Comprehensive annual financial report: fiscal year ended June 30, 2007, Maricopa County, Arizona

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Comprehensive Annual Financial Report
Maricopa County
Phoenix, Arizona
For the Fiscal Year
July 1, 2006 to June 30, 2007
Prepared By
Department of Finance
Tom Manos, Chief Financial Officer
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Comprehensive Annual Financial Report
Table of Contents
For the Fiscal Year Ended June 30, 2007
i
Introductory Section
Page
Table of Contents i
Listing of Maricopa County Officials v
Organizational Chart vi
Letter of Transmittal vii
Maricopa County Citizens Audit Advisory Committee Letter x
Financial Section
Independent Auditors’ Report 1
Management’s Discussion and Analysis 3
Basic Financial Statements
Definitions of Government- wide Financial Statements and Listing of Major Funds 19
Government- wide Financial Statements
Statement of Net Assets 21
Statement of Activities 22
Fund Financial Statements
Governmental Funds Financial Statements
Balance Sheet 24
Statement of Revenues, Expenditures, and Changes in Fund Balances 26
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 28
Proprietary Funds Financial Statements
Statement of Net Assets 30
Statement of Revenues, Expenses, and Changes in Fund Net Assets 31
Statement of Cash Flows 32
Fiduciary Funds Financial Statements
Statement of Fiduciary Net Assets 34
Statement of Changes in Fiduciary Net Assets 35
Basic Financial Statements – Notes 39
Required Supplementary Information
Budgetary Comparison Schedules – General Fund and Major Special Revenue Fund
General Fund 77
General Fund by Department 78
Detention Operations Fund 79
Note to Budgetary Comparison Schedules 80
Table of Contents ( Continued)
For the Fiscal Year Ended June 30, 2007
ii
Page
Schedule of Agent Retirement Plans’ Funding Progress 81
Modified Approach for Infrastructure Assets 82
Combining and Individual Fund Statements and Schedules
Listing of Nonmajor Governmental Funds 85
Governmental Funds
Combining Balance Sheet – Nonmajor Governmental Funds 92
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances –
Nonmajor Governmental Funds 108
Schedules of Revenues, Expenditures, and Changes in Fund Balances – Budget
and Actual
Special Revenue Funds
Adult Probation Fees Fund 125
Adult Probation Grants Fund 126
Air Quality Fees Fund 127
Air Quality Grants Fund 128
Animal Control Field Operations Fund 129
Animal Control Grants Fund 130
Animal Control License/ Shelter Fund 131
Ballpark Operations Fund 132
Cactus League Operations Fund 133
CDBG Housing Trust Fund 134
Check Enforcement Program Fund 135
Child Support Enhancement Fund 136
Children’s Issues Education Fund 137
Clerk of Court Fill the Gap Fund 138
Clerk of the Court EDMS Fund 139
Clerk of the Court Grants Fund 140
Conciliation Court Fees Fund 141
Correctional Health Grants Fund 142
County Attorney Fill the Gap Fund 143
County Attorney Grants Fund 144
County Attorney RICO Fund 145
County School Indirect Cost Fund 146
Court Document Retrieval Fund 147
Criminal Justice Enhancement Fund 148
Del Webb Special Revenue Fund 149
Diversion Fund 150
Domestic Relations Mediation Education Fund 151
Elections Grants Fund 152
Emergency Management Fund 153
Environmental Services Environmental Health Fund 154
Environmental Services Grants Fund 155
Events Center Fund 156
Table of Contents ( Continued)
For the Fiscal Year Ended June 30, 2007
iii
Page
Special Revenue Funds ( Continued)
Expedited Child Support Fund 157
Flood Control Fund 158
Flood Control Grants Fund 159
General Government Grants Fund 160
Human Services Grants Fund 161
Inmate Health Services Fund 162
Inmate Services Fund 163
Judicial Enhancement Fund 164
Justice Court Judicial Enhancement Fund 165
Justice Court Special Revenue Fund 166
Juvenile Probation Diversion Fund 167
Juvenile Probation Grants Fund 168
Juvenile Probation Special Fees Fund 169
Juvenile Restitution Fund 170
Lake Pleasant Recreation Services Fund 171
Law Library Fees Fund 172
Legal Defender Fill the Gap Fund 173
Library District Fund 174
Library District Grants Fund 175
Medical Examiner Grants Fund 176
Palo Verde Fund 177
Parks and Recreation Grants Fund 178
Parks Donations Fund 179
Parks Enhancement Fund 180
Parks Souvenir Fund 181
Parks Spur Cross Ranch Conservation Fund 182
Planning and Development Fees Fund 183
Probate Fees Fund 184
Public Defender Fill the Gap Fund 185
Public Defender Grants Fund 186
Public Defender Training Fund 187
Public Health Fund 188
Public Health Fees Fund 189
Recorder’s Surcharge Fund 190
School Communication Expense Fund 191
School Grants Fund 192
School Transportation Fund 193
Sheriff Donations Fund 194
Sheriff Grants Fund 195
Sheriff Jail Enhancement Fund 196
Sheriff RICO Fund 197
Spousal Maintenance Enforcement Enhancement Fund 198
Superior Court Fill the Gap Fund 199
Transportation Grants Fund 200
Transportation Operations Fund 201
Trial Court Grants Fund 202
Trial Court Special Revenue Fund 203
Victim Compensation Interest Fund 204
Victim Compensation Restitution Fund 205
Victim Location Fund 206
Waste Management Fund 207
Waste Tire Fund 208
Table of Contents ( Continued)
For the Fiscal Year Ended June 30, 2007
iv
Page
Debt Service Funds
County Improvement Debt Fund 209
Stadium District Debt Service Fund 210
Capital Projects Funds
County Improvement Fund 211
Detention Capital Projects Fund 212
Flood Control Capital Projects Fund 213
General Fund County Improvements Fund 214
Intergovernmental Capital Projects Fund 215
Long Term Project Reserve Fund 216
Transportation Capital Projects Fund 217
Schedule of Capital Projects – Budget and Actual
All Capital Improvement Projects 218
Nonmajor Enterprise Funds
Listing of Nonmajor Enterprise Funds 225
Combining Statement of Revenues, Expenses, and Changes in Net Assets 226
Combining Statement of Cash Flows 227
Internal Service Funds
Listing of Internal Service Funds 231
Combining Statement of Net Assets 232
Combining Statement of Revenues, Expenses, and Changes in Net Assets 234
Combining Statement of Cash Flows 236
Agency Fund
Listing of Agency Fund 241
Statement of Changes in Assets and Liabilities 242
Statistical Section
Listing of Statistical Information 245
Net Assets by Component 246
Changes in Net Assets 247
Fund Balances, Governmental Funds 249
Changes in Fund Balances, Governmental Funds 250
Tax Revenues by Source, Governmental Funds 252
Assessed Value and Estimated Market Value of Taxable Property 253
Direct and Overlapping Property Tax Rates 254
Principal Property Tax Payers 255
Property Tax Levies and Collections 256
Ratios of Outstanding Debt by Type 257
Legal Debt Margin Information 258
Pledged Revenue Coverage 259
Demographic and Economic Statistics 260
Principal Employers 261
Budgeted Full- time Equivalent County Employees by Function/ Program 262
Operating Indicators by Function/ Program 263
Capital Asset Statistics by Function/ Program 264
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Maricopa County Officials
BOARD OF SUPERVISORS
Fulton Brock, District 1
Don Stapley, District 2
Andrew Kunasek, District 3
Max Wilson, District 4
Mary Rose Garrido Wilcox, District 5
♦ ♦ ♦
COUNTY MANAGER
David R. Smith
♦ ♦ ♦
CHIEF FINANCIAL OFFICER
Tom Manos
Organizational Chart
vi
Appointed
Elected
Maricopa County
Citizens
County
Manager
Deputy County
Manager
Legal
Defender
Risk
Management
Parks &
Recreation
Community
Development
Human Services
Board of
Supervisors
Clerk of the
Court
Constables County Sheriff Treasurer
Attorney
Superintendent Assessor
of Schools
Medical
Examiner
Contract
Counsel
Public
Defender
Legal
Advocate
Integrated
Criminal
Justice
Systems
Correctional
Health
Public
Health
Human
Resources
Research
and
Reporting
General
Government
Health Care
Mandates
Employee
Health
Initiatives
Management
and Budget
Finance
Materials
Management
Public
Fiduciary
Animal Care
and Control
Regional Development
Services Assistant
County Manager
Recorder
STAR Call Elections
Center
Community Services
Assistant County
Manager
Chief Finance
Officer
Chief Information
Officer
Criminal Justice
Assistant County
Manager
Solid
Waste
Transportation
Public Works
Environmental
Services
Equipment
Services
Facilities
Management
Emergency
Management
Planning and
Development
Internal
Audit
Clerk of the
Board
Enterprise
Technology
Maricopa County
County Administrative Office
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301 West Jefferson Street
10th Floor
Phoenix, AZ 85003- 2143
Phone: 602- 506- 3571
Fax: 602- 506- 3328
www. maricopa. gov
June 12, 2008
The Honorable Board of Supervisors
Maricopa County
County Administration Building
301 W. Jefferson Street
Phoenix, AZ 85003
Arizona Revised Statute ( ARS) § 41- 1279.21 requires the Office of the Auditor General to conduct
financial audits of the accounts and records of County governments. Pursuant to the statute, the
Office of the Auditor General audited the Comprehensive Annual Financial Report ( CAFR) of
Maricopa County in accordance with generally accepted auditing standards for the year ended
June 30, 2007.
This report consists of management’s representations concerning the finances of Maricopa
County. Consequently, management assumes full responsibility of the completeness and
reliability of all the information presented in this report. To provide a reasonable basis for making
these representations, management of Maricopa County has established a comprehensive
internal control framework that is designed both to protect the government’s asset from loss, theft,
or misuse and to compile sufficient reliable information for preparation of Maricopa County’s
financial statements in conformity to generally accepted accounting principles ( GAAP). Because
the cost of internal control should not outweigh their benefits, Maricopa County’s comprehensive
framework of internal controls has been designed to provide reasonable rather than absolute
assurance that the financial statements will be free from material misstatement. As management,
we assert that, to the best of our knowledge and belief, this financial report is complete and
reliable in all material respects.
The goal of the independent audit was to provide reasonable assurance that the financial
statements of Maricopa County for the fiscal year ended June 30, 2007, are free of material
misstatement. The independent audit involved examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements; assessing the accounting principles used
and significant estimates made by management; and evaluating the overall financial statement
presentation. The independent auditors expressed an unqualified opinion on the Maricopa County
financial statements for the fiscal year ended June 30, 2007. The auditors concluded that the
financial statements were considered fairly presented in conformity with GAAP. The independent
auditor’s report is presented as the first component of the financial section of this report.
The independent audit of the financial statements of Maricopa County was part of a broader,
federally mandated “ Single Audit” designed to meet the special needs of federal grantor agencies.
The standards governing Single Audit engagements require the independent auditor to report not
only on the fair presentation of the financial statements, but also on the audited government’s
internal controls and compliance with legal requirements, with special emphasis on internal
controls and legal requirements involving the administration of federal awards. This report will be
available in Maricopa County’s separately issued Single Audit Report to be issued at a future date.
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On June 30, 1980, Arizona voters approved general propositions amending the Arizona Constitution to
establish expenditure and revenue limitations for local governments. The purpose of the expenditure limitation
is to control expenditures and to limit future increases in spending to adjustments for inflation, deflation and
population growth of the County. The Constitution also limits the amount of revenues that may be generated
from property taxes. A two- percent plus new construction annual increase is the maximum allowed by law
unless special voter approval is obtained. This report will be available in Maricopa County’s separately issued
Expenditure Limitation Report to be issued at a future date.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the
basic financial statements in the form of Management’s Discussion and Analysis ( MD& A). This letter of
transmittal is designed to complement the MD& A, which can be found immediately following the report of the
independent auditors.
County Profile
Maricopa County is located in the south- central portion of the State of Arizona. Maricopa County is considered
to be the top growth area in the state, and one of the top growth areas in the country. Maricopa County
occupies 9,224 square miles of which 2,228 square miles are incorporated.
Maricopa County operates under a five member elected Board of Supervisors who appoints a County Manager.
The County Manager is responsible for the general administration and overall operations of the various County
departments. Maricopa County has several- elected officials including the Assessor, Clerk of the Superior
Court, Constables, County Attorney, Recorder, Sheriff, Superintendent of Schools, and the Treasurer.
Maricopa County includes in its financial statements all activities of the County and its component units.
Component units are legally separate entities for which the County is considered to be financially accountable.
See Note 1 to the Notes to the Financial Statements - Summary of Significant Accounting Policies for additional
information.
