Mohave County annual financial report: fiscal year ended June 30,...

              Buster Johnson
District 3 Supervisor
Pete Byers
District 1 Supervisor
Tom Sockwell
District 2 Supervisor
Ron Walker
County Manager
Prepared by the Mohave County Office of Financial Services
John Timko
Financial Services DirectorMOHAVE COUNTY
Annual Financial Report
Year Ended June 30, 2002
TABLE OF CONTENTS
Independent Auditors’ Report............................................................................................1
Combined Balance Sheet - All Fund Types and Account Groups................................2 - 3
Combined Statement of Revenues, Expenditures, and Changes in
Fund Balances - All Governmental Fund Types.........................................................4
Combined Statement of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual - All Governmental Fund Types..................5 - 7
Combined Statement of Revenues, Expenses, and Changes in Retained
Earnings/Fund Equity – All Proprietary Fund Types..................................................8
Combined Statement of Cash Flows – All Proprietary Fund Types .................................9
Combining Statement of Net Assets – Investment Trust Funds.......................................10
Combining Statement of Changes in Net Assets - Investment Trust Funds.....................11
Table of Contents of Notes to Financial Statements........................................................12 Notes to Financial Statements................................................................................................13 – 32HEINFELD,MEECH&CO.,P.C.
CERTIFIED PUBLIC ACCOUNTANTS
3003 N. Central Avenue, Suite 1175
Phoenix. Arizona 85012
Gary Heinfeld, CPA, CGFM (6(02) 277–9449
Nancy A. Meedi, CPA, CGFM Fax (602) 277-9297 Jennifer L. Shields, CPA C. Christopher Arvizu, CHA www.hcinfeldmecch.com
INDEPENDENT AUDITORS' REPORT
The Auditor General of the State of Arizona
The Board of Supervisors of Mohave County, Arizona
We have audited the accompanying general-purpose financial statements of Mohave County as of and for the year ended June 30, 2002, as listed in the table of contents. These general-purpose financial statements are the responsibility of Mohave County's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
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 general-purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general-purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general-purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of Mohave County as of June 30, 2002, and the results of its operations, the cash flows of its proprietary fund types, and the net assets and changes in net assets of its investment trust funds for the year then ended in conformity with U.S. generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated December 12, 2002, on our consideration of Mohave County's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. 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.
HEINFELD, MEECH & CO., P.C. Certified Public Accountants
December 12, 2002
- 1 -
- 2 -
Governmental Fund TypesSpecial DebtCapitalGeneralRevenueServiceProjectsAssets Cash and investments 8,886,668$ 31,585,137$ 2,091,974$ 11,399,117$ Cash and investments held by trustees2,387,699 Receivables (net of allowances for uncollectibles): Property taxes2,341,934991,58230,580 Accounts393,743832,614 Accrued interest22,42253,8306,41122,431 Special assessments2,090,659 Due from: Other funds 289,7311,377,56680,380 Other governments1,273,1003,145,027408,760 Inventories258,197 Prepaid items21,58332,924280 Fixed assets: Land Infrastructure Buildings Accumulated depreciation Improvements other than buildings Machinery and equipment Accumulated depreciation Construction in progress (estimated cost to complete $ 10,765,000 ) Amount available in Debt Service Funds Amount to be provided for retirement of general long-term debt Total assets13,229,181$ 38,276,877$ 6,687,983$ 11,830,308$ Liabilities and Fund Equity Liabilities: Accrued liabilities407,182$ 2,907,406$ 44,418$ Accrued payroll and employee benefits917,041761,758 Due to: Other funds62,820559,1991,000,000$ 91,380 Other governments10,18420,855 Deposits held for others142,248129,584 Claims and judgements payable Obligations under capital leases Landfill closure and postclosure care costs payable Special assessment bonds with governmental commitment payable Certificates of participation: Principal payable1,135,000 Interest payable302,833 Deferred revenues3,519,909882,0842,121,191 Total liabilities5,059,3845,260,8864,559,024135,798 Fund equity and other credits: Contributed capital Investment in general fixed assets Retained earnings: Unreserved Fund balances: Reserved for inventories258,197 Reserved for investment trust participants Unreserved8,169,79732,757,7942,128,95911,694,510 Total fund equity and other credits8,169,79733,015,9912,128,95911,694,510 Total liabilities and fund equity13,229,181$ 38,276,877$ 6,687,983$ 11,830,308$ See accompanying notes to financial statements.June 30, 2002Combined Balance Sheet - All Fund Types and Account GroupsMOHAVE COUNTY- 3 -
MOHAVE COUNTY
Combined Balance Sheet - All Fund Types and Account Groups
June 30, 2002
Proprietary Fiduciary
Fund Types Fund Types Account Groups
Internal Trust and General General Long- Totals
Enterprise Service Agency Fixed Assets Term Debt (Memorandum Only)
Assets
Cash and investments $ 6 ,035,976 $ 4 1,325,619 $ 101,324,491
Cash and investments held by trustees 2,387,699
Receivables (net of allowances for uncollectibles):
Property taxes 3,364,096
Accounts $ 141,230 490 1,368,077
Accrued interest 13,730 2,763 121,587
Special assessments 2,090,659
Due from:
Other funds 60,187 1,807,864
Other governments 139 854 4,827,880
Inventories 200,732 10,013 468,942
Prepaid items 30,378 85,165
Fixed assets:
Land $ 24,310,430 24,310,430
Infrastructure 6,338,294 6,338,294
Buildings 47,123 31,911,822 31,958,945
Accumulated depreciation (110,483) (21,891) (132,374)
Improvements other than buildings 1,091,749 1,091,749
Machinery and equipment 25,748 8,848,352 17,628,621 26,502,721
Accumulated depreciation (5,927) (6,196,984) (6,202,911)
Construction in progress (estimated
cost to complete $ 10,765,000 ) 5,185,902 5,185,902
Amount available in Debt Service Funds $ 2,128,959 2,128,959
Amount to be provided for retirement of general
long-term debt 18,924,185 18,924,185
Total assets $ 6,589,733 $ 8,828,228 $ 41,328,382 $ 80,128,524 $ 21,053,144 $ 227,952,360
Liabilities and Fund Equity
Liabilities:
Accrued liabilities $ 87,262 $ 9 2,351 $ 866 $ 3,539,485
Accrued payroll and employee benefits 13,596 115,541 $ 1,969,938 3,777,874
Due to:
Other funds 30,636 63,829 1,807,864
Other governments 31,039
Deposits held for others 5,000 308,876 585,708
Claims and judgements payable 642,829 642,829
Obligations under capital leases 87,740 52,464 140,204
Landfill closure and postclosure care costs payable 2,100,742 2,100,742
Special assessment bonds with governmental
commitment payable 7,160,000 7,160,000
Certificates of participation:
Principal payable 9,770,000 10,905,000
Interest payable 302,833
Deferred revenues 6,523,184
Total liabilities 136,494 1,002,290 309,742 21,053,144 37,516,762
Fund equity and other credits:
Contributed capital 2,697,293 2,697,293
Investment in general fixed assets $ 80,128,524 80,128,524
Retained earnings:
Unreserved 6,453,239 6,453,239
Fund balances:
Reserved for inventories 258,197
Reserved for investment trust participants 41,018,640 41,018,640
Unreserved 5,128,645 59,879,705
Total fund equity and other credits 6,453,239 7,825,938 41,018,640 80,128,524 190,435,598
Total liabilities and fund equity $ 6,589,733 $ 8 ,828,228 $ 4 1,328,382 $ 80,128,524 $ 21,053,144 $ 227,952,360
See accompanying notes to financial statements.
