CITY OF CHARLOTTESVILLE, VIRGINIA

CITY OF CHARLOTTESVILLE, VIRGINIA

www.charlottesville.org City of Charlottesville, Virginia Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2010 CITY OF CHARLOTTESVILLE, VIRGINIA Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2010 Prepared by Department of Finance DEPARTMENT OF FINANCE Monica L. Brumfield John A. Chisholm Barbara Eyrse Elnora L. Grooms Kathy W. Hall Khristina S. Hammill Linda D. Harding Gail E. Hassmer Michael Heny Teresa A. Kirkdoffer Sharon O’Hare Michaela Roberts Beatrice M. Segal Peggy J. Sprouse Bernard Wray CITY OF CHARLOTTESVILLE, VIRGINIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2010 TABLE OF CONTENTS Exhibit or Schedule Page INTRODUCTORY SECTION Letter of Transmittal 1 GFOA Certificate of Achievement for Excellence in Financial Reporting 10 City Organizational Chart 11 List of Elected and Appointed Officials 12 FINANCIAL SECTION Independent Auditors’ Report 13 Management’s Discussion and Analysis 15 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets A 30 Statement of Activities B 31 Fund Financial Statements: Balance Sheet – Governmental Funds C 32 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds D 34 Statement of Net Assets – Proprietary Funds E-1 36 Reconciliation of the Proprietary Funds Statement of Net Assets to the Statement of Net Assets for Business-Type Activities E-2 37 Statement of Revenues, Expenses and Changes in Fund Net Assets – Proprietary Funds E-3 38 Reconciliation of the Proprietary Funds Statement of Revenues, Expenses and Changes in Fund Net Assets to the Statement of Activities E-4 39 Statement of Cash Flows – Proprietary Funds E-5 40 Statement of Fiduciary Net Assets – Fiduciary Funds F-1 41 Statement of Changes in Fiduciary Net Assets – Fiduciary Funds F-2 42 Notes to the Financial Statements 43 Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Budget Basis – General Fund G 76 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Budget Basis – Social Services Fund H 81 Schedule of Funding Progress and Employer Retirement Contributions – Employee Retirement and Post-Employment Benefit Plans I 82 Note to Required Supplementary Information 83 Supplementary Information: Combining and Individual Fund Statements: Combining Balance Sheet – Nonmajor Governmental Funds J 86 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds K 87 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Community Development Block Grant Fund K-1 88 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Grants Fund K-2 89 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Community Attention Fund K-3 90 CITY OF CHARLOTTESVILLE, VIRGINIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2010 TABLE OF CONTENTS Exhibit or Schedule Page Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Comprehensive Services Act Fund K-4 91 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Transit Fund K-5 92 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – Debt Service Fund K-6 93 Combining Statement of Net Assets – Internal Service Funds L-1 96 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets – Internal Service Funds L-2 97 Combining Statement of Cash Flows – Internal Service Funds L-3 98 Schedule to Assign Internal Service Fund Assets and Liabilities in the Statement of Net Assets L-4 99 Statement of Changes in Assets and Liabilities – Agency Fund – Comprehensive Services Act Trust Fund M 102 Component Unit – School Board: Statement of Net Assets N-1 105 Statement of Activities N-2 106 Balance Sheet – Governmental Funds N-3 107 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds N-4 108 Statement of Net Assets – Internal Service Fund N-5 109 Statement of Revenues, Expenditures and Changes in Fund Net Assets – Internal Service Fund N-6 110 Statement of Cash Flows – Internal Service Fund N-7 111 STATISTICAL SECTION Financial Trends: Net Assets by Component I 114 Change in Net Assets II 115 Fund Balances of Governmental Funds III 117 Changes in Fund Balances of Governmental Funds IV 118 Revenue Capacity: Tax Revenues by Source V 119 Assessed and Estimated Market Value of Taxable Property VI 120 Property Tax Rates (per $100 of Assessed Value) VII 121 Principal Taxpayers Current Year and Nine Years Prior VIII 122 Property Tax Levies and Collections IX 123 Estimated Value of Tax-Exempt Property X 124 Debt Capacity: Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt per Capita XI 125 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Governmental Expenditures and other Financing Uses XII 126 Ratios of Outstanding Debt by Type XIII 127 Computation of Legal Debt Margin XIV 128 CITY OF CHARLOTTESVILLE, VIRGINIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2010 TABLE OF CONTENTS Exhibit or Schedule Page Economic and Demographic Information: Property Values, Construction and Bank Deposits XV 129 Demographic Statistics XVI 130 Principal Employers Current Year and Nine Years Prior XVII 131 Operating Information: Government Employees by Function XVIII 132 Operating Indicators by Function XIX 133 Capital Asset Statistics by Function XX 135 INTRODUCTORY SECTION Honorable Mayor and Members of City Council November 15, 2010 – 2 – THE REPORTING ENTITY AND ITS SERVICES The City is located in Central Virginia, approximately 100 miles southwest of Washington, D.C. and 70 miles northwest of Richmond, Virginia. As the seat of both the City and Albemarle County governments, Charlottesville serves as an economic, cultural and educational center in Central Virginia. As the home of the University of Virginia, one of the most prestigious and highly-regarded universities in the country, the City derives a number of benefits, both economic and in the quality of life associated with this area. The City provides a full range of services. These services include police and fire protection, solid waste collection and disposal, education, parks, recreational and cultural activities, street and highway maintenance and construction, health and welfare, and community and economic development. In addition to these general governmental activities, the City also operates gas, water, and wastewater systems and a municipal golf course as enterprise funds and maintains a pension trust fund and a post-employment benefits fund for its employees. The financial reporting entity includes all funds of the Primary Government (i.e., the City), as well as the component units for which the City is financially accountable. The City of Charlottesville Public Schools (Schools) and the Charlottesville Economic Development Authority (CEDA) are included in the report as discretely presented component units in separate columns in the government-wide financial statements to emphasize that they are legally separate from the City and to differentiate their financial position and results of operations from that of the City. Both of these component units are administered by separate boards which are appointed by City Council. School Board members are elected At Large. The Charlottesville Redevelopment and Housing Authority (CRHA) is not included in the reporting entity because the City is not financially accountable for the CRHA. ECONOMIC CONDITION AND OUTLOOK Following several years of steady growth, the major revenue areas began to decline in 2008 marking the beginning of an economic slowdown in the City’s economy. By July 2008, residential and commercial real estate assessment growth had begun to slow, and revenue from food, lodging and sales tax experienced less significant increases than in previous years. In Honorable Mayor and M
embers of City Council November 15, 2010 – 3 – fiscal year 2009 and 2010 this trend continued with real estate assessments essentially flat and sales, lodging and meals taxes all declining compared to the previous year. The fair market value of commercial property decreased by 0.34% from fiscal year 2009 to fiscal year 2010, while residential property values decreased by 2.19%. The total value of existing property decreased by 1.55%. Total decreases with new construction were .76%. In addition, the City’s unemployment rate continued increasing during 2010 and as of July 2010 is at a 5 year high of 7.8%, which is below the national unemployment rate of 9.7%, but slightly higher than that state’s rate of 7.1%. The unemployment rate for the Charlottesville MSA stood at 6.3% during this same period. Despite the declines in revenue, the City’s situation is considerably less alarming than the state’s projected shortfall and the outlook of other local governments. In fact, the City’s sound financial policies were confirmed again in May 2010, when both Moody’s Investor Services and Standard & Poor’s gave the City their top rating (Aaa and AAA, respectively) on the City’s latest bond issue. The relative strength of the Charlottesville area is due in large part to its central Virginia location and the nature of the local economy. Charlottesville is the commercial and marketing center for a metropolitan area population of over 190,000. The predominant economic sectors are healthcare, service related industries, leisure and hospitality, and education. An emerging sector involves defense related businesses, with the relocation of 800 Defense Intelligence Agency personnel to the area in 2010. The City has also attracted companies specializing in printing, publishing, financial institution analysis, electronics equipment, and computer software development. The University of Virginia and its Medical Center continue to be the area’s largest employer by providing over 17,000 jobs and making the City a regional center for quality education and healthcare. The University has avoided layoffs to date and recently announced plans to grow its student enrollment at an increased rate over the next decade. This plan could signal moderate growth in the education, service and construction sectors. In addition, the University enjoys nationally ranked men’s and women’s teams in many major sports, including football, basketball, lacrosse, and soccer. The University’s John Paul Jones Arena, which at Honorable Mayor and Members of City Council November 15, 2010 – 4 – 15,000 seats is the largest in the Commonwealth of Virginia and, in addition to UVA athletics; the facility hosts a variety of entertainment, annually attracts over 500,000 visitors from around the state to the area. The City’s downtown has shown dramatic changes during the past decade, in particular during the past five years, as a result of both on-going public and private investment in new construction and renovation/restoration projects. The Downtown Mall is thriving, with an exciting combination of residential and retail units, restaurants, a movie complex, an ice skating rink, and the Charlottesville Pavilion, as well as a number of office complexes and financial institutions, all of which draw local residents and tourists to the area. While access to capital and concerns over the national economy has hampered some projects, a number of significant buildings are in various stages of planning and construction. Two notable privately funded projects completed in 2010 include Norcross Station phase three, which features 30 studio apartments, and The Gleason’s Building, a major mixed use project featuring over 100,000 square feet of retail, office and condominium units. The Gleason, which represents one of the largest single buildings ever constructed in the city, began construction in September 2008 just as the recession began. Also completed in spring 2010 is 455 2nd St, a 40,000 square foot, Class A commercial office building – the first in downtown Charlottesville in a decade. Within two months of opening, this building was fully leased to credit worthy tenants. Despite the challenging financial environment, construction began in December 2009 on the City’s first Whole Foods grocery store. The 45,000 square foot store will enhance sales tax revenue and bring over 100 jobs to the City when it opens in early 2011. Smaller renovations continue to occur at a brisk pace throughout downtown. Several downtown storefronts have undergone extensive rehabilitation for the first time in many years