Maricopa County offers a wide variety of governmental services, including:
• Justice and Law Enforcement: Clerk of the Superior Court, County Attorney, Superior Court, Juvenile
Court, Justice Court, Sheriff’s Department, Indigent Representation and Public Fiduciary
• Medical Services: Public Health, Human Services and Forensic Science Center
• Community Resources: Superintendent of Schools, Library District and Stadium District
• Public Works: Flood Control District, Transportation Department and Solid Waste Management
• County Administration: Board of Supervisors, County Administrator, Assessor’s Office, Clerk of the
Board, Elections, Finance, Human Resources, Information Technology, Treasurer and Facilities
Management
The annual budget serves as the foundation for Maricopa County’s financial planning and control. Maricopa
County is required by ARS § § 42- 17101 et. seq. to annually prepare and adopt a balanced budget. Arizona law
further requires that no expenditure shall be made or liability incurred in excess of the amounts budgeted
except as provided by law. Maricopa County’s annual budget is available on the Internet at the following
address: http:// www. maricopa. gov/ budget/.
Factors Affecting Financial Condition
Maricopa County currently enjoys a favorable unemployment rate of 4.0 percent at January 2008, compared to
the State of Arizona and the United States unemployment rates of 4.3 percent, and 4.9 percent, respectively
( Arizona Workforce February 28, 2008). According to Arizona Workforce Informer, at July 1, 2007, Maricopa
County contained 60.11 percent of the states total population ( www. workforce. az. gov). Maricopa County has a
variety of industries within its boundaries with the major industries being service retail trade and manufacturing.
Some of the major employers located in the state include Wal- Mart, Banner Health Systems, Wells Fargo & Co.
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and various local governments ( The Book of Lists 2008). Phoenix is the capital of Arizona as well as the
county seat for Maricopa County.
Because of a favorable climate and mild weather conditions, tourism is also a large factor in the strength of the
local economy. Major sporting events can be held year around and many people come to the area during the
winter months. Maricopa County is the home to teams from major league professional sports, which include
the Arizona Cardinals of the National Football League ( NFL), Phoenix Suns of the National Basketball
Association ( NBA), Arizona Diamondbacks of the Major League Baseball ( MLB) and the Phoenix Coyotes of
the National Hockey League ( NHL). Maricopa County also hosts nine major league baseball teams for the
annual spring training Cactus League. Maricopa County is also a host to other major sporting events such as
the FBR Open, formerly known as the Phoenix Open, golf tournament, and Phoenix International Raceway,
which at this time hosts two major NASCAR events each year. Cities within Maricopa County also host college
bowl games such as the Fiesta Bowl and the Insight Bowl. In January of 2008, the city of Glendale hosted the
NFL Super Bowl.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada ( GFOA) awards a Certificate of
Achievement for Excellence in Financial Reporting to governments to recognize and encourage excellence in
financial reporting. In order to be awarded a Certificate of Achievement, a government must publish an easily
readable and efficiently organized comprehensive annual financial report on a timely basis. Maricopa County
received this award for fifteen consecutive years for fiscal years ending 1989 through 2003.
As a result of a disclaimer of opinion on two of the County’s major enterprise funds ( Maricopa Health Plan Fund
and the ALTCS Fund) and on the government- wide business type activities, the County was not eligible for the
GFOA Certificate of Achievement for Excellence in financial reporting for fiscal years 2004, 2005, or 2006. In
fiscal year 2006, the Maricopa Health Plan Fund was transferred to the Maricopa County Special Health Care
District, a separate legal entity, and the ALTCS Fund was discontinued by the County. The County continued to
report these funds during the close out period until June 30, 2007, in which the remaining assets and liabilities
were transferred to the County General Fund. The County has reapplied to the GFOA for consideration of the
Certificate for fiscal year ended 2007.
The preparation of this report could not be accomplished without the efficient and dedicated services of the
Department of Finance staff, the assistance of administrative personnel in the various departments, and the
competent service of the Office of the Auditor General. We appreciate all of those who assisted in and
contributed to the preparation of this report. We also wish to express our sincere appreciation to the Board of
Supervisors for their support in planning and overseeing the financial operations of the County in a responsible
and progressive manner.
Respectfully submitted,
David R. Smith Tom Manos
County Manager Chief Financial Officer
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􀁍 􀁯 􀁤 􀁩 􀁦 􀁩 􀁥 􀁤 􀀠 􀁁 􀁰 􀁰 􀁲 􀁯 􀁡 􀁣 􀁨 􀀠 􀁦 􀁯 􀁲 􀀠 􀁉 􀁮 􀁦 􀁲 􀁡 􀁳 􀁴 􀁲 􀁵 􀁣 􀁴 􀁵 􀁲 􀁥 􀀠 􀁁 􀁳 􀁳 􀁥 􀁴 􀁳
􀁃 􀁯 􀁭 􀁢 􀁩 􀁮 􀁩 􀁮 􀁧 􀀠 􀁡 􀁮 􀁤 􀀠 􀁉 􀁮 􀁤 􀁩 􀁶 􀁩 􀁤 􀁵 􀁡 􀁬 􀀠 􀁆 􀁵 􀁮 􀁤 􀀠 􀁓 􀁴 􀁡 􀁴 􀁥 􀁭 􀁥 􀁮 􀁴 􀁳 􀀠 􀁡 􀁮 􀁤 􀀠 􀁓 􀁣 􀁨 􀁥 􀁤 􀁵 􀁬 􀁥 􀁳 􀀠
􀁎 􀁯 􀁮 􀁭 􀁡 􀁪 􀁯 􀁲 􀀠 􀁇 􀁯 􀁶 􀁥 􀁲 􀁮 􀁭 􀁥 􀁮 􀁴 􀁡 􀁬 􀀠 􀁆 􀁵 􀁮 􀁤 􀁳
􀁎 􀁯 􀁮 􀁭 􀁡 􀁪 􀁯 􀁲 􀀠 􀁅 􀁮 􀁴 􀁥 􀁲 􀁰 􀁲 􀁩 􀁳 􀁥 􀀠 􀁆 􀁵 􀁮 􀁤 􀁳
􀁉 􀁮 􀁴 􀁥 􀁲 􀁮 􀁡 􀁬 􀀠 􀁓 􀁥 􀁲 􀁶 􀁩 􀁣 􀁥 􀀠 􀁆 􀁵 􀁮 􀁤 􀁳
􀁁 􀁧 􀁥 􀁮 􀁣 􀁹 􀀠 􀁆 􀁵 􀁮 􀁤
DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
WILLIAM THOMSON
DEPUTY AUDITOR GENERAL
2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • ( 602) 553- 0333 • FAX ( 602) 553- 0051
Independent Auditors’ Report
Members of the Arizona State Legislature
The Board of Supervisors of
Maricopa County, Arizona
We have audited the accompanying financial statements of the governmental activities, business- type activities,
aggregate discretely presented component units, each major fund, and aggregate remaining fund information of
Maricopa County as of and for the year ended June 30, 2007, 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 did not audit the financial statements of two departments and the discretely presented component units, which
account for the following percentages of the assets; liabilities; revenues, additions, and other financing sources as
applicable; and expenses or expenditures, deductions, and other financing uses, as applicable, of the opinion units
affected:
Opinion Unit/ Department
Assets
Liabilities
Revenues/ Additions/
Other Sources
Expenses/
Expenditures/ Deductions/
Other Uses
Government- wide Statements
Governmental activities:
Stadium District 8.31% 9.10% 0.63% 0.81%
Accommodation Schools 0.37% 0.35% 0.63% 0.66%
Aggregate discretely presented
component units:
Housing Authority 99.87% 89.24% 98.61% 97.63%
Sports Commission 0.13% 10.76% 1.39% 2.37%
Fund Statements
Aggregate remaining fund information:
Stadium District 0.82% 0.09% 0.10% 0.11%
Accommodation Schools 0.13% 1.55% 0.08% 0.08%
Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our
opinions, insofar as they relate to the amounts included for those entities, are based solely on the reports of the other
auditors.
We conducted our audit in accordance with U. S. generally accepted auditing standards and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit and the reports of the other auditors provide a reasonable
basis for our opinions.
In our opinion, based on our audit and the reports of the other auditors, the financial statements referred to above
present fairly, in all material respects, the respective financial position of the governmental activities, business- type
activities, aggregate discretely presented component units, each major fund, and aggregate remaining fund
information of Maricopa County as of June 30, 2007, 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.
The Management’s Discussion and Analysis on pages 3 through 16, the Budgetary Comparison Schedules on
pages 77 through 80, the Schedule of Agent Retirement Plans’ Funding Progress on page 81, and the Infrastructure
Assets information on page 82 are not required parts of the basic financial statements, but are supplementary
information required by the Governmental Accounting Standards Board. We have applied certain limited procedures,
which consisted principally of inquiries of management regarding the methods of measurement and presentation of
the required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the County’s basic financial statements. The introductory section, combining and individual fund statements and
schedules, and statistical section listed in the table of contents are presented for purposes of additional analysis and
are not required parts of the basic financial statements. The combining and individual fund statements and
schedules have been subjected to the auditing procedures applied by us and the other auditors in the audit of the
basic financial statements and, in our opinion, based on our audit and the reports of the other auditors, are fairly
stated in all material respects in relation to the basic financial statements taken as a whole. The introductory and
statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial
statements and, accordingly, we express no opinion on them.
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, and 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.
Debbie Davenport
Auditor General
June 12, 2008
Management’s Discussion and Analysis
3
This discussion and analysis is intended to be an easily readable analysis of Maricopa County’s ( County)
financial activities based on currently known facts, decisions or conditions. This analysis focuses on
current year activities and should be read in conjunction with the Transmittal Letter that begins on page vii
and with the County’s basic financial statements following this section.
Financial Highlights
• The total assets of the County exceeded its liabilities at the close of the fiscal year by $ 3,610.5 million
( net assets), an increase of 8.6 percent from the prior year. Of this amount, $ 682.5 million
( unrestricted net assets) may be used to meet the County’s ongoing obligations to citizens and
creditors.
Composition of Net Assets
( in millions)
Restricted -
$ 437.9 ( 12%)
Unrestricted -
$ 682.5 ( 19%)
Invested in capital
assets, net of
related debt -
$ 2,490.1 ( 69%)
• The County’s total net assets as reported in the Statement of Activities increased by $ 287.0 million
from the prior year. Of this amount, $ 290.6 million is attributed to governmental activities and ($ 3.6)
million is attributable to business- type activities.
Net Assets by Activity
( in millions)
2006
2007
2007 2006
$( 500)
$-
$ 500
$ 1,000
$ 1,500
$ 2,000
$ 2,500
$ 3,000
$ 3,500
$ 4,000
Governmental Activities Business- type Activities
• The County’s governmental funds reported combined fund balances of $ 1,267.4 million, an increase
in fund balance of $ 285.3 million over the prior fiscal year. Approximately 96.1 percent of the
combined fund balances or $ 1,217.7 million is unreserved and available to meet the County’s current
and future needs.
Management’s Discussion and Analysis ( Continued)
4
• Unreserved fund balance for the General Fund decreased by 17.5 percent to $ 445.0 million;
approximately 47.2 percent of total General Fund expenditures. In accordance with Arizona Revised
Statutes ( A. R. S.), this entire amount is budgeted to be spent in the next fiscal year. A. R. S. § 42- 17151
requires that total estimated sources of revenue must equal the total estimated expenditures in the
budget for the current fiscal year. In addition, A. R. S. § 42- 17102 stipulates that the estimated
expenditures may include an amount for unanticipated contingencies or emergencies.
• The County’s enterprise funds reported combined total net assets of ($ 1.6) million, of which total
unrestricted net assets were ($ 3.5) million.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the County’s basic financial
statements. The County’s basic financial statements consist of three components: 1) Government- wide
financial statements, 2) Fund financial statements, and 3) Notes to the basic financial statements.
Required Supplementary Information is included in addition to the basic financial statements. The
Combining and Individual Fund Statements and Schedules – Nonmajor Funds begin on page 92.
Government- wide Financial Statements are designed to provide readers with a broad overview of the
County’s finances, in a manner similar to private- sector businesses.
• The Statement of Net Assets presents information on all County assets and liabilities, with the
difference between the two reported as net assets. Over time, increases or decreases in net assets
may serve as a useful indicator of whether the financial position of the County is improving or
deteriorating.
• The Statement of Activities presents information showing how net assets changed during the most
recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise
to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses
are reported in this statement for some items that will result in cash flows in future fiscal periods ( e. g.,
uncollected taxes and earned but unused vacation leave).
Both of these government- wide financial statements distinguish functions of the County that are
principally supported by taxes and intergovernmental revenues ( governmental activities) from other
functions that are intended to recover all or a portion of their costs through user fees and charges
( business- type activities). The governmental activities of the County include general government; public
safety; highways and streets; health, welfare and sanitation; culture and recreation; education; and
interest on long- term debt. The business- type activities of the County include Solid Waste Management,
the Arizona Health Care Cost Containment System ( AHCCCS)— Arizona Long- Term Care System
( ALTCS) program and AHCCCS— Acute Health Care program.
Component units are legally separate entities for which the County is considered to be financially
accountable. Blended component units, although legally separate entities, are in substance part of the
County’s operations. Therefore, data from these units is combined with data of the primary government.
Discretely presented component units, on the other hand, are reported in a separate column in the
government- wide financial statements to emphasize they are legally separate from the County. The
Maricopa County Flood Control District, Maricopa County Library District, Maricopa County Public
Finance Corporation, Maricopa County Special Assessment Districts, Maricopa County Stadium District,
and the Maricopa County Street Lighting Districts are reported as blended component units. The Housing
Authority of Maricopa County and Maricopa County Sports Commission are reported as discretely
presented component units.