- 4 -MOHAVE COUNTYCombined Statement of Revenues, Expenditures, and Changes in Fund Balances All Governmental Fund Types Year Ended June 30, 2002 Special Debt CapitalTotalsGeneral Revenue Service Projects(Memorandum Only)Revenues: Taxes19,381,433$ 8,589,994$ 27,971,427$ Special assessments1,325,982$ 2,386,421$ 3,712,403 Licenses and permits626,84521,479648,324 Intergovernmental20,043,96623,378,5154,446,47247,868,953 Charges for services4,783,9569,480,30214,264,258 Fines and forfeits1,197,07558,7811,255,856 Investment income285,071969,951182,730307,8321,745,584 Rents66,65296,200162,852 Contributions35,570 292,026327,596 Miscellaneous190,5181,414,0338,8001,613,351 Total revenues46,611,08644,301,2811,508,7127,149,52599,570,604Expenditures: Current: General government20,396,4793,451,64923,848,128 Public safety11,947,9835,073,73217,021,715 Highways and streets12,836,39412,836,394 Sanitation696,023696,023 Health8,075,4443,340,36711,415,811 Welfare4,579,3494,579,349 Culture and recreation3,860,6903,860,690 Education256,2153,090,4103,346,625 Capital outlay4,780,1404,780,140 Debt service: Principal retirement3,148,0003,148,000 Interest and fiscal charges939,744939,744 Total expenditures40,676,12136,928,6144,087,7444,780,14086,472,619Excess of revenues over (under) expenditures5,934,9657,372,667(2,579,032)2,369,38513,097,985Other financing sources (uses): Operating transfers in2,947,9891,342,2711,006,101150,0005,446,361 Operating transfers out(3,922,040)(506,998)(2,889,710)(7,318,748) Proceeds from sale of bonds4,909,0004,909,000 Proceeds of sale of County property427,500427,500 Total other financing sources (uses)(546,551)835,2731,006,1012,169,2903,464,113Excess of revenues and other sources over (under) expenditures and other uses5,388,4148,207,940(1,572,931)4,538,67516,562,098Fund balances, July 1, 2001, as restated2,781,38324,789,8164,226,6047,155,83538,953,638Residual equity transfers in (out)(524,714)(524,714)Increase in reserve for inventory of supplies18,23518,235Fund balances, June 30, 20028,169,797$ 33,015,991$ 2,128,959$ 11,694,510$ 55,009,257$ See accompanying notes to financial statements. Governmental Fund Types5
MOHAVE COUNTY
Combined Statement of Revenues, Expenditures, and Changes in Fund Balances
Budget and Actual - All Governmental Fund Types
Year Ended June 30, 2002
General Fund Special Revenue Funds
Budget Actual Variance Budget Actual Variance
Revenues:
Taxes $ 1 8,445,649 $ 19,381,433 $ 935,784 $ 8,574,786 $ 8,589,993 $ 15,207
Licenses and permits 569,533 626,845 57,312 30,000 21,479 (8,521)
Intergovernmental 19,742,780 20,043,966 301,186 24,864,592 23,378,516 (1,486,076)
Charges for services 3,991,813 4,783,956 792,143 9,302,973 9,480,302 177,329
Fines and forfeits 1,102,196 1,197,075 94,879 37,000 58,781 21,781
Investment income 312,048 285,071 (26,977) 829,950 969,951 140,001
Rents 64,252 66,652 2,400 95,000 96,200 1,200
Contributions 35,570 35,570 459,496 292,026 (167,470)
Miscellaneous 243,451 190,518 (52,933) 7,725,165 1,414,033 (6,311,132)
Total revenues 44,471,722 46,611,086 2,139,364 51,918,962 44,301,281 (7,617,681)
Expenditures:
Current:
General government 23,148,859 20,396,479 2,752,380 8,069,340 3,451,649 4,617,691
Public safety 12,583,031 11,947,983 635,048 7,701,487 5,073,732 2,627,755
Highways and streets 32,116,257 12,836,394 19,279,863
Sanitation 6,044,363 696,023 5,348,340
Health 8,078,800 8,075,444 3,356 4,928,051 3,340,367 1,587,684
Welfare 5,665,166 4,579,349 1,085,817
Culture and recreation 4,891,591 3,860,690 1,030,901
Education 256,240 256,215 25 4,791,067 3,090,410 1,700,657
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures 44,066,930 40,676,121 3,390,809 74,207,322 36,928,614 37,278,708
Excess of revenues over (under) expenditures 404,792 5,934,965 5,530,173 (22,288,360) 7,372,667 29,661,027
Other financing sources (uses):
Operating transfers in 2,609,906 2,947,989 338,083 2,006,533 1,342,271 (664,262)
Operating transfers out (4,257,085) (3,922,040) 335,045 (1,097,307) (506,998) 590,309
Proceeds from sale of bonds
Certificate of Participation Proceeds 6,040,000 (6,040,000)
Proceeds of sale of County property 427,500 427,500
Proceeds from sale of bonds
Total other financing sources (uses) (1,647,179) (546,551) 1,100,628 6,949,226 835,273 (6,113,953)
Excess of revenues and other sources over
(under) expenditures and other uses (1,242,387) 5,388,414 6,630,801 (15,339,134) 8,207,940 23,547,074
Fund balances, July 1, 2001, as restated 2,781,383 2,781,383 24,791,554 24,789,816 (1,738)
Residual equity transfer out
Increase in reserve for inventory of supplies 18,235 18,235
Fund balances, June 30, 2002 $ 1,538,996 $ 8,169,797 $ 6 ,630,801 $ 9,452,420 $ 3 3,015,991 $ 23,563,571
(Continued)
See accompanying notes to financial statements.
6MOHAVE COUNTYCombined Statement of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual - All Governmental Fund TypesYear Ended June 30, 2002(Continued)Debt Service FundsCapital Projects Funds BudgetActualVarianceBudgetActualVarianceRevenues: Special assessments1,564,404$ 1,325,982$ (238,422)$ 2,180,399$ 2,386,421$ 206,022$ Intergovernmental3,000,0004,446,4721,446,472 Charges for services Investment income203,664182,730(20,934)38,000307,832269,832 Contributions Miscellaneous8,8008,800 Total revenues1,768,0681,508,712(259,356)5,218,3997,149,5251,931,126Expenditures: Capital outlay12,903,8204,780,1408,123,680 Proceeds from sale of bonds Assessment refund Principal retirement2,098,0003,148,000(1,050,000) Interest and fiscal charges3,784,317939,7442,844,573 Total expenditures5,882,3174,087,7441,794,57312,903,8204,780,1408,123,680Excess of revenues over (under) expenditures(4,114,249)(2,579,032)1,535,217(7,685,421)2,369,38510,054,806Other financing sources (uses): Operating transfers in1,216,6581,006,101(210,557)708,772150,000(558,772) Operating transfers out(113,227)(2,889,710)(2,776,483) Proceeds from sale of bonds4,500,0004,909,000409,000 Certificate of Participation Proceeds Proceeds of Sale of County property Total other financing sources (uses)1,216,6581,006,101(210,557)5,095,5452,169,290(2,926,255)Excess of revenues and other sources over (under) expenditures and other uses(2,897,591)(1,572,931)1,324,660(2,589,876)4,538,6757,128,551Fund balances, July 1, 2001, as restated4,226,6044,226,6047,155,8357,155,835Residual equity transfer in (out)(524,714)(524,714)Increase in reserve for inventory of suppliesFund balances, June 30, 20021,329,013$ 2,128,959$ 799,946$ 4,565,959$ 11,694,510$ 7,128,551$ (Continued)See accompanying notes to financial statements.7
MOHAVE COUNTY
Combined Statement of Revenues, Expenditures, and Changes in Fund Balances
Budget and Actual - All Governmental Fund Types
Year Ended June 30, 2002
Totals
(Memorandum Only)
Budget Actual Variance
Revenues:
Taxes $ 2 7,020,435 $ 2 7,971,426 $ 9 50,991
Special assessments 3,744,803 3,712,403 (32,400)
Licenses and permits 599,533 648,324 48,791
Intergovernmental 47,607,372 47,868,954 261,582
Charges for services 13,294,786 14,264,258 969,472
Fines and forfeits 1,139,196 1,255,856 116,660
Investment income 1,383,662 1,745,584 361,922
Rents 159,252 162,852 3,600
Contributions 459,496 327,596 (131,900)
Miscellaneous 7,968,616 1,613,351 (6,355,265)
Total revenues 103,377,151 99,570,604 (3,806,547)
Expenditures:
Current:
General government 31,218,199 23,848,128 7,370,071
Public safety 20,284,518 17,021,714 3,262,804
Highways and streets 32,116,257 12,836,394 19,279,863
Sanitation 6,044,363 696,023 5,348,340
Health 13,006,851 11,415,811 1,591,040
Welfare 5,665,166 4,579,349 1,085,817
Culture and recreation 4,891,591 3,860,690 1,030,901
Education 5,047,307 3,346,626 1,700,681
Capital outlay 12,903,820 4,780,140 8,123,680
Debt service:
Assessment refund
Principal retirement 2,098,000 3,148,000 (1,050,000)
Interest and fiscal charges 3,784,317 939,744 2,844,573
Total expenditures 137,060,389 86,472,619 50,587,771
Excess of revenues over (under) expenditures (33,683,238) 13,097,985 46,781,224
Other financing sources (uses):
Operating transfers in 6,541,869 5,446,361 (1,095,508)
Operating transfers out (5,467,619) (7,318,748) (1,851,129)
Proceeds from sale of bonds 4,500,000 4,909,000 409,000
Certificate of Participation Proceeds 6,040,000 (6,040,000)
Proceeds of sale of County property 427,500 427,500
Total other financing sources (uses) 11,614,250 3,464,113 (8,150,137)
Excess of revenues and other sources over
(under) expenditures and other uses (22,068,988) 16,562,098 38,631,086
Fund balances, July 1, 2001, as restated 38,955,376 38,953,638 (1,738)
Residual equity transfers in (out) (524,714) (524,714)
Increase in reserve for inventories 18,235 18,235
Fund balances, June 30, 2002 $ 1 6,886,388 $ 5 5,009,257 $ 3 8,122,869
See accompanying notes to financial statements.