in preparation for new office use and retail tenants. The historic Jefferson Theater renovation has been completed adding a new venue for year around musical performances and meetings downtown. Honorable Mayor and Members of City Council November 15, 2010 – 5 – SNL Financial, a growing investment research firm that began leasing the former National Ground Intelligence Center in 2003 for its new headquarters from the Charlottesville Economic Development Authority (CEDA), continues to be a major city employer (with over 330 employees) in the downtown area. In 2010, SNL was recognized for the third straight year by Inc. Magazine as one of the 5,000 fastest growing private companies in the United States. In addition a number of new high technology firms have made Charlottesville home recently including Phthisis, Hotelicopter and HemoShear. Arts and entertainment continue to draw large numbers of visitors to Charlottesville. The Paramount Theater, a 1,200 seat multi-purpose auditorium which was renovated and restored in 2004, now plays host to many events. This $16 million project has significantly expanded the arts and entertainment opportunities downtown attracting more than 100,000 attendees annually. Also attracting people downtown is the Charlottesville Pavilion, which has an annual attendance of 95,000. The Pavilion recently completed its fifth full season featuring 20 national caliber artists. The covered, 3,500-seat facility is expected to play a key role in continuing to attract those seeking entertainment. The City maintains controlling interest in over 1,500 parking spaces at two facilities downtown. Every effort is made to keep parking available and affordable for residents, workers and visitors alike. At current usage levels, parking supply exceeds demand allowing opportunity for continued growth in the entertainment, retail and tourism sectors. A study to assess future parking availability was recently completed and the results will be used to examine current parking and to determine how new development and growth will impact downtown parking in the future. The West Main Street corridor and the Preston Avenue area both represent good opportunities for additional development in the future. In 2010, a number of key properties changed ownership likely signaling that renovation and development is eminent. Also, during the past year, the City continued free, daily Charlottesville Trolley service connecting the University grounds to the Downtown Mall. The West Main plan consists of a streetscape with wide sidewalks, shade trees, cafés, shops and parking structures. The City will continue to look Honorable Mayor and Members of City Council November 15, 2010 – 6 – for opportunities to partner with private developers as redevelopment occurs along these corridors. Despite the economic challenges faced by communities throughout the country in the past two years, we have reason to be optimistic about the continued prosperity of the City of Charlottesville. A prime example is Waterhouse, a 90,000 square foot mixed use downtown development featuring 10 luxury condominiums and class A office space for a 220 employee firm. This significant development, which has broken ground this fall, signals that interest in an urban environment remains high by both residential and commercial interests. The City’s proactive approach in welcoming investment continues to prove effective with support from a zoning ordinance that encourages denser, mixed-use development to help provide oppo
rtunities to expand the tax base and encourage quality commercial development. This activity provides a vibrant environment allowing us to continue to improve our city and the services it can provide to citizens, in an orderly and financially responsible manner. MAJOR INITIATIVES For the Year The FY 2010 budget focused on the continued delivery of efficient and effective government services to the City’s citizens, businesses, and visitors, with no tax increases. After several years of real estate tax rate reductions the 2010 rate remained unchanged at $.95 per $100 of assessed value for the calendar year. The budget reflected the City’s emphasis on building the community, enhancing neighborhoods, improving education, growing finances, creating more and better jobs, creating an environmentally sustainable community, building and expanding all modes of transportation, and delivering quality services to all. The City’s initiatives and achievements this year include the following: • Expanding quality, affordable housing opportunities for our residents, • Increasing workforce development and professional growth opportunities for the youth of our City through the Summer Youth Internship program, Honorable Mayor and Members of City Council November 15, 2010 – 7 – • Continuing to maintain and improve core infrastructure through an aggressive capital budget program, • Adding several new routes to the Charlottesville Transit System Other recent acknowledgements of Charlottesville’s success include: • Top College Town for Student Living –“American Institute for Independent Research” • Top “Brainiest” Metropolitan Areas – “The Atlantic” • Number One City for Retirement – “Kiplinger.com” • Top 12 College Football Towns – “Associated Press” • Healthiest Place to Live – “Men’s Journal magazine” 2010 • Top Place to Retire – “Kiplinger magazine” 2010 • AAA Bond Rating—Moody’s and Standard and Poor’s, 2010 For the Future Our emphasis in the upcoming year will continue to be on ensuring that Charlottesville remains a “world class” city and continues to improve. Creating innovative approaches to service delivery, providing good value to our citizens, exploring possibilities for public/private partnerships as well as privatization opportunities, and being results-oriented will be guidelines for the directions in which we move. These efforts will continue throughout the year and for many years to come. We continue to monitor closely both the state budget and the local economy. They will impact our financial planning and budget strategy in the upcoming months. We also continue to face increasing capital funding demands for a variety of areas, including the City Schools, fire station needs, strategic economic opportunities and public facilities. These and many other requests will have to be prioritized and planned for in order to assure continued success of our City. Pension Trust Fund Operations The operations of the City’s Retirement Fund continued to be financially sound and the required contribution was fully funded in fiscal 2010. Honorable Mayor and Members of City Council November 15, 2010 – 8 – The actuarially determined City contribution rate was 27.92% this year, and the fund’s investment yield was 11.3% for the year. The City employs an investment advisory firm and several investment managers for the Retirement Fund’s investment portfolio. On July 1, 2007 City Council established a Post-Employment Benefits Trust in addition to the Retirement Trust, which is presented on Exhibit F-1 and F-2 of the Basic Financial Section. Additional information concerning the City’s Retirement Fund can be found in Note 11 of Notes to the Financial Statements. Cash Management Cash temporarily idle during the year (for all funds except the City’s Retirement Fund) was invested primarily in money market accounts, obligations of the U.S. Treasury, the Local Government Investment Pool (administered by the Treasurer of the Commonwealth of Virginia), and demand deposits. The average yield on cash investments was approximately 1.1%, down from 2.1% for the prior year and 4.3% in 2008. Risk Management During fiscal 2010, the City continued to use a variety of techniques to monitor and finance its risk and exposures for the activities and functions of the City and moved toward emphasis on self-insuring for smaller claims. A separate Risk Management Fund is used to finance the purchase of insurance and to pay self-insured claims. Risk control techniques in various aspects of the City’s activities continue to be emphasized, as well as the City’s wellness program for employee health care. OTHER INFORMATION Independent Audit State law requires that the financial statements of the City be audited annually by a certified public accounting firm selected by City Council. An audit of the financial records of the City has been performed by the accounting firm of Cherry, Bekaert & Holland, LLP for the year ended June 30, 2010. The audit was also designed to meet the requirements of the Single Audit Act of 1996 and the related U.S. Office of Management and Budget Circular A-133. The independent auditors’ report on the government-wide financial statements and the fund financial statements and required supplementary information is included in the financial section of this report. Certificate of Presented to City of Charlottesville For its Comprehensive Annual June 30, 2009 President Executive Director Financial Report for the Fiscal Year Ended Reporting in Financial for Excellence Achievement Text38: Virginia A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. -11- CITY OF CHARLOTTESVILLE, VIRGINIA LIST OF ELECTED AND APPOINTED OFFICIALS JUNE 30, 2010 ELECTED OFFICIALS Council Members: Dave Norris Mayor Holly Edwards Vice-Mayor David E. Brown Council Member Satyendra Huja Council Member Kristin Szakos Council Member Constitutional Officers: Jennifer J. Brown City Treasurer R. Lee Richards Commissioner of Revenue Warner D. Chapman Commonwealth’s Attorney James E. Brown, III City Sheriff Paul D. Garrett Clerk of Circuit Court APPOINTED OFFICIALS Maurice T. Jones Acting City Manager Aubrey V. Watts, Jr. COO, CFO, Director of Economic Development Leslie M. Beauregard Director, Budget and Performance Management S. Craig Brown City Attorney Paige Barfield Clerk of Council Bernard Wray Director of Finance Charles Werner Fire Chief H. Galloway Beck Director of Human Resources Karen Parker Interim Director of Information Technology James E. Tolbert Director of Neighborhood Development Services Timothy J. Longo Sr. Chief of Police Judith M. Mueller Director of Public Works Roosevelt Barbour Real Estate Assessor Brian Daly Director of Parks and Recreation Sheri L. Iachetta General Registrar Diane E. Kuknyo Interim Director of Social Services Michael Murphy Director of Human Services Ric Barrick Director of Communications -12- FINANCIAL SECTION Independent Auditors’ Report To the Honorable Members of the City Council City of Charlottesville, Virginia We have audited the accompanying financial statements of the governmental activities, the businesstype activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Charlottesville, Virginia (the “City”), as of and for the year ended June 30, 2010, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City’s management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits containe
