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

              MOHAVE COUNTY
ANNUAL FINANCIAL REPORT
Mohave County Development Services Building, completed 2011
Fiscal Year Ended June 30, 2012
MOHAVE COUNTY
Annual Financial Report
Year Ended June 30, 2012
TABLE OF CONTENTS
Independent Auditors’ Report ............................................................................................................. 1 - 2
Required Supplementary Information - Management’s Discussion and Analysis ............................ 3 - 15
Government-wide Statements
Statement of Net Assets .................................................................................................................. 17
Statement of Activities .................................................................................................................. 18
Fund Statements
Governmental Funds
Balance Sheet ...................................................................................................................... 19
Reconciliation of the Balance Sheet to the Statement of Net Assets ................................... 20
Statement of Revenues, Expenditures, and Changes in Fund Balances ................................ 21
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balances to the Statement of Activities .............................................................................. 22
Proprietary Funds
Statement of Net Assets ....................................................................................................... 23
Statement of Revenues, Expenses, and Changes in Fund Net Assets .................................. 24
Statement of Cash Flows ..................................................................................................... 25
Fiduciary Funds
Statement of Fiduciary Net Assets ....................................................................................... 26
Statement of Changes in Fiduciary Net Assets .................................................................... 27
Notes to Financial Statements ......................................................................................................... 28 - 53
Other Required Supplementary Information
Budgetary Comparison Schedule – General Fund ................................................................... 55 - 56
Budgetary Comparison Schedule – Road Fund ............................................................................... 57
Budgetary Comparison Schedule – Flood Control Fund ................................................................. 58
Notes to Budgetary Comparison Schedules ..................................................................................... 59
Schedule of Agent Retirement Plans’ Funding Progress ................................................................. 60
Note to Schedule of Agent Retirement Plans’ Funding Progress..................................................... 61
4001 North 3rd Street
Suite 275
Phoenix, AZ 85012-2060
Tel: (602) 264-3077
Fax: (602) 265-6241
1
Independent Auditors’ Report
The Auditor General of the State of Arizona
The Board of Supervisors of
Mohave 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 Mohave County as
of and for the year ended June 30, 2012, which collectively comprise the County’s basic
financial statements as listed in the table of contents. 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 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 provides a reasonable basis
for our opinions.
In our opinion, 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 Mohave County as of June 30, 2012,
and the respective changes in financial position and, where applicable, cash flows thereof for the
year then ended in conformity with U.S. generally accepted accounting principles.
U.S. generally accepted accounting principles require that the Management’s Discussion and
Analysis on pages 3 through 15, the Budgetary Comparison Schedules on pages 55 through 59,
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and the Schedule of Agent Retirement Plans’ Funding Progress on pages 60 through 61 be
presented to supplement the basic financial statements. Such information, although not a part of
the basic financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the basic financial statements
in an appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with U.S. generally
accepted auditing standards, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management’s
responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
In connection with our audit, nothing came to our attention that caused us to believe that the
County failed to use highway user revenue fund monies received by the County pursuant to
Arizona Revised Statutes Title 28, Chapter 18, Article 2, and any other dedicated state
transportation revenues received by the County solely for the authorized transportation purposes.
However, our audit was not directed primarily toward obtaining knowledge of such
noncompliance.
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 on our tests of its
compliance with certain provisions of laws, regulations, contracts, grant agreements and other
matters at a future date. The purpose of that report is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on internal control over financial reporting or on compliance. That report is
an integral part of an audit performed in accordance with Government Auditing Standards and
should be considered in assessing the results of our audit.
This report is intended solely for the information and use of the members of the Arizona State
Legislature, the Auditor General of the State of Arizona, the Board of Supervisors, management,
and others within the County and is not intended to be and should not be used by anyone other
than these specified parties. However, this report is a matter of public record, and its distribution
is not limited.
February 28, 2013
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JOHN TIMKO 700 West Beale Street Phone: (928) 753-0735
Financial Services Director P.O. Box 7000 Fax: (928) 753-0704
Kingman, AZ 86402-7000
Management’s Discussion and Analysis
Our discussion and analysis of the County’s financial performance provides an overview of the County’s financial
activities for the year ended June 30, 2012. Please read the following discussion in conjunction with the County’s basic
financial statements, which begin on page 17.
Financial Highlights
 Total assets of the County exceeded its liabilities at the close of the fiscal year by $325.2 million, a 3.9%
increase from the prior year. Of this amount, $81.4 million is unrestricted and may be used to meet the
government’s ongoing obligations to citizens and creditors.
 The County’s total net assets as reported in the Statement of Activities increased by $12.2 million. Of this
amount, $15 million (123%) is attributable to governmental activities and -$2.7 million (-23%) is attributable
to business-type activities.
 Total liabilities decreased by $1.8 million from the prior year.
 Long-term Debt decreased by $5.7 million (8.8%) from the prior year.
 The unassigned fund balance for the General fund decreased by $.6 million (22.5%), General fund revenues
were below budgeted revenues by $1 million, and expenditures were only 83% of both the original adopted
and final General fund budgets.
Overview of the Financial Statements
The intent of this discussion and analysis is to serve as an introduction to Mohave County’s basic financial statements.
Mohave County’s basic financial statements are comprised of three components: 1) government-wide financial
statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other
required supplementary information in addition to the basic financial statements themselves.
Government-wide financial statements are designed to provide readers with a broad overview of Mohave County’s
finances, in a manner similar to a private-sector business.
The statement of net assets presents information on all of Mohave County’s assets and liabilities, with the difference
between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of
whether the financial position of Mohave County is improving or deteriorating.
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. Thus, revenues and expenses are reported in this statement for
some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused
accrued leave).
Both of these government-wide financial statements distinguish functions of Mohave County that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to
recover all or a significant portion of their costs through user fees and charges (business-type activities). The
governmental activities of Mohave County include general government, public safety, highways and streets, health,
welfare, education, and culture and recreation. The business-type activities of Mohave County include water
companies, recreation, and landfill operations.
Mohave County Financial Services
4
The government-wide financial statements include not only Mohave County itself (known as the primary government),
but blended component units. The blended component units are legally separate entities for which Mohave County is
financially accountable.
Blended component units include the following: a television district, two tax-levying districts, special assessment
districts, and two finance corporations. The County’s Board of Supervisors serves as the board of directors for all of the
component units except for the finance corporations, which have a separate board of directors made up of County
management. The list of blended component units follows:
 Mohave County Television District provides and maintains communication equipment for TV signals.
 Mohave County Library District provides and maintains library services for County residents.
 Mohave County Flood Control District provides and maintains flood control systems for the County.
 Mohave County Special Assessment Districts provide funds to construct or improve roads, bridges, and water
distribution systems.
 Mohave Administration Building Finance Corporation provides financing and oversight of the operation of the
Mohave County administration building.
 Mohave Jail Finance Corporation provides financing and oversight of the construction and equipping of a jail
facility for use of and ultimate ownership by Mohave County.
Financial information for the blended component units is combined with the financial information presented for the
primary government itself. The government-wide financial statements are on pages 17-18 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. Mohave County, like other state and local governments, uses fund
accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of Mohave
County can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental 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 fund 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.
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 governmental funds financial
statements can be found on pages 19-22 of this report.
Mohave County maintains 157 individual 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 fund, Road fund, Flood control fund, and the Admin building debt service fund, all of which are major
funds. Data from the other 153 governmental funds are combined into a single, aggregated presentation, under the
heading Other Governmental Funds.
Mohave County adopts an annual appropriated budget for all its funds. A budgetary comparison schedule has been
provided for the General fund and the major special revenue funds to demonstrate compliance with their budgets. These
schedules are presented on pages 55 to 59.
Proprietary funds - Mohave County maintains two different types of proprietary funds. Enterprise funds are used to
report the same functions presented as business-type activities in the government-wide financial statements. Mohave
County uses enterprise funds to account for its water companies, park services, and landfill operations.
Internal service funds are an accounting device used to accumulate and allocate costs internally among Mohave
County’s various functions. Mohave County uses internal service funds to account for its fleet of vehicles, employee
benefit health insurance trust, self-insurance trust, janitorial services, communication services, and for its management
information systems. Because all of these services predominantly benefit governmental rather than business-type
functions, they have been included within governmental activities in the government-wide financial statements.
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Proprietary funds financial statements provide the same type of information as the government-wide financial
statements, only in more detail. The proprietary funds financial statements provide separate information for the water
companies and the landfill operations, which are major funds of Mohave County. Conversely, all of the internal service
funds are combined into a single, aggregated presentation in the proprietary funds financial statements. The proprietary
funds financial statements are located on pages 23-25 of this report.
Fiduciary funds - Fiduciary funds 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 Mohave 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 26-27 of this report.
Notes to the financial statements - The notes provide additional information that is essential to a full understanding of
the data provided in the government-wide and fund financial statements. The notes to the financial statements are
located on pages 28-53 of this report.
Other information - In addition to the basic financial statements and accompanying notes, pages 55-61 present
required supplementary information including budgetary comparison schedules and Mohave County’s progress in
funding its obligation to provide pension benefits to some of its employees.
Government-wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of
Mohave County, assets exceeded liabilities by $325 million at the close of the most recent fiscal year.
By far the largest portion of Mohave County’s net assets (61%) reflects its investment in capital assets (e.g., land,
buildings, infrastructure, machinery, and equipment) less accumulated depreciation and any related debt used to acquire
those assets that is still outstanding. Mohave County uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although Mohave 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.
14% of Mohave County’s net assets represent resources subject to external restrictions on how they may be used. The
remaining $81.4 million (25%) of unrestricted net assets may be used to meet the government’s ongoing obligations to
citizens and creditors. The largest changes in the net assets occurred in the governmental funds. The changes are
discussed separately under the following sections; Governmental activities – net assets highlights, Business-type
activities – net assets highlights, and Capital Asset and Debt Administration.
6
The restricted net assets reflected a net decrease of $2.2 million from the prior year. Decreases of approximately $2.4
million from highways and streets, $2.1 million from sanitation, $4.5 million from debt service and $.5 million from
other sources were offset with increases of $6.6 million from capital projects. Unrestricted net assets increased by $1.1
million from the prior year, due to tax revenue exceeding expenditures. The increase in Net assets invested in capital
assets, net of related debt reflects the decrease in long-term debt of $5.7 million which offsets the investment in fixed
assets (restricted for debt service) and the majority of the excess revenue over expenditures, in the current fiscal year,
which was invested in capital purchases.
Governmental activities - net assets highlights: The net assets invested in capital assets, net of related debt had a net
increase of $13.7 million. The details of the increase in capital assets are discussed later in this report under the Capital
Asset and Debt Administration heading. Total liabilities decreased $2.3 million from last year. The decrease was due
to principal payments made on the County’s Beneficial Interest Certificates (BIC’s) and special assessment bonds
payable, without incurring any new long-term debt. On the other hand, other liabilities increased $3.9 million (58.5%).
This was due to a delay in payment of the flood control distributions for 2012 of $2.6 million. In addition, there was an
increase in purchases of road materials of $.6 million and various other timing differences of $.7 million spread over all
the governmental funds for payments of expenditures.
7
Governmental activities – comparative statement of activities highlights: The current year governmental activities
financial statements reflect an increase of $7.7 million in total program revenues. This amount is attributed to the
completion of the Beaver Dam bridge project on the Colorado strip and paved roads that were donated to the county and
accepted into the road maintenance program. The State of Arizona contributed $7.6 million for the bridge project
which is recorded under capital grants and contributions. The decrease in general revenues is caused by the decrease in
assessed values, resulting in decreased tax revenues. The $1.7 million (108%) increase in other revenues results from
recording the trade-in of motor graders.
Expenses increased $1.7 million (1.3%) from the prior year. The County managed to maintain moderate growth in
controllable expenses, through increased efficiency, and by offsetting increased costs with vacancy savings and
suspending cost of living and step increases for employees for a fourth year. Non-controllable expenses, such as court
costs from increased caseloads and indigent support, continue to rise along with health insurance costs, which are
reflected in the general government expenses. The main increases in expenditures for fiscal year 2012 were in jail costs
(public safety) and A.H.C.C.C.S costs (health), both are non-controllable. The jail costs vary with occupancy and the
A.H.C.C.C.S costs are an allocation from the State of the actual expenses incurred.