(Concluded)
8InternalCombinedEnterprise ServiceTotalsFundsFunds(Memorandum Only)Operating revenues: Charges for services699,320$ 7,710,382$ 8,409,702$ Miscellaneous175,62028,071 203,691 Total operating revenues874,9407,738,453 8,613,393Operating expenses: Personal services119,5231,309,491 1,429,014 Supplies8,999339,141 348,140 Professional services100,583268,649 369,232 Communication3,076431,899 434,975 Insurance18,741 18,741 Insurance claims4,034,280 4,034,280 Lawsuit judgements142,510 142,510 Repairs and maintenance7,007288,983 295,990 Public utility service513,7574,053 517,810 Rents and leases321443,318 443,639 Depreciation115,954723,426 839,380 Other2,867299,167 302,034 Total operating expenses872,0878,303,658 9,175,745 Operating income (loss)2,853(565,205) (562,352) Nonoperating revenues (expenses): Investment income3,648167,954 171,602 Loss on disposal of fixed assets(35,428) (35,428) Total (net) nonoperating revenues (expenses)3,648132,526 136,174 Income (loss) before operating transfers6,501(432,679) (426,178)Residual equity transfer in524,714 524,714Operating transfers in2,144,299 2,144,299Operating transfers out(271,912) (271,912) Net income (loss)531,2151,439,708 1,970,923 Assets contributed by other agencies304,600 304,600Retained Earnings / Fund equity, July 1, 20015,922,0246,081,630 12,003,654Retained Earnings / Fund equity, June 30, 20026,453,239$ 7,825,938$ 14,279,177$ See accompanying notes to financial statements. MOHAVE COUNTY Combined Statement of Revenues, Expenses, and Changes in Retained Earnings / Fund Equity All Proprietary Fund Types Year Ended June 30, 20029
MOHAVE COUNTY
Combined Statement of Cash Flows - All Proprietary Fund Types
Year Ended June 30, 2002
Internal
Enterprise
Service
Fund
Funds
Cash flows from operating activities:
Operating income (loss)
$ 2,853
$ (565,205)
Adjustments to reconcile operating income (loss) to net cash
provided (used for) operating activities:
Depreciation
115,954
723,426
Changes in assets and liabilities:
Increase in:
Accounts receivable
(44,116)
Accrued interest receivable
(863)
Due from other governments
(139)
(854)
Inventories
(10,013)
Prepaid items
(14,726)
Accrued liabilities
34,341
Accrued payroll and employee benefits
9,653
Due to other funds
30,636
37,115
Due to other governments
(89)
Decrease in:
Accounts receivable
5,526
Accrued interest receivable
1,609
Due from other funds
29,558
Accrued liabilities
(25,448)
Accrued payroll and employee benefits
(1,121)
Claims and judgements payable
(14,721)
Obligations under capital leases
(238,137)
Net cash provided (used for) operating activities
150,702
(75,463)
Cash flows from noncapital financing activities:
Residual equity transfer in
524,714
Operating transfers in
2,144,299
Operating transfers out
(271,912)
Net cash provided (used for) noncapital financing activities
524,714
1,872,387
Cash flows from capital and related financing activities:
Acquisition of capital assets
(843,570)
(277,299)
Proceeds from sale of County property
81,566
Net cash used for capital financing activities
(843,570)
(195,733)
Cash flows from investing activities:
Interest and dividends received on investments
3,648
167,953
Net cash provided by investing activities
3,648
167,953
Net increase (decrease) in cash and cash equivalents
(164,506)
1,769,144
Cash and Investments, July 1, 2001
164,506
4,266,833
Cash and Investments, June 30, 2002
$ 0
$ 6,035,977
Noncash capital and related financing activities:
Contributed capital
$ 304,600
$ -
$ 304,600 MOHAVE COUNTYCombining Statement of Net Assets - Investment Trust FundsYear Ended June 30, 2002Treasurer'sIndividualInvestmentInvestmentPoolAccountsTotalAssets Cash and investments39,542,986$ 1,472,891$ 41,015,877$ Interest and dividends receivable2,763 2,763 Due from other funds Total assets39,545,749$ 1,472,891$ 41,018,640$ Liabilities Total liabilities Net assets held in trust39,545,749$ 1,472,891$ 41,018,640$
10
11
MOHAVE COUNTY
Combining Statement of Changes in Net Assets - Investment Trust Funds
Year Ended June 30, 2002
Treasurer's
Individual
Investment
Investment
Pool
Accounts
Total
Additions:
Contributions from participants
$ 369,864,091
$ 5,982,360
$ 375,846,451
Investment income:
Interest and dividend income
685,990
43,087
729,077
Total additions
370,550,081
6,025,447
376,575,528
Deductions:
Distributions to participants
(369,084,261)
(6,856,571)
(375,940,832)
Total deductions
(369,084,261)
(6,856,571)
(375,940,832)
Net increase (decrease) in net assets
1,465,820
(831,124)
634,696
Net assets held in trust:
July 1, 2001
38,079,929
2,304,015
40,383,944
June 30, 2002
$ 39,545,749
$ 1,472,891
$ 41,018,640 Table of Contents NOTE 1 Summary of Significant Accounting Policies A. Reporting Entity B. Fund Accounting 1. Governmental Funds 2. Proprietary Funds 3. Fiduciary Funds 4. Account Groups C. Basis of Accounting D. Budgeting and Budgetary Control E. Cash Equivalents and Investments F. Inventories G. Fixed Assets H. Compensated Absences I. Investment Income J. Property Taxes K. Intergovernmental Grants and Aid L. Total Column (Memorandum Only) NOTE 2 Excess of Expenditures Over Appropriations/Individual Fund Deficits NOTE 3 Deposits and Investments NOTE 4 Property Taxes Receivable NOTE 5 Due From Other Governments NOTE 6 Changes in General Fixed Assets NOTE 7 Bonds Payable NOTE 8 Certificates of Participation Payable NOTE 9 Obligations Under Leases NOTE 10 Landfill Closure and Postclosure Care Costs NOTE 11 Risk Management NOTE 12 Interfund Receivables and Payables NOTE 13 Changes in Long-Term Liabilities NOTE 14 Retirement Plans NOTE 15 County Treasurer’s Investment Pool NOTE 16 Prior Period Adjustments NOTE 17 Implementation of GASB Statement No. 34 NOTE 18 Subsequent Events
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Note 1 - Summary of Significant Accounting Policies The accounting policies of Mohave County conform to generally accepted accounting principles applicable togovernmental units adopted by the Governmental Accounting Standards Board (GASB). A summary of the County's more significant accounting policies follow. The County's major operations include general government, public safety, highway and street maintenanceand construction, sanitation, health, welfare, culture and recreation, and education. In addition, the County operates eight internal service activities: a motor vehicle transportation service, an air transportation service,a central services, a communications service, information technology service, a janitorial service, a healthinsurance service, and a self-insurance service. The County also operates a water company which is reportedas an enterprise fund. A. Reporting Entity Mohave County is a general-purpose local government that is governed by a separately elected board of threecounty supervisors. These general-purpose financial statements present all the fund types and account groupsof the County (a 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 theCounty'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 combinedfinancial statements to emphasize that they are legally separate from the County. Each blended componentunit discussed below has a June 30 year-end. The County has no discretely presented component units. Blended component units are special districts, which have been established to serve unique needs. Thesespecial districts consist of various improvement districts, a Library District, a Television District, and a FloodControl District. The financial data for these districts is included in the financial statements of theappropriate fund type (i.e., in the Special Revenue, Debt Service, and Capital