d in Government Auditing Standards issued by the Comptroller General of the United States, and the Specifications for Audit of Counties, Cities and Towns, issued by the Auditor of Public Accounts of the Commonwealth of Virginia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of the City as of June 30, 2010, and the respective changes in financial position, and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated November 15, 2010 on our consideration of the City’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. 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 the 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 conjunction with this report in considering the results of our audit. -13- The Management’s Discussion and Analysis and the other required supplementary information included in the table of contents are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit this 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 City’s basic financial statements. The introductory section, combining and individual nonmajor fund statements and schedules, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, 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. Richmond, Virginia November 15, 2010 -14- CITY OF CHARLOTTESVILLE, VIRGINIA Management’s Discussion and Analysis Year Ended June 30, 2010 This section of the City of Charlottesville’s (the City’s) annual financial report presents an overall review of the City’s financial activities for the fiscal year ended June 30, 2010. Please read it in conjunction with the transmittal letter at the front of this report and the City’s financial statements, which follow this section. The intent of this discussion and analysis is to evaluate the City’s financial performance as a whole. FINANCIAL HIGHLIGHTS FOR THE YEAR • The City’s total net assets, on a government-wide basis excluding component units, totaled $243.3 million at June 30, 2010. Of this amount, $89.0 million is unrestricted. • The City’s total net assets increased by $19.6 million over the prior year. This increase is the sum of an $18.5 million increase for the governmental activities and a $1.1 million increase for the businesstype net assets. • At June 30, 2010, the City’s governmental funds reported combined ending fund balances of $68.8 million (a decrease of $1.9 million over the prior year). Approximately 35.3 percent or $24.3 million of this amount is unreserved and undesignated. • The General Fund, on a current financial resources basis, reported an excess of revenues and other financing sources over expenditures and other financing uses of $3.4 million, due primarily to lower than projected expenditures for a number of accounts, including landfill costs, the local match for Social Services, unspent citywide reserves and personnel costs. • At the end of the fiscal year, undesignated fund balance for the General Fund was $24.3 million or 19.0 percent of total General Fund expenditures and other financing uses. • The City’s total debt, consisting of general obligation bonds, literary loans and notes payable, increased by $7.2 million during the current fiscal year. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City of Charlottesville’s basic financial statements. The City’s basic financial statements comprise three components: • Government-wide financial statements, • Fund financial statements, • Notes to the financial statements. This report contains other supplementary information in addition to the basic financial statements themselves. -15- The basic financial statements include two kinds of statements presenting different views of the City: • The first two statements are government-wide financial statements that provide both long-term and short-term information about the City’s overall financial status. • The remaining statements are fund financial statements that focus on individual parts of the City’s government, reporting the City’s operations in more detail than the government-wide statements. – The governmental fund statements tell how general government services like public safety were financed in the short term as well as what amounts remain for future spending. – Proprietary fund statements offer short- and long-term financial information about the activities the government operates like businesses, such as the public utilities (water, sewer, and gas) systems and the golf course. – Fiduciary fund statements provide information about the financial relationship in which the City acts solely as a trustee or agent for the benefit of others, to whom the resources in question belong, like the City’s retirement plans. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the information in the financial statements. Figure A shows how the required parts of this Management’s Discussion and Analysis and the City’s basic financial statements are arranged and relate to one another. Figure A Required Components of Charlottesville’s Financial Statements Management’s Discussion and Analysis (MD&A) Government-wide financial statements Fund financial statements Notes to financial statements Notes to RSI Required supplementary information (RSI) (other than MD&A) The government-wide financial statements provide both long-term and short-term information about the City’s overall financial status. The fund financial statements focus on the individual parts of the City government, reporting the City’s operations in more detail than the government-wide statements. Both perspectives (government-wide and fund) allow the user t
o address relevant questions, broaden the basis of comparison (year-to-year or government-to-government) and enhance the City’s accountability. -16- GOVERNMENT-WIDE STATEMENTS The government-wide statements report information about the City as a whole using accounting methods similar to those used by private-sector companies. The Statement of Net Assets and the Statement of Activities, which are the government-wide statements, include all of the government’s assets and liabilities using the accrual basis of accounting. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid. These two government-wide statements report the City’s net assets and how they have changed. Net assets – the difference between the City’s assets and liabilities – is one way to measure the City’s financial health, or financial position. Over time, increases or decreases in the City’s net assets are an indicator of whether its financial health is improving or deteriorating. Other non-financial factors such as changes in the City’s property tax base and the condition of the City’s roads and other infrastructure may need to be considered to assess the overall health of the City. In the Statement of Net Assets and the Statement of Activities, the City is divided into three categories: • Governmental activities – Most of the City’s basic services are included here, such as the activities of the police, fire, public works, social services, and parks and recreation departments, and general administration. Property taxes and state and federal grants finance most of these activities. • Business-type activities – The City charges fees to customers to cover the cost of certain services it provides. The City’s water, sewer, and gas systems as well as the golf course are included here. • Component units – The City includes two separate legal entities in its report – the City of Charlottesville Economic Development Authority and the Charlottesville Public Schools. Although legally separate, these “component units” are important because the City is financially accountable for them and provides operating funding. FUND FINANCIAL STATEMENTS The format of the fund financial statements will be more familiar to long-time users of government financial statements. The fund financial statements provide more detailed information about the City’s most significant funds – not the City as a whole. Funds are accounting mechanisms that the City uses to keep track of specific sources of funding and spending for particular purposes. Some funds are required by State law; City Council establishes other funds to control and manage money for particular purposes or to show that it is properly using certain grants. -17- The City has three kinds of funds: ∗ Governmental funds – Most of the City’s basic services are included in governmental funds, which focus on (1) how cash and other financial assets that can readily be converted to cash flow in and out and (2) the balances remaining at year-end that are available for spending. Consequently, the governmental fund statements provide a detailed short-term view that helps the reader determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. Because this information does not encompass the long-term focus of the government-wide statements, additional information is provided on a subsequent page that explains the relationship (or differences) between the government-wide and fund statements. ∗ Proprietary funds – Services for which the City charges customers a fee are generally reported in proprietary funds. Proprietary funds, like the government-wide statements, provide both short-term and long-term financial information. The City’s enterprise funds (one type of proprietary fund) are the same as its business-type activities, with the exception of the Internal Service Funds’ allocation, but they provide more detail and additional information, such as cash flows. The City also uses internal service funds (another kind of proprietary fund) to report activities that provide supplies and services for the City’s other programs and activities – such as the Risk Management Fund and the Information Technology Fund. ∗ Fiduciary funds – Fiduciary funds are used to report assets held in a trustee or agency capacity for others outside the government. The City maintains two pension trust funds (the Retirement and PostEmployment Benefits Funds) and an agency fund. These activities are reported in a separate statement of fiduciary net assets. The City excludes this activity from its government-wide financial statements because the City cannot use these assets to finance its operations. The Total Governmental Funds column requires reconciliation because of the different measurement focus from the government-wide statements (current financial resources versus total economic resources) which is reflected at the bottom of or following each statement. The flow of current financial resources will reflect bond proceeds and inter-fund transfers as other financing sources as well as capital expenditures and bond principal payments as expenditures. The reconciliation will eliminate these transactions and incorporate the capital assets and long-term obligations (bond and others) into the Governmental Activities column (in the government-wide statements). -18- FINANCIAL ANALYSIS OF THE CITY AS A WHOLE Statement of Net Assets The following table reflects the condensed Net Assets: City of Charlottesville, Virginia Summary of Net Assets June 30, 2010 and 2009 Table I Total Percentage Change 2010 2009 2010 2009* 2010 2009* Assets: Current and other assets 118,648,869 $ $ 120,387,292 $ 32,143,579 $ 26,541,066 $ 150,792,448 $ 146,928,358 2.6 % Capital assets 199,884,375 175,794,364 42,641,919 42,659,833 242,526,294 218,454,197 11.0 Total assets 318,533,244 296,181,656 74,785,498 69,200,899 393,318,742 365,382,555 7.6 Liabilities: Long-term liabilities outstanding 69,812,682 65,670,412 23,136,618 20,365,231 92,949,300 86,035,643 8.0 Other liabilities 49,318,604 49,561,977 7,704,531 6,023,580 57,023,135 55,585,557 2.6 Total liabilities $ 119,131,286 115,232,389 30,841,149 26,388,811 149,972,435 141,621,200 5.9 Net assets: Invested in capital assets, net of related debt 132,614,179 117,881,979 21,576,238 21,006,447 154,190,417 138,888,426 11.0 Restricted Special revenue funds, expendable 10,000 10,000 – 10,000 – 10,000 – Permanent fund, nonexpendable 162,501 162,501 – 162,501 – 162,501 – Unrestricted 66,615,278 62,894,787 22,368,111 21,805,641 88,983,389 84,700,428 5.1 Total net assets $ 199,401,958 $ 180,949,267 $ 43,944,349 $ 42,812,088 $ 243,346,307 $ 223,761,355 8.8 2009-2010 Governmental Activities Business-Type Activities Total * Certain amounts have been restated consistent with detail in note 18. Net assets (assets over liabilities) may serve over time as a useful indicator of a government’s financial position. In the case of the City of Charlottesville, assets exceeded liabilities by $243.3 million at the close of fiscal year 2010. The largest portion of the City’s net assets (63.4%) reflects its investment in capital assets (e.g., land, buildings, equipment, and infrastructure); less accumulated depreciation and less any related outstanding debt used to acquire those assets. The City uses these assets to provide services to its citizens and consequently, these assets are not available for future spending. The resources needed to repay the debt related to these capital assets must be provided from other sources. Approximately 0.07% of the City’s net assets are subject to external restrictions. The remaining balance of unrestricted net assets ($89.0 million or 36.6%) may be used to meet the City’s ongoing obligations to citizens and creditors. -19- Governmental Activities Net assets of the City’s governmental activities increased from $180.9 million to $199.4 million as a result of the increase in net assets of $18.5 million as shown on the Statement of Activities.