The Government- wide financial statements can be found on pages 21- 23 of this report.
Management’s Discussion and Analysis ( Continued)
5
Fund Financial Statements are groupings of related accounts that are used to maintain control over
resources that have been segregated for specific activities or objectives. The County, like other state and
local governments, uses fund accounting to ensure and demonstrate finance- related legal compliance. All
of the funds of the County can be divided into three categories: governmental funds, proprietary funds
and fiduciary funds.
• Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government- wide financial statements. However, unlike the
government- wide financial statements, governmental funds financial statements focus on near- term
inflows and outflows of spendable resources, as well as on balances of spendable resources
available at the end of the fiscal year. Such information may be useful in evaluating a county’s near-term
financing requirements. Governmental funds include the general, special revenue, debt service,
and capital projects funds.
Because the focus of governmental funds is narrower than that of the government- wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government- wide financial statements. By
doing so, readers may better understand the long- term impact of the government’s near- term
financing decisions. Both the governmental funds Balance Sheet and the governmental funds
Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
The County reports four major governmental funds. Information is presented separately in the
governmental funds Balance Sheet and in the governmental funds Statement of Revenues,
Expenditures, and Changes in Fund Balances for the General, Detention Operations, County
Improvement Debt, and General Fund County Improvements funds.
Data from the other governmental funds ( nonmajor) are combined into a single, aggregated
presentation. Individual fund data for each of these nonmajor governmental funds is provided in the
form of combining statements, which begin on page 92 of this report.
The governmental funds financial statements can be found on pages 24- 28 of this report.
• Proprietary funds are maintained two ways. Enterprise funds are used to report the same functions
presented as business- type activities in the government- wide financial statements. The County uses
enterprise funds to account for Solid Waste Management, the Arizona Health Care Cost Containment
System ( AHCCCS)— Acute Health Care program, and the AHCCCS— Arizona Long- Term Care
System ( ALTCS) program. Internal service funds are an accounting device used to accumulate and
allocate costs internally among the County’s various functions. The County uses internal service
funds to account for its equipment services, telecommunications, reprographics, risk management,
employee benefits trust, and sheriff warehouse functions. Because these services predominantly
benefit governmental rather than business- type functions, they have been included within
governmental activities in the government- wide financial statements.
Fund financial statements for the enterprise funds provide the same type of information as the
government- wide financial statements, only in more detail. The Solid Waste Management Fund is
considered to be a major fund of the County. The County’s internal service funds are combined into a
single, aggregated presentation in the proprietary funds financial statements. Individual fund data for
the internal service funds is provided in the form of combining statements, which begin on page 231
of this report.
The proprietary fund financial statements can be found on pages 30- 32 of this report.
Management’s Discussion and Analysis ( Continued)
6
• Fiduciary funds are used to account for resources held for the benefit of parties outside the
government. Fiduciary funds are not reflected in the government- wide financial statements because
the resources of those funds are not available to support the County’s own programs. The accounting
used for fiduciary funds is much like that used for proprietary funds.
The fiduciary funds financial statements can be found on pages 34- 35 of this report.
Notes to the Financial Statements provide additional information that is essential to a full understanding
of the data provided in the government- wide and fund financial statements. The notes can be found on
pages 39- 74 of this report.
Required Supplementary Information is presented concerning the County’s General Fund and
Detention Operations Fund. A budgetary comparison schedule has been provided for both of these funds
to demonstrate compliance with budget and additional information is provided by the Note to Budgetary
Comparison Schedules. Also presented is the schedule of funding progress for the County’s two agent
retirement plans and infrastructure assets reported using the modified approach. Required supplementary
information can be found on pages 77- 82 of this report.
Government- wide Financial Analysis
This year is the sixth fiscal year that the County applied Governmental Accounting Standards Board
( GASB) Statement No. 34.
Net Assets
As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position.
The following table reflects the condensed Statement of Net Assets of the County for June 30, 2007, as
compared to the prior year.
Schedule of Net Assets
As of June 30
( in millions)
Governmental Business- type
Activities Activities Total
2007 2006* 2007 2006* 2007 2006*
% Chg
P/ Y
Current and other assets $ 1,533.5 $ 1,227.3 $ 13.7 $ 21.6 $ 1,547.2 $ 1,248.9 23.9%
Capital assets 2,632.5 2,516.3 1.9 1.4 2,634.4 2,517.7 4.6
Total assets 4,166.0 3,743.6 15.6 23.0 4,181.6 3,766.6 11.0
Current liabilities 200.1 180.9 .1 2.7 200.2 183.6 9.1
Long- term liabilities 353.8 241.2 17.1 18.3 370.9 259.5 42.9
Total liabilities 553.9 422.1 17.2 21.0 571.1 443.1 28.9
Net assets
Invested in capital assets,
net of related debt 2,488.3 2,414.0 1.8 1.3 2,490.1 2,415.3 3.1
Restricted 437.8 345.6 .1 437.9 345.6 26.7
Unrestricted 686.0 561.9 ( 3.5) .7 682.5 562.6 21.3
Total net assets $ 3,612.1 $ 3,321.5 $ ( 1.6) $ 2.0 $ 3,610.5 $ 3,323.5 8.6
* The governmental activities and total columns’ net assets, invested in capital assets, net of related debt and capital assets amounts for
fiscal year 2006 were adjusted by ($ 29.9) million primarily from corrections of errors in Transportation infrastructure assets. In addition,
the governmental activities, business- type activities and total column’s total net assets, current and other assets, current liabilities, and
long- term liabilities columns for fiscal year 2006 were restated for various adjustments related to the prior period. See Note 3 –
Beginning Balances Restated for additional information.
The largest increase in the County’s Statement of Net Assets was in current and other assets, which
increased $ 298.3 million or 23.9 percent. This was due to an increase in cash of $ 301.0 million, which is
comprised of $ 301.7 and ($. 7) million in governmental and business- type activities, respectively. The
Management’s Discussion and Analysis ( Continued)
7
increase in governmental activities is primarily due to proceeds from the issuance of Lease Revenue
Bonds, Series 2007 A, and the related premium from issuance of $ 108.7 million. The increase in cash for
governmental activities can also be attributed to an increase in tax revenues of $ 65.3 million and an
increase in short- term liabilities of $ 29.9 million, which resulted in a temporary timing difference between
when liabilities were paid and lowering cash consumption during the fiscal year. The decrease in
business- type activities cash is due to the decrease in landfill closure and postclosure care cost liability of
$ 1.1 million, of which $. 7 million is due to cash payments.
At June 30, 2007, the County’s combined governmental activities and business- type activities assets
exceeded liabilities by approximately $ 3.6 billion, an increase from the prior year of $ 287.0 million. The
governmental activities comprise 101.3 percent of this increase, with an increase in net assets as
reported in the statement of activities of $ 290.6 million. The increase for governmental activities is
attributed to the increase in the County’s capital assets and tax revenue, as discussed below. The
decrease in business- type activities net assets of ($ 3.6) million from the prior year is attributed to the
transfer of the Arizona Health Care Cost Containment System ( AHCCCS) — Acute Health Care program
and the AHCCCS — ALTCS program assets and liabilities to the General Fund. See page 9 for
additional information.
By far, the largest portion - $ 2.5 billion or 69.0 percent - of the County’s net assets reflects the investment
in capital assets ( e. g., land, buildings and improvements, machinery and equipment, infrastructure and
construction in progress), less accumulated depreciation and any related debt used to acquire those
assets that is still outstanding. The County uses these capital assets to provide services to its citizens;
consequently, these assets are not available for future spending. Although the County’s investment in its
capital assets is reported net of related debt, it should be noted that the resources needed to repay this
debt must be provided from other sources, since the capital assets themselves cannot be used to
liquidate these liabilities. The governmental activities comprise 99.9 percent of this component of net
assets.
Governmental activities net assets invested in capital assets increased by $ 74.3 million due to an
increase in net capital assets of $ 116.2 million, which was offset by an increase in capital related debt of
$ 41.9 million. The increase in capital assets can be attributed to the construction related to the justice
courts and administrative facilities, for which a total of $ 75.5 million was expended and included $ 32.8
million in the County Improvement Fund, $ 27.0 million in the General Fund County Improvement Fund,
$ 9.2 million in the Detention Capital Projects Fund, and $ 6.5 million in the Intergovernmental Capital
Projects Fund. The increase can also be attributed to the infrastructure capital projects of the Flood
Control District and the Transportation Department. These projects are accounted for in the Flood Control
Capital Projects Fund and the Transportation Capital Projects Fund, which had capital outlay
expenditures of $ 53.6 and $ 100.6 million, respectively. The business- type activities invested in capital
assets increased $. 6 million primarily due to the construction of solid waste transfer stations, which
resulted in a $. 6 million increase in construction in progress.
The second component of the County’s total net assets, $ 437.9 million or approximately 12.1 percent,
represents resources that are subject to external restrictions on how they may be used. The
governmental activities comprise 100 percent of this component of net assets. This component increased
for governmental activities by $ 92.2 million. The increase in governmental activities restricted net assets
is mainly attributable to the public safety function, with a fund balance increase of $ 66.0 million from the
prior fiscal year. The net asset increase in this function is primarily attributable to an increase in sales
taxes for detention operations of $ 7.5 million, an increase in Flood Control District property tax revenues
of $ 3.7 million, an increase in maintenance of effort transfers to detention operations of $ 15.2 million, and
an increase in transfers for detention capital projects of $ 23.7 million
The final component consists of unrestricted net assets, $ 682.5 million or 18.9 percent, and may be used
to meet the County’s ongoing obligations. The governmental activities comprise 100.5 percent of this
component. Unrestricted net assets for governmental activities increased from fiscal year 2006 by $ 124.1
million, or 22.1 percent. The increase in unrestricted net assets can be attributed to an increase in tax
Management’s Discussion and Analysis ( Continued)
8
revenue recorded in the General Fund. Unrestricted property tax, sales tax and vehicle license tax
revenues increased $ 25.1, $ 22.6, and $ 5.5 million, respectively, from the prior fiscal year.
Changes in Net Assets
As discussed previously, the County’s total net assets of $ 3.6 billion increased by $ 287.0 million as
reported in the Statement of Activities. Of this amount, $ 290.6 million, or 101.3 percent, is attributable to
governmental activities, and $( 3.6) million is related to business- type activities. A discussion of each is
presented below.
The following table reflects the condensed Statement of Activities of the County for the fiscal year 2007
compared to the prior year and indicates the changes in net assets for governmental and business- type
activities:
Schedule of Activities
For the Fiscal Years Ended June 30, 2007 and June 30, 2006
( in millions)
Governmental Business- type
Activities Activities Total % Chg
2007 2006* 2007 2006* 2007 2006* P/ Y
Revenues:
Program revenues:
Charges for services $ 185.0 $ 203.7 $ 2.5 $ 84.0 $ 187.5 $ 287.7 ( 34.8)%
Operating grants and contributions 443.6 393.4 443.6 393.4 12.8
Capital grants and contributions 47.3 42.5 47.3 42.5 11.3
General revenues:
Taxes 1,272.8 1,207.5 1,272.8 1,207.5 5.4
Other 67.6 44.9 0.9 0.5 68.5 45.4 50.9
Total Revenues 2,016.3 1,892.0 3.4 84.5 2,019.7 1,976.5 2.2
Expenses:
General government** 211.5 185.6 211.5 185.6 14.0
Public safety 864.9 782.1 864.9 782.1 10.6
Health, welfare and sanitation 464.3 433.8 464.3 433.8 7.0
Other*** 191.1 131.1 191.1 131.1 45.8
AHCCCS– ALTCS program .2 56.7 .2 56.7 ( 99.6)
AHCCCS– Acute Health Care program .4 40.0 .4 40.0 ( 99.0)
Solid Waste Management .3 2.4 .3 2.4 ( 87.5)
Total Expenses 1,731.8 1,532.6 .9 99.1 1,732.7 1,631.7 6.2
Excess ( deficiency) before transfers 284.5 359.4 2.5 ( 14.6) 287.0 344.8 ( 16.8)
Transfers 6.1 ( 43.4) ( 6.1) 43.4
Change in net assets 290.6 316.0 ( 3.6) 28.8 287.0 344.8 ( 16.8)
Net assets – beginning, as restated 3,321.5 3,005.5 2.0 ( 26.8) 3,323.5 2,978.7 11.6
Net assets – ending $ 3,612.1 $ 3,321.5 $ ( 1.6) $ 2.0 $ 3,610.5 $ 3,323.5 8.6
* The governmental activities and total columns’ net assets for fiscal year 2006 were adjusted by ($ 29.9) million primarily from
corrections of errors in Transportation infrastructure assets. In addition, the governmental activities, business- type activities and total
column’s total net assets for fiscal year 2006 were restated for various adjustments related to the prior period. See Note 3 –
Beginning Balances Restated for additional information.
** Beginning fiscal year 2007, general government expenses include loss on disposal of capital assets. This amount was previously
shown separately on the Statement of Activities. For comparison purposes, the fiscal year 2006 loss on disposal of capital assets
was reclassified on this schedule into general government.
*** The functions of highways and streets, culture and recreation, and education along with interest on long- term debt are shown in the
condensed statement of activities above as other expenses.