Increase %
2011 2012 (decrease) Change
Revenues:
Program revenues
Charges for services $ 18,930,726 $ 1 7,913,376 $ (1,017,350) -5.37%
Operating grants and contributions 26,107,374 2 7,079,300 9 71,926 3.72%
Capital grants and contributions 46,945 7 ,796,964 7 ,750,019 16508.72%
Total program revenues 45,085,045 5 2,789,640 7 ,704,595 17.09%
General revenues
Property taxes 57,461,013 5 4,300,875 (3,160,138) -5.50%
Other taxes 35,063,969 3 4,564,317 (499,652) -1.42%
Other revenues 1,569,340 3 ,266,716 1 ,697,376 108.16%
Total general revenues 94,094,322 9 2,131,908 ( 1,962,414) -2.09%
Total revenues 139,179,367 1 44,921,548 5 ,742,181 4.13%
Expenses:
General government 59,154,601 5 5,360,181 (3,794,420) -6.41%
Public safety 23,201,571 2 7,841,512 4 ,639,941 20.00%
Highways and streets 2 3,262,369 2 0,859,871 (2,402,498) -10.33%
Health 11,653,603 1 3,726,048 2 ,072,445 17.78%
Welfare 4,697,172 5 ,422,044 7 24,872 15.43%
Culture and recreation 4,506,929 4 ,964,298 4 57,369 10.15%
Education 2,250,034 2 ,453,762 2 03,728 9.05%
Interest on long-term debt 2,219,545 2 ,016,597 (202,948) -9.14%
Total expenses 130,945,824 132,644,313 1 ,698,489 1.30%
Increase in net assets before transfers 8,233,543 12,277,235 4 ,043,692 49.11%
Transfers 4 63,780 2,713,413 2 ,249,633 485.06%
Increase in net assets 8,697,323 14,990,648 6 ,293,325 72.36%
Net assets beginning of year 276,152,338 284,849,661 8 ,697,323 3.15%
Net assets end of year $ 2 84,849,661 $ 2 99,840,309 $ 1 4,990,648 5.26%
Governmental Activities
Year Ended June 30,
Comparative Statement of Activities
8
The chart below represents all revenues collected from governmental activities, including general revenues, as reported
in the Statement of Activities.
The following graph represents the expenses and program revenues for governmental activities as reported in the
Statement of Activities. Program revenue does not include the general revenues listed on the bottom portion of the
Statement of Activities. Total revenues generated by governmental activities (program revenues and general revenues)
were $145 million. General revenues of $92.1 million are not included in this graph, though they represent 64% of total
revenues reported for governmental activities. While this graph indicates expenses exceeded program revenues, the
addition of general revenues produced an increase to net assets of $15 million for the fiscal year as indicated on the
Statement of Activities.
9
Business-type activities - net assets highlights: Net assets decreased by $2.7 million due to a transfer to the public
works department to cover a portion of the cost of the new public works building. This building will provide space for
the administrative offices for the business-type funds. Long-term liabilities increased due to the increase in landfill
closure and post-closure costs from the prior year; these are estimated future costs provided by engineering consultants
for managing the Cerbat and Mohave Valley landfills.
The chart below represents all revenues collected from business-type activities, including general revenues, as reported
in the Statement of Activities.
Analysis of revenue changes - The Business-type Activities Comparative Statement of Activities schedule on the
following page shows the increases and decreases in revenue with an overall 2.2% increase to total revenues. The only
significant change was the increase in the amount of Capital grants received by the Parks department this year.
Increase %
2011 2012 (Decrease) Change
Current assets and other assets $ 19,438,326 $ 17,511,969 $ (1,926,357) -9.91%
Capital assets 14,960,939 14,606,545 (354,394) -2.37%
Total assets 34,399,265 32,118,514 (2,280,751) -6.63%
Long-term liabilities outstanding 5,913,782 6,376,759 462,977 7.83%
Other liabilities 395,282 400,194 4,912 1.24%
Total liabilities 6,309,064 6,776,953 467,889 7.42%
Net assets:
Invested in capital assets, net of related debt 14,960,939 14,606,545 (354,394) -2.37%
Restricted 8,575,013 6,372,792 (2,202,221) -25.68%
Unrestricted 4,554,249 4,362,224 (192,025) -4.22%
Total net assets $ 28,090,201 $ 25,341,561 $ (2,748,640) -9.79%
Net Assets
As of June 30,
Business-type Activities
10
Business-type activities - comparative statement of activities highlights: Net assets for the enterprise funds
decreased by $2.7 million (9.8%) from the prior year. This decrease was due to transfers made to the Road fund for the
construction of a public works building. The 46.1% decrease in the landfill expenses reflects a decrease in the estimated
closure/postclosure costs for 2012 from last year’s estimate along with a decrease in the waste tire disposal cost and a
restructuring of the enterprise funds. A portion of the prior years’ landfill costs related to a division called “ERACE”
was moved from the Landfill fund to a separate non-major fund. The new fund is combined with recreation on the
Statement of Activities, to better reflect the purpose of the fund. This explains the increase in the recreation line and the
remaining decrease in the landfill line, approximately 25%. The ERACE expenses increased from $215,000 in fiscal
year 2011 to $380,000 in fiscal year 2012. This reflected the division being fully staffed in 2012.
The graph below represents the expenses and program revenues for business-type activities as reported in the Statement
of Activities. Please note that program revenue does not include the general revenues on the bottom portion of the
statement.
Increase %
2011 2012 (decrease) Change
Revenues:
Program revenues
Charges for services $ 4,105,571 $ 4,102,772 $ (2,799) -0.07%
Operating grants and contributions 390,315 413,996 23,681 6.07%
Capital grants and contributions 80,000 170,000 90,000 112.50%
Total program revenues 4,575,886 4,686,768 1 10,882 2.42%
General revenues
Other taxes 100,000 100,000 - 0.00%
Other revenues 174,334 167,634 (6,700) -3.84%
Total general revenues 274,334 267,634 (6,700) -2.44%
Total revenues 4,850,220 4,954,402 1 04,182 2.15%
Expenses:
Landfill 1,922,039 1,035,214 (886,825) -46.14%
Recreation 1,259,673 1,609,355 3 49,682 27.76%
Water companies 2,083,998 2,345,060 2 61,062 12.53%
Total expenses 5,265,710 4,989,629 (276,081) -5.24%
Increase in net assets before transfers (415,490) (35,227) 3 80,263 -91.52%
Transfers (463,780) (2,713,413) (2,249,633) -485.06%
Increase in net assets (879,270) (2,748,640) (1,869,370) 212.60%
Net assets beginning of year 28,969,471 28,090,201 (879,270) -3.04%
Net assets end of year $ 28,090,201 $ 25,341,561 $ (2,748,640) -9.79%
Year Ended June 30,
Business-type Activities
Comparative Statement of Activities
11
Financial Analysis of the Government’s Funds
As noted earlier, Mohave County uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
Governmental funds - The focus of Mohave County’s governmental funds is to provide information on near-term
inflows, outflows, and balances of spendable sources. Such information is useful in assessing Mohave County’s
financing requirements. In particular, unrestricted fund balance may serve as a useful measure of a government’s net
resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, Mohave County’s governmental funds reported combined ending fund balances
of $99.9 million, a decrease of $.6 million in comparison with the prior year. Fund balances totaling $77.7 million for
the Road fund, Flood control fund, Admin building debt service fund and the Other governmental funds are restricted or
committed and can only be used for specific purposes.
The General fund is the chief operating fund of Mohave County. At the end of the current fiscal year, the unassigned
fund balance of the General fund was $10 million and the fund balance committed by the Board of Supervisors for
future projects was $11.7 million. As a measure of the General fund’s liquidity, it may be useful to compare unassigned
fund balance to total fund expenditures. The General fund unassigned fund balance equals 14.2% of total General fund
expenditures.
The total change in governmental fund balances was minimal even though there were significant changes in individual
major funds and other governmental funds. The reason for this is that there were several significant transfers between
funds during the year. The Board of Supervisors authorized the transfer of $5 million from the Admin Building debt
Service fund (a major fund) to the Jail debt service fund (a non-major fund) to better meet the debt payment needs of the
County. In addition, the Road fund transferred funds to a capital project fund to build the new public works building.
The changes in the General fund were a reflection of increases in property tax rates resulting in increased revenue and
receivables, as well as an increase in deferred revenue, related to property taxes receivable. The lack of significant
changes in fund balance also reflects the effort put into maintaining the expenses at a level not to exceed the expected
revenue in all the funds.
General Fund Road Fund
Flood Control
Fund
Admin Building
Debt Service
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Assets $ 25,057,877 $ 16,218,721 $ 20,947,621 $ 12,215,168 $ 40,223,120 $ 114,662,507
Liabilities 5,341,942 588,657 1,594,990 919,028 5,756,627 1 4,201,244
Total fund balance 19,715,935 15,630,064 19,352,631 11,296,140 34,466,493 100,461,263
Assets 2 8,144,489 14,564,629 22,730,993 6,845,984 4 5,170,908 117,457,003
Liabilities 6,449,705 1,370,063 4,501,408 918,403 4,314,389 1 7,553,968
Total fund balance 21,694,784 13,194,566 18,229,585 5,927,581 4 0,856,519 9 9,903,035
Increase (decrease)
Assets 3,086,612 (1,654,092) 1,783,372 (5,369,184) 4,947,788 2,794,496
Liabilities 1,107,763 781,406 2,906,418 (625) (1,442,238) 3,352,724
Total fund balance $ 1,978,849 $ (2,435,498) $ (1,123,046) $ (5,368,559) $ 6,390,026 $ (558,228)
% change
Assets 12.32% -10.20% 8.51% -43.96% 12.30% 2.44%
Liabilities 20.74% 132.74% 182.22% -0.07% -25.05% 23.61%
Total fund balance 10.04% -15.58% -5.80% -47.53% 18.54% -0.56%
2012
Comparative Balance Sheet
Governmental Funds
As of June 30,
2011
12
During the current fiscal year, the fund balance of the General fund increased by $2 million. This was a decrease of
$1.6 million from the prior year increase of $3.6 million. Most of this decrease was due to a one-time transfer in of $2
million from other funds to offset income the State withheld from state shared revenues in 2011. This represents a 10%
increase from the fiscal year 2011 ending fund balance. Revenues increased by $.7 million (.9%), mostly from tax
revenues as a result of increased tax rates. Expenditures increased by $1.7 million and total expenditures as a percentage
of the total original budget were only 83% in fiscal year 2012. The County did not provide employees with any cost of
living or step increases during the year. Most of the increase in expense arose from increased A.H.C.C.C.S payments to
the State and increased public safety costs. Expenditures in most of the other funds decreased in 2012.
The Road fund had a total fund balance of $13.2 million, of which $289,099 is reserved for inventories and $12.9
million is restricted and will be used for road maintenance and other approved projects for highway user funds. The
remaining fund balance reflects funds available for ongoing road projects of the County. The current year road projects
exceeded the current year revenue by $2.4 million, which is reflected by a corresponding decrease in the fund balance.
The Flood Control fund had a total fund balance of $18.2, which was a decrease of $1.1 million. Expenses decreased
$3.8 million over the prior year, consisting of fewer channel maintenance projects and capital improvement projects of
flood control systems in 2012. Revenue was down $2.4 million due to lower assessed values, resulting in lower tax
revenue. Funds are restricted for ongoing flood control projects of the County.
The Admin Building Debt Service fund balance was $5.9 million at year end. The fund balance represents transfers in
from the County capital improvement - sales tax fund and the general fund for future debt service payments. During the
current year, the debt payments exceeded the transfers in by $.4 million. In addition, $5 million of the fund balance
(resulting from prior years transfers in) was re-allocated and moved to the Jail debt service fund. The remaining funds
are available for future debt payments.
General Fund Road Fund
Flood Control
Fund
Admin Building
Debt Service
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Revenues $ 72,937,465 $ 13,697,592 $ 11,558,586 $ 116,783 $ 37,926,073 $ 136,236,499
Expenditures 68,259,605 1 2,146,026 1 1,995,795 1,840,806 4 6,309,276 140,551,508
Other financing sources (uses) (1,060,638) 2,349,392 (2,639,430) 4,028,553 (2,214,097) 463,780
Net change in fund balance 3,617,222 3,900,958 (3,076,639) 2,304,530 (10,597,300) (3,851,229)
Revenues 73,607,098 12,778,109 9,136,964 48,707 3 7,485,516 133,056,394
Expenditures 69,994,748 15,162,015 8,178,826 1,840,306 4 2,013,157 137,189,052
Other financing sources (uses) (1,633,501) (36,984) (2,081,184) (3,576,960) 1 0,917,667 3,589,038
Net change in fund balance 1,978,849 (2,420,890) (1,123,046) (5,368,559) 6,390,026 (543,620)
Increase (decrease)
Revenues 669,633 ( 919,483) (2,421,622) (68,076) ( 440,557) (3,180,105)
Expenditures 1,735,143 3,015,989 (3,816,969) (500) (4,296,119) (3,362,456)
Other financing sources (uses) (572,863) (2,386,376) 558,246 (7,605,513) 1 3,131,764 3,125,258
Net change in fund balance $ (1,638,373) $ (6,321,848) $ 1,953,593 $ (7,673,089) $ 16,987,326 $ 3,307,609
% change
Revenues 0.92% -6.71% -20.95% -58.29% -1.16% -2.33%
Expenditures 2.54% 24.83% -31.82% -0.03% -9.28% -2.39%
Other financing sources (uses) 54.01% -101.57% -21.15% -188.79% -593.10% 673.87%
Net change in fund balance -45.29% -162.06% -63.50% -332.96% -160.30% -85.88%
Comparative Statement of Revenues, Expenditures, and Changes in Fund Balances
Year Ended June 30,
2011
2012
Governmental funds
13
The other governmental funds had a combined fund balance of $40.9 million at year-end. This was a net increase of
$6.4 million from the prior year. The increase primarily reflects the transfer in of $5 million to the jail debt service fund,
from the Admin building debt service fund. A capital projects fund was created for the construction of a public works
building and funds totaling $5.1 million were transferred in from various major funds. The Bullhead City library
remodel cost an additional $1.8 million, which decreased the fund balance. In addition, $2.7 million of expenditures
were made from prior years’ balances, from various funds.