This increase was largely due to the lower than anticipated expenditures in a number of accounts, including landfill costs, the local match for Social Services, unspent citywide reserves and personnel costs. Long-term liabilities increased due to issuance of new debt instruments. Business-type Activities The net assets of the City’s business-type activities increased by $1.1 million, as restated, primarily due to the operating gain in the City’s gas system (the result of the colder and snowier winter). These resources are not to be used to make up for any net asset deficit in governmental activities. In general, the City can only use these net assets to finance the continued operations of its enterprise operations, which include the Water, Sewer, Gas and Meadowcreek Golf Course enterprise funds. -20- Statement of Activities The following table shows the revenues and expenses of the governmental and business-type activities: City of Charlottesville, Virginia Changes In Net Assets For the Years Ended June 30, 2010 and 2009 Table II Total Percentage Change 2010 2009 2010 2009** 2010 2009** Revenues: Program Revenues: Charges for services $ 16,533,315 $ 16,252,727 $ 49,012,901 $ 56,281,594 $ 65,546,216 $ 72,534,321 (9.6) % Operating grants and contributions 30,041,750 29,928,495 – 30,041,750 – 29,928,495 0.4 Capital grants and contributions 13,937,735 11,741,986 – 13,937,735 – 11,741,986 18.7 General Revenues: Property taxes 55,625,137 57,299,828 – 55,625,137 – 57,299,828 (2.9) Other taxes 36,280,784 37,273,727 – 36,280,784 – 37,273,727 – Grants and contributions* 25,160,421 21,166,672 54,667 58,838 25,215,088 21,225,510 18.8 Interest and investmentearnings 918,853 1,435,592 240,142 246,926 1,158,995 1,682,518 (31.1) Total revenues 178,497,995 175,099,027 49,307,710 56,587,358 227,805,705 231,686,385 (1.7) Expenses: General government 20,575,390 25,817,176 – 20,575,390 – 25,817,176 (20.3) Public safety 30,547,357 30,527,165 – 30,547,357 – 30,527,165 – Community services 21,602,923 20,577,112 – 21,602,923 – 20,577,112 5.0 Health and welfare 31,358,502 30,161,585 – 31,358,502 – 30,161,585 4.0 Parks, recreation and culture 9,546,796 9,561,694 – 9,546,796 – 9,561,694 (0.2) Education 41,990,709 41,558,411 – 41,990,709 – 41,558,411 1.0 Conservation and Development 6,985,191 8,588,251 – 6,985,191 – 8,588,251 (18.7) Interest on long term debt 2,454,390 2,235,928 – 2,454,390 – 2,235,928 9.8 Water – 8,009,139 – 7,416,972 8,009,139 7,416,972 8.0 Sewer – 8,840,500 – 7,090,366 8,840,500 7,090,366 24.7 Gas – 25,111,699 – 34,388,021 25,111,699 34,388,021 (27.0) Golf Course – 1,198,157 – 1,210,638 1,198,157 1,210,638 (1.0) Total expenses 165,061,258 169,027,322 43,159,495 50,105,997 208,220,753 219,133,319 (5.0) Change in net assets before transfers 13,436,737 6,071,705 6,148,215 6,481,361 19,584,952 12,553,066 56.0 Transfers 5,015,954 4,768,644 (5,015,954) (4,768,644) – – – Change in net assets 18,452,691 10,840,349 1,132,261 1,712,717 19,584,952 12,553,066 56.0 Net assets – beginning of year 180,949,267 170,108,918 42,812,088 41,099,371 223,761,355 211,208,289 5.9 Net assets – end of year 199,401,958 $ $ 180,949,267 $ 43,944,349 $ 42,812,088 $ 243,346,307 $ 223,761,355 8.8 2009-2010 Governmental Activities Business-Type Activities Total ∗ Not restricted to specific programs. ** Certain amounts have been restated consistent with detail in note 18. -21- Governmental Activities The City’s total revenues from governmental activities were $178.5 million for the fiscal year ended June 30, 2010, an increase of $3.4 million. The more significant changes are the following: • Property taxes – a decrease of $1.7 million, primarily from real estate taxes and personal property taxes. • Grants and Contributions – an increase of $4.0 million, primarily from Revenue Sharing with Albemarle County. • Capital Grants and Contributions – an increase of $2.2 million, primarily from transit. Transit received grant funds from the American Recovery Reinvestment Act. Approximately 51.7% of the City’s revenue from governmental activities comes from property and other taxes. (54% in 2009). Revenues by Source – Governmental Activities Property taxes 31.3% Other taxes 20.4% Charges for services Interest and 8.1% investments 0.5% Fees and permits 0.9% Grants and contributions 38.8% City of Charlottesville Sources of Revenue for Fiscal Year 2010 Governmental Activities -22- The City’s expenses decreased by $4.0 million in 2010. Expenses for fiscal year 2010 cover a wide range of services, with 19.0% or $31.4 million related to health and welfare, 25.4% or $42.0 million for education (primarily payments to the Public Schools, a component unit), and 18.5% or $30.5 million related to public safety. For fiscal year 2010, the City changed its spending in the following areas: • Health and welfare – an increase of $1.2 million, representing increased spending under the Comprehensive Services Act Program and Community Attention. • Community services – an increase of $1.0 million, representing construction of new sidewalks, contributions to road construction, the Ivy Landfill and transit. • General government – a decrease of $5.2 million, representing reduced expenditures on the Juvenile and Domestic Relations Court and reduced local match required for the Meadowcreek Parkway. Expenses by Function – Governmental Activities General government 12.5% Public safety 18.5% Community services 13.1% Health and welfare 19.0% Parks, recreation and culture 5.8% Education 25.4% Conservation and development Interest 4.2% 1.5% City of Charlottesville Functional Expenses for Fiscal Year 2010 Governmental Activites Business-Type Activities Net assets for the City’s business-type activities increased by $1.1 million (as restated, note 18) primarily due to higher volumes for the City’s gas system (the result of the colder and snowier winter). Gas wholesale prices remained steady during fiscal year 2010, starting with a price of $3.949 per the NYMEX index in July 2009 and ending with a price of $4.155 in June 2010. While the City’s gas prices -23- remained steady during fiscal year 2010, they had decreased dramatically from the all time high prices of FY2009. According to NYMEX the first seven months of fiscal year 2009 averaged $4.17 higher than the first seven months of fiscal year 2010. This combined with conservation efforts of citizens reduced gas revenues in fiscal year 2010. The wholesale cost of water and sewage treatment rose due to a rate increase from Rivanna Water and Sewer Authority; City water and sewer rates rose correspondingly, resulting in higher revenues. 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 Water Sewer Gas Golf Course Million Dollars City of Charlottesville Expenses and Program Revenues Business-type Activities Program Revenues Expenses FINANCIAL ANALYSIS OF THE CITY’S FUNDS The City of Charlottesville uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. Governmental Funds The focus of Charlottesville’s governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. In particular, unreserved fund balance may serve as a useful measure of a city’s net resources available at the end of a fiscal year. For the fiscal year ended June 30, 2010, the governmental funds reported combined ending fund balances of $68.8 million, a decrease of $2.0 million in comparison with the prior year. Included in this are the following major transactions: • $28.7 million spent in the Capital Projects Fund for capital outlay to fund Forest Hills Recreation Building, Single Room Occupancy Housing project, Smith Pool, Avon Transit Station, Ivy Rd/Fontaine Ave Fire Station, neighborhood and housing initiatives, bridge, road and sidewalk construction and other projects. -24- • $41.1 million contributed by the City’s governmental funds to finance the Public Schools’ operations. Approximately $52.9 million of the combined total fund balances constitutes unreserved fund balance, which generally
