Pima County June 30, 2019 Financial Report
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2019 Comprehensive Annual FINANCIAL REPORT For the Fiscal Year Ended June 30, 2019 • Pima County, Arizona PIMA COUNTY, ARIZONA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2019 BOARD OF SUPERVISORS Richard Elías Chair District #5 Ramón Valadez Ally Miller Vice Chair District #1 District #2 Sharon Bronson Steve Christy District #3 District #4 COUNTY ADMINISTRATOR C. H. Huckelberry Chief Deputy County Administrator Jan Lesher Prepared by the Department of Finance and Risk Management Michelle Campagne, CPA Director Sam Correa Robert W. Johnson Deputy Director Deputy Director Meridith Litton, CPA Andy Welch Deputy Director Deputy Director Supervisors Emilia Eveningred Pete Rodriguez Blanca Rossetti Accountants Len Baldazo Chih-Yu Lee, CPA Valentin R. Dominguez, CPA Alex C. Ramires Brenda Escarcega Jennifer Serrano Jessica Espinoza Jennifer Sia, MBA Linda House David A. Tribble Yvette M. Hurley, CPA PIMA COUNTY, ARIZONA Comprehensive Annual Financial Report For the Year Ended June 30, 2019 TABLE OF CONTENTS Exhibit Page I. INTRODUCTORY SECTION Letter of Transmittal 1 - 7 Certificate of Achievement for Excellence in Financial Reporting 8 Organizational Chart 9 II. FINANCIAL SECTION Independent Auditors' Report 10 - 12 A. MANAGEMENT'S DISCUSSION AND ANALYSIS (required supplementary information) 13 - 30 B. BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position A-1 31 Statement of Activities A-2 32 - 33 Governmental Fund Financial Statements (Major and Other) Balance Sheet A-3 34 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position A-4 35 Statement of Revenues, Expenditures and Changes in Fund Balances A-5 36 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities A-6 37 Proprietary Fund Financial Statements (Major and Other) Statement of Net Position A-7 38 Statement of Revenues, Expenses and Changes in Fund Net Position A-8 39 Statement of Cash Flows A-9 40 - 41 Fiduciary Fund Financial Statements Statement of Fiduciary Net Position A-10 42 Statement of Changes in Fiduciary Net Position A-11 43 PIMA COUNTY, ARIZONA Comprehensive Annual Financial Report For the Year Ended June 30, 2019 TABLE OF CONTENTS (continued) Exhibit Page Notes to Financial Statements Note 1: Summary of Significant Accounting Policies 44 - 50 Note 2: Change in Accounting Principle 51 Note 3: Cash and Investments 52 - 56 Note 4: Fund Balance Classifications of the Governmental Funds 57 Note 5: Capital Assets 58 - 59 Note 6: Claims, Judgments and Risk Management 60 - 61 Note 7: Long-Term Liabilities 62 - 70 Note 8: Landfill Liabilities 71 Note 9: Operating Leases 72 Note 10: Pension and Other Postemployment Benefits 73 - 89 Note 11: Due from Other Governments 90 Note 12: Interfund Transactions 91 - 92 Note 13: Construction and Other Significant Commitments 93 Note 14: Deficit Fund Balances/Net Position 94 Note 15: Subsequent Events 94 C. REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MANAGEMENT'S DISCUSSION AND ANALYSIS Schedule of Revenues, Expenditures and Changes in Fund Balance - B-1 Budget and Actual - General Fund 95 Notes to Schedule of Revenues, Expenditures and Changes in 96 Fund Balance – Budget and Actual – General Fund Schedule of the County’s Proportionate Share of the Net Pension B-2 97 Liability – Cost-Sharing Pension Plans Schedule of Changes in the County’s Net Pension Liability and Related 98 - 99 Ratios – Agent Pension Plans Schedule of County Pension Contributions 100 Notes to Pension Plan Schedules 101 D. COMBINING STATEMENTS AND OTHER SCHEDULES Other (Nonmajor) Governmental Funds C-1 102 - 103 Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in C-2 104 - 105 Fund Balances - Nonmajor Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Other Governmental Funds Capital Projects Fund C-3 106 Debt Service Fund C-4 107 Transportation - Special Revenue Fund C-5 108 Health - Special Revenue Fund C-6 109 Regional Flood Control District - Special Revenue Fund C-7 110 Other - Special Revenue Fund C-8 111 Other Grants - Special Revenue Fund C-9 112 Wireless Integrated Network - Special Revenue Fund C-10 113 School Reserve - Special Revenue Fund C-11 114 Environmental Quality - Special Revenue Fund C-12 115 Waste Tire - Special Revenue Fund C-13 116 Library District - Special Revenue Fund C-14 117 Stadium District - Special Revenue Fund C-15 118 Improvement & Other Districts - Special