Proprietary funds
Reports for Mohave County’s proprietary funds provide the same type of information found in the government-wide
financial statements, but in more detail. In response to the economic downturn, County departments cut expenses
wherever possible. Even with these measures, some funds reflected in the statements show decreases to net assets.
Statement of Net Assets-Business-type Activities - Net assets for the enterprise funds, in total, decreased $2.7 million.
At the end of the year, the unrestricted net assets of the water companies and other enterprise funds, which includes park
services, was $4.4 million. The I-40 water corridor fund and G.V.I.D. fund reflected net losses before contributions and
transfers, after recording depreciation expense. The Landfill fund showed a $2.2 million decrease in net assets, which
reflected three transfers during the year. The first was $.4 million to a new fund to separate out the “ERACE” program
from the Landfill fund. For the second year in a row, the landfill transferred funds to the HURF fund (as allowed by
Arizona Revised Statutes) to help offset the State’s withholding of HURF funds ($.7 million in 2012). The third
transfer of $1.5 million was for a new public works facility, which will house the Landfill administrative offices. The
other enterprise funds’ net assets increased by $.37 million primarily due to the ERACE transfer discussed above.
Statement of Net Assets-Governmental Activities-Internal Service Funds - Net assets for the internal service funds
increased by $2 million. $1.2 million of the increase was from the Employee Benefit Trust fund (EBT). Insurance
claims expenses decreased this year in the EBT fund, resulting in $1.2 million excess revenue over expenses which will
be used as a hedge against future claims. Another $.77 million was from increases to the Vehicle Replacement fund and
Communications fund. The investment in capital assets, net of related debt, increased due to purchases in the current
year exceeding depreciation expense by $1 million. The Vehicle Replacement fund purchased vehicles totaling $1.6
million, offset by depreciation of $.6 million.
Statement of Revenues, Expenses, and Changes in Fund Net Assets-Business-type Activities - The only difference
between this statement and the Statement of Activities-Business type, discussed previously on page 10, is the
presentation. The expenses are broken out in more detail on this report and the revenues are shown as either operating
or non-operating.
Statement of Revenues, Expenses, and Changes in Fund Net Assets-Governmental Activities Internal Service
Funds – There was no significant change in the income before contributions and transfers this year. Both revenues and
expenses decreased by approximately $1.2 million or 6% in total for all the internal service funds. To consolidate all of
the Self Insurance Retention Trust fund (SIR fund) expenses into one fund, the operating expenses previously reported
in the General fund were moved into the SIR fund. These expenses are supported by a corresponding transfer from the
General fund in the amount of $.7 million. The increase in net assets of $2 million is attributed to a decrease in
insurance claims.
General Fund Budgetary Highlights
Revenues: The General fund revenue was below the total amount budgeted by $1 million (1%). Actual revenues
increased by $670 thousand over the prior year’s actuals, but remained lower than budgeted.
Expenditures: Differences between the original budget and the final amended budget line items resulted from moving
expenditures between departments. The total budgeted expenditures between the original and final budgets for 2012
decreased by $162,328. Budgeted expenditures increased $1.9 million from 2011. Total actual expenditures were below
budgeted expenditures by $13.9 million, $10 million of that amount (72%) was unspent contingency funds
Variances between actual revenues, expenditures, and final budgeted amounts will be discussed below for all significant
differences, as related to the schedule in required supplementary information on pages 55-56.
14
Revenues: Revenue budgets were increased by 1% for 2012 and actual revenue fell short of the increased budget by
1%. Property tax revenues fell 4% short of the increased budget, but were actually slightly higher than the amount
collected in the previous year. This was due to slow collections and court approved tax adjustments. Intergovernmental
revenue, a major revenue source, was below budget by $.6 million. The primary cause was shortfalls in the State shared
and in lieu tax revenues. Charges for services revenue exceeded the budgeted amount by $1 million. The budget
reflected expected revenue decreases in certain areas, but did not reflect the aggressive billing of inmate charges for the
prison or the unexpected increase in population at the jail.
Expenditures: Actual expenditures were less than budgeted expenditures by $13.9 million. For the prior year the
difference was $13.7 million. The budgeted amounts increased $2 million for 2012 while actual expenditures increased
over the prior year by $1.7 million (3%). Of the County contingency budget of $11.2 million, $1.04 million was
transferred to other general fund departments, $.16 million was transferred to non-general fund departments (including
capital projects of $159,500) and $10 million remained unused. This accounted for most of the remaining unspent
budget. The balance of available budget is scattered throughout the other departments. Most departments were able to
maintain expenses at the prior year level or reduce them. The exceptions fell in the public safety area. The jail
continues to make adjustments for the expansion of the new jail. The Sheriff had a special detail to patrol the strip area
at the request of the State. This was covered by a $500,000 grant from the State. No merit raises or cost of living
increases have been given to employees since fiscal year 2009, when a 2.5% step increase was given. This continues to
keep the expenditures down.
Capital Assets and Debt Administration
Capital assets – Mohave County’s investment in capital assets for its governmental and business-type activities as of
June 30, 2012 amounts to $241.9 million (net of accumulated depreciation). This investment in capital assets includes
land, buildings, water systems, improvements other than buildings, machinery and equipment, park facilities, roads,
highways, bridges, and an internally generated software program. The increase in capital assets of $7.6 million (net of
depreciation) resulted from the following major projects and purchases: remodel and expansion of the Bullhead City
Library, North Canyon justice court, several flood control projects, donated roads accepted into the County maintenance
program, and the purchase of additional fleet vehicles and road equipment.
Major capital asset events during the current fiscal year include the following:
 $1.7 million was spent on the Bullhead City library addition/remodel with completion expected
by December 2012.
 The County replaced fifty-seven aging vehicles from the fleet at a total cost of $1.9 million. All
were purchased using general government funding: forty-five from the Vehicle Replacement
fund, seven from Road fund, and five from other governmental funds.
Increase %
2011 2012 (Decrease) Change
Governmental activities
Capital assets, not being depreciated $ 36,779,101 $ 38,000,267 $ 1 ,221,166 3.32%
Capital assets, being depreciated 182,505,887 189,312,337 6 ,806,450 3.73%
Total governmental capital assets 219,284,988 227,312,604 8 ,027,616 3.66%
Business-type activities
Capital assets, not being depreciated 1,812,136 1,687,754 (124,382) -6.86%
Capital assets, being depreciated 13,148,803 12,918,791 (230,012) -1.75%
Total business-type capital assets 14,960,939 14,606,545 (354,394) -2.37%
Total governmental and
business-type activities
Capital assets, not being depreciated 38,591,237 39,688,021 1 ,096,784 2.84%
Capital assets, being depreciated 195,654,690 202,231,128 6 ,576,438 3.36%
Total capital assets $ 234,245,927 $ 241,919,149 $ 7 ,673,222 3.28%
Capital Assets, net of accumulated depreciation
As of June 30,
15
 The Board of supervisors approved the construction of a new Public Works building and entered
into a $5 million construction contract. The building is to be completed in fiscal year 2013.
 $7.6 million was spent by the State on the completion of the Beaver-dam Bridge project, which
was recorded this year.
Notes 5 and 6, on pages 39-40 of this report, contain additional information on Mohave County’s capital
assets.
Long-term liabilities - At the end of the current fiscal year, Mohave County had total long-term liabilities outstanding
of $59.4 million. Of this amount, $44 million is related to completed construction projects backed as follows: $10
million of funds set aside for early re-payment of debt, $34 million backed by buildings of the government used as
collateral for Beneficial Interest Certificates issued. The special assessment the County had been paying, was paid off in
fiscal year 2012. The remainder of Mohave County’s long-term liabilities is comprised of claims and judgments
payable, landfill closure and postclosure care costs payable, and compensated absences payable incurred during normal
operations. For details see note 8.
State statutes limit the amount of general obligation debt a government entity may issue to 6% of its total secondary
assessed valuation, without taxpayer approval, and up to 15% with the approval of a majority of taxpayers. The debt
limitation for Mohave County for fiscal year 2011/2012 was $120 million (6% of $2 billion secondary assessed value).
Mohave County does not have any outstanding general obligation debt and therefore has its full debt limit capacity
available for future needs.
Note 8, on pages 41-44 of this report, contains additional information on Mohave County’s long-term debt.
Economic Factors and Next Year’s Budgets and Rates
Population growth has leveled off, but there are still significant service demands for the existing population. The
revenue trend for governments was stagnant for 2012 and is just beginning to come back, slowly, in 2013. This trend is
predicted to continue for the next year. A full recovery is not expected until 2015 or 2016. All of these factors were
considered in preparing Mohave County’s budget for the 2013 fiscal year. In an effort to keep expenses down and
avoid layoffs, the County will continue to reduce operating costs through attrition and increased efficiency.
The average unemployment rate for Mohave County was 9.7% for 2012, which is a decrease from an average rate of
11.0%1 in 2011. The unemployment rate in Mohave County exceeded the State’s average unemployment rate of 8.4%
and compares unfavorably to the national average rate 8.1%. In September 2012, Mohave County’s rate was at 9.1%
while the State’s was 8.0% and the Federal rate was 7.8%.
Requests for Information
This financial report is designed to provide a general overview of Mohave County’s finances for all those with an
interest in the government’s finances. Questions concerning any of the information provided in this report or requests
for additional financial information should be addressed to:
Mohave County Finance
P.O. Box 7000
Kingman, AZ 86402-7000
1 Bureau of Labor Statistics (BLS) website is the source of unemployment data. Mohave County’s 2011 figures were amended after
fiscal year 2011 financials were prepared.
Page intentionally left blank
Basic Financial Statements
The notes to the financial statements are an integral part of this statement.
17
The notes to the financial statements are an integral part of this statement.
18
Functions/Programs Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital
Grants and
Contributions
Governmental
Activities
Business-type
Activities Total
Primary government:
Governmental activities:
General government $ 55,360,181 $ 11,977,162 $ 2 ,101,115 $ 7,796,964 $ (33,484,940) $ - $ (33,484,940)
Public safety 27,841,512 2,958,775 4,239,489 - (20,643,248) - (20,643,248)
Highways and streets 20,859,871 667,163 9,784,693 - (10,408,015) - (10,408,015)
Health 13,726,048 1,710,746 3,380,864 - (8,634,438) - (8,634,438)
Welfare 5,422,044 527,004 5,185,045 - 290,005 - 290,005
Culture and recreation 4,964,298 72,526 166,770 - (4,725,002) - (4,725,002)
Education 2,453,762 - 2,221,324 - (232,438) - (232,438)
Interest on long-term debt 2,016,597 - - - (2,016,597) - (2,016,597)
Total governmental activities 132,644,313 17,913,376 27,079,300 7,796,964 (79,854,673) - (79,854,673)
Business-type activities:
Landfill 1,035,214 983,295 413,996 - - 362,077 3 62,077
Recreation 1,609,355 1,445,411 - 170,000 - 6,056 6,056
Water companies 2,345,060 1,674,066 - - - (670,994) ( 670,994)
Total business-type activities 4,989,629 4,102,772 413,996 170,000 - (302,861) (302,861)
Total primary government $ 137,633,942 $ 22,016,148 $ 27,493,296 $ 7,966,964 ( 79,854,673) (302,861) (80,157,534)
General revenues:
Taxes:
Property taxes, levied for general purposes 4 5,690,144 - 45,690,144
Property taxes, levied for flood control 8,610,731 - 8,610,731
Share of state sales taxes 1 7,335,534 - 17,335,534
Special county sales tax for capital projects 5,396,008 - 5,396,008
Auto-lieu tax 8,119,156 - 8,119,156
Federal in-lieu tax 3,316,599 100,000 3,416,599
Local in-lieu tax 19,061 - 19,061
Utilities franchise tax 377,959 - 377,959
County equalization revenue 94,636 - 94,636
Investment earnings 910,544 151,610 1,062,154
Miscellaneous 399,322 14,780 4 14,102
Rent 253,008 2,000 255,008
Gain or Loss on Sale/Trade of Capital Assets 1,609,206 ( 756) 1,608,450
Transfers 2,713,413 (2,713,413) -
Total general revenues and transfers 94,845,321 (2,445,779) 92,399,542
Change in net assets 14,990,648 (2,748,640) 12,242,008
Net assets, July 1, 2011 284,849,661 28,090,201 312,939,862
Net assets, June 30, 2012 $ 299,840,309 $ 25,341,561 $ 3 25,181,870
MOHAVE COUNTY
Statement of Activities
Year Ended June 30, 2012
Net (Expense) Revenue and Changes in Net Assets
Primary Government
Program Revenues
The notes to the financial statements are an integral part of this statement.