is available for spending at the government’s discretion. Of this amount, $1.3 million is designated for non-major governmental funds of which $9.5 million is for debt service. The remainder of the unreserved fund balance at June 30, 2010, not designated for a specific purpose, is $24.3 million in the General Fund. This amount represents 19.0% of General Fund expenditures and transfers as a measure of the General Fund’s liquidity. Total fund balance of the General Fund increased by $3.4 million in fiscal year 2010. Proprietary Funds The City of Charlottesville’s proprietary fund statements provide the same type of information found in the government-wide financial statements, but in more detail. The Water Fund had an increase in net assets of $.5 million. The Sewer Fund had a decrease in net assets of $.4 million. The Gas Fund also had an increase of $.9 million. GENERAL FUND BUDGETARY HIGHLIGHTS General Fund For the Year Ended June 30, 2010 Table III Variance Original Amended Positive Budget Budget Actual (Negative) Revenues Property taxes $ 58,135,398 $ 58,135,398 $ 57,520,194 $ (615,204) Other taxes 34,979,446 34,979,446 34,731,264 (248,182) Intergovernmental 30,515,537 30,612,660 30,462,577 (150,083) Other 8,099,602 8,573,753 8,431,720 (142,033) Total 131,729,983 132,301,257 131,145,755 (1,155,502) Expenditures and transfers (net) Expenditures 111,418,097 118,537,172 108,868,320 9,668,852 Transfers (net) 16,251,602 20,296,381 18,907,210 1,389,171 Total 127,669,699 138,833,553 127,775,530 11,058,023 Change in Fund Balance $ 4,060,284 $ (6,532,296) $ 3,370,225 $ 9,902,521 The City’s budget ordinance includes, as part of the original budget for expenditures, the amount of $643,413 for encumbrances reappropriated from June 30, 2009, as well as continuing appropriations from the prior year totaling $3,158,736, and $1,492,461 for Landfill Remediation Reserve. Differences between the original and the final amended budget for the City’s General Fund for expenditures and other financing uses, net, totaled $11,163,854. This difference is primarily due to the continuing appropriations from the prior year and supplemental appropriations during the year. Actual total revenues were less than the amended budget by $1.1 million, primarily due to lower than estimated tax revenues and current economic conditions. Expenditures and transfers were below budget by $11 million. -25- CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City of Charlottesville’s investment in capital assets for its governmental and business-type activities as of June 30, 2010, amounts to $242.5 million (net of depreciation). This investment includes land, municipal and school buildings and improvements, water, sewer and gas distribution systems, machinery and equipment, roads, and bridges. Major capital asset events during the fiscal year included the following: • Downtown Mall and side street renovations • Neighborhood improvements and housing initiatives • Recreation facility and park improvements • General government building renovations • Smith Pool • Avon Transit Station • Forest Hills Recreation Building • Single Room Occupancy Housing project • Ivy Rd/Fontaine Ave Fire Station. The City’s fiscal year 2010 capital budget provides for $16.3 million for various capital projects; $2.5 million in school related projects, $1.2 million for public safety, $2.8 million for transportation projects, and $6.1 million for parks and recreation facility improvements, $1.1 facility capital projects and, $0.8 million for stormwater initiatives, $1.8 other governmental commitments. General obligation bonds have been issued for a portion of the funding, in accordance with the City’s on-going, five year capital plan. City of Charlottesville’s Capital Assets (net of accumulated depreciation) June 30, 2010 and 2009 Table IV Total Percentage Change 2010 2009 2010 2009* 2010 2009* Land $ 14,763,359 $ 13,723,753 $ 2,026,623 $ 1,999,823 $ 16,789,982 $ 15,723,576 6.8 % Buildings and improvements 117,852,097 100,322,482 620,695 664,323 118,472,792 100,986,805 17.3 Vehicles 8,360,174 7,351,091 684,958 703,586 9,045,132 8,054,677 12.3 Equipment 4,941,611 5,503,575 818,128 1,003,442 5,759,739 6,507,017 (11.5) Streets 15,211,978 9,223,972 – 15,211,978 – 9,223,972 64.9 Bridges 2,153,970 2,051,477 – 2,153,970 – 2,051,477 5.0 Infrastructure 36,601,186 37,618,014 – 36,601,186 – 37,618,014 (2.7) Distribution and collection systems – 38,491,515 – 38,288,659 38,491,515 38,288,659 0.5 Total $ 199,884,375 $ 175,794,364 $ 42,641,919 $ 42,659,833 $ 242,526,294 $ 218,454,197 11.0 2009-2010 Governmental Activities Business-Type Activities Total * Certain amounts have been restated consistent with detail in note 18. Additional information about the City of Charlottesville’s capital assets can be found in note 9 of the financial statements. -26- Long-term Debt At the end of the current fiscal year, the City of Charlottesville had total bonded debt (including notes payable and literary loans) outstanding of $99.7 million. This entire amount is backed by the full faith and credit of the City and $25.4 million is being repaid by the City’s utilities. City of Charlottesville’s Outstanding Debt General Obligation Bonds, Literary Loans and Notes Payable June 30, 2010 and 2009 Table V Total Percentage Change 2010 2009 2010 2009 2010 2009 General obligation bonds $ 72,117,050 $ 67,492,366 $ 25,212,952 $ 22,187,636 $ 97,330,002 $ 89,680,002 8.5 % Literary loans payable 144,861 171,379 – 144,861 – 171,379 (15.5) Installment notes payable 2,086,798 2,399,760 151,791 244,456 2,238,589 2,644,216 (15.3) Total 74,348,709 $ $ 70,063,505 $ 25,364,743 $ 22,432,092 $ 99,713,452 $ 92,495,597 7.8 2009-2010 Governmental Activities Business-Type Activities Total Charlottesville’s total debt increased by $7.2 million during the fiscal year. On its most recent bond issue in June 2010, the City’s bond rating was reaffirmed by Standard & Poor’s Corporation and Moody’s Investors Service, as AAA and Aaa, respectively. State statutes limit the amount of general obligation debt a government entity may issue to 10 percent of its total assessed valuation of real property. The current debt limitation for the City of Charlottesville is $525,718,270. This is significantly more than the City’s current total outstanding debt. Additional information on the City of Charlottesville’s long-term debt can be found in note 10 of the financial statements. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES • Unemployment levels in the City of Charlottesville as of June 30, 2010 were 7.8 percent. This compares favorably with the national rate of 9.7 percent and is slightly higher than the state’s rate of 7.1 percent. • City employment levels declined slightly from 20,551 in July 2009 to 20,136 in July 2010 based on current Virginia Employment Commission statistics. • The City has a population of 40,745, according to the 2000 census revised in October 2005. These indicators were taken into account when adopting the general fund budget for 2011. Amounts available for appropriation in the General Fund budget for 2011 are $126.0 million, a decrease of 0.8% percent over the final 2010 budget of $126.9 million. -27- -28- CONTACTING THE CITY’S FINANCIAL MANAGEMENT This financial report is designed to provide citizens, taxpayers, customers, investors, and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the funds it receives. If you have questions about this report or need additional financial information, contact the Director of Finance, City of Charlottesville, 605 East Main Street, Charlottesville, Virginia 22902. -29- BASIC FINANCIAL SECTION CITY HARL T LLE, RGINIA OF C OT ESVI VI EXHIBIT A STATEMENT OF NET ASSETS JUNE 30, 2010 Primary Government Component Units Economic Governmental Business-type School Development Activities Activities Total Board Authority ASSETS Cash and cash equivalents (note 3) $ 78,063,273 $ 23,523,153 $ 101,586,426 $ 5,563,097 $ 592,615 Investments (note 3) – – – – 856,380 Accou
