2003
39
INVESTMENT
TRUST FUNDS
Additions:
Contributions from participants $ 9,441,131,872
Investment income:
Interest income 21,483,766
Net decrease in fair value of investments (1,126,507)
Net investment earnings 20,357,259
Total additions 9,461,489,131
Deductions:
Distributions to participants 9,352,697,658
Total deductions 9,352,697,658
Change in net assets 108,791,473
Net assets – beginning 1,188,178,962
Net assets – ending $ 1,296,970,435
The notes to the financial statements are an integral part of this statement.
40
Financial Section
Basic Financial Statements - Notes
Basic Financial Statements - Notes
Maricopa County
Listing of Basic Financial Statement Notes
43
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 2 REPORTING CHANGES
NOTE 3 BEGINNING BALANCES RESTATED
NOTE 4 RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS
NOTE 5 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
NOTE 6 DEPOSITS AND INVESTMENTS
NOTE 7 CONDENSED FINANCIAL STATEMENTS OF COUNTY TREASURER’S
INVESTMENT POOL
NOTE 8 RECEIVABLES
NOTE 9 DUE FROM OTHER GOVERNMENTAL UNITS
NOTE 10 CAPITAL ASSETS
NOTE 11 CONSTRUCTION AND OTHER SIGNIFICANT COMMITMENTS
NOTE 12 LONG-TERM LIABILITIES
NOTE 13 MUNICIPAL LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS
NOTE 14 MUNICIPAL REVOLVING LINE OF CREDIT AND IRREVOCABLE STANDBY
LETTER OF CREDIT
NOTE 15 OPERATING LEASES
NOTE 16 RISK MANAGEMENT
NOTE 17 EMPLOYEE RETIREMENT PLANS
NOTE 18 INTERFUND BALANCES AND ACTIVITY
NOTE 19 DISPROPORTIONATE SHARE SETTLEMENT
NOTE 20 MEDICAL CENTER FUND’S OPERATING REVENUES
NOTE 21 SUBSEQUENT EVENTS
Maricopa County
Notes to the Financial Statements
For the Fiscal Year Ended June 30, 2003
44
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of Maricopa County conform to generally accepted accounting principles
applicable to governmental units adopted by the Governmental Accounting Standards Board (GASB).
A. Reporting Entity
Maricopa County is a general purpose local government 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 combined 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.
The reporting entity is thus comprised of the primary government, Maricopa County Flood Control
District, Maricopa County Library District, Maricopa County Public Finance Corporation, Maricopa
County Special Assessment Districts, Maricopa County Stadium District, and the Maricopa County
Street Lighting Districts.
The blended component units are as follows:
Maricopa County Flood Control District
The Maricopa County Flood Control District is a legally separate entity that provides flood control
facilities and regulates floodplains and drainage to prevent flooding of property in Maricopa County.
As the County Board of Supervisors serves as the Board of Directors of the Flood Control District, the
District is considered a component unit of the County.
Maricopa County Library District
The Library District is a legally separate entity that provides and maintains library services for the
residents of Maricopa County. As the County Board of Supervisors serves as the Board of Directors
of the Library District, the District is considered a component unit of the County.
Maricopa County Public Finance Corporation
Maricopa County Public Finance Corporation is a nonprofit corporation created by the Maricopa
County Board of Supervisors that exists solely for the purpose of assisting the County in the
acquisition, construction, and improvement of County facilities, including real property and personal
property. The Board of Directors of the Public Finance Corporation is subject to the approval of the
County Board of Supervisors and the corporation exists solely to benefit the County, therefore, the
corporation is considered a component unit of the County. The corporation issued certificates of
participation and lease revenue bonds that evidence undivided proportionate interests in rent
payments to be made under the lease agreements, with an option to purchase, between Maricopa
County and the Corporation. Since this debt is in substance the County’s obligation, these liabilities
and resulting assets are reported on the County’s financial statements.
Notes to the Financial Statements
(Continued)
45
Maricopa County Special Assessment Districts
The Special Assessment Districts are legally separate entities that provide improvements to various
properties within the County. As the County Board of Supervisors serves as the Board of Directors of
the Maricopa County Special Assessment Districts, the Districts are considered a component unit of
the County.
Maricopa County Stadium District
The Stadium District is a legally separate entity that provides regional leadership and fiscal resources
to assure the presence of Major League Baseball in Maricopa County. As the County Board of
Supervisors serves as the Board of Directors of the Maricopa County Stadium District, the District is
considered a component unit of the County.
Maricopa County Street Lighting Districts
The Street Lighting Districts are legally separate entities that provide street lighting in areas of the
County that are not under local city jurisdictions. As the County Board of Supervisors serves as the
Board of Directors of the Maricopa County Street Lighting Districts, the Districts are considered a
component unit of the County.
Complete financial statements of the Maricopa County Stadium District may be obtained at the entity’s
administrative office listed below:
Maricopa County Stadium District
Bank One Ballpark
401 East Jefferson
Phoenix, Arizona 85004
Separate financial statements of the remaining blended component units are not prepared.