19
100 205 305 410
Flood Admin Building Other Total
General Road Control Debt Service Governmental Governmental
Assets Fund Fund Fund Fund Funds Funds
Cash and investments $ 21,302,763 $ 13,041,512 $ 21,243,147 $ 5,595,315 $ 38,550,508 $ 99,733,245
Property taxes 4,402,291 - 1,442,050 - 1,228,838 7,073,179
Accounts 550,707 5,892 - - 249,228 805,827
Accrued interest 45,415 25,876 45,746 11,064 80,539 208,640
Due from:
Other funds 10,925 - - - 185,608 196,533
Other governments 1,818,838 1,202,250 - - 2,612,707 5,633,795
Inventories - 289,099 - - - 289,099
Prepaid items 13,550 - 50 - 229,856 243,456
Restricted cash - - - 1,239,605 2,033,624 3,273,229
Total assets $ 28,144,489 $ 14,564,629 $ 22,730,993 $ 6,845,984 $ 45,170,908 $ 117,457,003
Liabilities and Fund Balances
Liabilities
Accounts payable $ 929,304 $ 1,102,218 $ 665,940 $ - $ 772,325 $ 3,469,787
Accrued payroll and employee benefits 1,680,395 243,206 48,345 - 621,307 2,593,253
Due to:
Other funds 15,196 1,815 10 - 173,184 190,205
Other governments 27,868 22,824 2,598,180 - 337,408 2,986,280
Deposits held for others 278,938 - - - 78,578 357,516
Advances payable - Landfill - - - - 828,400 828,400
Beneficial interest certificates:
Principal payable - - - 635,000 - 635,000
Interest payable - - - 283,403 - 283,403
Deferred revenue 3,518,004 - 1,188,933 - 1,503,187 6,210,124
Total liabilities 6,449,705 1,370,063 4,501,408 9 18,403 4,314,389 17,553,968
Fund balances
Nonspendable 13,550 289,099 50 - 229,856 532,555
Restricted - 12,905,467 18,229,535 1,239,605 28,633,684 61,008,291
Committed 1 1,708,898 - - 4,687,976 11,992,979 28,389,853
Unassigned 9,972,336 - - - - 9,972,336
Total fund balances 2 1,694,784 13,194,566 18,229,585 5,927,581 40,856,519 99,903,035
Total liabilities and fund balances $ 28,144,489 $ 14,564,629 $ 22,730,993 $ 6,845,984 $ 45,170,908 $ 117,457,003
MOHAVE COUNTY
Governmental Funds
June 30, 2012
Receivables (net of allowances
for uncollectibles):
Balance Sheet
The notes to the financial statements are an integral part of this statement.
20
Fund balances - total governmental funds $ 99,903,035
Amounts reported for governmental activities in the Statement of
Net Assets are different because:
Capital assets and restricted assets - HUD properties used in
224,335,110
Some receivables are not available to pay for current-period
expenditures and, therefore, are deferred in the funds.
Property taxes receivable 5,719,850 5,719,850
Internal service funds are used by management to charge the
costs of certain activities, such as insurance, automotive
maintenance and operation,and telecommunications to
individual funds. The assets and liabilities of the internal
service funds are included in governmental activities in the
Statement of Net Assets. 20,433,386
Some liabilities, including bonds and beneficial interest
certificates payable, are not due and payable in the
current period and, therefore, are not reported in the funds.
Beneficial interest certificates $ (43,345,000)
Beneficial interest certificates premium-unamortized (278,428)
Compensated absences (6,927,644) (50,551,072)
Net assets of governmental activities $ 299,840,309
MOHAVE COUNTY
Reconciliation of the Balance Sheet to the Statement of Net Assets
June 30, 2012
Governmental Funds
governmental activities are not financial resources and,
therefore, are not reported in the funds.
The notes to the financial statements are an integral part of this statement.
21
Flood Admin Building Other Total
General Road Control Debt Service Governmental Governmental
Fund Fund Fund Fund Funds Funds
Revenues:
Taxes $ 3 7,290,972 $ - $ 8,610,731 $ - $ 13,690,450 $ 59,592,153
Special assessments - - - - 355,274 355,274
Licenses and permits 557,623 3 4,100 5,800 - 724,190 1,321,713
Intergovernmental 26,738,788 11,712,294 360,041 - 16,713,918 55,525,041
Charges for services 6,867,180 626,693 - - 4,536,569 12,030,442
Fines and forfeits 1,834,219 570 - - 523,504 2,358,293
Investment earnings 160,655 115,369 160,392 48,707 292,628 777,751
Rents - 86,358 - - 231,650 318,008
Contributions 226 - - - 382,983 383,209
Miscellaneous 157,435 202,725 - - 34,350 394,510
Total revenues 73,607,098 12,778,109 9,136,964 48,707 37,485,516 133,056,394
Expenditures:
Current:
General government 36,657,364 - - - 5,573,545 42,230,909
Public safety 24,126,824 - - - 5,928,955 30,055,779
Highways and streets - 15,162,015 8,178,826 - 12,963 23,353,804
Health 8,815,566 - - - 6,109,728 14,925,294
Welfare - - - - 6,208,365 6,208,365
Culture and recreation - - - - 7,620,649 7,620,649
Education 394,994 - - - 2,419,336 2,814,330
Capital outlay - - - - 2,333,325 2,333,325
Debt service:
Principal retirement - - - 1,255,000 4,375,000 5,630,000
Interest and fiscal charges - - - 585,306 1,431,291 2,016,597
Total expenditures 69,994,748 15,162,015 8,178,826 1,840,306 42,013,157 137,189,052
Excess (deficiency) of
revenues over expenditures 3,612,350 (2,383,906) 958,138 (1,791,599) (4,527,641) (4,132,658)
Other financing sources (uses):
Transfers in 2,673,007 4,010,602 - 1,423,040 16,308,487 24,415,136
Transfers out (4,306,508) (5,656,792) (2,081,184) ( 5,000,000) (5,390,820) (22,435,304)
Sale of Capital assets - 1,609,206 - - - 1,609,206
(1,633,501) (36,984) (2,081,184) (3,576,960) 10,917,667 3,589,038
Net change in fund balances 1,978,849 (2,420,890) (1,123,046) (5,368,559) 6,390,026 (543,620)
Fund balances, July 1, 2011 19,715,935 15,630,064 19,352,631 11,296,140 34,466,493 100,461,263
- (14,608) - - - (14,608)
Fund balances, June 30, 2012 $ 2 1,694,784 $ 13,194,566 $ 18,229,585 $ 5,927,581 $ 40,856,519 $ 99,903,035
Total other financing sources
(uses)
Changes in nonspendable resources:
Decrease in inventories
MOHAVE COUNTY
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
Year Ended June 30, 2012
The notes to the financial statements are an integral part of this statement.
22
Net change in fund balances - total governmental funds $ (543,620)
Amounts reported for governmental activities in the Statement of Activities
are different because:
Governmental funds report capital outlays as expenditures. However,
in the Statement of Activities, the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense.
Capital outlay $ 10,888,359
Depreciation expense (9,367,605) 1,520,754
In the Statement of Activities, only the gain/loss on the sale of capital assets is
reported, whereas in the governmental funds, the proceeds from the sale
increase financial resources. Thus, the change in net assets differs from the
change in fund balance by the book value of the capital assets sold.
Net effect of disposal of capital assets (1,853,249)
Debt proceeds provide current financial resources to governmental funds,
but issuing debt increases long-term liabilities in the Statement of Net Assets.
Repayment of debt is an expenditure in the governmental funds, but the
repayment reduces long-term liabilities in the Statement of Net Assets.
Principal repaid on long-term debt:
Special assessment bonds 991,000
Beneficial interest certificates-payments 4,730,000
Beneficial interest certificates premium-amortization 39,775 5,760,775
Under the modified accrual basis of accounting used in governmental funds,
expenditures are not recognized for transactions that are not normally paid
with expendable available resources. In the Statement of Activities, however,
which is presented on the accrual basis of accounting, expenses are
reported regardless of when the financial resources are available.
Decrease in compensated absences 148,760
Revenues in the Statement of Activities that do not provide current financial resources
are not reported as revenues in the funds. 8,019,015
Some cash outlays, such as the purchase of supply inventories, are recorded as
expenditures in the governmental funds when purchased. In the Statement of
Activities, however, inventories are reported as expenses when consumed.
Decrease in supply inventory (14,608)
Internal service funds are used by management to charge the costs of certain
activities, such as insurance, automotive maintenance and operation, information
technology and telecommunications, to individual funds. The net revenue
of certain internal service funds is reported with governmental activities in the
Statement of Activities. 1,952,821
Change in net assets of governmental activities $ 14,990,648
Year Ended June 30, 2012
MOHAVE COUNTY
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances to the Statement of Activities
Governmental Funds
The notes to the financial statements are an integral part of this statement.
23
850 505 856 Governmental
I-40 Water Other Activities-
Corridor Landfill G.V.I.D. Enterprise Internal Service
Fund Fund Fund Funds Total Funds
Assets
Current assets:
Cash and investments $ 1 ,389,057 $ 10,736,438 $ 1 ,280,054 $ 1,205,012 $ 14,610,561 $ 1 7,951,333
Property taxes - - 376 - 376 -
Accounts 1 85,730 115,447 5 3,639 29,355 384,171 4 48,629
Accrued interest 3 ,662 21,098 3 ,775 2,239 30,774 3 1,517
Due from:
Other funds - - 500 - 500 6 9
Other governments - 102,084 - 177,659 279,743 3 ,830
Inventories 2 52,063 - 179,265 - 431,328 7 0,255
Prepaid items 6 1,261 - - 2,215 63,476 305,850
Total current assets 1 ,891,773 10,975,067 1 ,517,609 1,416,480 15,800,929 1 8,811,483
Noncurrent assets:
Restricted cash 3 33,399 - 549,741 - 883,140 2 01,160
Advance to other funds - 828,400 - - 828,400 -
Land - 108,699 4 0,388 1,481,772 1,630,859 -
Infrastructure, net 3 ,475,459 8 47,550 5,954,546 861,895 11,139,450 -
Buildings, net - - 46,023 1,253,765 1,299,788 -
Equipment, net 2 8,350 - 197,532 253,671 479,553 3 ,675,183
Construction in progress - 56,895 - - 56,895 -
Total noncurrent assets 3 ,837,208 1,841,544 6,788,230 3,851,103 16,318,085 3 ,876,343
Total assets 5 ,728,981 12,816,611 8 ,305,839 5,267,583 32,119,014 2 2,687,826
Liabilities
Current liabilities:
Accounts payable 8 7,255 54,912 27,303 37,176 206,646 3 26,882
5,289 4,797 9,043 33,150 5 2,279 108,382
Due to:
Other funds 500 - - - 500 6,397
Other governments 934 353 5,740 1,809 8,836 3 9
Deposits held for others 3 5,000 - 77,461 - 112,461 -
Deferred revenues - - 19,972 - 19,972 6 0
Current portion of:
Compensated absences payable 1 0,001 15,097 17,798 82,908 125,804 2 46,333
Claims and judgments payable - - - - - 1,538,978
Total current liabilities 138,979 7 5,159 157,317 155,043 526,498 2 ,227,071
Noncurrent liabilities:
- 6,236,979 - - 6,236,979 -
Compensated absences payable 1,111 1,677 1,977 9,211 13,976 2 7,369
Total noncurrent liabilities 1 ,111 6,238,656 1 ,977 9,211 6,250,955 2 7,369
Total liabilities 1 40,090 6,313,815 1 59,294 164,254 6,777,453 2 ,254,440
Net Assets
3,503,809 1,013,144 6,238,489 3,851,103 14,606,545 3 ,675,183
Capital projects 333,399 - 549,741 - 883,140 -
Sanitation - 5,489,652 - - 5,489,652 -
Unrestricted 1 ,751,683 - 1,358,315 1,252,226 4,362,224 1 6,758,203
Total net assets $ 5 ,588,891 $ 6,502,796 $ 8,146,545 $ 5,103,329 $ 25,341,561 $ 2 0,433,386
MOHAVE COUNTY
Statement of Net Assets
Proprietary Funds
June 30, 2012
Restricted for:
Invested in capital assets,
net of related debt
Accrued payroll and employee benefits
Receivables (net of allowances
for uncollectibles):
Business-Type Activities-Enterprise Funds
Capital assets, net of accumulated
depreciation, where applicable
Landfill closure and postclosure
care costs payable
The notes to the financial statements are an integral part of this statement.