nts receivable, net 503,419 4,521,845 5,025,264 751,921 – Special assessments receivable 16,813 – 16,813 – – Taxes receivable, net 29,136,304 – 29,136,304 – – Loans receivable (note 5) 960,967 – 960,967 – – Notes receivable (note 6) – 1,574,830 1,574,830 – 1,797,152 Due from other governments (note 7) 9,011,532 – 9,011,532 3,495,803 – Internal balances 362,972 (362,972) – – – Inventories 204,462 337,582 542,044 78,658 – Prepaid expenses 389,127 2,549,141 2,938,268 – 26 Capital assets (note 9): Land 12,610,083 1,921,723 14,531,806 982,889 – Infrastructure right of way 2,153,276 104,900 2,258,176 – – Depreciable assets, net 185,121,016 40,615,296 225,736,312 5,590,879 – Total assets 318,533,244 74,785,498 393,318,742 16,463,247 3,246,173 LIABILITIES Accounts payable 5,829,245 3,737,853 9,567,098 466,445 608 Accrued liabilities 5,753,670 343,433 6,097,103 5,158,333 137,752 Customer deposits – 753,319 753,319 – 65,895 Due to other governments 71,105 – 71,105 – – Unearned revenue 26,935,767 – 26,935,767 34,886 – Accrued interest payable 584,220 222,039 806,259 – – Noncurrent liabilities due within one oncurrent liabilities due within one year: Insurance claims payable (note 16) 2,676,810 – 2,676,810 452,927 – Compensated absences (note 10) 235,938 28,482 264,420 144,502 – Notes and loans payable (note 10) 621,860 74,382 696,242 – – Bonds payable (note 10) 5,539,950 2,110,050 7,650,000 – – Noncurrent liabilities due in more than one year: Insurance claims payable (note 16) 147,183 – 147,183 – – Compensated absences (note 10) 1,730,210 208,873 1,939,083 1,059,679 – Unfunded liability for post employment medical benefits (note 10) – – – 190,159 – Notes and loans payable (note 10) 1,609,799 77,409 1,687,208 – – Bonds payable (note 10) 67,395,529 23,285,309 90,680,838 – – Total liabilities 119,131,286 30,841,149 149,972,435 7,506,931 204,255 NET ASSETS Invested in capital assets, net of related debt 132,614,182 21,576,238 154,190,420 6,573,768 – Restricted for: (note 2a) Conservation and development 10,000 – 10,000 – – Permanent fund, nonexpendable 162,501 – 162,501 – – Unrestricted 66,615,275 22,368,111 88,983,386 2,382,548 3,041,918 Total net assets $ 199,401,958 $ 43,944,349 $ 243,346,307 $ 8,956,316 $ 3,041,918 The accompanying notes are an integral part of the basic financial statements. -30- CITY OF CHARLOTTESVILLE, VIRGINIA EXHIBIT B STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2010 Operating Capital Economic Charges for Grants and Grants and Governmental Business-type School Development FUNCTIONS/PROGRAMS Expenses Services Contributions Contributions Activities Activities Total Board Authority PRIMARY GOVERNMENT: Governmental activities: General government 20,575,390 $ 10,624,798 $ 2,099,757 $ 630,275 $ (7,220,560) $ – $ (7,220,560) $ Public safety 30,547,357 42,850 1,554,604 – (28,949,903) – (28,949,903) Community services 21,602,923 1,945,796 7,947,633 13,285,028 1,575,534 – 1,575,534 Health and welfare 31,358,502 2,719,628 18,163,600 – (10,475,274) – (10,475,274) Parks, recreation and culture 9,546,796 943,705 51,953 – (8,551,138) – (8,551,138) Education (includes payment to school system) 41,990,709 228,853 224,203 22,432 (41,515,221) – (41,515,221) Conservation and development 6,985,191 27,685 – – (6,957,506) – (6,957,506) Interest on long-term debt 2,454,390 – – – (2,454,390) – (2,454,390) Total governmental activities 165,061,258 16,533,315 30,041,750 13,937,735 (104,548,458) – (104,548,458) Business-type activities: Water 8,009,139 9,134,985 – – – 1,125,846 1,125,846 Sewer 8,840,500 8,952,616 – – – 112,116 112,116 Gas 25,111,699 29,860,371 – – – 4,748,672 4,748,672 Golf course 1,198,157 1,064,929 54,667 – – (78,561) (78,561) Component Units Program Revenues Net (Expense) Revenue and Changes in Net Assets Primary Government Total business-type activities 43,159,495 49,012,901 54,667 – – 5,908,073 5,908,073 TOTAL PRIMARY GOVERNMENT 208,220,753 $ 65,546,216 $ 30,096,417 $ 13,937,735 $ (104,548,458) 5,908,073 (98,640,385) COMPONENT UNITS: Economic Development Authority $ 605,369 352,713 $ – $ – $ $ 252,656 – $ School Board 62,036,896 2,896,629 10,829,141 – – (48,311,126) TOTAL COMPONENT UNITS 62, $ 3,501,998 389,609 $ 10,829,141 $ – $ 252,656 (48,311,126) General Revenues: General property taxes 55,625,137 – 55,625,137 – – Sales tax – 9,312,664 9,312,664 – – Utility tax – 4,419,303 4,419,303 – – Communications tax – 3,352,581 3,352,581 – – Meals tax – 6,454,663 6,454,663 – – Lodgings tax – 2,475,914 2,475,914 – – Other taxes – 3,762,710 3,762,710 – – Business license tax – 6,502,949 6,502,949 – – Grants and contributions not restricted to specific programs 25,160,421 – 25,160,421 14,015,506 – Payment from City – – – 34,553,321 – Interest and investment earnings 918,853 240,142 1,158,995 4,016 155,955 Transfers, net 5,015,954 (5,015,954) – – – Total general revenues and transfers 123,001,149 (4,775,812) 118,225,337 48,572,843 155,955 Change in net assets 18,452,691 1,132,261 19,584,952 261,717 408,611 Net assets – July 1, 2009, as restated in note 18 180,949,267 42,812,088 223,761,355 8,694,599 2,633,307 Net assets – June 30, 2010 199,401,958 $ 43,944,349 $ 243,346,307 $ 8,956,316 $ 3,041,918 $ The accompanying notes are an integral part of the basic financial statements. -31- CITY OF CHARLOTTESVILLE, VIRGINIA EXHIBIT C BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2010 Capital Social Other General Projects Services Fund Fund Fund Funds Total ASSETS Cash and cash equivalents 34,913,188 $ 22,660,346 $ 102,832 $ 10,213,024 $ 67,889,390 $ Accounts receivable, net 250,844 154,919 4,178 92,851 502,792 Taxes receivable, net 29,136,303 – – – 29,136,303 Special assessments receivable – 16,813 – – 16,813 Due from other governments (note 7) 2,969,213 1,378,266 785,630 3,878,423 9,011,532 Due from other funds (note 8) 1,256,022 – – – 1,256,022 Loans receivable (note 5) – 880,000 – 80,967 960,967 Total assets 68,525,570 $ 25,090,344 $ 892,640 $ 14,265,265 $ 108,773,819 $ LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable 1,338,202 $ 3,677,768 $ 24,131 $ 521,379 $ 5,561,480 $ Accrued liabilities 3,312,479 – 384,966 1,815,129 5,512,574 Due to other governments – – – 71,105 71,105 Due to other funds (note 8) – – – 809,895 809,895 Deferred revenue 28,059,809 – – – 28,059,809 Total liabilities 32,710,490 3,677,768 409,097 3,217,508 40,014,863 FUND BALANCES (note 2c): Governmental FUND BALANCES (note 2c): Reserved 1,180,647 14,545,925 – 172,501 15,899,073 Unreserved, designated: Major Governmental Funds 10,363,172 6,866,651 483,543 – 17,713,366 Special Revenue Funds – – – 1,328,208 1,328,208 Debt Service Fund – – – 9,547,048 9,547,048 Unreserved, undesignated: General Fund 24,271,261 – – – 24,271,261 Total fund balances 35,815,080 21,412,576 483,543 11,047,757 68,758,956 Total liabilities and fund balances 68,525,570 $ 25,090,344 $ 892,640 $ 14,265,265 $ 108,773,819 $ (continued) -32- CITY OF CHARLOTTESVILLE, VIRGINIA EXHIBIT C, CONTINUED BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2010 Total fund balances per Balance Sheet for Governmental Funds $ 68,758,956 Amounts reported for governmental activities in the Statement of Net Assets (Exhibit A) are different because: Capital assets used in government activities are not financial resources and therefore are not reported in the funds. The Statement of Net Assets, however, include these assets, net of accumulated depreciation. 198,943,474 Other long-term assets are not available to pay current-period expenditures and therefore are deferred in the governmental funds and are not included in fund balance. Property taxes receivable 1,124,040 Internal service funds are used by management to charge the cost of certain activities, such as insurance and telecommunication to individual funds. The assets and liabilities of certain internal service funds are included in governmental activi
ties in the Statement of Net Assets. Internal Service Funds equity 8,193,519 Some liabilities, including general governmental bonds payable, are not due and payable in the current period and therefore are not reported as fund liabilities. All liabilities are included in the Statement of Net Assets. Accrued interest payable (584,220) Unamortized premium on bonds (1,070,039) Bonds and notes payable (74,348,709) Deferred amount of refunding 251,610 Co pe sated abse ces Compensated absences ( ,866,6 3) 1,866,673) Net assets of governmental activities $ 199,401,958 The accompanying notes are an integral part of the basic financial statements. -33- CITY OF CHARLOTTESVILLE, VIRGINIA EXHIBIT D STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2010 Capital Social Other General Projects Services Fund Fund Fund Funds Total REVENUES Taxes 92,251,458 $ – $ – $ – $ 92,251,458 $ Fees and permits 1,640,727 – – – 1,640,727 Intergovernmental 30,462,577 12,513,591 10,028,497 14,884,174 67,888,839 Charges for services 4,569,003 – – 3,499,427 8,068,430 Fines 392,515 – – – 392,515 Investment earnings 891,788 6 – 27,061 918,855 Miscellaneous 937,687 297,793 42,390 527,708 1,805,578 Total revenues 131,145,755 12,811,390 10,070,887 18,938,370 172,966,402 EXPENDITURES Current: General government 12,528,527 1,316,054 – – 13,844,581 Public safety 5,001 30,206,377 – 548,660 30,760,038 Community service 7,168,627 4,698,996 – 9,132,730 21,000,353 Health and welfare 5,247,485 – 12,736,520 13,499,051 31,483,056 Parks, recreation and culture 8,923,677 147,961 – 51,953 9,123,591 Education 40,094,555 1,009,804 – – 41,104,359 Conservation and development 4,422,401 1,423,753 – 549,759 6,395,913 