Governmental Activities
As previously mentioned, governmental activities contributed $ 290.6 million, or 101.3 percent, of the
$ 287.0 million increase in net assets of the County. This increase can be attributed to the treatment of
capital outlay and depreciation expense in the government- wide statements and to the increase in tax
revenues.
Management’s Discussion and Analysis ( Continued)
9
One of the main differences a reader will see between the governmental funds reported in the fund
financial statements and the Statement of Activities is that governmental funds in the fund financial
statements report capital outlays as expenditures. However, in the Statement of Activities the cost of
those assets is reported as a capital asset and the expense of those assets is allocated over their
estimated useful lives and reported as depreciation expense. Capital outlay expenditures exceeded
depreciation expense in the current period by $ 150.8 million. This increase is offset by disposals and
other miscellaneous capital asset transactions, such as donations, totaling ($ 34.7) million.
In the government- wide statement of activities, the significant revenues reported for governmental
activities included County- levied taxes, general sales taxes, vehicle license taxes and operating grants.
Taxes and operating grants represent 63.1 and 22.0 percent, respectively, of total governmental activities
revenues for fiscal year 2007. Tax revenues increased by $ 65.3 million from sales taxes of $ 22.6 million,
property taxes levied of $ 29.9 million, other County- levied taxes of $ 7.3 million, and vehicle license taxes
of $ 5.5 million. The increase in tax revenues can be attributed to a strong economy, increasing County
population, and higher property values. Although Maricopa County’s economic environment is fairly
strong, the economic growth is slowing down and these revenue increases are smaller than those
realized in fiscal year 2006 of $ 132.4 million. Operating grants and contributions increased $ 50.2 million,
which is in part attributable to increases in the health, welfare and sanitation and general government
functions of $ 15.3 and $ 13.3 million, respectively. Health, welfare and sanitation functional revenues
increased primarily from an increase in disproportionate share revenue of $ 5.1 million. General
government functional revenues increased primarily from an increase in grant revenue of $ 6.4 million for
the purchase of updated voting equipment. Tax and other operating revenues provide the principal
support for the functions of the County, which include general government; public safety; highways and
streets; health, welfare and sanitation; culture and recreation; and education.
Although governmental activities revenues increased by $ 124.3 million, or 6.6 percent, over the prior
period, this increase was offset by an increase in expenses. Governmental activities expenses increased
by $ 199.2 million, or 13.0 percent, over the prior period. The largest increases are in the public safety and
health, welfare, and sanitation functions of $ 82.8 and $ 30.5 million, respectively. The increase in the
public safety function is attributable to increases in the General Fund and Detention Operations Fund of
$ 53.6 and $ 28.0 million, respectively. The increases in both the General and Detention Operations funds
were due to an increase in personnel and payroll expenses as a result of the County initiative beginning
in fiscal year 2007 to expand court and justice facilities and services. The increase in health, welfare, and
sanitation is due to an increase in disproportionate share and Arizona Long- term Care System payments
of $ 5.1 and $ 15.5 million, respectively.
Business- type Activities
As discussed earlier, the business- type activities of the County include Solid Waste Management, the
Arizona Health Care Cost Containment System ( AHCCCS) — Acute Health Care program, and the
AHCCCS — Arizona Long- Term Care System ( ALTCS) program. Business- type activities total net assets
decreased by ($ 3.6) million from the prior fiscal year, for total net assets at June 30, 2007, of ($ 1.6)
million. Solid Waste Management comprised $ 1.0 million or ( 28.1) percent of the change in net assets for
fiscal year 2007. Solid Waste Management realized an increase in charges for services revenue of $. 3
million and a decrease in estimate for the landfill closure and postclosure care liability of $. 4 million during
fiscal year 2007, which contributed to the increase in net assets of $ 1.0 million. The health care programs
comprised ($ 4.6) million or 128.1 percent of the total decrease in business- type activities. This decrease
in net assets is primarily due to the transfer of the Arizona Health Care Cost Containment System
( AHCCCS) — Acute Health Care program and the AHCCCS — ALTCS program assets and liabilities to
the General Fund, which totaled ($ 9.3) million. Overall, health care program revenues and expenditures
decreased 95.9 and 89.5 percent, respectively, from fiscal year 2006 due to the closure or transfer of
these programs. In fiscal year 2006, the Arizona Health Care Cost Containment System ( AHCCCS) —
Acute Health Care program was transferred to the Maricopa County Special Health Care District, a
separate legal entity, and the AHCCCS — ALTCS program was discontinued by the County. The County
Management’s Discussion and Analysis ( Continued)
10
continued to report these funds during the closeout period until June 30, 2007, in which the remaining
assets and liabilities were transferred to the General Fund.
The primary revenue source for business- type activities is charges for services, which comprised $ 2.5
million or 93.5 percent of total business- type operating revenues. This component consists mainly of
patient service revenues and charges for services revenues from the two health care programs. The
primary expense for business- type activities consists of medical services, changes in closure and
postclosure cost, and personal services costs that account for $. 4 million of the $. 7 million in operating
expenses. As noted above, health care program revenues and expenditures decreased 95.9 percent and
89.5 percent, respectively, from fiscal year 2006 due to the closure or transfer of the two health care
programs.
Financial Analysis of the County’s Funds
As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements.
Governmental Funds. Governmental activities are contained in the general, special revenue, debt
service, and capital projects funds. The focus of the County’s governmental funds is to provide
information on near- term inflows, outflows, and balances of spendable resources. Such information is
useful in assessing the County’s financing requirements. In particular, unreserved fund balance may
serve as a useful measure of a government’s net resources available for spending at the end of the fiscal
year.
As of June 30, 2007, the governmental funds reported combined fund balances of $ 1,267.4 million and an
increase in fund balance of $ 285.8 million over the prior fiscal year. Approximately 96.1 percent of the
combined fund balances or $ 1,217.7 million is available to meet the County’s current and future needs
( unreserved fund balance). The remaining fund balance is reserved for inventories, intergovernmental
loans, advances and debt service.
The following funds are the County’s major governmental funds:
The General Fund is the County’s primary operating fund. At the end of the current fiscal year,
unreserved fund balance of the General Fund was $ 445.0 million, while total fund balance was $ 471.5
million. This represents a decrease in the unreserved fund balance from the prior year of $ 94.6 million, or
17.5 percent. This decrease can be attributed to an increase in operating transfers out of $ 282.1 million,
which is primarily due to an increase in transfers to capital projects funds for capital outlay. The increase
in operating transfers out was offset by increases in tax revenue of $ 27.0 million, intergovernmental
revenue of $ 40.2 million, and operating transfers in of $ 80.2 million. See pages 11 and 12 for additional
information. As a measure of the General Fund’s liquidity, it may be useful to compare both unreserved
fund balance and total fund balance to the total fund expenditures. Unreserved fund balance represents
47.2 percent of the total fiscal year 2007 General Fund expenditures, while total fund balance represents
50.0 percent of that same amount. These ratios indicate a strong fund balance position in comparison to
expenditures.
The Detention Operations Fund is a special revenue fund that was established under the authority of
propositions 400 and 401, which were passed in the General Election of November 3, 1998. These
propositions authorized a temporary 1/ 5 of one- cent sales tax to be used for the construction and
operation of adult and juvenile detention facilities. On November 5, 2002, the voters approved the
extension of the 1/ 5 of one- cent sales tax in the General Election to be used for jail facility operations.
The extension begins in the month following the expiration of the original tax and may continue for not
more than twenty years after the date the tax collection begins. The Detention Operations Fund accounts
for the jail tax revenue along with transfers from the General Fund for maintenance of effort ( MOE). The
MOE transfer from the General Fund is used to support the jail detention operations. Arizona Revised
Statutes require the County to calculate the maintenance of effort transfer on an annual basis. The
Management’s Discussion and Analysis ( Continued)
11
Detention Operations Fund transfers monies to the Detention Capital Projects Fund for the construction of
the jail facilities. At the end of the current fiscal year, total fund balance of the Detention Operations Fund
was $ 148.1 million, of which more than 99 percent is unreserved. This was an increase in total fund
balance of $ 24.3 million, or 19.6 percent, from the prior fiscal year. Although the fund had more
expenditures than revenues by $ 98.3 million, the increase in fund balance can be partially attributed to
net transfers of $ 122.6 million, which was a net decrease of $ 8.1 million over the prior year. Transfers
from the General Fund for maintenance of effort were $ 161.0 million while transfers to the Detention
Capital Projects Fund were $ 38.7 million. The amount to be transferred to the Detention Capital Projects
Fund for any given year is determined through the budget planning process.
The County Improvement Debt Fund is a debt service fund that accounts for the debt service on the
Lease Revenue Bonds, Series 2001; the Lease Revenue Refunding Bonds, Series 2003; Lease Revenue
Bonds, Series 2007A; Lease Revenue Refunding Bonds, Series 2007B; Lease Trust Certificates, Series
2004; and other long- term obligations. The fund balance is set aside for future debt service on the Lease
Revenue Bonds, Series 2001 and Series 2007A, and Lease Revenue Refunding Bonds, Series 2007B,
and each year the fund balance will be reduced by the annual debt service payment until the debt is
satisfied. Funding for the Lease Revenue Refunding Bonds, Series 2003, is provided by transfers from
the departments who benefited by the refunding bond issue and revenue from the Maricopa County
Special Health Care District. Funding for the Lease Trust Certificates, Series 2004, is provided by
pledged contributions from various donors that are used to repay Maricopa County for long- term financing
pertaining to the Human Services Campus improvements. At the end of the current fiscal year,
unreserved fund balance of the County Improvement Debt Fund was $ 18.5 million, while total fund
balance was $ 26.8 million.
The General Fund County Improvements Fund is a capital projects fund that accounts for capital projects
funded by transfers from the General Fund. Projects that are currently funded include justice,
administrative and parks facilities. During fiscal year 2007, the General Fund provided a transfer of
$ 307.4 million, primarily for the construction of court facilities. At the end of the current fiscal year, fund
balance of the General Fund County Improvements Fund was $ 242.4 million, all of which is unreserved.
The following table presents the amount of all governmental funds revenues from various sources as well
as increases or decreases from the prior year.
Revenues Classified by Source
Governmental Funds
( in millions)
2007 2006 Increase
Percent Percent % Chg
Revenues by Source Amount of Total Amount of Total Amount P/ Y
Taxes $ 640.4 32% $ 601.2 33% $ 39.2 6.5%
Intergovernmental 1,105.8 55 1,025.7 55 80.1 7.8
Other 268.8 13 226.0 12 42.8 18.9
Totals $ 2,015.0 100% $ 1,852.9 100% $ 162.1 8.7
During fiscal year 2007, the County experienced an increase in governmental revenues from the previous
year of $ 162.1 million, an 8.7 percent increase. This increase is mainly attributable to increases in taxes
revenue and intergovernmental revenue of $ 39.2 and $ 80.1 million, respectively. Intergovernmental and
taxes revenues comprises 87 percent of total governmental funds revenue. Tax revenues increased
primarily from property tax revenue of $ 31.7 million. Property tax revenue increased as a result of an
increase in assessed values and new housing. The intergovernmental revenues increase was mainly
attributable to an increase in the sales tax apportionment, as reported in the General Fund, of $ 22.6
million and an increase in capital project cost- sharing revenue, as reported in the Transportation Capital
Projects Fund, of $ 30.2 million. The increases of sales tax apportionment can be attributed to the
County’s economic vitality. The increase in cost- sharing revenue is primarily attributable to the Cotton
Lane Bridge Transportation project for which the County received $ 22.2 million in contributions from other
jurisdictions.
Management’s Discussion and Analysis ( Continued)
12
The following table presents the amount of all governmental funds expenditures by function compared to
prior year amounts.
Expenditures by Function
Governmental Funds
( in millions)
2007 2006 Increase
Expenditures by Function Amount
Percent of
Total Amount
Percent of
Total Amount
% Chg
P/ Y
General government $ 173.1 9% $ 131.0 8% $ 42.1 32.1%
Public safety 813.3 43 733.2 45 80.1 10.9
Health, welfare and sanitation 461.7 25 430.6 26 31.1 7.2
Capital outlay 301.4 16 232.9 14 68.5 29.4
Other 123.3 7 118.7 7 4.6 3.9
Totals $ 1,872.8 100% $ 1,646.4 100% $ 226.4 13.8
Expenditures from governmental fund types for fiscal year 2007 increased by $ 226.4 million, a 13.8
percent increase from the prior year. The most significant changes were in general government, public
safety and capital outlay expenditures with increases of $ 42.1, $ 80.1 and $ 68.5 million, respectively. The
increase in general government was mainly attributed to increases in Elections Department expenditures
of $ 18.4 million and internal service charges of $ 5.3 million. The increase in the Elections Department
expenditures is due to the expansion of voting facilities and services, including expansion of the mail- in
ballot program, and the purchase of updated voting equipment. The increase in internal service charges
is due to the rise in cost of major maintenance, building and ground services and energy management for
the County as a whole. The increase in public safety was attributed to $ 66.7 million in additional payroll
and personnel expenditures. This increase in personnel and payroll expenditures is mainly attributable to
the County results initiative beginning in fiscal year 2007 to expand court and justice facilities and
services. This results initiative resulted in the significant addition of full- time equivalent staff, thus
considerably increasing the payroll and related expenditures of this expenditure function from the prior
year. The increase in capital outlay expenditures is attributed to increases in general, transportation, and
justice related county improvement capital outlay expenditures as reported in the General Fund County
Improvements Fund, Transportation Capital Projects Fund, and County Improvement Fund, with
increases from the prior fiscal year of $ 19.8, $ 17.3, and $ 27.8 million, respectively.