24
850 505 856 Governmental
I-40 Water Fy09 Add 922 Other Activities-
Corridor Landfill G.V.I.D. Enterprise Internal
Fund Fund Fund Funds Total Service Funds
Operating revenues:
Charges for services $ 1,041,573 $ 9 83,295 $ 602,033 $ 1,475,871 $ 4,102,772 $ 20,123,096
Miscellaneous 5,623 - 3,843 5,314 14,780 4 ,812
Total operating revenues 1,047,196 983,295 605,876 1,481,185 4,117,552 2 0,127,908
Operating expenses:
Personnel services 1 11,535 110,506 235,029 876,805 1,333,875 2,533,760
Supplies 8 ,185 5 54 14,776 195,959 219,474 367,227
Professional services 1 27,524 2 29,618 1 44,315 76,118 577,575 446,218
Communications 5 ,633 6 85 18,289 20,092 44,699 632,309
Insurance 7 6,019 - 17,917 39,497 133,433 725,397
Landfill closure and postclosure care costs - 459,889 - - 459,889 -
Insurance claims - - - - - 10,574,869
Lawsuit judgments - - - - - 212,391
Repairs and maintenance 1 6,059 - 126,686 76,258 219,003 93,134
Public utility service 5 21,756 83,421 102,792 266,430 974,399 -
Rents and leases 5,500 5,500 11,000 10,358 32,358 1,265,542
Depreciation 2 97,925 47,737 381,196 105,458 832,316 888,778
Other 16,942 97,304 40,248 8,114 162,608 1,316,287
Total operating expenses 1,187,078 1 ,035,214 1,092,248 1,675,089 4,989,629 1 9,055,912
Operating income (loss) ( 139,882) (51,919) (486,372) (193,904) (872,077) 1,071,996
Nonoperating revenues (expenses):
Investment earnings 16,219 111,788 12,996 10,607 151,610 132,793
Rent income - - 2,000 - 2,000 -
Grants - 413,996 - 270,000 683,996 -
Gain (loss) on disposal of capital assets - - - (756) (756) 14,451
Total nonoperating revenues 16,219 525,784 14,996 279,851 836,850 1 47,244
(123,663) 473,865 (471,376) 8 5,947 (35,227) 1,219,240
Transfers in - - - 484,745 484,745 733,581
Transfers out ( 150,000) (2,698,158) (150,000) (200,000) (3,198,158) -
Increase (decrease) in net assets ( 273,663) (2,224,293) (621,376) 370,692 (2,748,640) 1 ,952,821
5,862,554 8 ,727,089 8,767,921 4,732,637 28,090,201 1 8,480,565
Total net assets, June 30, 2012 $ 5,588,891 $ 6,502,796 $ 8 ,146,545 $ 5,103,329 $ 25,341,561 $ 2 0,433,386
Total net assets, July 1, 2011
Income (loss) before contributions and
transfers
MOHAVE COUNTY
Statement of Revenues, Expenses, and Changes in Fund Net Assets
Proprietary Funds
Year Ended June 30, 2012
Business-type Activities - Enterprise Funds
The notes to the financial statements are an integral part of this statement.
25
Governmental
I-40 Water Other Activities-
Corridor Landfill G.V.I.D. Enterprise Internal
Fund Fund Fund Funds Total Service Funds
Receipts from customers and users $ 8 90,053 $ 1,030,516 $ 601,802 $ 1,449,026 $ 3,971,397 $ 1,042,639
Receipts from interfund services provided - - - - - 19,701,580
Payments to suppliers ( 822,652) ( 425,215) (363,931) (589,656) (2,201,454) (16,014,064)
Payments for employee wages and benefits ( 110,476) ( 121,665) (223,482) (818,627) (1,274,250) (2,414,321)
Payments for interfund services used ( 23,845) ( 2,250) (100,476) (115,152) (241,723) (283,419)
( 66,920) 481,386 (86,087) (74,409) 253,970 2,032,415
Transfers from (to) other funds ( 150,000) (2,563,324) (150,000) 2 41,178 (2,622,146) 7 33,753
Rent income - - 1,500 - 1,500 -
Subsidy from non-capital grant - 408,944 - 100,000 508,944 -
( 150,000) (2,154,380) (148,500) 3 41,178 (2,111,702) 7 33,753
Purchases of capital assets ( 163,823) - (33,689) (261,188) (458,700) (1,734,259)
Proceeds from sales of capital assets - - 8 13,437 13,445 6 0,305
( 163,823) - (33,681) (247,751) (445,255) (1,673,954)
Interest and dividends received 1 8,741 128,754 18,796 11,744 178,035 1 46,191
1 8,741 128,754 18,796 11,744 178,035 1 46,191
( 362,002) (1,544,240) (249,472) 3 0,762 (2,124,952) 1,238,405
Cash and cash equivalents, July 1, 2011 2 ,084,458 12,280,678 2,079,267 1,174,250 17,618,653 16,914,088
Cash and cash equivalents, June 30, 2012 $ 1 ,722,456 $ 10,736,438 $ 1,829,795 $ 1,205,012 $ 15,493,701 $ 18,152,493
0.00 0.00 0.00 0.00
Operating income (loss) $ ( 139,882) $ ( 51,919) $ (486,372) $ (193,904) $ ( 872,077) $ 1,071,996
Depreciation expense 2 97,925 4 7,737 381,196 105,458 832,316 8 88,778
Landfill closure and postclosure care costs - 459,889 - - 459,889 -
Expenses incurred but not reported - - - - - (281,533)
Changes in assets and liabilities:
Receivables, (increase) decrease ( 80,225) 4 7,324 ( 441) (29,355) (62,697) 103,864
Due from other funds, (increase) decrease - - (492) - (492) 2 23
- - - (260) ( 260) 2,142
Inventories, (increase) decrease ( 35,049) - 20,652 - (14,397) 3 2,627
Prepaid items, (increase) decrease ( 61,261) - - 338 (60,923) 179,165
3 4,906 ( 1,922) 6 48 9,474 43,106 3 ,086
Due to other funds, increase (decrease) 5 00 - - - 500 (15,047)
( 4,624) 3 53 (2,151) 1 ,809 (4,613) 3 9
1 ,553 (4,089) 1,331 10,858 9 ,653 33,692
( 4,405) (15,987) 2 ,307 21,173 3 ,088 13,383
Deferred revenues, increase (decrease) ( 86,358) - 5,769 - (80,589) -
Deposits held for others, increase (decrease) 1 0,000 - (8,534) - 1,466 -
Total adjustments 7 2,962 533,305 400,285 119,495 1,126,047 9 60,419
Net cash provided by (used for) operating activities $ ( 66,920) $ 481,386 $ (86,087) $ (74,409) $ 2 53,970 $ 2,032,415
Turn this row font white to print - - - - - -
Cash at June 30, 2012 is comprised of the following:
Cash and investments $ 1 ,389,057 $ 10,736,438 $ 1,280,054 $ 1,205,012 $ 14,610,561 $ 17,951,333
Restricted cash 3 33,399 - 549,741 - 883,140 2 01,160
Total $ 1 ,722,456 $ 10,736,438 $ 1,829,795 $ 1,205,012 $ 15,493,701 $ 18,152,493
0.00 0.00 0.00 0.00 0.00 0
activities:
MOHAVE COUNTY
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2012
Business-type Activities- Enterprise Funds
Net cash provided by (used for)
noncapital financing activities
Cash flows from operating activities:
Adjustments to reconcile operating income (loss)
to net cash provided by (used for) operating
Net cash provided by (used for)
operating activities
Cash flows from noncapital financing activities:
Cash flows from capital and related
financing activities:
Net cash used for capital
and related financing activities
Compensated absences payable,
increase (decrease)
Due to other governments, increase (decrease)
Due from other governments,
(increase) decrease
Net increase (decrease)
in cash and cash equivalents
Cash flows from investing activities:
Net cash provided by investing activities
Accounts payable, increase (decrease)
Accrued payroll and employee benefits
increase (decrease)
Reconciliation of operating income (loss) to net cash
provided by (used for) operating activities:
The notes to the financial statements are an integral part of this statement.
26
Investment
Trust Agency
Funds Fund
Assets
Cash and investments $ 49,961,216 $ 175,585
Receivables (net of allowances for uncollectibles):
Accrued interest 110,898 -
Total assets 50,072,114 175,585
Liabilities
Deposits held for others - 175,585
Total liabilities - $ 175,585
Net Assets
Held in trust for investment trust participants $ 50,072,114
MOHAVE COUNTY
Statement of Fiduciary Net Assets
Fiduciary Funds
June 30, 2012
The notes to the financial statements are an integral part of this statement.
27
Investment
Trust
Funds
Additions:
Contributions from participants $ 379,892,324
Investment earnings:
Interest and dividend income 656,110
Net investment earnings 656,110
Total additions 380,548,434
Deductions:
Distributions to participants (385,514,515)
Total deductions (385,514,515)
Change in net assets (4,966,081)
Net assets, July 1, 2011 55,038,195
Net assets, June 30, 2012 $ 50,072,114
MOHAVE COUNTY
Statement of Changes in Fiduciary Net Assets
Fiduciary Funds
Year Ended June 30, 2012
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
28
Table of Contents
Note 1 – Summary of Significant Accounting Policies ................................................................................... 29
A. Reporting Entity...................................................................................................................................................... 29
B. Basis of Presentation ............................................................................................................................................... 30
C. Basis of Accounting ................................................................................................................................................ 31
D. Cash and Investments ............................................................................................................................................. 32
E. Inventories and Prepaid Items ................................................................................................................................. 32
F. Property Tax Calendar ............................................................................................................................................ 33
G. Capital Assets ......................................................................................................................................................... 33
H. Fund Balance Classifications .................................................................................................................................. 33
I. Investment Earnings ............................................................................................................................................... 34
J. Compensated Absences .......................................................................................................................................... 34
Note 2 – Stewardship, Compliance, and Accountability ................................................................................. 35
Note 3 – Deposits and Investments ................................................................................................................. 35
Note 4 – Property Taxes Receivable ............................................................................................................... 38
Note 5 – Capital Assets .................................................................................................................................. 39
Note 6 – Construction and Other Significant Commitments ........................................................................... 40
Note 7 – Restricted Assets ............................................................................................................................... 41
Note 8 – Long-Term Liabilities ....................................................................................................................... 41
Note 9 – Fund Balance Classifications of the Governmental Funds ............................................................... 45
Note 10 – Risk Management ............................................................................................................................. 45
Note 11 – Operating Leases ............................................................................................................................... 46
Note 12 – Pensions and Other Postemployment Benefits ................................................................................. 46
Note 13 – Interfund Balances and Activity ....................................................................................................... 51
Note 14 – County Treasurer’s Investment Pool ................................................................................................ 52
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
29
Note 1 - Summary of Significant Accounting Policies
Mohave County’s accounting policies conform to generally accepted accounting principles applicable
to governmental units adopted by the Governmental Accounting Standards Board (GASB).
A. Reporting Entity
Mohave County is a general purpose local government that is governed by a separately elected board
of three 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 so intertwined with the
County that they are in substance part of the County's operations. Therefore, data from these units is
combined with data of the primary government. Discretely presented component units, on the other
hand, are reported in a separate column in the government-wide financial statements to emphasize
that they are legally separate from the County. The County has no discretely presented component
units. Each blended component unit discussed below has a June 30 year end.
The following table describes the County’s component units:
Component Unit Description; Criteria for Inclusion
Reporting
Method
For Separate
Financial
Statements
Mohave County
Flood Control District
A tax-levying district that provides flood control
systems; County board of supervisors serves as board
of directors
Blended Not available
Mohave County
Library District
A tax-levying district that provides and maintains
library services for County residents; County board of
supervisors serves as board of directors
Blended Not available
Mohave County
Television District
Provides and maintains communication equipment
resources to provide television signals to residents;
County board of supervisors serves as board of
directors
Blended Not available
Mohave County
Special Assessment
Districts
Constructs or improves roads, bridges, and water
distribution systems; County board of supervisors
serves as board of directors
Blended Not available
Mohave
Administration
Building - Finance
Corporation
A corporation set up to provide financing and oversight
of the construction and operation of the Mohave
County administration building; management of
Mohave County serves as the board of directors of the
corporation
Blended Not available
Mohave Jail - Finance
Corporation
A corporation set up to provide financing and oversight
of the construction and operation of the Mohave
County jail facility; management of Mohave County
serves as the board of directors of the corporation
Blended Not available
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
30
Note 1 - Summary of Significant Accounting Policies (cont’d)
B. Basis of Presentation
The basic financial statements include both government-wide statements and fund financial
statements. The government-wide statements focus on the County as a whole, while the fund
financial statements focus on major funds. Each presentation provides valuable information that can
be analyzed and compared between years and between governments to enhance the usefulness of the
information.