Other activities 276,671 – – – 276,671 Debt service: Governmental Debt service: Principal – – – 5,926,396 5,926,396 Interest – – – 2,407,670 2,407,670 Miscellaneous – – – 107,867 107,867 Capital outlay 28,702,858 – – – 28,702,858 Total expenditures 108,868,320 37,304,427 12,736,520 32,224,086 191,133,353 Revenues over (under) expenditures 22,277,435 (24,493,037) (2,665,633) (13,285,716) (18,166,951) OTHER FINANCING SOURCES (USES) Transfers from other funds (note 8) 5,124,632 9,206,529 2,665,737 13,645,178 30,642,076 Transfers to other funds (note 8) (24,287,242) (238,146) – (207,726) (24,733,114) Issuance of debt (note 10) 255,400 9,956,200 – – 10,211,600 Premium on issuance of debt – 93,887 – – 93,887 Total other financing sources (uses) (18,907,210) 19,018,470 2,665,737 13,437,452 16,214,449 Net change in fund balance 3,370,225 (5,474,567) 104 151,736 (1,952,502) FUND BALANCE – JULY 1, 2009 26,887,143 32,444,855 483,439 10,896,021 70,711,458 FUND BALANCE – JUNE 30, 2010 $ 21,412,576 35,815,080 $ 483,543 $ 11,047,757 $ 68,758,956 $ (continued) -34- CITY OF CHARLOTTESVILLE, VIRGINIA EXHIBIT D, CONTINUED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2010 Net change in fund balances – total governmental funds (Exhibit D) (1,952,502) $ Amounts reported for governmental activities in the Statement of Activities (Exhibit B) are different because: Governmental funds report the cost of equipment and facilities acquired as current expenditures while the Statement of Activities reports depreciation expense to allocate those expenditures over the life of the assets. Change in capital assets 32,444,266 Depreciation expense (7,677,621) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Property taxes (345,540) Debt proceeds provide current financing resources to governmental funds, but debt issues increase long term liabilities in the Statement of Net Assets. Principal repayments are expenditures in governmental funds, but reduce long term liabilities in the Statement of Net Assets New debt issued (10,211,600) Principal payments 5,926,396 Governmental funds report interest on long-term debt as expenditures when payments are due, while the Statement of Activities reports interest expense on the accrual basis. Change in accrued interest 43,343 Amortization of bond premium (13,619) Amortization of deferred amount of refunding (62,464) Some expenses reported in the Statement of Activities do not require the use of current financial resources and 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. Compensated absences 16,966 The net expense of internal service funds is combined with governmental activities on the Statement of Activities. 285,066 Change in Net Assets of Governmental Activities $ 18,452,691 The accompanying notes are an integral part of the basic financial statements. -35- CI F TY O CHARLOTTE LLE V RG SVI , I INIA EXHIBIT E-1 STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30, 2010 Internal Business – type Activities – Enterprise Funds Service Water Sewer Gas Golf Course Total Funds ASSETS Current assets: Cash and cash equivalents $ 5,691,418 $ 9,180,033 $ 8,556,519 $ 1,100 $ 23,429,070 $ 10,267,966 Accounts receivable, net 733,900 584,203 1,005,359 5,277 2,328,739 631 Unbilled accounts receivable 708,005 683,783 801,318 – 2,193,106 – Note receivable 507,164 1,067,666 – – 1,574,830 – Inventories – – – 30,100 30,100 511,944 Prepaid expenses – – 2,549,141 – 2,549,141 389,127 Total current assets 7,640,487 11,515,685 12,912,337 36,477 32,104,986 11,169,668 Noncurrent assets: Capital assets (note 9): Land – – 584,291 1,337,432 1,921,723 – Easements – 70,800 34,100 – 104,900 – Buildings and improvements – – – 1,743,755 1,743,755 – Vehicles 378,974 597,893 1,422,079 14,156 2,413,102 35,724 Transmission lines and mains 17,575,847 13,302,829 37,920,562 – 68,799,238 – Equipment 499,386 402,899 2,031,144 288,464 3,221,893 8,922,216 Total capital assets 18,454,207 14,374,421 41,992,176 3,383,807 78,204,611 8,957,940 Less accumulated depreciation (7,961,554) (4,197,557) (22,024,423) (1,379,158) (35,562,692) (8,017,039) Net noncurrent assets 10,492,653 10,176,864 19,967,753 2,004,649 42,641,919 940,901 Total assets 18,133,140 21,692,549 32,880,090 2,041,126 74,746,905 12,110,569 LIABILITIES Current liabilities: Accounts payable 728,919 1,519,616 1,454,304 20,628 3,723,467 282,152 Accrued liabilities 42,927 42,179 210,583 42,051 337,740 246,789 Accrued interest payable 84,973 66,526 70,540 – 222,039 – Customer deposits 172,553 – 580,766 – 753,319 – Due to other funds (note 8) – – – 446,127 446,127 – Insurance claims payable (note 16) – – – – – 2,676,810 Compensated absences 4,757 4,120 16,315 3,176 28,368 12,052 Bonds payable – due within one year (note 10) 629,500 648,250 832,300 – 2,110,050 – Note payable – due within one year (note 10) – – 74,382 – 74,382 – Total current liabilities 1,663,629 2,280,691 3,239,190 511,982 7,695,492 3,217,803 Noncurrent liabilities: Compensated absences 34,888 30,215 119,645 23,289 208,037 88,373 Bonds payable (net of unamortized premium and deferred amount on refunding) (note 10) 8,864,398 9,785,132 4,635,779 – 23,285,309 – Note payable (note 10) – – 77,409 – 77,409 – Insurance claims payable (note 16) – – – – – 147,183 Total noncurrent liabilities 8,899,286 9,815,347 4,832,833 23,289 23,570,755 235,556 Total liabilities 10,562,915 12,096,038 8,072,023 535,271 31,266,247 3,453,359 NET ASSETS Invested in capital assets, net of related debt 2,173,085 3,050,620 14,347,883 2,004,650 21,576,238 940,901 Unrestricted 5,397,140 6,545,891 10,460,184 (498,795) 21,904,420 7,716,309 Total net assets $ 7,570,225 $ 9,596,511 $ 24,808,067 $ 1,505,855 $ 43,480,658 $ 8,657,210 The accompanying notes are an integral part of the basic financial statements. -36- CITY F O CHARLOTTE LLE V RG SVI , I INIA EXHIBIT E-2 RECONCILIATION OF THE PROPRIETARY FUNDS STATEMENT OF NET ASSETS TO THE STATEMENT OF NET ASSETS FOR BUSINESS-TYPE ACTIVITIES JUNE 30, 2010 Busi
ness-type Total Internal Activities Enterprise Service Funds Statement of Funds Allocation Net Assets Assets: Current assets: Cash and cash equivalents $ 23,429,070 $ 94,083 $ 23,523,153 Accounts receivable, net 2,328,739 – 2,328,739 Unbilled accounts receivable 2,193,106 – 2,193,106 Notes receivable 1,574,830 – 1,574,830 Due from other funds – 83,155 83,155 Inventories 30,100 307,482 337,582 Prepaid expenses 2,549,141 – 2,549,141 Total current assets 32,104,986 484,720 32,589,706 Noncurrent assets: Capital assets: Land 1,921,723 – 1,921,723 Easements 104,900 – 104,900 Buildings 1,743,755 – 1,743,755 Vehicles 2,413,102 – 2,413,102 Transmission lines and mains 68,799,238 – 68,799,238 Equipment 3,221,893 – 3,221,893 Total capital assets 78,204,611 – 78,204,611 Less accumulated depreciation (35,562,692) – (35,562,692) Net noncurrent assets 42,641,919 – 42,641,919 Total assets 74,746,905 484,720 75,231,625 Liabilities Current liabilities: Accounts payable 3,723,467 14,386 3,737,853 Accrued liabilities 337,740 5,693 343,433 Accrued interest payable 222,039 – 222,039 Customer deposits 753,319 – 753,319 Due to other funds 446,127 – 446,127 Compensated absences 28,368 114 28,482 Bonds payable – due within one year 2,110,050 – 2,110,050 Note payable – due within one year 74,382 – 74,382 Total current liabilities 7,695,492 20,193 7,715,685 Noncurrent liabilities: Compensated absences 208,037 836 208,873 Bonds payable (net of unamortized premium and deferred amount on refunding) 23,285,309 – 23,285,309 Note payable – due after one year 77,409 – 77,409 Total noncurrent liabilities 23,570,755 836 23,571,591 Total liabilities 31,266,247 21,029 31,287,276 Net Assets Invested in capital assets, net of related debt 21,576,238 – 21,576,238 Unrestricted 21,904,420 463,691 22,368,111 Total net assets $ 43,480,658 $ 463,691 $ 43,944,349 The accompanying notes are an integral part of the basic financial statements. -37- CITY OF CHARLOT ESVILLE, VIRGINIA T EXHIBIT E-3 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2010 Internal Business – type Activities – Enterprise Funds Service Water Sewer Gas Golf Course Total Funds Operating revenues Utility charges $ 8,535,024 $ 8,438,447 $ 29,549,226 $ – $ 46,522,697 $ – Other charges for services 185,009 64,106 291,319 995,929 1,536,363 20,397,522 Total operating revenues 8,720,033 8,502,553 29,840,545 995,929 48,059,060 20,397,522 Operating expenses Purchases for resale 4,610,815 6,509,729 15,984,765 55,634 27,160,943 1,745,841 Personnel costs 1,045,242 1,131,288 4,104,159 629,295 