Proprietary funds. The County’s enterprise funds provide the same information found in the
government- wide financial statements ( business- type activities), but in more detail. Internal Service
Funds, although proprietary funds, are not included in the following section.
As of June 30, 2007, the enterprise funds reported combined net assets of ($ 1.6) million and a decrease
in fund balance of $ 3.6 million over the prior fiscal year. Of the total fund balance, $ 1.9 million is invested
in capital assets, net of related debt, $ 7.7 thousand is restricted for debt service, and the remainder is
unrestricted.
The Solid Waste Management Fund is the County’s only major enterprise fund. The Solid Waste
Management Fund accounts for the activities that assist the cities and towns, businesses, and citizens in
continuously improving regional waste management systems. This includes managing the County’s
landfills and transfer stations, which provide solid waste transfer, disposal and recycling services to
County residents. The Solid Waste Management Fund also accounts for the County’s environmental
liabilities for closure and postclosure care costs associated with its landfills. The beginning net assets
balance for Solid Waste Management was restated to ($ 2.6) million for a restatement of the liability for
closure and postclosure cost of ($. 1) million. This restatement was a result of a prior period correction
due to a clerical error in the calculation of the liability for closure and postclosure care costs at June 30,
2006. Operating revenues consist primarily of charges for services to citizens and municipalities for solid
waste management services of $ 667.4 thousand. Operating expenses for the fiscal year consisted
primarily of the decrease in the landfill closure and postclosure liability of $. 4 million. Besides the
decrease in landfill closure and postclosure care costs, Solid Waste Management activities during the
fiscal year remained consistent with the prior fiscal year. The fund’s fiscal year- end net assets balance
Management’s Discussion and Analysis ( Continued)
13
increased $ 1.0 million to ($ 1.6) million at June 30, 2007. This increase can be attributed to an increase in
charges for services revenue and a decrease in closure and postclosure care costs during fiscal year
2007.
The following table shows actual revenues, expenses and results of operations for the current fiscal year
for all enterprise funds:
Schedule of Revenues, Expenses and Changes in Fund Net Assets
Enterprise Funds
( in millions)
Increase/( Decrease)
2007 2006 Amount % Chg P/ Y
Operating revenues $ 2.7 $ 84.0 $ ( 81.3) ( 96.8)%
Operating expenses .7 97.0 ( 96.3) ( 99.3)
Operating income ( loss) 2.0 ( 13.0) 15.0 ( 115.4)
Nonoperating revenues ( expenses), net .5 ( 1.6) 2.1 ( 131.3)
Gain ( loss) before transfers 2.5 ( 14.6) 17.1 ( 117.1)
Transfers, net ( 6.1) 43.4 ( 49.5) ( 114.1)
Change in net assets $ ( 3.6) $ 28.8 $ ( 32.4) ( 112.5)
At June 30, 2007, revenues and expenses for enterprise fund activities accounted for .13 and .02 percent
of the County’s total fund- based revenues and expenses, respectively. The two health care programs
comprised 75.3 and 55.7 percent of the enterprise funds operating revenues and expenses, respectively.
The decrease in net assets of $ 3.6 million is primarily from the transfer of the assets and liabilities of the
two health care programs to the General Fund, which totaled ($ 9.3) million. In fiscal year 2006, the
Maricopa Health Plan Fund was transferred to the Maricopa County Special Health Care District, a
separate legal entity, and the ALTCS Fund was discontinued by the County. The County continued to
report these funds during the close out period until June 30, 2007, in which the remaining assets and
liabilities were transferred to the General Fund. Overall, revenues and expenditures decreased
significantly from fiscal year 2006 due to the closure or transfer of the health care programs.
General Fund Budgetary Highlights
The difference between the original budget and the final amended budget for the General Fund resulted
in a decrease in revenue of $ 69.2 million and a decrease in expenditures of $ 152.6 million. During fiscal
year 2007, the County eliminated disproportionate share revenues and expenditures from the budget.
This resulted in a decrease of $ 63.4 million in both budgeted revenues and expenditures. The decrease
in budgeted expenditures can also be attributed to a decrease in Pre- AHCCCS claims liability funding of
$ 23.3 million. Significant favorable expenditure variances, as compared to the budget, were incurred in
the General Government Department ( general government function) of $ 178.7 million. The savings were
a result of spending from contingency and reserve funds that was less than anticipated. No variances
between the budget to actual amounts were significant enough to affect the County’s ability to provide
future services.
Capital Assets and Long- Term Liabilities
Capital Assets
The County’s capital assets balance for its governmental and business- type activities as of June 30,
2007, were $ 2.6 billion ( net of accumulated depreciation). Capital assets include land, buildings and
improvements, infrastructure, machinery and equipment, and construction in progress. Capital assets, net
of accumulated depreciation, increased by $ 116.7 million, or 4.6 percent, from the prior year. Of this
amount, $ 116.2 million, or 99.6 percent, is attributable to governmental activities, and $. 5 million is related
to business- type activities.
Management’s Discussion and Analysis ( Continued)
14
Capital assets for the governmental and business- type activities are presented below ( in millions) to
illustrate changes from the prior year:
Governmental Activities Business- type Activities Total
%
Chg
2007 2006* 2007 2006 2007 2006* P/ Y
Land $ 507.6 $ 490.7 $ 1.2 $ 1.2 $ 508.8 $ 491.9 3.4%
Infrastructure 588.9 541.0 588.9 541.0 8.9
Buildings and improvements ( net of
accumulated depreciation) 1,084.3 1,044.5 1,084.3 1,044.5 3.8
Machinery and equipment
( net of accumulated depreciation) 75.7 71.9 0.1 0.2 75.8 72.1 5.1
Construction in progress 204.2 197.0 0.6 204.8 197.0 4.0
Infrastructure ( net of accumulated
depreciation) 171.8 171.2 171.8 171.2 0.4
Totals $ 2,632.5 $ 2,516.3 $ 1.9 $ 1.4 $ 2,634.4 $ 2,517.7 4.6
* The governmental activities and total columns’ capital asset amounts for fiscal year 2006 were restated for various prior period corrections.
See Note 3 – Beginning Balances Restated for additional information.
The most significant impact on the increase in governmental activities capital assets for the fiscal year
ended June 30, 2007, was in the increase in Transportation Department Completed infrastructure of
$ 47.9 million or 8.9 percent. The County reports infrastructure assets, which consist of the Flood Control
District and Transportation Department infrastructure, in the government- wide financial statements in
accordance with GASB Statement No. 34. Additional information regarding infrastructure assets can be
found in the Notes to the Financial Statements ( Note 1 – Summary of Significant Accounting Policies and
Note 11 – Capital Assets).
The Flood Control District infrastructure assets consist of drainage systems, dams, flood channels and
canals. Flood Control infrastructure is reported using the depreciation approach and the County uses the
straight- line method of depreciation on these assets. At June 30, 2007, Flood Control District
infrastructure- related assets consisted of land, infrastructure and construction in progress of $ 261.9,
$ 171.8, and $ 155.4 million, respectively, net of any related accumulated depreciation.
The Transportation Department infrastructure assets consist of a roadway system and a bridge system.
Both systems are reported under the modified approach, which means the County will maintain the
assets using an asset management system and will document that the infrastructure assets are being
preserved at the established condition level. During fiscal year 2007, the condition level of both systems
was within the established condition level. Actual maintenance/ preservation costs did not vary
significantly from the estimated costs. For the roadway system, actual maintenance/ preservation costs
were $ 682,445 above the estimated costs. Actual maintenance/ preservation costs of the bridge system
were $ 214,035 below estimated costs. See Required Supplementary Information on page 82 for
additional information. At June 30, 2007, Transportation Department infrastructure- related assets
consisted of land, infrastructure and construction in progress of $ 131.2, $ 588.9, and $ 17.1 million,
respectively.
Capital assets for business- type activities increased $. 5 million during the fiscal year. This increase is
due to the construction of two solid waste transfer stations, which were incomplete at fiscal year- end and
had a cumulative cost of $. 5 million at June 30, 2007.
Long- Term Liabilities
At June 30, 2007, the County had total long- term liabilities ( noncurrent liabilities due within one year and
more than one year) outstanding of $ 370.9 million, which represents a $ 111.4 million increase from the
restated prior year balance of $ 259.5 million. The County restated the beginning balance for closure and
postclosure care costs liability and reported and incurred but not reported claims liability of $. 1 and $. 6
million, respectively. See Note 3 – Beginning Balances Restated for additional information. The majority
Management’s Discussion and Analysis ( Continued)
15
of the $ 110.8 million increase is attributable to the issuance of Lease Revenue Bonds, Series 2007A and
2007B, of $ 140.9 million, the issuance of capital leases of $ 25.7 million, and debt service payments made
during fiscal year 2007 for Lease Revenue Bonds ($ 40.9 million), Lease Trust Certificates ($ 2.4 million),
Stadium District revenue bonds ($ 2.8 million), Stadium District contractual obligations ($ 2.4 million) and
capital leases ($ 8.9 million). The largest components of long- term liabilities at June 30, 2007, consisted of
Lease Revenue Bonds - $ 181.2 million, Stadium District revenue bonds - $ 47.2 million, Capital Leases -
$ 33.0 million, and reported claims and incurred but not reported claims - $ 59.9 million.
Maricopa County received an upgrade on all of its bond ratings from Moody’s Investor Services, Fitch
Ratings, and Standard & Poor’s. On April 26, 2007, Moody’s Investor Services upgraded Maricopa
County’s lease revenue bonds and certificate of participation ratings to Aa2 and Aa3, respectively. On
April 25, 2007, Fitch Ratings rated Maricopa County’s lease revenue bonds and certificates of
participation at AA+. In addition, Moody’s Investor Services and Fitch Ratings assigned an implied ( issuer
credit rating) general obligation rating of Aa1 and AAA, respectively. On August 21, 2007, Standard &
Poor’s rated Maricopa County’s lease revenue bonds at AA+. Standard & Poor’s also gave Maricopa
County an implied ( issuer credit rating) general obligation rating of AAA. At June 30, 2007, the County
had no general obligation bonds outstanding. All rating agencies referred to the County’s stable economic
environment, strong financial profile, low debt burdens, and complete insulation from the health care
system as reasons for the upgraded ratings.
Lease revenue bonds applicable to governmental activities are paid from the County Improvement Debt
Fund ( debt service fund) that was funded in prior years by transfers from the General Fund and is
predominately unrestricted. At June 30, 2007, the fund balance in the County Improvement Debt Fund to
pay future liabilities was $ 26.8 million. Proceeds from the bonds are currently being used for capital
projects.
Stadium District revenue bonds are special obligations of the District. The bonds are payable solely from
pledged revenues, consisting of car rental surcharges levied and collected by the Stadium District
pursuant to A. R. S. § 48- 4234. On June 5, 2002, the Stadium District issued Revenue Refunding Bonds in
the amount of $ 58,225,000 ( par value) of which $ 47,230,000 remains outstanding.
Capital leases applicable to governmental activities of $ 33.0 million have been entered into for various
lease- purchase agreements, which are noncancelable, for the acquisition of audio/ visual systems,
computer systems and equipment, and communications equipment. This is an increase of $ 16.7 million
from the prior year primarily related to purchase of voting equipment, network infrastructure technology
equipment, and officer radio and taser units.
Reported and incurred but not reported claims applicable to governmental activities of $ 59.9 million are
reported in the Risk Management and Employee Benefits Trust funds ( internal service funds). This is an
increase of $ 1.2 million from the prior year primarily related to actuarial estimates for the County’s self-insured
portion of future claims for general litigation related to torts; thefts of, damage to, and destruction
of assets; errors and omissions; injuries to employees; natural disasters; and certain health benefits that
are paid through the operations of the funds. Additional information regarding long- term liabilities can be
found in the Notes to Financial Statements ( Note 13 – Long- Term Liabilities and Note 17 – Risk
Management).
Economic Factors and Next Year’s Budget and Rates
• Arizona’s economy is projected to experience small employment losses in 2008, primarily driven
by the decline in residential construction, a slower housing market, and higher energy costs.
Gradual economic improvements are forecasted for 2009, taking into account lower interest rates,
greater availability of credit, the economic stimulus programs, and a leveling of petroleum prices,
according to the Arizona Department of Economic Security ( www. workforce. az. gov).
Management’s Discussion and Analysis ( Continued)
16
• The population in Maricopa County continues to grow at a rapid pace. The U. S. Census Bureau
reports that Maricopa County’s population increased by 2.7 percent from fiscal year 2006 to 2007
( www. census. gov). The unemployment rate in Maricopa County, according to Arizona’s
Workforce, in March 2008 was 3.5 percent, which remains below both the state average of 4.0
percent and national average of 5.1 percent ( www. workforce. az. gov).