Projects Funds) of the County.Although these special districts are legally separate entities from the County, the Board of Supervisors of theCounty serves as the Board of Directors of these entities. Separate financial statements of the blendedcomponent units are not prepared. Under the provisions of Arizona Revised Statutes (A.R.S.) §15-365, the Mohave County School Superintendent's Office was established and oversees the Mohave County Educational Services Cooperative(M.E.S.C.), an independently managed purchasing cooperative for school-related equipment and services.The M.E.S.C. primarily serves school districts, however, other governmental entities in the State can purchasethrough the cooperative. All entities purchasing through the cooperative's contracts are required to pay theirmonies to the cooperative, which then distributes the money to the appropriate vendors. The County actsmerely as the conduit between the purchaser and the vendor and is not obligated in any manner for the debtresulting from those purchases. Therefore, except for amounts held in an agency capacity by the County Treasurer at June 30, 2002, the accompanying financial statements do not report such monies collected ordisbursed to vendors. However, entities outside Mohave County pay a 1 percent administrative fee whichhelps to cover the cost of M.E.S.C. operations, and the accompanying financial statements do report suchadministrative fee revenues and the operating expenditures of M.E.S.C. in the Special Revenue Funds.
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Note 1 - Summary of Significant Accounting Policies (Cont’d.) 3. Fiduciary Funds account for assets the County holds on behalf of others, and include the following fundtypes: The Investment Trust Funds account for investments made by the County on behalf of other governmentalentities using the economic resources measurement focus. The Agency Fund is custodial in nature and does not present results of operations or have a measurement focus. This fund is used to account for assets that the County holds for others in an agency capacity. 4. Account Groupsare used to establish control and accountability for certain County assets and liabilities thatare not recorded in the funds and include the following two groups: The General Fixed Assets Account Groupaccounts for all fixed assets of the County, except those accounted forin Proprietary Funds. The General Long-Term Debt Account Group accounts for all of the County’s long-term obligations, except those accounted for in Proprietary Funds. C. Basis of Accounting The financial statements of the Governmental and Agency Funds are presented on the modified accrual basis ofaccounting. Revenues are recognized when they become measurable and available to finance current-period expenditures. Expenditures are recognized when the related fund liability is incurred, except for principal andinterest on general long-term debt that are recognized when due. However, since debt service resources areprovided during the current year for payment of general long-term debt principal and interest due early in the following year, those expenditures and related liabilities have been recognized in the Debt Service Funds. Revenues susceptible to accrual are property taxes; franchise taxes; special assessments; licenses and permits;intergovernmental aid, grants, and reimbursements; interest revenue; charges for services; and sales taxescollected and held by the State at year-end on the County’s behalf. Fines and forfeits, rents, contributions, andmiscellaneous revenues are not susceptible to accrual because generally they are not measurable until receivedin cash. The financial statements of the Proprietary and Investment Trust Funds are presented on the accrual basis of accounting. Revenues are recognized when they are earned, and expenses are recognized when they areincurred. D. Budgeting and Budgetary Control Arizona Revised Statutes (A.R.S.) require the County to prepare and adopt a balanced budget annually for each separate fund. The Board of Supervisors must approve such operating budgets on or before the third Monday inJuly to allow sufficient time for the legal announcements and hearings required for the adoption of the property tax levy on the third Monday in August. A.R.S. prohibit expenditures or liabilities in excess of the amountsbudgeted. Essentially the County prepares its budget on the same modified accrual basis of accounting used to recordactual revenues and expenditures.
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Note 1 - Summary of Significant Accounting Policies (Cont’d.) The County has adopted budgets in accordance with the A.R.S. requirements for the General, Special Revenue,Debt Service, and Capital Projects Funds. Formal budget integration is not employed for the Internal Service and Enterprise Funds because effective budgetary control is alternatively achieved through the capability of costrecovery. Expenditures may not legally exceed appropriations at the department level. In certain instances, transfers ofappropriations between departments or from the contingency account to a department may be made uponapproval of the Board of Supervisors. The Board of Supervisors made one supplementary budget appropriationto a governmental fund, other than the General Fund, during the year, resulting in an overall increase inrevenues and expenditures of $200,000. Encumbrance accounting, under which purchase orders, contracts, and other commitments to expend monies arerecorded to reserve that portion of the applicable fund balance, is employed as an extension of formal budgetarycontrol. Encumbrances outstanding at year-end for goods or services that were not received before fiscal year-end are canceled. However, the County may draw warrants against encumbered amounts for goods or servicesreceived but unpaid at June 30 for 60 days immediately following the close of the fiscal year. After 60 days theremaining encumbered balances lapse. E. Cash Equivalents and Investments For purposes of its statement of cash flows, the County considers all cash and investments to be cashequivalents. Nonparticipating interest-earning investment contracts are stated at cost. All other investments are stated at fairvalue. F. Inventories Inventories of the Governmental Funds consist of expendable supplies held for consumption and are recorded asexpenditures at the time of purchase. Amounts on hand at year-end are shown on the balance sheet as an asset for informational purposes only and are offset by a fund balance reserve to indicate that they do not constitute"available spendable resources." These inventories are stated at cost using the first-in, first-out method. Inventories of the Proprietary Funds are recorded as assets when purchased and expensed when consumed. These inventories are stated at cost using the first-in, first-out method. G. Fixed Assets Purchased fixed assets capitalized in the General Fixed Assets Account Group are recorded at the time ofpurchase as expenditures in the funds from which the expenditures were made. Such assets are capitalized atcost plus any ancillary charges. Donated fixed assets are capitalized at their estimated fair market value at thetime received. Depreciation on general fixed assets is not recorded, and interest incurred during construction is not capitalized.Also, public domain (infrastructure) general fixed assets consisting of certain improvements other thanbuildings, such as roads, bridges, curbs and gutters, streets and sidewalks, and drainage and lighting systems are not capitalized.