Related Organization
The Industrial Development Authority of Maricopa County (Authority) is a legally separate entity that
was created to assist in the financing of commercial and industrial enterprises; safe, sanitary, and
affordable housing; and healthcare facilities. The Authority fulfills its function through the issuance of
tax exempt or taxable revenue bonds. The County Board of Supervisors appoints the Authority’s
Board of Directors. The Authority’s operations are completely separate from the County and the
County is not financially accountable for the Authority. Therefore, the financial activities of the
Authority have not been included in the accompanying financial statements.
B. Basis of Presentation
The basic financial statements include both government-wide statements and fund financial
statements. The government-wide statements focus on the County as a whole, while the fund
financial statements focus on major funds. Each presentation provides valuable information that can
be analyzed and compared between years and between governments to enhance the usefulness of
the information.
Government-wide financial 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. They also distinguish between the governmental and business-type activities of
the County. Governmental activities generally are financed through taxes and intergovernmental
revenues. Business-type activities are financed in whole or in part by fees charged to external parties.
Notes to the Financial Statements
(Continued)
46
The statement of activities presents a comparison between direct expenses and program revenues
for each function of the County’s governmental activities and segment of its business-type activities.
Direct expenses are those that are specifically associated with a program or function and, therefore,
are clearly identifiable to a particular function. The County allocates indirect expenses to programs or
functions. 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.
Revenues that are not classified as program revenues, including internally dedicated resources and all
County levied taxes or taxes not levied by the County that are not restricted to a specific program, 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 doing so would distort the direct costs and program
revenues reported by the departments concerned.
Fund financial statements – provide information about the County’s funds, including fiduciary funds
and blended component units. Separate statements are presented for the governmental, proprietary,
and fiduciary fund categories. The emphasis of fund financial statements is on major governmental
and enterprise funds, each displayed in a separate column. All remaining governmental and
enterprise funds are aggregated and reported as nonmajor funds. Fiduciary funds are aggregated
and reported by fund type.
Proprietary fund operating revenues, such as charges for services, result from transactions
associated with the fund’s principal activity in which each party receives and gives up essentially equal
values. Nonoperating revenues, such as subsidies and investment earnings, result from transactions
in which the parties do not exchange equal values. Revenues generated by ancillary activities are
also reported as nonoperating revenues.
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 Jail Operations Fund – was established under the authority of propositions 400 and 401, which
were passed in the General Election of November 3, 1998. These propositions authorized a
temporary 1/5 of one-cent sales tax to be used for the construction and operation of adult and juvenile
detention facilities. The voters approved the extension of the 1/5 of one-cent sales tax in the General
Election on November 5, 2002. The extended tax shall be levied beginning in the month following the
expiration of the previous tax as approved by the voters in 1998. The Jail Operations Fund accounts
for the receipt of tax revenue, jail operations expenditures, and transfers to the Jail Construction Fund
for construction of the adult and juvenile detention facilities.
The General Obligation Fund – accounts for debt service on all various purpose general obligation
bonds. Funding is provided by the County’s secondary property tax revenues, which may be used
only for debt service.
The Lease Revenue Fund – accounts for the debt service on the Lease Revenue Bonds, Series 2001.
Funding is provided by transfers from the General Fund.
Notes to the Financial Statements
(Continued)
47
The Jail Construction Fund – accounts for the proceeds associated with the temporary 1/5 of one-cent
Sales Tax approved by voters in the General Election on November 3, 1998. The proceeds are for
the construction and operation of adult and juvenile detention facilities. The voters approved the
extension of the 1/5 of one-cent sales tax in the General Election on November 5, 2002. The
extended tax shall be levied beginning in the month following the expiration of the previous tax as
approved by the voters in 1998. The Jail Construction Fund receives transfers from the Jail
Operations Fund for construction of the adult and juvenile detention facilities.
The County Improvement Fund – accounts for capital projects funded through the issuance of the
Lease Revenue Bonds, Series 2001.
The County reports the following major enterprise funds:
The Medical Center Fund – accounts for the operations of the Maricopa Medical Center which
provides quality, cost competitive health care and health professional education to assure the health
security of individuals, families, and the community.
The Maricopa Health Plan Fund – is an ambulatory health care plan operated by Maricopa Managed
Care System (MMCS). MMCS contracts with the Arizona Health Care Cost Containment System
(AHCCCS) which provides monthly capitation revenues based on Maricopa Health Plan (MHP)
enrollment.
The Arizona Long-Term Care System (ALTCS) Fund – is a managed care, long term care plan
operated by Maricopa Managed Care Systems (MMCS). Chronically ill and physically disabled
patients receive medical services as a result of an annual contract with the Arizona Health Care Cost
Containment System (AHCCCS).
The County reports the following fund types:
The internal service funds – account for automotive maintenance and service, telecommunications
services, printing and duplicating services, insurance services, self-insured employee benefits, and
warehouse services provided to County departments or to other governments 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 as an agent for the State and various local
governments, and for the property taxes collected and distributed to the State, local school districts,
community college districts and special districts.
C. Basis of Accounting
The government-wide, proprietary fund, and fiduciary fund financial statements are presented using
the economic resources measurement focus and the accrual basis of accounting. 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