• As reported by the U. S. Census Bureau, Maricopa County’s population increased 25.3 percent
from April 1, 2000 to July 1, 2007, which is higher than the United States overall population
increase of 6.9 percent for the same time period. This suggests that more people are migrating to
Arizona than to most other states ( www. census. gov).
As part of the annual budget planning process, the County’s Office of Management and Budget
developed a financial forecast to assist in both short and long range financial planning. This forecast
provides a conservative estimate of the County’s fiscal condition through the next five years given a
realistic economic forecast, current Board policies and existing laws. The forecast was instrumental in the
determination of the fiscal year 2008 budget and tax rate. It was based on the following assumptions:
• Declining growth in property tax assessed values due to the slowdown in the housing market is
fully reflected in the property tax base. Maricopa County’s primary ( general operating) property
tax levy is limited to 2% annual increases on existing property, plus taxes on new properties.
• Significantly lower growth in State Shared Sales Tax, Vehicle License Tax, and Jail Excise Tax
revenues. These revenue sources experienced unprecedented growth in FY 2005- 06, but this
growth was not sustainable. Revenues will continue to grow, but at a much lower rate.
• Sizable increases in mandated payments to the State of Arizona for health care, in particular
ALTCS program.
• Steady increases in employee compensation and health benefits and retirement contributions.
At the end of the fiscal year, unreserved fund balance for the General Fund was $ 445.0, or 47.2 percent
of total General Fund expenditures. Unreserved fund balance decreased by almost 17.5 percent from the
prior year. The decrease is attributable to General fund transfers out to the General Fund County
Improvements Fund for capital projects. In accordance with Arizona Revised Statutes ( A. R. S.), the entire
amount will be budgeted in the next fiscal year. A. R. S. § 42- 17151 requires that total estimated sources of
revenue must equal the total estimated expenditures in the budget for the current fiscal year. The
estimated expenditures may include an amount for unanticipated contingencies or emergencies, per
A. R. S. § 42- 17102.
Request for Information
This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with
a general overview of the County’s finances and to demonstrate the County’s accountability for the
money it receives. If you have any questions about this report or need additional financial information,
please contact Maricopa County Department of Finance, 301 W. Jefferson, Suite 960, Phoenix, AZ
85003, or at www. maricopa. gov.
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Maricopa County
Definitions of Government- wide Financial Statements and
Listing of Major Funds
19
Government- wide Financial Statements
The Statement of Net Assets presents information on all of Maricopa County’s assets and liabilities, with
the difference between the two reported as net assets.
The Statement of Activities presents information showing how the government’s net assets changed
during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event
giving rise to the change occurs, regardless of the timing of related cash flows.
The above two statements are presented utilizing the following types of activities:
Governmental Activities – generally are financed through taxes and intergovernmental revenues.
Business- type Activities – are financed in whole or in part by fees charged to external parties.
Major Funds
General Fund – is the County’s primary operating fund. It accounts for all financial resources of the
general government, except those required to be accounted for in another fund.
Special Revenue Funds
Detention Operations Fund – was established under the authority of propositions 400 and 401, which
were passed in the General Election of November 3, 1998. These propositions authorized a temporary
1/ 5 of one- cent sales tax to be used for the construction and operation of adult and juvenile detention
facilities. On November 5, 2002, the voters approved the extension of the 1/ 5 of one- cent sales tax in the
General Election to be used for jail facility operations. The extension begins in the month following the
expiration of the original tax and may continue for not more than twenty years after the date the tax
collection begins. The Detention Operations Fund accounts for the receipt of tax revenue, jail operations
expenditures, and transfers to the Detention Capital Projects Fund for construction of the adult and
juvenile detention facilities.
Debt Service Funds
County Improvement Debt Fund – accounts for the debt service on the Lease Revenue Bonds, Series
2001; the Lease Revenue Refunding Bonds, Series 2003; Lease Revenue Bonds, Series 2007A; Lease
Revenue Refunding Bonds, Series 2007B; Lease Trust Certificates, Series 2004; and other long- term
obligations. Funding is provided by transfers from the General Fund, revenue from the Maricopa County
Special Health Care District, a separate legal entity, and pledged contributions from various donors for
the Human Services Campus.
Maricopa County
Definitions of Government- wide Financial Statements and
Listing of Major Funds
20
Capital Projects Funds
General Fund County Improvements Fund – accounts for capital projects funded by transfers from the
General Fund.
Enterprise Funds
Solid Waste Management Fund – assists the cities and towns, businesses, and citizens in continuously
improving regional waste management systems. This includes an ever- increasing focus on reducing the
amount of waste generated, maximizing resource recovery, proper management of special wastes, and
environmentally sound disposal.
Maricopa County
Statement of Net Assets
June 30, 2007
21
PRIMARY GOVERNMENT COMPONENT UNITS
Governmental Business- type Housing Sports
Activities Activities Total Authority Commission Total
ASSETS
Cash in bank and on hand $ 4,318,657 $ 1,375 $ 4,320,032 $ 3,665,553 $ 23,339 $ 3,688,892
Cash and investments held by
County Treasurer 1,145,533,356 13,565,652 1,159,099,008
Receivables ( net of allowances
for uncollectibles) 26,378,778 93,273 26,472,051 5,194,561 9,500 5,204,061
Due from other governmental units 201,999,484 201,999,484
Inventories 11,359,197 11,359,197 58,700 58,700
Prepaids 1,855,519 1,855,519 4,102 4,102
Deferred costs 5,537,308 5,537,308
Miscellaneous 4,161,200 3,944 4,165,144
Intergovernmental loans 21,018,395 21,018,395
Advances to other funds 48,666 48,666
Cash and investments held by
trustee – restricted 111,338,782 7,691 111,346,473
Capital assets:
Land 507,611,245 1,187,486 508,798,731 4,830,082 4,830,082
Buildings and improvements 1,354,576,953 979,795 1,355,556,748 41,168,077 41,168,077
Machinery and equipment 219,266,153 1,623,205 220,889,358 707,447 32,195 739,642
Infrastructure – nondepreciable 588,921,213 588,921,213
Infrastructure – depreciable 230,077,875 230,077,875
Construction in progress 204,212,055 647,516 204,859,571 1,017,243 1,017,243
( Accumulated depreciation) ( 472,206,622) ( 2,498,749) ( 474,705,371) ( 26,325,015) ( 24,328) ( 26,349,343)
Total assets 4,166,008,214 15,611,188 4,181,619,402 30,320,750 40,706 30,361,456
LIABILITIES
Accounts payable 77,587,358 14,811 77,602,169 103,230 76,840 180,070
Accrued liabilities 11,945,382 7,095 11,952,477
Employee compensation payable 80,367,560 72,533 80,440,093 129,389 129,389
Interest payable 1,307,626 441 1,308,067
Deferred revenue 27,814,030 27,814,030 7,500 7,500
Due to other governmental units 171,993 171,993
Deposits held for other parties 949,822 949,822 151,260 151,260
Noncurrent liabilities:
Due within one year 54,105,454 5,225,375 59,330,829
Due in more than one year 299,620,478 11,909,298 311,529,776 315,297 315,297
Total liabilities 553,869,703 17,229,553 571,099,256 699,176 84,340 783,516
NET ASSETS
Invested in capital assets, net of
related debt 2,488,280,795 1,860,630 2,490,141,425 21,397,834 21,397,834
Restricted for:
General government 7,645,247 7,645,247
Public safety 290,858,864 290,858,864
Highways and streets 51,844,801 51,844,801
Health, welfare and sanitation 32,588,784 32,588,784 281,922 281,922
Culture and recreation 32,304,087 32,304,087
Education 3,465,068 3,465,068
Debt service 19,149,976 7,691 19,157,667
Unrestricted 686,000,889 ( 3,486,686) 682,514,203 7,941,818 ( 43,634) 7,898,184
Total net assets $ 3,612,138,511 $ ( 1,618,365) $ 3,610,520,146 $ 29,621,574 $ ( 43,634) $ 29,577,940
The notes to the financial statements are an integral part of this statement.
Maricopa County
Statement of Activities
For the Fiscal Year Ended June 30, 2007
22
Program Revenues
Operating Capital
Charges for Grants and Grants and
Expenses Services Contributions Contributions
Functions/ Programs
Primary government:
Governmental activities:
General government $ 211,473,080 $ 34,852,251 $ 17,398,183 $ 1,834,422
Public safety 864,907,381 95,402,079 102,606,342 142,298
Highways and streets 132,992,498 12,756,421 109,891,744 45,266,868
Health, welfare and sanitation 464,255,008 36,933,502 193,694,005
Culture and recreation 36,196,645 4,213,017 6,691,988 12,961
Education 15,687,335 818,977 13,325,416
Interest on long- term debt 6,254,330
Total governmental activities 1,731,766,277 184,976,247 443,607,678 47,256,549
Business- type activities:
Solid Waste Management 334,354 667,376
Other business- type activities 591,472 1,878,307
Total business- type activities 925,826 2,545,683
Total primary government $ 1,732,692,103 $ 187,521,930 $ 443,607,678 $ 47,256,549
Component units:
Housing Authority $ 17,166,959 $ 1,631,515 $ 14,178,995 $ 368,583
Sports Commission 416,585 146,051 82,290
Total component units $ 17,583,544 $ 1,777,566 $ 14,261,285 $ 368,583
General revenues:
Taxes:
Property taxes, levied for general purposes
Property taxes, levied for Flood Control District
Property taxes, levied for Library District
Share of state sales taxes
Sales tax – Jail construction and operation
Surcharge tax – Stadium District
Share of state vehicle license tax
Grants and contributions not restricted to specific programs
Unrestricted investment earnings
Miscellaneous
Transfers
Total general revenues and transfers
Change in net assets
Net assets ( deficit), beginning, as restated
Net assets ( deficit), ending
The notes to the financial statements are an integral part of this statement.
23
Net ( Expense) Revenue and
Changes in Net Assets
Primary Government Component Units
Business- type Housing Sports
Activities Activities Total Authority Commission Total
$ ( 157,388,224) $ $ ( 157,388,224)
( 666,756,662) ( 666,756,662)
34,922,535 34,922,535
( 233,627,501) ( 233,627,501)
( 25,278,679) ( 25,278,679)
( 1,542,942) ( 1,542,942)
( 6,254,330) ( 6,254,330)
( 1,055,925,803) ( 1,055,925,803)
333,022 333,022
1,286,835 1,286,835
1,619,857 1,619,857
( 1,055,925,803) 1,619,857 ( 1,054,305,946)
$ ( 987,866) $ $ ( 987,866)
( 188,244) ( 188,244)
( 987,866) ( 188,244) ( 1,176,110)
413,294,370 413,294,370
65,513,238 65,513,238
18,390,885 18,390,885
480,411,950 480,411,950
145,389,597 145,389,597
6,288,093 6,288,093
143,543,618 143,543,618
1,844,364 1,844,364
55,405,747 684,104 56,089,851
10,346,066 169,932 10,515,998
6,098,668 ( 6,098,668)
1,346,526,596 ( 5,244,632) 1,341,281,964
290,600,793 ( 3,624,775) 286,976,018 ( 987,866) ( 188,244) ( 1,176,110)
3,321,537,718 2,006,410 3,323,544,128 30,609,440 144,610 30,754,050
$ 3,612,138,511 $ ( 1,618,365) $ 3,610,520,146 $ 29,621,574 $ ( 43,634) $ 29,577,940
Maricopa County
Balance Sheet
Governmental Funds
June 30, 2007
24
Detention County
General Operations Improvement Debt
ASSETS
Cash in bank and on hand $ 102,770 $ 350 $
Cash and investments held by County Treasurer 365,240,599 169,290,182 13,688,536
Receivables 16,710,875 1,196,590 3,566,661
Due from other funds 8,539,582 4,742,824
Due from other governmental units 104,298,096 30,835,178 18,828,056
Inventories 5,516,416 261,532
Miscellaneous 710,030
Intergovernmental loans 21,018,395
Advances to other funds 48,666
Cash and investments held by trustee - restricted 17,427,149
Total assets $ 522,185,429 $ 201,583,832 $ 58,253,226
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable $ 17,297,175 $ 8,089,322 $
Employee compensation payable 16,462,602 6,702,543
Accrued liabilities 1,612,599
Due to other funds 4,783,055 38,670,475
Due to other governmental units 3,391
Interest payable 1,085,624
Bonds payable 8,017,750
Special assessment debt with governmental commitment
Deferred revenue 10,562,420 22,330,741
Deposits held for other parties
Total liabilities 50,717,851 53,465,731 31,434,115
Fund balances:
Reserved for:
Inventories 5,516,416 261,532
Intergovernmental loans 20,950,382
Advances 36,500
Debt service 8,323,775
Unreserved, reported in:
General fund 444,964,280
Special revenue funds 147,856,569
Capital projects funds
Debt service funds 18,495,336
Total fund balances 471,467,578 148,118,101 26,819,111
Total liabilities and fund balances $ 522,185,429 $ 201,583,832 $ 58,253,226
Amounts reported for governmental activities in the Statement of Net Assets are different because:
Capital assets used in governmental activities are not financial resources and therefore, are not reported in the funds.