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Note 1 - Summary of Significant Accounting Policies (Cont’d.) Purchased fixed assets of the Proprietary Fundsare capitalized in those funds at cost plus any ancillarycharges. Major outlays for assets or improvements to them are capitalized as projects are constructed. Interestincurred during the construction phase of the project is capitalized net of interest earned on the investedproceeds over the same period. Donated fixed assets are capitalized at their estimated fair market value at thetime received. Depreciation of fixed assets in the Proprietary Funds is charged as an expense against operations.These assets are depreciated over their estimated useful lives using the straight-line method. The estimateduseful lives are as follows: Buildings 30 years Machinery and equipment 3-10 years Infrastructure 25-50years H. Compensated Absences Compensated absences consist of vested sick leave and accrued PersonalTime Off (PTO) earned by employees who have completed the required probationary period of employment (either 6 or 12 months) depending on thejob classification. Employees may accumulate up to a maximum of 240 hours of PTO. Any unused PTO hours at year-end, in excess of the maximum allowed, are forfeited. The entire liability for vested compensated absences of theGovernmental Funds is recorded in the General Long-Term Debt Account Group since the amount expected tobe paid from current financial resources is not significant. Vested compensated absences of the ProprietaryFunds are recorded as expenses and liabilities of those funds, as the benefits accrue to employees. I. Investment Income Investment income is composed of interest, dividends, and net changes in the fair value of applicable investments. J. Property Taxes Property taxes are recognized as revenues in the fiscal year they are levied and collected or if they are collectedwithin 30 days subsequent to fiscal year-end. Property taxes not collected within 30 days subsequent to fiscal year-end or collected in advance of the fiscal year for which they are levied are reported as deferred revenues. K. Intergovernmental Grants and Aid Grants and assistance awards made on the basis of entitlement periods are recorded as intergovernmentalreceivables and revenues when entitlement occurs. Reimbursement grants for the acquisition of fixed assets ofProprietary Fund Types are recorded as intergovernmental receivables and contributed capitalwhen the related expense is incurred. All other reimbursement grants are recorded as intergovernmental receivables and revenueswhen the related expenditures or expenses are incurred. Reimbursements not received within 60 dayssubsequent to fiscal year-end are reported as deferred revenues.
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Note 1 - Summary of Significant Accounting Policies (Concl’d.) L. Total Column (Memorandum Only) The total column on the combined statements is captioned “Memorandum Only” to indicate that it is presentedonly to facilitate financial analysis. Data in this column does not present financial position, results ofoperations, or cash flows in conformity with generally accepted accounting principles. Neither is such datacomparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Note 2 – Excess of Expenditures over Appropriations/Individual Fund Deficits Excess of Expenditures over Appropriations in Individual Funds One General Fund department had excess of expenditures over appropriations: Superior Courts, $5,770. Deficit Fund Balance/Retained Earnings in Individual Funds The Judge Pro Tempore (Special Revenue Fund) had a deficit fund balance of $1. Central Services andJanitorial Services (Internal Service Funds) had deficit fund equity balances of $5,070 and $4,553 respectively,at June 30, 2002. Flight Services, Central Services, Communications and Janitorial services (Internal ServiceFunds) had deficit unreserved retained earnings of $476,226, $5,215, $141,604, and $4,553, respectively. Most of these funds had deficits carried forward from prior years. All deficits, with the exception of Communicationsand Flight Services, are expected to be eliminated by reducing expenditures/expenses and obtaining additional grants or other funds during normal operations in fiscal year 2002-2003. The Fight Services will be integrated into the Sheriff’s department next year. In addition, plans to continue evaluating the rates charged will ensure deficits in the Internal Service Funds will be prevented or eliminated in the future.
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Note 3 - Deposits and Investments Arizona Revised Statutes authorize the County to invest public monies in the State Treasurer’s investment pool;U.S. Treasury obligations; specified state and local government bonds; and interest-earning investments such assaving accounts, certificates of deposit, and repurchase agreements in eligible depositories. The Statutes requirecollateral for demand deposits, certificates of deposit, and repurchase agreements at 101 percent of all deposits not covered by federal depository insurance. County Treasurer’s Investment Pool -Arizona Revised Statutes require community colleges, school districts,and other local governments to deposit certain public monies with the County Treasurer (see note 15). Those monies are pooled with the County monies for investment purposes. Deposits--At June 30, 2002, the investment pool had cash on hand of $9,605. The carrying amount of theinvestment pool’s total cash in bank was $1,328,682 and the bank balance was $389,755. The investment pool’s deposits at June 30, 2002, were entirely covered by federal depository insurance or by collateral held bythe County’s custodial bank in the County’s name. Investments--The State Board of Deposit provides oversight for the State Treasurer’s pools, and the LocalGovernment Investment Pool Advisory Committee provides consultation and advice to the Treasurer. The fairvalue of a participant’s position in the pool approximates the value of those participants pool shares. Those shares are not identified with specific investments and are not subject to custodial credit risk. The investment pool’s investments at June 30, 2002, are categorized below to give an indication of the level of risk assumed by the County at year-end. Category 1- insured or registered in the County's name, or securities held by the County or its agent in theCounty's name. Category 2- uninsured and unregistered with securities held by the counter party's trust department or agent in the County's name. Category 3- uninsured and unregistered with securities held by the counter party, or by its trust department oragent but not in the County's name. Category Fair 1 2 3 Value U.S. Government Securities $ 94,122,236 $94,122,236 Investments not subject to Categorization: State Treasurer's investment pool 3,616,493 Total $97,738,729
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Note 3 - Deposits and Investments (Concl’d.) Other Deposits- At June 30, 2002, the total nonpooled cash on hand was $625. The carrying amount of the County’s total nonpooled cash in bank was $2,246,850, (including $1,950,106 of Money Market Securities) and the bank balance was $2,542,260. Of the bank balance, $282,126 was covered by federal depository insurance or by collateral held by the County or its agent in the County's name; and $2,260,134 was covered by collateral held by the pledging financial institution’s trust department or agent in the County’s name. Other Investments - At June 30, 2002, The County’s nonpooled investments, totaling $2,387,699 in fair value of U.S. Government Securities, were uninsured and unregistered with securities held by the counterparty in the County’s name. A reconciliation of cash and investments to amounts shown on the Combined Balance Sheet follows. Cash and Investments: County Treasurer’s Investment Pool Other Total Cash on hand $ 9,605 $ 625 $ 10,230 Carrying amount of deposits 1,328,682 2,246,850 3,575,532 Reported amount of investments 97,738,729 2,387,699 100,126,428 Total $ 99,077,016 $ 4,635,174 $ 103,712,190 Combined Balance Sheet: Cash and investments $ 101,324,491Cash and investments held by trustees 2,387,699 Total $ 103,712,190