Government-wide statements—provide information about the primary government (the County)
and its component units. The statements include a statement of net assets and a statement of
activities. These statements report the overall government’s financial activities, 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.
A 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 only allocates indirect expenses to special
taxing districts and proprietary funds. Program revenues include:
• Charges to customers or applicants for goods, services, or privileges provided;
• Operating grants and contributions; and
• Capital grants and contributions, including special assessments.
Revenues that are not classified as program revenues, including internally dedicated resources and all
taxes levied or imposed by the County, are reported as general revenues.
Generally, the effect of interfund activity has been eliminated from the government-wide financial
statements to minimize the double-counting of internal activities. However, charges for interfund
services provided and used are not eliminated if the prices approximate their external exchange
values.
Fund financial statements—Provide information about the County’s funds, including fiduciary
funds and blended component units. Separate statements are presented for the governmental,
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 revenues and expenses are classified as either operating or nonoperating. Operating
revenues and expenses generally result from transactions associated with the fund’s principal activity.
Accordingly, revenues, such as user charges and insurance premiums, in which each party receives
and gives up essentially equal values, are operating revenues. Other revenues, such as noncapital
grants, result from transactions in which the parties do not exchange equal values and are considered
nonoperating revenues along with investment earnings and revenue generated by ancillary activities.
Operating expenses include the cost of services, administrative expenses, and depreciation on capital
assets. Other expenses, such as interest expense, are considered to be nonoperating expenses.
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
31
Note 1 - Summary of Significant Accounting Policies (cont’d)
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 Road fund accounts for all taxes on gas and auto license fees collected for building and
maintaining County roads.
 The Flood control fund accounts for all monies collected from local taxpayers in the form of
a levy on real property. These funds are used in planning, engineering, constructing,
repairing, and maintaining flood control channels in Mohave County.
 The Admin building debt service fund accounts for debt service payments on the 2004
Beneficial Interest Certificates and is funded from the ¼ cent sales tax fund.
The County reports the following major enterprise funds:
 The I-40 water corridor fund accounts for the operations of a water company located in the
County’s industrial park, off U.S. I-40.
 The Landfill fund accounts for the operations of two landfills located in Mohave County.
 The G.V.I.D. fund accounts for the operations of a water company located in Golden Valley.
The County reports the following fund types:
The internal service funds account for automotive maintenance and operation, insurance, computer
services, janitorial services, and telecommunications services provided to the County’s departments
or to other governments on a cost-reimbursement basis.
The investment trust funds account for pooled assets the County Treasurer holds and invests on behalf
of other governmental entities.
The agency funds accounts for assets the County holds as an agent for the Public Fiduciary clients.
C. Basis of Accounting
The government-wide, proprietary fund, and fiduciary fund financial statements are presented using
the economic resources measurement focus, with the exception of agency funds, and the accrual basis
of accounting. The agency funds are custodial in nature and do not have a measurement focus.
Revenues are recorded when earned, and expenses are recorded at the time liabilities are incurred,
regardless of when the related cash flows take place. Property taxes are recognized as revenue in the
year for which they are levied. Grants and donations are recognized as revenue as soon as all
eligibility requirements the provider imposed have been met.
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
32
Note 1 - Summary of Significant Accounting Policies (cont’d)
Governmental funds in the fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Under this method, revenues are
recognized when they become both measurable and available. The County considers all revenues
reported in the governmental funds to be available if the revenues are collected within 60 days after
year-end. The County’s major revenue sources that are susceptible to accrual are property taxes,
special assessments, intergovernmental, charges for services, and investment earnings. Expenditures
are recorded when the related fund liability is incurred, except for principal and interest on general
long-term debt, claims and judgments, compensated absences, and landfill closure and postclosure
care costs, which are recognized as expenditures to the extent they are due and payable. General
capital asset acquisitions are reported as expenditures in governmental funds. Issuances of general
long-term debt and acquisitions under capital lease agreements are reported as other financing
sources.
Under the terms of grant agreements, the County funds certain programs by a combination of grants
and general revenues. Therefore, when program expenses are incurred, there are both restricted and
unrestricted net assets available to finance the program. The County applies grant resources to such
programs before using general revenues except where matching requirements exist.
The County’s business-type activities and enterprise funds follow FASB Statements and
Interpretations issued on or before November 30, 1989, Accounting Principles Board Opinions, and
Accounting Research Bulletins, unless those pronouncements conflict with GASB pronouncements.
The County has chosen the option not to follow FASB Statements and Interpretations issued after
November 30, 1989.
D. Cash and Investments
For purposes of its statement of cash flows, the County considers all cash on hand, demand deposits,
cash on deposit with the County Treasurer, and only those highly liquid investments with a maturity
of 3 months or less when purchased to be cash equivalents.
Nonparticipating interest-earning investment contracts are stated at cost. All other investments are
stated at fair value.
E. Inventories and Prepaid Items
The County accounts for its inventories in the governmental funds using the purchase method.
Inventories of the governmental funds consist of expendable supplies held for consumption and are
recorded as expenditures at the time of purchase. Amounts on hand at year-end are shown on the
balance sheet as an asset for informational purposes only and as nonspendable fund balance to
indicate that they do not constitute "available spendable resources." These inventories are stated at
cost using the first-in, first-out method.
Inventories in the government-wide and the proprietary funds’ financial statements are recorded as
assets when purchased and expensed when consumed. These inventories are stated at cost using the
first-in, first-out method.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both the government-wide and fund financial statements.
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
33
Note 1 - Summary of Significant Accounting Policies (cont’d)
F. Property Tax Calendar
The County levies real and personal property taxes on or before the third Monday in August that
become due and payable in two equal installments. The first installment is due on the first day of
October and becomes delinquent after the first business day of November. The second installment is
due on the first day of March of the next year and becomes delinquent after the first business day of
May.
A lien assessed against real and personal property attaches on the first day of January preceding
assessment and levy.
G. Capital Assets
Capital assets are reported at actual cost, or estimated historical cost if historical records are not
available. Certain infrastructure costs were estimated by calculating the current replacement cost of a
similar asset and deflating this cost through the use of price-level indexes. Donated assets are reported
at estimated fair value at the time received. Certain types of road improvements are expensed rather
than capitalized. The improvement types that are expensed are millings and soil stabilization.
Capitalization thresholds (the dollar values above which asset acquisitions are added to the capital
asset accounts), depreciation methods, and estimated useful lives of capital assets reported in the
government-wide statements and proprietary funds are as follows:
Capitalization Threshold
Land All
Construction in progress $5,000
Depreciation
Method
Estimated
Useful Life
Buildings $5,000 Straight Line 20-50 years
Equipment $5,000 Straight Line 3-20 years
Infrastructure and improvements other
than buildings $5,000 Straight Line 10-50 years
Utility systems $5,000 Straight Line 10-50 years
Intangibles $5,000 Straight Line 7-15 years
H. Fund Balance Classifications
Fund balances of the governmental funds are reported separately within classifications based on a
hierarchy of the constraints placed on the use of those resources. The classifications are based on the
relative strength of the constraints that control how the specific amounts can be spent. The
classifications are nonspendable, restricted, and unrestricted, which includes committed, assigned and
unassigned fund balance classifications.
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
34
Note 1 - Summary of Significant Accounting Policies (concl’d)
The nonspendable fund balance classification includes amounts that cannot be spent because they are
either not in spendable form, such as inventories, or are legally or contractually required to be
maintained intact. Restricted fund balances are those that have externally imposed restrictions on
their usage by creditors, such as through debt covenants, grantors, contributors, or laws and
regulations.
The unrestricted fund balance category is composed of committed, assigned, and unassigned
resources. Committed fund balances are self-imposed limitations approved by the County’s Board of
Supervisors, which is the highest level of decision-making authority within the County. The
constraints placed on committed fund balances can be removed or changed only by the Board.
The unassigned fund balance is the residual classification for the General fund and includes all
spendable amounts not reported in the other classifications. Also, deficits in fund balances of the
other governmental funds are reported as unassigned.
When an expenditure is incurred that can be paid from either restricted or unrestricted fund balances,
the County will use restricted fund balance first. For the disbursement of unrestricted fund balances,
it is the County’s policy to use committed amounts first, followed by unassigned amounts.
I. Investment Earnings
Investment earnings are composed of interest, dividends, and net changes in the fair value of
applicable investments.
J. Compensated Absences
Compensated absences consist of vacation leave and a calculated amount of sick leave earned by
employees based on services already rendered. The County uses PTO (personal time off), which is a
combination of vacation and sick leave, for compensating employees. PTO benefits do not vest with
employees until they have satisfactorily completed their probationary period. Public Safety
employees and those employees covered under the Judicial Merit System have a one year
probationary period. All other employees have a six month probationary period.
Employees may accumulate up to 900 hours of PTO annually. Upon terminating employment, most
employees will be paid up to 400 hours of PTO. However, at-will employees are paid up to 600
hours of PTO. Any remaining PTO balance, in excess of the maximum, will be forfeited.
Accordingly, benefits are accrued as a liability in the government-wide and proprietary funds’
financial statements. A liability for these amounts is reported in the governmental funds’ financial
statements only if they have matured, for example, as a result of employee resignations and
retirements by fiscal year-end.
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
35
Note 2 – Stewardship, Compliance, and Accountability
Deficit fund balances or net assets-At June 30, 2012, the following nonmajor fund reported a deficit
fund balance:
Fund Deficit
Capital projects
G.V.I.D. construction $ 709,965
The G.V.I.D. construction fund borrowed funds from the Landfill fund to cover expenses of an
improvement district instead of issuing bonds. These funds are reflected as a liability, rather than
revenue, resulting in a negative fund balance. The liability is to be paid back to the Landfill fund
through collections from the property owners.
Note 3 – Deposits and Investments
Arizona Revised Statutes (A.R.S.) authorize the County to invest public monies in the State
Treasurer’s investment pool; obligations issued or guaranteed by the United States or any of the
senior debt of its agencies, sponsored agencies, corporations, sponsored corporations, or
instrumentalities; specified state and local government bonds and notes; interest-earning investments
such as savings accounts, certificates of deposit, and repurchase agreements in eligible depositories;
and specified commercial paper, bonds, debentures, and notes issued by corporations organized and
doing business in the United States; and certain open-end and closed-end mutual funds, including
exchange traded funds. In addition, the County Treasurer may invest trust funds in certain fixed
income securities of corporations doing business in the United States or District of Columbia.
Credit risk - Statutes have the following requirements for credit risk:
1. Commercial paper must be of prime quality and be rated within the top two ratings by a
nationally recognized rating agency.
2. Corporate bonds, debentures, and notes must be rated within the top three ratings by a nationally
recognized rating agency.
3. Fixed income securities must carry one of the two highest ratings by Moody’s investors service
and Standard and Poor’s rating services. If only one of the above-mentioned services rates the
security, it must carry the highest rating of that service.
Custodial credit risk
Statutes require collateral for demand deposits and certificates of deposit at 101 percent of all
deposits not covered by federal depository insurance.
Concentration of credit risk
Statutes do not include any requirements regarding concentration of credit risk.
Interest rate risk - Statutes require that public monies invested in securities and deposits have a
maximum maturity of 5 years. Investments in repurchase agreements must have a maximum maturity
of 180 days.
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
36
Note 3 – Deposits and Investments (cont’d)
Foreign currency risk - Statutes do not allow foreign investments.
Deposits - At June 30, 2012, the carrying amount of the County’s deposits was $10,407,890 and the
bank balance was $12,780,121. There was cash on hand of $33,204. It is the County’s policy to
collateralize all deposits by at least 101 percent of the deposits not covered by depository insurance.
Investments – The County’s investments at June 30, 2012, were as follows:
Investment Type Amount
U.S. agency securities $ 166,351,339
Corporate bonds 5,997,036
State Treasurer’s Local Government Investment Pool 4,000,000
Total investments $ 176,348,375
The State Board of Investment provides oversight for the State Treasurer’s pools. The fair value of a
participant’s position in the pool approximates the value of that participant’s pool shares, and the
participant’s shares are not identified with specific investments.
Credit Risk – It is the County’s investment policy to invest to preserve the principal value of the
portfolio. This is to be accomplished through limiting the types of securities purchased, the percent
of the portfolio of each type of security and the length of time they can be held. Investments allowed
are obligations issued or guaranteed by the United States or any of the senior debt of its agencies,
sponsored agencies, corporations, sponsored corporations or instrumentalities. The County can also
invest in certificates of deposits, commercial paper, obligations of Arizona state and local
governments, repurchase agreements, money market mutual funds, and corporate bonds, debentures
or notes issued by United States companies with AA or greater ratings by Standard and Poor’s rating
service. All purchases must have prior approval of the investment oversight committee. At June 30,
2012, credit risk for the County’s investments was as follows:
At the time of purchase, all investments carried ratings at or above AA.