Other assets are not available to pay for current period expenditures and therefore, are deferred in the funds.
Internal service funds are used by management to charge the costs of equipment services, telecommunications, reprographics, risk management,
employee benefits, and the sheriff warehouse to individual funds. The assets and liabilities of the internal service funds are included in
governmental activities in the Statement of Net Assets.
Some long- term liabilities and compensated absences are not due and payable shortly after June 30, 2007, and therefore, are not reported in the funds.
Net assets of governmental activities
The notes to the financial statements are an integral part of this statement.
25
General Fund Other Total
County Governmental Governmental
Improvements Funds Funds
$ $ 886,881 $ 990,001
243,993,280 271,516,809 1,063,729,406
4,387,422 25,861,548
38,710,706 51,993,112
48,038,154 201,999,484
3,977,182 9,755,130
2,314,519 3,024,549
21,018,395
48,666
93,911,633 111,338,782
$ 243,993,280 $ 463,743,306 $ 1,489,759,073
$ 1,619,274 $ 40,719,172 $ 67,724,943
6,407,341 29,572,486
9,766,255 11,378,854
7,979,268 51,432,798
168,602 171,993
4,043 1,089,667
8,017,750
8,587 8,587
19,096,946 51,990,107
949,822 949,822
1,619,274 85,100,036 222,337,007
3,977,182 9,755,130
20,950,382
36,500
10,826,201 19,149,976
444,964,280
158,387,513 306,244,082
242,374,006 205,452,374 447,826,380
18,495,336
242,374,006 378,643,270 1,267,422,066
$ 243,993,280 $ 463,743,306
2,627,791,227
24,176,077
23,004,977
( 330,255,836)
$ 3,612,138,511
Maricopa County
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2007
26
Detention County
General Operations Improvement Debt
REVENUES
Taxes $ 405,681,192 $ 145,389,597 $
Licenses and permits 2,510,839
Intergovernmental 735,206,991 27,459,208 3,346,366
Charges for services 31,719,110 3,735
Fines and forfeits 18,244,445
Special assessments
Miscellaneous 39,820,387 7,384,495 3,098,682
Total revenues 1,233,182,964 180,237,035 6,445,048
EXPENDITURES
Current:
General government 155,019,006
Public safety 413,983,793 269,659,969
Highways and streets
Health, welfare and sanitation 324,829,215
Culture and recreation 1,754,910
Education 1,976,114
Debt service:
Principal 10,758,187
Interest 3,243,113
Other expenditures 249,944
Capital outlay 45,377,305 8,960,017
Total expenditures 942,940,343 278,619,986 14,251,244
Excess ( deficiency) of revenues over expenditures 290,242,621 ( 98,382,951) ( 7,806,196)
OTHER FINANCING SOURCES ( USES)
Transfers in 80,433,885 161,279,161 76,831,405
Transfers out ( 491,099,978) ( 38,670,475) ( 68,818,587)
Capital lease agreements 25,720,244
Proceeds from bond issuance 32,840,000
Premium on bond issuance 973,842
Payment to escrow agent ( 34,414,011)
Loan Proceeds
Total other financing sources ( uses) ( 384,945,849) 122,608,686 7,412,649
Net change in fund balances ( 94,703,228) 24,225,735 ( 393,547)
Fund balances at beginning of year, as restated 565,179,124 123,822,406 27,212,658
Increase in reserve for inventories 991,682 69,960
Fund balances at end of year $ 471,467,578 $ 148,118,101 $ 26,819,111
The notes to the financial statements are an integral part of this statement.
27
General Fund Other Total
County Governmental Governmental
Improvements Funds Funds
$ $ 89,304,825 $ 640,375,614
37,568,003 40,078,842
339,829,419 1,105,841,984
55,945,987 87,668,832
13,397,424 31,641,869
3,929,786 3,929,786
4,114 55,157,811 105,465,489
4,114 595,133,255 2,015,002,416
18,102,461 173,121,467
129,653,687 813,297,449
56,087,569 56,087,569
136,839,639 461,668,854
26,528,825 28,283,735
13,242,217 15,218,331
5,539,331 16,297,518
2,787,125 6,030,238
1,210,523 1,460,467
27,052,019 219,993,663 301,383,004
27,052,019 609,985,040 1,872,848,632
( 27,047,905) ( 14,851,785) 142,153,784
307,419,489 165,550,825 791,514,765
( 58,240,485) ( 128,586,572) ( 785,416,097)
25,720,244
108,100,000 140,940,000
622,246 1,596,088
( 34,414,011)
1,217,018 1,217,018
249,179,004 146,903,517 141,158,007
222,131,099 132,051,732 283,311,791
20,242,907 245,624,560 982,081,655
966,978 2,028,620
$ 242,374,006 $ 378,643,270 $ 1,267,422,066
Maricopa County
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds to the
Statement of Activities
For the Fiscal Year Ended June 30, 2007
28
Net change in fund balances – total governmental funds ( page 27) $ 283,311,791
Amounts reported for governmental activities in the Statement of Activities
pages 22 – 23 are different because:
Governmental funds report capital outlays as expenditures. However, in the
Statement of Activities, the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense. This is the amount by which
capital outlays exceeded depreciation in the current period. 150,810,209
The net effect of various miscellaneous transactions involving capital assets
( i. e., sales, trade- ins, and donations) is to decrease net assets. ( 34,747,252)
Collection of revenues in the governmental funds exceeded revenues reported
in the Statement of Activities. ( 546,217)
The issuance of long- term debt ( e. g., bonds, leases) provides current financial
resources to governmental funds, while the repayment of the principal of long-term
debt consumes the current financial resources of governmental funds.
Neither transaction, however, has any effect on net assets. Also, governmental
funds report the effect of issuance costs, premiums, discounts, and similar items
when debt is first issued, whereas these amounts are deferred and amortized in
the Statement of Activities. This amount is the net effect of these differences in
the treatment of long- term debt and related items. ( 108,985,331)
Some expenses reported in the Statement of Activities do not require the use of
current financial resources and therefore, are not reported as expenditures in
governmental funds. ( 5,357,048)
Internal service funds are used by management to charge the costs of
equipment services, telecommunications, reprographics, risk management,
employee benefits, and the sheriff warehouse to individual funds. The net
revenue of internal service funds is reported with governmental activities. 6,114,641
Change in net assets of governmental activities ( page 23) $ 290,600,793
The notes to the financial statements are an integral part of this statement.
29
Maricopa County
Statement of Net Assets
Proprietary Funds
June 30, 2007
30
Business- type Activities - Governmental
Enterprise Fund Activities -
Solid Waste Internal Service
Management Funds
ASSETS
Current assets:
Cash in bank and on hand $ 1,375 $ 3,328,656
Cash and investments held by County Treasurer 13,565,652 81,803,950
Accrued interest receivable 93,273 517,230
Inventories 1,604,067
Prepaids 1,855,519
Miscellaneous 3,944 1,136,651
Total current assets 13,664,244 90,246,073
Noncurrent assets:
Restricted:
Cash and investments held by trustee 7,691
Capital assets:
Land 1,187,486
Buildings and improvements 979,795 323,649
Machinery and equipment 1,623,205 10,413,783
Construction in progress 647,516
Less accumulated depreciation ( 2,498,749) ( 6,069,787)
Total noncurrent assets 1,946,944 4,667,645
Total assets 15,611,188 94,913,718
LIABILITIES
Current liabilities:
Accounts payable 14,811 9,862,415
Employee compensation payable 72,533 928,896
Accrued liabilities 7,095 566,528
Interest payable 441
Due to other funds 560,314
Leases payable 54,501
Lease revenue bonds payable ( current portion) 7,250
Advances from other funds ( current portion) 12,166
Liability for reported and incurred but not reported claims ( current portion) 23,923,105
Liability for closure and postclosure costs ( current portion) 5,205,959
Total current liabilities 5,320,255 35,895,759
Noncurrent liabilities:
Lease revenue bonds payable 22,707
Advances from other funds 36,500
Liability for reported and incurred but not reported claims 36,012,982
Liability for closure and postclosure costs 11,850,091
Total noncurrent liabilities 11,909,298 36,012,982
Total liabilities 17,229,553 71,908,741
NET ASSETS
Invested in capital assets, net of related debt 1,860,630 4,613,144
Restricted for debt service 7,691
Unrestricted ( deficit) ( 3,486,686) 18,391,833
Total net assets ( deficit) $ ( 1,618,365) $ 23,004,977
The notes to the financial statements are an integral part of this statement.
Maricopa County
Statement of Revenues, Expenses, and Changes in Fund Net Assets
Proprietary Funds
For the Fiscal Year Ended June 30, 2007
31
BUSINESS- TYPE ACTIVITIES – ENTERPRISE FUNDS Governmental
Solid Nonmajor Activities -
Waste Enterprise Internal Service
Management Funds Total Funds
OPERATING REVENUES
Charges for services $ 667,376 $ 1,878,307 $ 2,545,683 $ 89,188,642
Miscellaneous 3,059 166,873 169,932 468,153
Total operating revenues 670,435 2,045,180 2,715,615 89,656,795
OPERATING EXPENSES
Personal services 389,874 389,874 8,213,480
Supplies 48,912 48,912 15,737,989
Medical services 420,482 420,482
Other services 81,570 81,570 4,564,061
Legal 8,934,567
Insurance 37,320,508
Leases and rentals 14,125 14,125 2,643,478
Repairs and maintenance 59,066 59,066 2,145,296
Travel and transportation 695 695 4,460
Utilities 3,106 3,106 5,700,216
Depreciation 85,381 85,381 950,639
Miscellaneous 71,355 71,355
Change in closure and postclosure cost ( 419,730) ( 419,730)
Total operating expenses 334,354 420,482 754,836 86,214,694
Operating income 336,081 1,624,698 1,960,779 3,442,101
NONOPERATING REVENUES ( EXPENSES)
Investment income 684,104 684,104 3,328,890
Interest expense ( 170,990) ( 170,990) ( 75,035)
Total nonoperating revenues ( expenses) 684,104 ( 170,990) 513,114 3,253,855
Income before contributions and transfers 1,020,185 1,453,708 2,473,893 6,695,956
Capital contributions 5,431
Transfers in 3,215,410 3,215,410
Transfers out ( 9,314,078) ( 9,314,078) ( 586,746)
Change in net assets 1,020,185 ( 4,644,960) ( 3,624,775) 6,114,641
Total net assets ( deficit) – beginning, as restated ( 2,638,550) 4,644,960 2,006,410 16,890,336
Total net assets ( deficit) – ending $ ( 1,618,365) $ $ ( 1,618,365) $ 23,004,977
The notes to the financial statements are an integral part of this statement.
Maricopa County
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2007
32
BUSINESS- TYPE ACTIVITIES -
ENTERPRISE FUNDS Governmental
Solid Nonmajor Activities -
Waste Enterprise Internal Service
Management Funds Total Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from contractors, patients and other payors $ $ 12,001,247 $ 12,001,247 $
Charges for services 667,376 667,376 90,162,629
Other receipts 3,059 3,059 468,153
Payments for goods and services ( 1,016,299) ( 5,731,589) ( 6,747,888) ( 68,379,381)
Payments for personal services ( 373,621) ( 373,621) ( 8,003,602)
Net cash provided by ( used for) operating activities ( 719,485) 6,269,658 5,550,173 14,247,799
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Advances from General Fund 560,314
Cash transfers from other funds 3,018,089 3,018,089
Cash transfers to other funds ( 9,314,078) ( 9,314,078)
Interest payments ( 170,990) ( 170,990) ( 72,235)
Loan payments to General Fund ( 12,168) ( 12,168) ( 1,626,754)
Premium tax 197,321 197,321
Net cash used for noncapital financing activities ( 12,168) ( 6,269,658) ( 6,281,826) ( 1,138,675)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Acquisition of capital assets ( 672,920) ( 672,920) ( 1,622,206)
Capital lease payments ( 98,929)
Lease revenue bond payments ( 6,976) ( 6,976)
Interest payments on long- term debt ( 139) ( 139) ( 2,800)
Net cash used for capital and related financing activities ( 680,035) ( 680,035) ( 1,723,935)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest and dividends 670,670 670,670 3,172,431
Net cash provided by investing activities 670,670 670,670 3,172,431
Net increase ( decrease) in cash and cash equivalents ( 741,018) ( 741,018) 14,557,620
Cash and cash equivalents, July 1, 2006 14,315,736 14,315,736 70,574,986
Cash and cash equivalents, June 30, 2007 $ 13,574,718 $ $ 13,574,718 $ 85,132,606
RECONCILIATION OF OPERATING INCOME ( LOSS) TO NET CASH
PROVIDED BY ( USED FOR) OPERATING ACTIVITIES
Operating income $ 336,081 $ 1,624,698 $ 1,960,779 $ 3,442,101
Adjustments to reconcile operating loss to net cash
provided by ( used for) operating activities
Depreciation expense 85,381 85,381 950,639
Liability for reported and incurred but not reported claims – noncurrent 3,164,708
Net change in liability for closure and postclosure costs – noncurrent ( 5,158,517) ( 5,158,517)
Changes in assets [( increase)/ decrease] and liabilities [ increase/( decrease)]:
Accounts receivable 9,956,067 9,956,067
Inventories 23,513
Prepaids 4,305,864 4,305,864 149,502
Miscellaneous 973,987
Accounts payable ( 16,754) 262,493 245,739 7,216,305
Employee compensation payable 16,253 16,253 209,878
Accrued liabilities ( 312,140) ( 312,140) 34,165
Due to other County funds ( 7,079,352) ( 7,079,352)
Medical claims payable ( 2,487,972) ( 2,487,972)
Liability for reported and incurred but not reported claims – current ( 1,916,999)
Liability for closure and postclosure costs – current 4,018,071 4,018,071
Net cash provided by ( used for) operating activities $ ( 719,485) $ 6,269,658 $ 5,550,173 $ 14,247,799
SCHEDULE OF NONCASH INVESTING, CAPITAL AND NONCAPITAL
FINANCING ACTIVITIES – Debit ( Credit)
Accumulated depreciation from disposed capital assets $ 134,923
Machinery and equipment disposed ( 134,923)
Capital contributions ( 5,431)
Capital assets transferred from governmental activities 5,431
Capital assets transferred to governmental activities ( 586,746)
Accumulated depreciation transferred to governmental activities 586,746
The notes to the financial statements are an integral part of this statement.