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Note 3 - Deposits and Investments (Concl’d.) Other Deposits- At June 30, 2002, the total nonpooled cash on hand was $625. The carrying amount of the County’s total nonpooled cash in bank was $2,246,850, (including $1,950,106 of Money Market Securities) and the bank balance was $2,542,260. Of the bank balance, $282,126 was covered by federal depository insurance or by collateral held by the County or its agent in the County's name; and $2,260,134 was covered by collateral held by the pledging financial institution’s trust department or agent in the County’s name. Other Investments - At June 30, 2002, The County’s nonpooled investments, totaling $2,387,699 in fair value of U.S. Government Securities, were uninsured and unregistered with securities held by the counterparty in the County’s name. A reconciliation of cash and investments to amounts shown on the Combined Balance Sheet follows. Cash and Investments: County Treasurer’s Investment Pool Other Total Cash on hand $ 9,605 $ 625 $ 10,230 Carrying amount of deposits 1,328,682 2,246,850 3,575,532 Reported amount of investments 97,738,729 2,387,699 100,126,428 Total $ 99,077,016 $ 4,635,174 $ 103,712,190 Combined Balance Sheet: Cash and investments $ 101,324,491Cash and investments held by trustees 2,387,699 Total $ 103,712,190
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Note 4 - Property Taxes Receivable The County levies real property taxes on or before the third Monday in August that become due and payable in two equal installments. The first installment is due on the first day of October and becomes delinquent after the first business day of November. The second installment is due on the first day of March of the next year and becomes delinquent after the first business day of May. During the year, the County also levies various personal property taxes that are due the second Monday of the month following receipt of the tax notice and become delinquent 30 days later. A lien assessed against real and personal property attaches on the first day of January preceding assessment and levy. Property taxes receivable consist of uncollected real and personal property taxes as determined from the records of the County Treasurer's Office, and at June 30, 2002, were as follows: Special Debt General Revenue Service Fiscal Year Fund Funds Funds 2001-02 $ 1,016,377 $ 554,517 $ Prior 1,325,557 437,065 30,580 Totals $ 2,341,934 $ 991,582 $ 30,580 That portion of property taxes receivable, not collected within 30 days after June 30, 2002, has been deferred and, consequently, is not included in current-year revenues. Note 5 - Due From Other Governments Amounts due from other governments at June 30, 2002, include $879,393, $1,050,556, $1,117,645, $1,572,781, $106,982, and $84,136 in state-shared revenue from highway user taxes, sales taxes, Federal and State Grants, vehicle license taxes, inter-government cost sharing, and incarceration fees respectively. The balance of these receivables, $16,387, represents various expense reimbursements. Note 6 - Changes in General Fixed Assets A summary of the changes in general fixed assets follows: Balance Transfers/ Balance July 1, 2001 Additions Deletions June 30, 2002 Land $24,310,430 $24,310,430 Buildings 31,597,072 $ 314,750 31,911,822 Improvements other than buildings 1,091,749 1,091,749 Machinery and equipment 16,180,228 2,307,939 $859,546 17,628,621 Construction in progress 62,402 5,123,500 5,185,902 Total $73,241,881 $7,746,189 $859,546 $80,128,524
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Note 7 - Bonds Payable The County's bonded debt consists of various issues of special assessment bonds. Special Assessment Bonds - Special assessment bonds are secured by pledges of revenues from specialassessments levied against the benefiting property owners. The proceeds of the bond issues were used tofinance construction in these districts. These bonds are generally callable with interest payable semiannually.The County is not obligated in any manner for the special assessment debt. However, in the event a propertyowner defaults on their payment of the debt, the County places a lien on the property. In the event that the lienis not cleared, the property is sold and the proceeds are used to pay off the debt. The following special assessment districts had bonds outstanding at June 30, 2002. Outstanding Outstanding Interest Principal Additions Principal District Rates Maturities July 1, 2001 (Redemptions) June 30, 2002 G.V.I.D. No. 1 Phase II 7.25% 1/97-1/06 $ 375,000 $ (75,000) $ 300,000 G.V.I.D. No. 1 Phase III 6.70% 1/98-1/07 240,000 (40,000) 200,000 G.V.I.D. No. 1 Phase IV 5.60% 1/03-1/12 409,000 409,000 G.V.I.D. Water Storage and Distribution 9.30% 1/93-1/03 545,000 (545,000) 0 G.V.I.D. Eloy Rd Waterline Extension 8.95% 1/93-1/02 4,000 (4,000) 0 G.V.I.D. Stewart Rd Waterline Extension 8.95% 1/93-1/02 4,000 (4,000) 0 Butler Improvement District 8.40% 1/93-1/03 250,000 (250,000) Butler No. 2 Improvement District 7.4% 1/96-1/05 260,000 (260,000) 0 G.V.I.D. Egar/Estrella Roads Improvement 8.75% 1/94-1/03 380,000 (380,000) 0 Rancho Verde Street Improvement 7.75% 1/95-1/04 210,000 (70,000) 140,000 Cerbat Ranch Street Improvement 7.25% 1/95-1/05 60,000 (15,000) 45,000 G.V.I.D. Zones B&D Waterline Extension 7.90% 1/96-1/05 1,120,000 (280,000) 840,000 Rainbow Acres Street Improvement 6.40% 1/98-1/07 140,000 (25,000) 115,000 Horizon Six Street Improvement 6.375% 7/00-1/10 585,000 (65,000) 520,000 Scenic Road and Bridge Project Improvement 6.30% 1/04-1/13 4,500,000 4,500,000 Mohave County Improvement District 5.50% in arrears 91,000
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_________ 91,000 Total $4,264,000 $2,896,000 $7,160,000
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Note 7 - Bonds Payable (Concl’d.) Special assessment bond debt service requirements to maturity, including $2,183,884 of interest, are as follows: Year ending June 30, 2003 $1,057,361 2004 1,449,229 2005 1,303,576 2006 1,038,683 2007 831,270 Thereafter 3,663,765 Total $ 9,343,884 Note 8 - Certificates of Participation Payable At June 30, 2002, the County had outstanding $10,905,000 in certificates of participation with interest rates ranging from 3.75 to 7.375 percent. The current portion of $1,135,000, due July 1, 2002, is reported in the individual funds. The remaining liability is recorded in the General Long-Term Debt group of accounts. The certificates are generally noncallable, with interest payable semiannually. Principal and interest requirements at June 30, 2002, were as follows: Description Interest Rate(s) Maturity Outstanding Principal July 1, 2001 (Retirements) Outstanding Principal June 30, 2002 Cert of Part series 1998 3.75%-4.9% 7/1/2013 $7,410,000$(875,000) $6,535,000Cert of Part series 2000 6.75%-7.375% 7/1/2010 4,870,000(500,000) 4,370,000 Total $12,280,000$(1,375,000) $10,905,000 Certificates of participation debt service requirements to maturity, including $3,434,012 of interest, are as follows: Year ending June 30, 2003 $1,711,091 2004 1,680,634 2005 1,237,601 2006 1,102,547 2007 1,230,711 Thereafter 7,376,428 Total $14,339,012 Note 9 - Obligations Under Leases Capital Leases - The County has acquired equipment under the provisions of various long-term lease agreements classified as capital leases for accounting purposes because they provide for a bargain purchase option or a transfer of ownership by the end of the lease term.