Investment Type Rating Rating Agency Amount
U.S. agency securities AA+ S & P $ 161,356,954
U.S. agency securities A-1+ S & P 4,994,385
Corporate bonds BBB- S & P 5,000,000
Corporate bonds Unrated S & P 997,036
State Treasurer’s Local Government
Investment Pool 7 Unrated Not applicable 4,000,000
$ 176,348,375
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
37
Note 3 – Deposits and Investments (cont’d)
Custodial Credit Risk – For an investment, custodial credit risk is the risk that, in the event of the
counterparty’s failure, the County will not be able to recover the value of its investments or collateral
securities that are in the possession of an outside party. The County’s formal policy for custodial
credit risk states that an independent third-party custodian, selected by the Mohave County Treasurer,
will hold the securities in the County’s name.
Concentration of Credit Risk - The County’s formal investment policy requires at least 10 percent
of the overall portfolio to be invested in highly liquid accounts such as local government pools,
money market funds or overnight repurchase agreements to ensure the ability to meet ongoing
obligations. It also limits the total amount of corporate securities to 20 percent of the total portfolio,
with not more than 5 percent invested in any single corporation. Corporate bonds represented 3.4
percent of the total portfolio at June 30, 2012. All other securities will be structured with varying
maturity dates, not to exceed 5 years, and in various types of investments described under credit risk.
The County had investments at June 30, 2012, of 5 percent or more in Federal Home Loan Bank,
Federal Home Loan Mortgage Corporation, and Federal National Mortgage Association. These
investments were 9.9 percent, 19.93 percent, and 64.5 percent, respectively, of the County’s total
investments.
Interest Rate Risk – The County’s formal policy with respect to interest rate risk minimizes the risk
by structuring the portfolio into two accounts to meet cash needs. The return on investment is
secondary to safety and liquidity. One account consists of highly liquid securities with maturities of
120 days or less. The second account has maturities of greater than 120 days. Both accounts will
have active secondary markets. At June 30, 2012, the County had the following investments in debt
securities:
Investment Maturities
Less than 1 to 5
Investment Type Amount 1 year Years
State Treasurer's investment pool $ 4,000,000 $ 4,000,000 $ -
U.S. agency securities 166,351,339 17,454,747 148,896,592
Corporate bonds 5,997,036 5,997,036 -
Total $ 176,348,375 $ 27,451,783 $ 148,896,592
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
38
Note 3 – Deposits and Investments (concl’d)
A reconciliation of cash, deposits, and investments to amounts shown on the Statements of Net
Assets follows:
Cash, deposits, and investments:
Amount
Cash on hand $ 33,204
Amount of deposits 10,407,890
Amount of investments 176,348,375
Total $186,789,469
Statements of Net Assets:
Note 4 – Property Taxes Receivable
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, 2012 were as follows:
General Flood control
Other
governmental
Total
governmental
Fiscal Year fund fund funds funds
2011 $ 2,722,003 0 $ 780,809 0 $ 663,221 0 $ 4,166,033
2010 574,420 0 250,584 0 211,280 0 1,036,284
Prior 1,105,867 0 410,658 0 354,337 0 1,870,862
Total $ 4,402,290 $ 1,442,051 $ 1,228,838 $ 7,073,179
That portion of property taxes receivable, not collected within 60 days after June 30, 2012, has been
deferred and, consequently, is not included in current-year revenues on the fund statements. For the
government-wide statements, the entire receivable balance has been recognized as revenue.
Governmental
activities
Business-type
activities
Investment
trust funds
Agency
funds Total
Cash and investments $ 117,684,578 $ 14,610,561 $ 49,961,216 $ 175,585 $ 182,431,940
Restricted cash 3,474,389 883,140 - - 4,357,529
Total $ 121,158,967 $ 15,493,701 $ 49,961,216 $ 175,585 $ 186,789,469
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
39
Note 5 – Capital Assets
Balance Balance
July 1, 2011 Increases Decreases June 30, 2012
$ 26,737,632 $ 562,623 $ - $ 2 7,300,255
10,041,469 5,382,954 (4,724,411) 10,700,012
Total capital assets not being depreciated 36,779,101 5,945,577 (4,724,411) 38,000,267
146,449,809 1,319,210 - 1 47,769,019
109,715,419 11,833,682 - 1 21,549,101
Intangibles 64,501 - - 64,501
42,734,658 5,650,242 (3,216,502) 45,168,398
Total 298,964,387 18,803,134 (3,216,502) 3 14,551,019
(18,096,882) (4,267,546) - (22,364,428)
(71,993,366) (3,153,417) - (75,146,783)
Intangibles (7,679) (9,214) - (16,893)
(26,360,573) (2,826,206) 1,476,201 (27,710,578)
Total (116,458,500) ( 10,256,383) 1,476,201 (125,238,682)
Total capital assets being depreciated, net 182,505,887 8,546,751 (1,740,301) 1 89,312,337
$ 219,284,988 $ 14,492,328 $ (6,464,712) $ 227,312,604
$ 1,630,859 $ - $ - $ 1,630,859
181,277 190,817 (315,199) 56,895
Total capital assets not being depreciated 1,812,136 190,817 (315,199) 1,687,754
2,056,567 60,108 - 2,116,675
21,088,650 505,725 - 21,594,375
1,388,091 49,820 (133,481) 1,304,430
Total 24,533,308 615,653 (133,481) 25,015,480
(767,895) ( 48,991) - (816,886)
(9,777,252) (677,673) - (10,454,925)
(839,358) (105,652) 1 20,132 (824,878)
Total (11,384,505) (832,316) 1 20,132 (12,096,689)
Total capital assets being depreciated, net 13,148,803 (216,663) (13,349) 12,918,791
$ 14,960,939 $ (25,846) $ (328,548) $ 1 4,606,545
Land
Capital assets not being depreciated:
Equipment
Construction in progress
Land
Construction in progress
Buildings
Capital assets being depreciated:
Buildings
Less accumulated depreciation for:
Infrastructure and improvements other than buildings
Capital asset activity for the year ended June 30, 2012, was as follows:
Business-type activities capital assets, net
Less accumulated depreciation for:
Capital assets being depreciated:
Governmental activities capital assets, net
Buildings
Utility systems
Equipment
Buildings
Utility systems
Equipment
Capital assets not being depreciated:
Governmental activities:
Business-type activities:
Equipment
Infrastructure and improvements other than buildings
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
40
Note 5 – Capital Assets (concl’d)
Note 6 – Construction and Other Significant Commitments
The County had 5 major contractual commitments at June 30, 2012, as follows:
Contractual Commitments Funding Source
Expenditures
to Date
Total
Contractual
Commitments
Remaining
Commitments
Horizon Six subdivision – construction
of detention basin Secondary tax revenue $ 694,193 $ 4,375,738 $ 3,681,545
Assessor’s software contract
7/1/2012 through 6/30/2021 Tax revenues - 1,528,039 1,528,039
Prison health care contract
11/17/11 through 11/16/12 Tax revenues 1,650,411 2,471,666 821,255
Public works building construction Secondary tax revenues 404,493 5,781,068 5,376,575
Treasurer’s software Tax revenues 67,103 434,825 367,722
Total $ 2,816,200 $ 14,595,526 $ 11,779,326
Depreciation expense was charged to functions as follows:
Governmental activities:
General government $ 1 ,448,725
Public safety 3,443,698
Highways and streets 4,112,980
Health 43,355
Welfare 75,528
Culture and recreation 229,806
Education 13,513
Internal service funds 888,778
Total governmental activities depreciation expense $ 10,256,383
Business-type activities:
Landfill $ 47,737
Recreation 90,652
Water companies 693,927
Total business-type activities depreciation expense $ 832,316
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
41
Note 7 – Restricted Assets
As of June 30, 2012, the County had restricted assets as follows:
Governmental activities assets:
Cash $ 3,474,389
Cash held by trustees restricted by agreements for construction,
debt payments, insurance trusts, loans, or major maintenance.
HUD Properties 697,689 HUD rehabilitated homes restricted for sale to qualified buyers.
Total governmental activities $ 4,172,078
Business-type activities assets:
Cash $ 333,399
I-40 collections restricted for future repairs of infrastructure by
agreement with customers.
Cash 549,741
G.V.I.D. water corridor collections restricted for future
infrastructure repairs by agreement with customers.
Total business-type activities $ 883,140
Note 8 – Long-Term Liabilities
The following schedule details the County’s long-term liability and obligation activity for the year
ended June 30, 2012:
Balance
July 1, 2011 Additions Reductions
Balance
June 30, 2012
Due Within
1 Year
Governmental activities:
Special assessment
bonds payable $ 991,000 $ - $ (991,000) $ - $ -
Beneficial interest
certificates payable 48,680,000 - (4,700,000) 43,980,000 4,875,000
Beneficial interest
certificates
premium-unamortized
318,203 - (39,775) 278,428 39,776
Compensated absences
payable 7,336,723 6,250,527 (6,385,904) 7,201,346 6,000,000
Insurance claims
payable 1,841,182 10,617,471 (10,919,675) 1,538,978 1,500,000
Total governmental
activities long-term
liabilities $59,167,108 $16,867,998 $(23,036,354) $ 52,998,752 $12,414,776
Business-type activities:
Landfill closure and
postclosure care
costs payable $ 5,777,090 $ 459,889 $ - $ 6,236,979 $ -
Compensated absences
payable 136,692 117,182 (114,094) 139,780 125,801
Total business-type
activities long-term
liabilities $ 5,913,782 $ 577,071 $ (114,094) $ 6,376,759 $ 125,801
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
42
Note 8 – Long-Term Liabilities (cont’d)
Bonds - The County's bonded debt for special assessment bonds was paid off in fiscal year 2012. The
principal and interest paid in 2012 was $932,850 (79.5% of available net revenue collected in the
current and prior years.) The original amount of special assessment bonds issued in prior years was
$4,591,000.
Beneficial Interest Certificates (BIC) - The County has issued 15 and 12 year beneficial interest
certificates that are generally noncallable, with principal payable in annual installments and interest
payable semiannually, to construct capital facilities. The BICs are secured, for the life of the
certificates, by pledges of the ¼ percent sales tax revenue, up to the amount of the annual debt
payments. The 2012 debt service requirement of $6,707,119 was 125 % of the current year tax
revenue. This amount exceeded revenue by approximately $1.3 million, which was paid from prior
years fund balance. The County expects to do a defeasance of the beneficial interest certificates series
2004 in fiscal year 2013. The remaining amount of debt to be covered by the ¼ percent sales tax
revenue, after the defeasance, will be $4.9 million annually. The expected annual sales tax revenue
that will be available for the debt payments during that period is $6 million per year. The original
amount of certificates issued in prior years was $65,320,000.
Beneficial interest certificates outstanding at June 30, 2012, were as follows:
Description
Original
Amount
Maturity
Ranges
Interest
Rates
Outstanding
Principal
June 30, 2012
Beneficial interest
certificates
Series 2004 $ 19,320,000 7/2012-7/2019 4.12%-5.25% $ 11,300,000
Beneficial interest
certificates
Series 2008 46,000,000 10/2012-4/2020 3.125%-4.25% 32,680,000
Total $ 65,320,000 $ 43,980,000
The following schedule details debt service requirements to maturity for the County’s beneficial
interest certificates payable at June 30, 2012:
Governmental activities
Beneficial Interest Certificates
Year
Ending
June 30, Principal Interest
2013 $ 4,875,000 $ 1,832,181
2014 5,045,000 1,657,903
2015 5,225,000 1,475,169
2016 5,445,000 1,258,394
2017 5,685,000 1,021,169
2018-20 17,705,000 1,488,600
Total $ 43,980,000 $ 8,733,416
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
43
Note 8 - Long-Term Liabilities (cont’d)
Landfill closure and postclosure care costs - The County owns two 160-acre landfill sites, Cerbat and
Mohave Valley, which are operated by independent contractors 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 to the 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 at the sites for 30 years after closure. Although closure and postclosure care costs
will not be paid until near or after the date that the landfills stop accepting waste, the County reports a
portion of these closure and postclosure care costs in each period that the County operates the landfills.
These costs will be paid from the enterprise fund.
The amount of cost recognized each year is based on landfill capacity used at the end of each fiscal
year. The $6,236,979 reported as landfill closure and postclosure care liability at June 30, 2012,
represents the cumulative amount reported to date at the Cerbat and Mohave Valley landfills. The
calculation is based on the use of 94.3% and 79.1%, respectively, of the estimated capacity of the open
cells of the landfills. The County will recognize the remaining estimated costs of closure and
postclosure care costs of $725,648 as the remaining estimated capacity is filled. These amounts are
based on what it would cost to perform all closure and postclosure care in fiscal year 2012. The County
expects to close the landfills in the years 2013 and 2016, respectively, and the actual cost may 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 government
financial test requirements that ensure the County can meet the costs of landfill closure, postclosure,
and corrective action when needed. The County is in compliance with these requirements.