Revenue Fund C-16 119 Rocking K South Community Facilities District - Special Revenue Fund C-17 120 PIMA COUNTY, ARIZONA Comprehensive Annual Financial Report For the Year Ended June 30, 2019 TABLE OF CONTENTS (continued) Exhibit Page Other (Nonmajor) Enterprise Funds Combining Statement of Net Position C-18 121 Combining Statement of Revenues, Expenses and Changes in Fund Net Position C-19 122 Combining Statement of Cash Flows C-20 123 - 124 Internal Service Funds Combining Statement of Net Position C-21 125 Combining Statement of Revenues, Expenses and Changes in Fund Net Position C-22 126 Combining Statement of Cash Flows C-23 127 - 128 Fiduciary Funds Combining Statement of Fiduciary Net Position - Investment Trust Funds C-24 129 Combining Statement of Changes in Fiduciary Net Position - Investment Trust Funds C-25 130 Combining Statement of Fiduciary Net Position - Agency Funds C-26 131 Combining Statement of Changes in Fiduciary Net Position - Agency Funds C-27 132 III. STATISTICAL SECTION Financial Trends Information D-1 through 4 133 - 137 Net Position by Component Changes in Net Position Fund Balances - Governmental Funds Changes in Fund Balances - Governmental Funds Revenue Capacity Information D-5 through 12 138 - 149 Taxable Assessed Value and Estimated Actual Value of Property Direct and Overlapping Property Tax Rates Direct and Overlapping Property Tax Rates - School Districts Principal Property Taxpayers Real Property Tax Levies and Collections Assessed, Limited and Full Cash (Secondary) Value of Taxable Property Comparative Net Valuations and Tax Rates Historical Collections - Hotel Excise Tax, Car Rental Surcharges and Recreational Vehicle Tax Streets and Highways Revenues PIMA COUNTY, ARIZONA Comprehensive Annual Financial Report For the Year Ended June 30, 2019 TABLE OF CONTENTS (continued) Exhibit Page Debt Capacity Information D-13 through 19 150 - 158 Ratios of Outstanding Debt by Type to Personal Income and Per Capita Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita Ratio of Direct and Overlapping Debt to Property Values and Per Capita Computation of Direct and Overlapping Governmental Activities Debt Outstanding Legal Debt Margin Regional Wastewater Reclamation Pledged Sewer Revenue Debt Coverage Transportation Revenue Bonds - Pledged Revenue Bond Coverage Lease, Lease-purchase Installment Notes Payable and Purchase Agreements Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures Demographic and Economic Information D-20 through 26 159 - 166 Demographic and Economic Statistics Principal Employers Population and Employment Transportation and Real Estate Economic Indicators by Calendar Year Population Statistics Average Annual Jail Population Operating Information D-27 through 29 167 - 169 Employees by Function Operating Indicators by Program Capital Assets and Infrastructure by Program INTRODUCTION 2019 Comprehensive Annual FINANCIAL REPORT For the Fiscal Year Ended June 30, 2019 • Pima County, Arizona INTRODUCTORY SECTION n Letter of Transmittal n Certificate of Achievement for Excellence in Financial Reporting n Organizational Chart FINANCIAL SECTION STATISTICAL SECTION INTRODUCTORY SECTION The purpose of the Introductory Section in a comprehensive annual financial report (CAFR) is to familiarize readers with the organizational structure of the government, the nature and scope of the services it provides, and the specifics of its legal operating environment. December 17, 2019 To the Honorable Board of Supervisors and Citizens of Pima County, Arizona: We are pleased to submit the Comprehensive Annual Financial Report (CAFR) of Pima County for the fiscal year ended June 30, 2019. This report presents comprehensive financial and operating information about the County’s activities for the fiscal year. We believe that the financial information, as presented, is accurate in all material aspects; that it is presented in a manner designed to openly disclose the financial position and results of operations of the County as measured by the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain the maximum understanding of the County’s financial affairs have been included. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. The State of Arizona Office of the Auditor General is required to audit financial transactions and accounts kept by counties. The Auditor General has issued an unmodified (“clean”) opinion on the Pima County financial statements for the