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Note 9 -Obligations Under Leases (Concl’d.) Accordingly, such assets have been capitalized, and a summary of them at June 30, 2002, follows: General Fixed Assets Internal Service Funds Machinery and equipment $163,729 $740,524 Less accumulated depreciation 382,666 Carrying value $163,729 $357,858 The future minimum lease payments under the capital leases, together with the present value of the net minimum lease payments at June 30, 2002, were as follows: Year ending June 30, General Long-Term Debt Account Group Internal Service Funds 2003 $36,743 $97,025 2004 18,372 Total minimum lease payments 55,115 97,025 Less amount representing interest (2,651) (9,285) Present value of net minimum lease payments $52,464 $87,740 Operating Leases - The County leases buildings, copiers and a parking lot under the provisions of various long-term lease agreements classified as operating leases for accounting purposes. Rental expenditures under the terms of the operating leases were $530,289 for the year ended June 30, 2002. The operating leases have remaining noncancellable lease terms from one to twelve years and provide renewal options. The future minimum rental payments required under the operating leases as of June 30, 2002, are as follows: Year ending June 30, General Fund Special Revenue Funds Internal Service Funds 2003 $ 96,341 $125,007 $ 2,980 2004 47,050 81,957 2005 34,718 65,425 2006 34,251 65,425 2007 30,051 Thereafter 90,153 Total minimum payments required $332,564 $337,814 $ 2,980
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Note 10 - Landfill Closure and Postclosure Care Costs The County owns two 160-acre landfill sites, Cerbat and Mohave Valley, which are operated by independentcontractors under contract with the County. Both landfills began operations in January 1989. The County operates its landfills on a cell basis. The County owns additional unused parcels of land adjacent tothe existing landfill sites that will (or may) be used, as needed, to open additional cells. State and federal laws and regulations require the County to place a final cover on its Cerbat and Mohave Valley landfill sites when they stop accepting waste and to perform certain maintenance and monitoring functions atthe sites for 30 years after closure. Although closure and postclosure care costs will not be paid until near orafter the date that the landfills stop accepting waste, the County reports the long-term portion of these closureand postclosure care costs as an addition to the General Long-Term Debt Group in each period based on landfill capacity used as of each balance sheet date. The $2,100,742 reported as landfill closure and postclosure care liability at June 30, 2002, represents thecumulative amount reported to date at the Cerbat and Mohave Valley landfills based on the use of 70% and55%, respectively, of the estimated capacity of the open cells of the landfill. The County will recognize theremaining estimated cost of closure and postclosure care of $1,005,184 as the remaining estimated capacity isfilled. These amounts are based on what it would cost to perform all closure and postclosure care in fiscal year 2002. The County expects to close the landfills in the years 2004 and 2029 respectively, and the actual costmay be higher due to inflation, changes in technology, or changes in regulations. According to state and federal laws and regulations, the County must comply with the local governmentfinancial test requirements that assure the County can meet the costs of landfill closure, postclosure, andcorrective action when needed. The County is in compliance with these requirements. Note 11 - Risk Management The County is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;errors and omissions; injuries to employees; and natural disasters; but was unable to obtain insurance at a cost it considered to be economically justifiable for Workers Compensation or liability insurance. Therefore, theCounty joined and is covered by two public entity risk pools: the Arizona Counties Property and Casualty Pool,and the Arizona Counties Workers’ Compensation Pool, which are described below. The Arizona Counties Property and Casualty Pool is a public entity risk pool currently composed of 11 membercounties. The pool provides member counties catastrophic loss coverage for risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters; and provides riskmanagement services. Such coverage includes all defense costs as well as the amount of any judgment orsettlement. The County is responsible for paying a premium, based on its exposure in relation to the exposureof the other participants and a deductible of $50,000 for each occurrence. The County is also responsible forany payments in excess of the maximum coverage of $100 million per occurrence for property claims and $15 million for liability claims. A County must participate in the pool at least three years after becoming a member;however, it may withdraw after the initial three-year period. If the pool were to become insolvent, the County would be assessed an additional contribution.
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Note 11 - Risk Management (Concl’d.) The Arizona Counties Workers’ Compensation Pool is a public entity risk pool currently composed of 11member counties. The pool provides member counties with workers’ compensation coverage, as required by law, and risk management services. The County is responsible for paying a premium, based on an experiencerating formula, that allocates pool expenditures and liabilities among the members. The Arizona Counties Property and Casualty Pool and the Arizona Counties Workers’ Compensation Poolreceive independent audits annually and an audit by the Arizona Department of Insurance triennially. Both poolsaccrue liabilities for losses that have been incurredbut not reported. These liabilities are determined annuallybased on an independent actuarial valuation. The County established two Internal Service funds, Health Insurance and Self Insurance. The Health InsuranceFund is used to account for employee health benefits through a combination of self-insurance and commercial insurance. The Self Insurance Fund (an Internal Service Fund) provides property, casualty and general liabilitycoverage up to $50,000 per claim and also accounts for the Arizona Counties Worker’s Compensation Pool. The Self Insurance Fund is used to account for the risk financing of certain benefits and losses through combinationsof cost-reimbursement, self-insurance for losses up to certain limits, participation in public entity riskpools, and the purchase of insurance for losses above the limits. Settled claims have not exceeded risk pool coverage or thepurchased commercial insurance in any of the past three fiscal years. The Health Insurance Fund (an Internal Service Fund) accounts for the financing of the uninsured risk of loss for certain health benefits (comprehensive major medical, prescriptions, dental, life/accidental death &dismemberment and short-term disability), to eligible employees and their dependents, through a combination of commercial insurance and self insurance. The County is self insured, up to certain limits, with commercialinsurance to cover losses above the limits. The life insurance is 100% commercial insurance. Under the healthinsurance program, the employees have a PPO program. The County is fully self insured for dental, which isadministered through Delta Dental. The short term disability became administered by a third party, effectiveOctober of 2001. Settled claims have not exceeded available selfinsurance funds or the purchased commercial insurance in any of the past three fiscal years. The insurance claims payable liability of the self-insurance fund and health insurance fund of $642,829, reportedbelow at June 30, 2002, is the estimated ultimate cost of settling claims that have been reported but not settledand claims that have been incurred but not reported. These estimates are based on estimates received from ourhealth care administrator (based on claims received subsequent to June 30, 2002) and AICIP ( based on expected outcomes of outstanding lawsuits and incurred but not reported occurrences). Changes in the claims payable liability amount for the years ended June 30, 2001 and 2002, were as follows: 2001 2002 Claims Payable - Beginning of Year $ 471,316 $ 657,550 Add: Claims incurred and changes in estimates 2,136,508 4,162,069 Deduct: Claims paid ( 1,950,274) (4,176,790) Claims Payable - End of Year $ 657,550 $ 642,829
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Note 12- Interfund Receivables and Payables The interfund assets and liabilities by fund are as follows: Due From Due To Other Funds Other Funds General Fund $ 289,731 $ 62,820 Special Revenue Funds Law Library 73 Recorder Surcharge 546 Road Fund 226,725 35,683 County Health Services 5,587 1,520 Judge Pro Tempore 7,517 Parks 706 Court/Attorney Enhancement 7,517 Health Grants 6,669
Dom Anti R
87,636
County Attorney 8,152 121,272
Senior Programs 332 6,713
estic Relations 3,133 696
acketeering 519
Emergency Management 1,262
Flood Control 77 163,372
Library District 1,095
Sheriff / Waterways 20,162 26,243
Landfill 1,000,000 20
M.E.S.C. 20,762 20,762
Probation 18,608 20,622
School Superintendent 4,053 4,454
G.V.I.D 5,860 1,503
Improvement Districts Administration 11,000 1
C.D.B.G. 115 19,759
Housing Programs 38,777 9,219
Workforce Development 37 28,006
Enterprise Fund 30,636
Internal Service Funds
Information Services 580
Motor Pool 57,899 25,161
Central Services 862 19,478
Communications 405 73
Janitorial 386 936
Self Insurance 635
Flight Services 17,601
Debt Service Funds
I-40 Corridor 1,000,000
G.V.I.D. 78,710
Improvement Districts 1,670