Insurance Claims - The County established two internal service funds, Health Insurance and Self-
Insurance. The health insurance fund accounts for employee health benefits through a combination of
self-insurance and commercial insurance. The self-insurance fund provides property, casualty, and
general liability coverage up to $50,000 per claim and also accounts for premium payments to the
Arizona Counties Workers’ Compensation Pool for workers’ compensation coverage. The Self-
Insurance Fund accounts for the risk financing of certain benefits and losses through combinations of
cost-reimbursement, self-insurance for losses up to certain limits, participation in public entity risk
pools, and the purchase of insurance for losses above the limits. Settled claims have not exceeded risk
pool coverage or the purchased commercial insurance in any of the past four fiscal years.
The health insurance fund accounts for the financing of the uninsured risk of loss for certain health
benefits (comprehensive major medical, prescriptions, dental, life/accidental death and 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
commercial insurance to cover losses above the limits. The life insurance is 100% commercial
insurance. Under the health insurance program, the employees have a preferred provider organization
program. The County is fully self-insured for dental, which is administered by Delta Dental. A third
party, AFLAC, administers the short-term disability program. Settled claims have not exceeded
available self-insurance funds or the purchased commercial insurance in any of the past four fiscal
years.
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
44
Note 8 - Long-Term Liabilities (concl’d)
The insurance claims payable liability of the self-insurance fund and health insurance fund totaling
$1,538,978, included in the balance below at June 30, 2012, is the estimated ultimate cost of settling
claims that have been reported but not settled, and claims that have been incurred but not reported.
This estimate is based on actuarial estimates provided by the County’s healthcare administrator
(based on claims received subsequent to June 30, 2012) and Arizona Counties Property and Casualty
Pool (based on expected outcomes of outstanding lawsuits and incurred but not reported occurrences).
Changes in the funds’ claims payable for the years ended June 30, 2011 and 2012, were as follows:
2011 2012
Claims payable - beginning of year $ 1,219,017 $ 1,841,182
Add: Claims incurred and changes in estimates 14,573,842 10,617,471
Deduct: Claims paid (13,951,677) (10,919,675)
Claims payable - end of year $ 1,841,182 $ 1,538,978
Compensated absences and insurance claims – Compensated absences are paid from various funds
in the same proportion that those funds pay payroll costs. Insurance claims are paid from the internal
service health insurance and self-insurance funds. During fiscal year 2012, the County’s liability for
compensated absences is allocated as follows: 60 percent to the General fund, 12 percent to other
major funds, and 28 percent to Other governmental funds. The County paid for insurance claims as
follows: 98 percent from the health insurance fund and 2 percent from the self-Insurance Fund. The
claims paid from the health insurance fund were medical claims funded through payroll deductions
and contributions from County funds. The self-insurance fund was funded $389,528 (49%) by the
General fund, $348,237 (44%) by various public works funds, $36,000 (4%) by Internal service funds
and $23,109 (3%) by Enterprise funds this past year to cover insurance expense and possible
settlements.
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
45
Note 9 – Fund Balance Classifications of the Governmental funds
The fund balance classifications of the governmental funds as of June 30, 2012, were as follows:
Note 10 – 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. For these risks of loss, the
County joined and is covered by two public entity risk pools: the Arizona Counties Property and
Casualty Pool and the Arizona Counties Workers’ Compensation Pool, which are described below.
The Arizona Counties Property and Casualty Pool is a public entity risk pool currently composed of
11 member counties. The pool provides member counties catastrophic loss coverage for risks of loss
related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural
disasters; and provides risk management services. Such coverage includes all defense costs as well as
the amount of any judgment or settlement. The County is responsible for paying a premium, based on
its exposure in relation to the exposure of the other participants, and a deductible of $10,000 per
occurrence for property claims and $50,000 per occurrence for liability claims. The County is also
responsible for any payments in excess of the maximum coverage of $300 million per occurrence for
property claims and $15 million per occurrence for liability claims. However, lower limits apply to
certain categories of losses. A county must participate in the pool at least 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.
General
Fund
Road
Fund
Flood
Control
Fund
Admin Building
Debt Service
Fund
Other
Governmental
Funds Total
Fund balances:
Nonspendable
Inventories $ - $ 2 89,099 $ - $ - $ - $ 289,099
Prepaid items 13,550 - 50 - 229,856 243,456
Total nonspendable 13,550 289,099 50 - 229,856 532,555
Restricted for:
Government services - - - - 2 ,147,121 2,147,121
Law enforcement - - - - 5 ,719,655 5,719,655
Highways and streets - 12,905,467 18,229,535 - 1,550 31,136,552
Health - - - - 1 ,112,593 1,112,593
Welfare - - - - 949,136 949,136
Education - - - - 174,752 174,752
Culture and recreation - - - - 16,495,253 16,495,253
Debt service - - - 1,239,605 2,033,624 3,273,229
Total Restricted - 12,905,467 18,229,535 1,239,605 28,633,684 61,008,291
Committed to:
Government services 11,708,898 - - - - 11,708,898
Debt service - - - 4,687,976 2,249,349 6,937,325
Capital outlay - - - - 9 ,743,630 9,743,630
Total committed 11,708,898 - - 4,687,976 11,992,979 28,389,853
Unassigned 9,972,336 - - - - 9,972,336
Total fund balances $ 21,694,784 $ 13,194,566 $ 18,229,585 $ 5,927,581 $ 40,856,519 $ 99,903,035
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
46
Note 10 – Risk Management (concl’d)
The Arizona Counties Workers’ Compensation Pool is a public entity risk pool currently composed of
11 member counties. The pool provides member counties with workers’ compensation coverage, as
required by law, and risk management services. The County is responsible for paying a premium,
based on an experience-rating formula that allocates pool expenditures and liabilities among the
members.
The Arizona Counties Property and Casualty Pool and the Arizona Counties Workers’ Compensation
Pool receive independent audits annually and an audit by the Arizona Department of Insurance every
5 years. Both pools accrue liabilities for losses that have been incurred but not reported. These
liabilities are determined annually based on an independent actuarial valuation.
Note 11 – Operating Leases
The County leases buildings, copiers, computers, fiber optics, and land under the provisions of
various long-term lease agreements classified as operating leases for accounting purposes. Rental
expenditures under the terms of the operating leases were $994,650 for the year ended June 30, 2012.
The operating leases have remaining noncancellable lease terms from one to eighty-four years and
provide renewal options. The future minimum payments required under the operating leases at June
30, 2012, were as follows:
Year ending June 30,
Governmental
Activities
Business-type
Activities
2013 $ 1,044,290 $ 1,993
2014 760,933 664
2015 224,159 -
2016 33,287 -
2017 3,751 -
2018-2022 12,005 -
2023-2096 4,874 -
Total minimum lease payments $ 2,083,299 $ 2,657
Note 12 – Pensions and Other Postemployment Benefits
Plan Descriptions - The County contributes to four plans, three of which are described below. The
Elected Officials Retirement Plan (EORP) is not described, due to its relative insignificance to the
County’s financial statements. Benefits are established by state statute, and the plans generally provide
retirement, long-term disability and health insurance premium benefits, including death and survivor
benefits. The retirement benefits are generally paid at a percentage, based on years of service, of the
retirees’ average compensation. Long-term disability benefits vary by circumstance, but generally pay
a percentage of the employee’s monthly compensation. Health insurance premium benefits are
generally paid as a fixed dollar amount per month towards the retiree’s healthcare insurance premiums,
in amounts based on whether the benefit is for the retiree or for the retiree and his or her dependents.
The Arizona State Retirement System (ASRS) administers a cost-sharing multiple-employer defined
benefit pension plan; a cost-sharing, multiple-employer defined benefit health insurance premium plan
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
47
Note 12- Pensions and Other Postemployment Benefits (cont’d)
and a cost-sharing, multiple-employer defined benefit long-term disability plan that covers employees
of the State of Arizona and employees of participating political subdivisions and school districts. The
ASRS is governed by the Arizona State Retirement System Board according to the provisions of
A.R.S. Title 38, Chapter 5, Article 2.
The Public Safety Personnel Retirement System (PSPRS) administers an agent multiple-employer
defined benefit pension plan and an agent multiple-employer defined benefit health insurance
premium plan that covers public safety personnel who are regularly assigned hazardous duty as
employees of the State of Arizona and participating political subdivisions. The PSPRS, acting as a
common investment and administrative agent, is governed by a seven-member board, known as The
Board of Trustees, and the participating local boards according to the provisions of A.R.S. Title 38,
Chapter 5, Article 4.
The Corrections Officer Retirement Plan (CORP) administers an agent multiple-employer defined
benefit pension plan and an agent multiple-employer defined benefit health insurance premium plan
that covers state, county, and local correction officers; dispatchers; and probation, surveillance, and
juvenile detention officers. The CORP is governed by The Board of Trustees of PSPRS and the
participating 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
required supplementary information. A report may be obtained by writing or calling the applicable
plan.
ASRS PSPRS and CORP
3300 N. Central Ave. 3010 E. Camelback Rd., Suite 200
P. O. Box 33910 Phoenix, AZ 85016-4416
Phoenix, AZ 85067-3910 (602) 255-5575
(602) 240-2000 or (800) 621-3778
Funding Policy - The Arizona State Legislature establishes and may amend active plan members’
and the County’s contribution rates for ASRS, PSPRS, and CORP.
Cost-sharing plans - For the year ended June 30, 2012, active ASRS members were required by
statute to contribute at the actuarially determined rate of 10.74 percent (10.5 percent for retirement
and 0.24 percent for long-term disability) of the members’ annual covered payroll and the County
was required by statute to contribute at the actuarially determined rate of 10.74 percent (9.87 percent
for retirement, 0.63 percent for health insurance premium, and 0.24 percent for long-term disability)
of the members’ annual covered payroll.
The County’s contributions for the current and 2 preceding years, all of which were equal to the
required contributions, were as follows:
Retirement
fund
Health benefit
supplement fund
Long-term
disability fund
Year ended June 30
2012 $3,577,496 $ 228,351 $86,991
2011 3,367,385 224,492 93,538
2010 3,205,300 253,657 153,731
MOHAVE COUNTY
Notes to Financial Statements
June 30, 2012
48
Note 12- Pensions and Other Postemployment Benefits (cont’d)
Agent plans - For the year ended June 30, 2012, active PSPRS members were required by statute to
contribute 8.65 percent of the members’ annual covered payroll and the County was required to
contribute 19.56 percent, the aggregate of which is the actuarially required amount. The health
insurance premium portion of the contribution was actuarially set at 1.51 percent of covered payroll.
Active CORP members were required by statute to contribute 8.41 percent of the members’ annual
covered payroll. In addition, the County was required to contribute 5.00 percent. The aggregate of
the members’ and the County’s contributions is the actuarially required amount. The health insurance
premium portion of the contribution rate was actuarially set at 0.94 percent of covered payroll.
Active CORP-AOC members were required by statute to contribute 8.41 percent of covered payroll
and the County was required to contribute 13.13 percent of the members’ annual covered payroll,
which included 1.43 percent for the health insurance premium portion.
All participating employers in CORP Administrative Office of the Courts (AOC) are accounted for as
one group within the Corrections Officer Retirement Plan and, as such, an actuarial valuation of
CORP-AOC is only performed for the group as a whole. Therefore, actuarial information and certain
trend information for the County, as a participating government, are not available.
Actuarial methods and assumptions - The contribution requirements for the year ended June 30,
2012, were established by the June 30, 2010 actuarial valuations, and those actuarial valuations were
based on the following actuarial methods and assumptions.
Actuarial valuations involve estimates of the value of reported amounts and assumptions about the
probability of events in the future. Amounts determined regarding the funded status of the plans and
the annual required contributions are subject to continual revision as actual results are compared to
past expectations and new estimates are made. The required schedule of funding progress presented
as required supplementary information provides multiyear trend information that shows whether the
actuarial value of the plans’ assets are increasing or decreasing over time relative to the actuarial
accrued liability for benefits.
Projections of benefits are based on (1) the plans as understood by the County and the plans’
members and include the types of benefits in force at the valuation date, and (2) the pattern of sharing
benefit costs between the County and plans’ members to that point. Actuarial calculations reflect a
long-term perspective and employ methods and assumptions that are designed to reduce short-term
volatility in actuarial accrued liabilities and the actuarial value of assets. The significant actuarial
methods and assumptions used are the same for all plans and related benefits (unless noted), and the
actuarial methods and assumptions used to establish the fiscal year 2012 contribution requirements,
are as follows:
Actuarial valuation date June 30, 2010
Actuarial cost method Projected unit credit
Amortization method Level percent closed for unfunded actuarial accrued liability,
open for