33
Maricopa County
Statement of Fiduciary Net Assets
Fiduciary Funds
June 30, 2007
34
Investment Agency
Trust Fund Fund
Assets
Cash in bank and on hand $ $ 37,023,998
Cash and investments held by County Treasurer 2,549,928,316
Accrued interest receivable 16,364,478
Total assets 2,566,292,794 $ 37,023,998
Liabilities
Deposits held for other parties $ 37,023,998
Total liabilities $ 37,023,998
Net Assets
Held in trust for investment participants $ 2,566,292,794
The notes to the financial statements are an integral part of this statement.
Maricopa County
Statement of Changes in Fiduciary Net Assets
Fiduciary Funds
For the Fiscal Year Ended June 30, 2007
35
Investment
Trust Fund
Additions:
Contributions from participants $ 14,211,676,680
Investment income:
Interest income 87,670,977
Net increase in fair value of investments 11,228,939
Net investment earnings 98,899,916
Total additions 14,310,576,596
Deductions:
Distributions to participants 13,917,381,548
Total deductions 13,917,381,548
Change in net assets 393,195,048
Net assets – beginning, as restated 2,173,097,746
Net assets – ending $ 2,566,292,794
The notes to the financial statements are an integral part of this statement.
36
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􀁂 􀁡 􀁳 􀁩 􀁣 􀀠 􀁆 􀁩 􀁮 􀁡 􀁮 􀁣 􀁩 􀁡 􀁬 􀀠 􀁓 􀁴 􀁡 􀁴 􀁥 􀁭 􀁥 􀁮 􀁴 􀁳 􀀠 􀀭 􀀠 􀁎 􀁯 􀁴 􀁥 􀁳
􀁂 􀁡 􀁳 􀁩 􀁣 􀀠 􀁆 􀁩 􀁮 􀁡 􀁮 􀁣 􀁩 􀁡 􀁬 􀀠 􀁓 􀁴 􀁡 􀁴 􀁥 􀁭 􀁥 􀁮 􀁴 􀁳 􀀠 􀀭 􀀠 􀁎 􀁯 􀁴 􀁥 􀁳
Maricopa County
Basic Financial Statements – Notes
39
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 2 REPORTING CHANGES
NOTE 3 BEGINNING BALANCES RESTATED
NOTE 4 RECONCILIATION OF GOVERNMENT- WIDE AND FUND FINANCIAL
STATEMENTS
NOTE 5 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
NOTE 6 DEPOSITS AND INVESTMENTS
NOTE 7 CONDENSED FINANCIAL STATEMENTS OF COUNTY TREASURER’S
INVESTMENT POOL
NOTE 8 RECEIVABLES
NOTE 9 DUE FROM OTHER GOVERNMENTAL UNITS
NOTE 10 INTERGOVERNMENTAL LOANS
NOTE 11 CAPITAL ASSETS
NOTE 12 CONSTRUCTION AND OTHER SIGNIFICANT COMMITMENTS
NOTE 13 LONG- TERM LIABILITIES
NOTE 14 MUNICIPAL LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS
NOTE 15 MUNICIPAL REVOLVING LINE OF CREDIT AND IRREVOCABLE STANDBY
LETTER OF CREDIT
NOTE 16 OPERATING LEASES
NOTE 17 RISK MANAGEMENT
NOTE 18 EMPLOYEE RETIREMENT PLANS
NOTE 19 INTERFUND BALANCES AND ACTIVITY
NOTE 20 DISPROPORTIONATE SHARE SETTLEMENT
NOTE 21 SUBSEQUENT EVENTS
Notes to the Financial Statements
( Continued)
40
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of Maricopa County conform to generally accepted accounting principles
applicable to governmental units adopted by the Governmental Accounting Standards Board ( GASB).
A. Reporting Entity
Maricopa County is a general purpose local government governed by a separately elected board of
five county supervisors. The accompanying financial statements present the activities of the County
( the primary government) and its component units.
Component units are legally separate entities for which the County is considered to be financially
accountable. Blended component units, although legally separate entities, are in substance part of
the County’s operations. Therefore, data from these units is combined with data of the primary
government. Discretely presented component units, on the other hand, are reported in a separate
column in the government- wide financial statements to emphasize they are legally separate from the
County. Each blended and discretely presented component unit discussed below has a June 30
year- end.
The reporting entity is comprised of the primary government, Maricopa County Flood Control District,
Maricopa County Library District, Maricopa County Public Finance Corporation, Maricopa County
Special Assessment Districts, Maricopa County Stadium District, Maricopa County Street Lighting
Districts, Housing Authority of Maricopa County, and Phoenix Regional Sports Commission.
The blended component units are as follows:
Maricopa County Flood Control District
The Maricopa County Flood Control District is a legally separate, tax- levying entity that provides flood
control facilities and regulates floodplains and drainage to prevent flooding of property in Maricopa
County. As the Maricopa County Board of Supervisors serves as the Board of Directors of the Flood
Control District, it is able to significantly influence the programs, projects, activities, or level of
services provided by the District; therefore, the District is considered a blended component unit of the
County.
Maricopa County Library District
The Maricopa County Library District is a legally separate, tax- levying entity that provides and
maintains library services for the residents of Maricopa County. As the Maricopa County Board of
Supervisors serves as the Board of Directors of the Library District, it is able to significantly influence
the programs, projects, activities, or level of services provided by the District; therefore, the District is
considered a blended component unit of the County.
Maricopa County Public Finance Corporation
Maricopa County Public Finance Corporation is a nonprofit corporation created by the Maricopa
County Board of Supervisors that exists primarily to assist the County in the acquisition, construction,
and improvement of County facilities, including real property and personal property. The Board of
Directors of the Public Finance Corporation is subject to the approval of the County Board of
Supervisors and the corporation exists primarily for the benefit of the County; therefore, the
Corporation is considered a blended component unit of the County. The Corporation has issued
certificates of participation, lease revenue bonds, and lease trust certificates that evidence undivided
proportionate interests in rent payments to be made under the lease agreements, with an option to
purchase, between Maricopa County and the Corporation. Since this debt is in substance the
County’s obligation, these liabilities and resulting assets are reported on the County’s financial
statements.
Notes to the Financial Statements
( Continued)
41
Maricopa County Special Assessment Districts
The Special Assessment Districts are legally separate entities that provide improvements to various
properties within the County. As the Maricopa County Board of Supervisors serves as the Board of
Directors of the Maricopa County Special Assessment Districts, it is able to significantly influence the
activities or level of services provided by the Districts; therefore, the Districts are considered a
blended component unit of the County.
Maricopa County Stadium District
The Maricopa County Stadium District is a legally separate entity that provides regional leadership
and fiscal resources to assure the presence of Major League Baseball in Maricopa County. As the
Maricopa County Board of Supervisors serves as the Board of Directors of the Stadium District, it is
able to significantly influence the programs, projects, activities, or level of services provided by the
District; therefore, the District is considered a blended component unit of the County.
Complete financial statements for the Maricopa County Stadium District may be obtained at the
entity’s administrative office listed below:
Maricopa County Stadium District
401 East Jefferson
Phoenix, Arizona 85004
www. maricopa. gov/ stadiumdistrict
Maricopa County Street Lighting Districts
The Street Lighting Districts are legally separate entities that provide street lighting in areas of the
County that are not under local city jurisdictions. As the Maricopa County Board of Supervisors
serves as the Board of Directors of the Maricopa County Street Lighting Districts, the Districts are
considered a blended component unit of the County.
The discretely presented component units are as follows:
Housing Authority of Maricopa County
The Housing Authority is a legally separate entity that provides efficient and affordable rental housing
to low- income households of Maricopa County. Each member of the Maricopa County Board of
Supervisors appoints one member to the Board of Commissioners while the sixth member shall be
based on the recommendation of the County Administrative Officer and the seventh member shall be
appointed by a majority vote of the Maricopa County Board of Supervisors. The County does not
have the ability to impose its will on the Housing Authority. The Housing Authority is a discretely
presented component unit, as the Maricopa County Board of Supervisors may dissolve the Authority
at any time at the sole discretion of the County and, therefore, a financial benefit or burden exists.
Complete financial statements for the Housing Authority of Maricopa County may be obtained at the
entity’s administrative office listed below:
Housing Authority of Maricopa County
2024 North Seventh Street, Suite 101
Phoenix, Arizona 85006
www. maricopahousing. org
Notes to the Financial Statements
( Continued)
42
Phoenix Regional Sports Commission
The Phoenix Regional Sports Commission ( Sports Commission), formerly Maricopa County Sports
Commission, is a legally separate entity pursuant to A. R. S. § 11- 701( F). The Sports Commission
provides the citizens of Maricopa County with a variety of sporting experiences by assisting in the
promotion and acquisition of events, teams, and youth programs. The Sports Commission’s
governing board consists of fifteen members, of whom the Maricopa County Board of Supervisors
appoints five members, a state university president appoints one member, and the remaining nine
members are appointed by the seven most populous cities’ mayors within the County. The County
does not have the ability to impose its will on the Sports Commission. The Sports Commission is a
discretely presented component unit, as the Maricopa County Board of Supervisors may dissolve the
Sports Commission at any time at the sole discretion of the County and, therefore, a financial benefit
or burden exists.
Complete financial statements for the Phoenix Regional Sports Commission may be obtained at the
entity’s administrative office listed below:
Phoenix Regional Sports Commission
400 East Van Buren, Suite 600
Phoenix, Arizona 85004
www. phxsports. org
Related Organization
The Industrial Development Authority of Maricopa County ( Authority) is a legally separate entity that
was created to assist in the financing of commercial and industrial enterprises; safe, sanitary, and
affordable housing; and healthcare facilities. The Authority fulfills its function through the issuance of
tax exempt or taxable revenue bonds. The County Board of Supervisors appoints the Authority’s
Board of Directors. The Authority’s operations are completely separate from the County and the
County is not financially accountable for the Authority. Therefore, the financial activities of the
Authority have not been included in the accompanying financial statements.
B. Basis of Presentation
The basic financial statements include both government- wide statements and fund financial
statements. The government- wide statements focus on the County as a whole, while the fund
financial statements focus on major funds. Each presentation provides valuable information that can
be analyzed and compared between years and between governments to enhance the usefulness of
the information.
Government- wide financial statements – provide information about the primary government ( the
County) and its component units. The statements include a statement of net assets and a statement
of activities. These statements report the financial activities of the overall government, except for
fiduciary activities. They also distinguish between the governmental and business- type activities of
the County and between the County and its discretely presented component units. 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.
The statement of activities presents a comparison between direct expenses and program revenues
for each function of the County’s governmental activities and segment of its business- type activities.
Direct expenses are those that are specifically associated with a program or function and, therefore,
are clearly identifiable to a particular function. The County allocates indirect expenses to programs or
functions. Program revenues include:
• Charges to customers or applicants for goods, services, or privileges provided,
• Operating grants and contributions, and
• Capital grants and contributions, including special assessments.
Notes to the Financial Statements
( Continued)
43
Revenues that are not classified as program revenues, including internally dedicated resources,
unrestricted grant revenues, and all County levied taxes or taxes not levied by the County that are not
restricted to a specific program, are reported as general revenues.
Generally, the effect of interfund activity has been eliminated from the government- wide financial
statements to minimize the double counting of internal activities. However, charges for interfund
services provided and used are not eliminated if doing so would distort the direct costs and program
revenues reported by the departments concerned.
Fund financial statements – provide information about the County’s funds, including fiduciary funds
and blended component units. Separate statements are presented for the governmental, proprietary,
and fiduciary fund categories. The emphasis of fund financial statements is on major governmental
and enterprise funds, each displayed in a separate column. All remaining governmental and
enterprise funds are aggregated and reported as nonmajor funds. Fiduciary funds are aggregated
and reported by fund type.
Proprietary fund 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, in which each party receives and
gives up essentially equal values, are reported as operating revenues. Nonoperating revenues, such
as investment income, result from transactions in which the parties do not exchange equal values.
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.
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 Detention Operations Fund –