Capital Project Funds
G.V.I.D. Well/ Distribution 89,710
Improvement District __________ 1,670
Total $ 1,807,864 $ 1,807,864
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Note 13 - Changes in Long-Term Liabilities A summary of changes in the liabilities reported in the General Long-Term Debt Account Group follows: Balance Balance July 1, 2001 Asrestated Additions Reductions June 30, 2002 Compensated Absences $ 2,016,908 $ $ 46,970 $ 1,969,938 Obligations under Capital Leases 87,563 35,099 52,464 Claims and judgements payable 602,160 602,160 Landfill closure and postclosure care costs payable 1,911,916 188,826 2,100,742 Special assessment bonds payable 4,264,000 4,909,000 2,013,000 7,160,000 Certificates of participation - principal payable 10,905,000 _________ 1,135,000 9,770,000 Totals $19,787,547 $5,097,826 $3,832,229 $21,053,144 The July 1, 2001 Landfill closure and postclosure care costs payable, as stated in the 2001 CAFR, were overstated by $523,378, due to an error in calculation. The beginning liability has been restated to reflect the corrected amount. Note 14 - Retirement Plans Plan Descriptions - The County contributes to four plans, three of which are described below. The Elected Officials Retirement System is not described, due to its relative insignificance to the County’s financial statements. Benefits are established by state statute and generally provide retirement, death, long-term disability, survivor, and health insurance premium benefits. The Arizona State Retirement System (ASRS) administers a cost-sharing multiple-employer defined benefit pension plan that covers general employees of the County. The ASRS is governed by the Arizona State Retirement System Board according to the provisions of A.R.S. Title 38, Chapter 5, Article 2. The Public Safety Personnel Retirement System (PSPRS) is an agent multiple-employer defined benefit pension plan that covers public safety personnel who are regularly assigned hazardous duty as employees of the State of Arizona or one of its political subdivisions. The PSPRS, acting as a common investment and administrative agent, is governed by a five-member board, known as The Fund Manager, and 189 local boards according to the provisions of A.R.S. Title 38, Chapter 5, Article 4. Note 14 - Retirement Plans (Cont’d.) The Corrections Officer Retirement Plan (CORP) is an agent multiple-employer defined benefit pension plan that covers certain employees of the State of Arizona, Departments of Corrections and Juvenile Corrections, andCounty employees whose primary duties require direct inmate contact. The CORP is governed by The Fund Manager of PSPRS, and 12 local boards, according to the provisions of A.R.S. Title 38, Chapter 5, Article 6. Each plan issues a publicly available financial report that includes its financial statements and requiredsupplementary information. A report may be obtained by writing or calling the applicable plan. ASRS PSPRS, CORP, and EORP 3300 N. Central Avenue 1020 E. Missouri Avenue P. O. Box 33910 Phoenix, AZ 85014-2613 Phoenix, AZ 85067-3910 (602) 240-2000 or (800) 621-3778 (602) 255-5575 Funding Policy - The Arizona State Legislature establishes and may amend active plan members’ and theCounty’s contribution rates. Cost-sharing plans - For the year ended June 30, 2002, active ASRS members and the County were eachrequired by statute to contribute at the actuarially determined rate of 2.49 percent (2.00 percent retirement and0.49 percent long-term disability) of the members’ annual covered payroll. The County’s contributions to ASRSfor the years ended June 30, 2002, 2001, and 2000, were $1,208,183, $1,364,611, and $1,351,805 respectively,which were equal to the required contributions for the year. Agent plans - For the year ended June 30, 2002, active PSPRS members were required by statute to contribute7.65 percent of the members’ annual covered payroll, and the County was required to contribute at the actuariallydetermined rate of 6.39 percent. Active CORP members were required by statute to contribute 8.5 percent of themembers’ annual covered payroll, and the County was required to contribute at the actuarially determined rate of 2.00 percent. Annual Pension Costs - The County’s pension cost for the two agent plans for the year ended June 30, 2002 andrelated information follow. PSPRS CORP Contribution rates: County 6.39% 2.00% Plan members 7.65% 8.5% Annual Pension cost $200,532 $31,662 Contributions made $200,532 $31,662 The current-year annual required contributions, for both the PSPRS and CORP, were determined as part of theirJune 30, 2000 actuarial valuations using the entry-age actuarial cost method. The actuarial assumptionsincluded (a) 9 percent investment rate of return and (b) projected salary increases ranging from 6.5 percent to9.5 percent per year. Both (a) and (b) included an inflation component of 5.5 percent. The assumptions did notinclude cost-of-living adjustments. The actuarial value of assets was determined using techniques that smooththe effects of short-term volatility in the market value of investments over a 4-year period. The unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open basis. Theremaining amortization period at June 30, 2002, was 20 years.
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Note 14 - Retirement Plans (Concl’d.) Trend Information – Annual pension cost information for the current and two preceding years follows for each of the agent plans. Percentage of Year Ended Annual Pension APC Net Pension Plan June 30 Cost (APC) Contributed Obligation PSPRS 2002 $ 200,532 100% $ 0 2001 212,472 100% $ 0 2000 106,006 100% $ 0 CORP 2002 31,662 100% $ 0 2001 4,722 100% $ 0 2000 69,547 100% $ 0 Analysis of Funding Progress - The following information was obtained from the three most recent actuarial valuations of the agent plans. PSPRS Unfunded Liability as Actuarial Actuarial Funding Annual Percentage Actuarial Value of Accrued Liability Funded Covered of Covered Valuation Plan Assets Liability (Excess) Ratio Payroll Payroll Date (a) (b) (a-b) (a/b) (c) ([a-b]/c) 06/30/02 $14,357,706 $11,473,155 $(2,884,551) 125.1% $3,035,539 - % 06/30/01 $14,403,410 $10,204,990 $(4,198,420) 141.1% $3,332,859 - 06/30/00 $13,144,845 $11,055,727 $(2,089,118) 118.9% $3,639,536 - CORP Unfunded Liability as Actuarial Actuarial Funding Annual Percentage Actuarial Value of Accrued Liability Funded Covered of Covered Valuation Plan Assets Liability (Excess) Ratio Payroll Payroll Date (a) (b) (a-b) (a/b) (c) ([a-b]/c) 06/30/02 $3,795,255 $1,793,433 $( 2,001,822) 211.6% $1,601,298 - % 06/30/01 $3,825,686 $1,735,357 $( 2,090,329) 220.5% $1,522,321 - 06/30/00 $3,548,008 $1,748,931 $( 1,799,077) 202.9% $1,804,218 -
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Note 15 - County Treasurer’s Investment Pool
Arizona Revised Statutes require community colleges, school districts, and other local governments to deposit
certain public monies with the County Treasurer. The Treasurer has a fiduciary responsibility to administer those
and the County monies under her stewardship. The Treasurer invests, on a pool basis, all idle monies not
specifically invested for a fund or program. In addition, the Treasurer determines the fair value of those pooled
investments annually at June 30.
The County Treasurer’s investment pool is not registered with the Securities and Exchange Commission as an
investment company and there is no regulatory oversight of its operations. The pool’s structure does not provide
for shares and the County has not provided or obtained any legally binding guarantees to support the value of the
participants’ investments.
Details of each major investment classification follow.
Investment
Type Principal
Interest
Rate(s) Maturities Fair Value
Fed Farm Credit Bank $3,750,000 3.65-5.72% 1/04-06/07 $3,762,126
Fed Home Loan Bank 27,900,000 3.00-5.95% 1/04-05/07 27,952,013
Fed Home Loan Mrtg Corp 24,850,000 3.50-7.00% 3/04-6/07 24,082,555
Fed National Mrtg Assoc 33,530,000 3.50-6.21% 4/04-05/07 34,005,989
Total Other 4,000,000 6.875% 4,319,553
Local Gov Investment Pool 3,616,493 5.31-6.12% 7/03-11/03 3,616,493
$97,646,493 $97,738,729
A condensed statement of the investment pool’s net assets and changes in net assets follows.
Statement of Net Assets
Assets $99,198,602
Liabilities 0
Net assets 99,198,602
Net assets held in trust for:
Internal participants $59,652,853
External participants 39,545,749
Total net assets held in trust $99,198,602
Statement of Changes in Net Assets
Total additions $746,403,721
Total deductions 724,235,244
Net increase 22,168,477
Net assets held in trust:
July 1, 2001 77,030,125
June 30, 2002 $99,198,602
Note 16 - Prior Period Adjustments A prior period adjustment resulted from several immaterial errors in the amounts reported for the fiscal year ended June 30, 2001. The net amount of all adjustments resulted in an increase of $4,933 in the June 30, 2001balance of the Special Revenue Funds. Note 17– Implementation of GASB Statement No. 34 Beginning with fiscal year 2003, the County will prepare its external financial reports following the requirements ofGASB Statement No.34, Basic Financial Statements- and Management’s Discussion and Analysis-for State and Local Governments. Implementing this standard will significantly change the accounting principles and reportingformat used by the County in future financial reports. Note 18-Subsequent Events A road department vehicle was involved in a multi-vehicle accident resulting in several fatalities. The County will be liable for the $100,000 deductible, as well as an increase in our pool contribution of over $400,000 per year. The ASRS increased the retirement contribution rate from 2.0% to 5.4% for the next fiscal year.
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