6,909,984 2,832,553 Materials and supplies 237,628 145,313 536,015 151,767 1,070,723 453,890 Contractual services and charges 1,328,736 528,242 3,178,340 273,904 5,309,222 2,475,382 Depreciation 480,669 277,278 1,185,860 94,720 2,038,527 833,858 Claims incurred – – – – – 8,848,610 Insurance premiums – – – – – 1,830,660 Total operating expenses 7,703,090 8,591,850 24,989,139 1,205,320 42,489,399 19,020,794 Operating income (loss) 1,016,943 (89,297) 4,851,406 (209,391) 5,569,661 1,376,728 Nonoperating revenues (expenses) Insurance recovery 835 – 4,444 – 5,279 – Gain on sale of capital assets 251 921 4,077 69,000 74,249 – Interest expense (304,457) (256,039) (243,660) (848) (805,004) – Interest income 66,783 107,212 66,147 – 240,142 – Bond issuance expense (26,575) ( , ( ,21893) – – ( ,48468) – Capacity fees-nonoperating 410,810 448,225 – – 859,035 – Grants and contributions – – – 54,667 54,667 – Total nonoperating revenues (expenses), net 147,647 278,426 (168,992) 122,819 379,900 – Income (loss) before transfers 1,164,590 189,129 4,682,414 (86,572) 5,949,561 1,376,728 Transfers Transfers from other funds – – – 43,905 43,905 132,759 Transfers to other funds (678,047) (619,718) (3,762,094) – (5,059,859) (1,025,767) Total transfers, net (678,047) (619,718) (3,762,094) 43,905 (5,015,954) (893,008) Change in net assets 486,543 (430,589) 920,320 (42,667) 933,607 483,720 Total net assets – July 1, 2009, as restated note 18 7,083,682 10,027,100 23,887,747 1,548,522 42,547,051 8,173,490 Total net assets – June 30, 2010 $ 7,570,225 $ 9,596,511 $ 24,808,067 $ 1,505,855 $ 43,480,658 $ 8,657,210 Change in net assets $ 933,607 Warehouse external sales 15,278 Expenses associated with warehouse external sales (14,741) Net allocation of warehouse external sales 537 Internal service fund allocations 198,117 Change in net assets – Statement of Activities $ 1,132,261 The accompanying notes are an integral part of the basic financial statements. -38- CITY F TT O CHARLO ESVILLE, VIRGINIA EXHIBIT E-4 RECONCILIATION OF THE PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2010 Water Sewer Gas Golf Course Fund Fund Fund Fund Total Direct Revenues Charges for services $ 8,720,033 8,5$ 02,553 $ 29,840,545 $ 995,929 $ 48,059,060 Capacity fees 410 ,810 448,225 – – 859,035 Insurance recovery 835 – 4,444 – 5,279 Gain on sale of capital assets 251 921 4,077 69,000 74,249 Warehouse external sales 3,056 917 11,305 – 15,278 Charges for services 9,134,985 8,9 52,616 29,860,371 1,064,929 49,012,901 Operating grants and contributions – – – 54,667 54,667 Program revenues – Statement of Activities 9,134,985 8,9 52,616 29,860,371 1,119,596 49,067,568 Direct Expenses Purchases for resale 4,610,815 6,5 09,729 15,984,765 55,634 27,160,943 Personnel costs 1,045,242 1,131,288 4,104,159 629,295 6,909,984 Materials and supplies 237,628 145,313 536,015 151,767 1,070,723 Contractual services and charges 1,328 ,736 528,242 3,178,340 273,904 5,309,222 Depreciation 480,669 277,278 1,185,860 94,720 2,038,527 Interest expense 304,457 256,039 243,660 848 805,004 Bond issuance expense 26,575 21,893 – – 48,468 Total fund expenses 8,034,122 8,8 69,782 25,232,799 1,206,168 43,342,871 Expenses associated with warehouse external sales 2,948 884 10,909 – 14,741 Internal service fund allocations (27,931) (30,166) (132,009) (8,011) (198,117) Program expenses – Statement of Activities 8,009,139 8,8 40,500 25,111,699 1,198,157 43,159,495 Revenues over (under) expenses 1,125 ,846 112,116 4,748,672 (78,561) 5,908,073 Interest and investment earnings 66,783 107,212 66,147 – 240,142 Transfers from other funds – – – 43,905 43,905 Transfers to other funds (678 ,047) (619,718) (3,762,094) – (5,059,859) Change in Net Assets 514$ ,582 ($ 400,390) $ 1,052,725 $ (34,656) $ 1,132,261 The accompanying notes are an integral part of the basic financial statements. -39- CITY OF CHARLOTTESVILLE, VIRGINIA EXHIBIT E-5 STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2010 Internal Business – type Activities – Enterprise Funds Service Water Sewer Gas Golf Course Total Funds Cash Flows From Operating Activities: Receipts from customers $ 8,740,495 $ 8,451,294 $ 30,541,259 $ 989,366 $ 48,722,414 $ 20,809,519 Payments to suppliers (5,879,355) (6,208,868) (19,334,082) (457,906) (31,880,211) (15,500,368) Payments to employees (1,038,300) (1,134,502) (4,101,215) (624,453) (6,898,470) (2,917,908) Net cash provided by (used for) operating activities 1,822,840 1,107,924 7,105,962 (92,993) 9,943,733 2,391,243 Cash Flows From Noncapital Financing Activities: Transfers from other funds – – – 43,905 43,905 (1,025,767) Transfers to other funds (678,047) (619,718) (3,762,094) – (5,059,859) 132,759 Payments received from other funds – – – (52,539) (52,539) (169,486) Payments received on notes receivable 122,172 257,192 – – 379,364 – Insurance recovery 835 – 4,444 – 5,279 – Grants and contributions – – – 54,667 54,667 – Net cash provided by (used for) noncapital financing activities (555,040) (362,526) (3,757,650) 46,033 (4,629,183) (1,062,494) Cash Flows From Capital and Related Financing Activities: Acquisition and construction of capital assets (367,955) (1,402,830) (249,828) – (2,020,613) (157,224) Capacity fees 410,810 448,225 – – 859,035 – Bond proceeds 1,486,000 3,417,
800 – – 4,903,800 – Bond principal paid p p p (557,917) ( ( )482,300) ( )838,267) – ( )1,878,484) – Interest paid (294,605) (211,983) (233,313) – (739,901) – Bond issuance expenses (26,575) (21,893) – – (48,468) – Premium on bonds issued 14,013 – – – 14,013 – Note payable principal paid – – (71,473) (21,192) (92,665) – Note payable interest paid – – – (848) (848) – Proceeds from sale of capital assets 251 921 4,077 69,000 74,249 – Net cash provided by (used for) capital and related financing activities 664,022 1,747,940 (1,388,804) 46,960 1,070,118 (157,224) Cash Flows From Investing Activities: Interest on investments 66,783 107,212 66,147 – 240,142 – Net increase (decrease) in cash and cash equivalents 1,998,605 2,600,550 2,025,655 – 6,624,810 1,171,525 Balances – July 1, 2009 3,692,813 6,579,483 6,530,864 1,100 16,804,260 9,096,441 Balances – June 30, 2010 $ 5,691,418 $ 9,180,033 $ 8,556,519 $ 1,100 $ 23,429,070 $ 10,267,966 Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities Operating income (loss) $ 1,016,943 $ (89,297) $ 4,851,406 $ (209,391) $ 5,569,661 $ 1,376,728 Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation expense 480,669 277,278 1,185,860 94,720 2,038,527 833,858 (Increase) decrease in accounts receivable 5,565 (51,259) 681,237 (520) 635,023 411,997 Decrease in inventories – – – 11,870 11,870 61,996 Decrease in prepaid expenses – – 216,387 – 216,387 272,477 Increase in accounts payable 297,824 974,415 148,651 11,529 1,432,419 10,790 Increase (decrease) in accrued liabilities 3,825 (731) 4,278 3,119 10,491 27,226 Increase in customer deposits 14,897 – 19,477 – 34,374 – Decrease in unredeemed gift certificates – – – (6,043) (6,043) – Increase (decrease) in compensated absences 3,117 (2,482) (1,334) 1,723 1,024 612 Decrease in insurance claims payable – – . – – (604,441) Net cash provided by (used for) operating activities $ 1,822,840 $ 1,107,924 $ 7,105,962 $ (92,993) $ 9,943,733 $ 2,391,243 The accompanying notes are an integral part of the basic financial statements. -40- CITY F HARLOTT O C ESVILLE, VIR IN G IA EXHIBIT F-1 STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2010 Pension Trust Funds PostEmployment Agency Pension Benefits Total Fund ASSETS Cash and cash equivalents (note 3b) $ 1,101,105 $ 98,575 $ 1,199,680 $ 631,429 Interest receivable 211,583 18,942 230,525 – Investments (Note 3b): Common stocks 23,076,105 2,065,853 25,141,958 – Corporate fixed-income securities 6,922,952 619,767 7,542,719 – U.S. Government and agency fixed income securities 18,121,567 1,622,305 19,743,872 – Mutual funds: Domestic 8,013,176 717,367 8,730,543 – International 9,150,041 819,143 9,969,184 – Total investments 65,283,841 5,844,435 71,128,276 – Total assets 66,596,529 5,961,952 72,558,481 631,429 LIABILITIES Accounts payable 27,909 2,499 30,408 631,429 NET ASSETS Held in trust for pension and post-employment benefits $ 66,568,620 $ 5,959,453 $ 72,528,073 $ – The accompanying notes are an integral part of the basic financial statements. -41- CITY F HARLOTT O C ESVILLE, VIR IN G IA EXHIBIT F-2 STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2010 Pension Trust Funds PostEmployment Pension Benefits Total ADDITIONS Contributions: Employer $ 4,872,461 $ 3,966,988 $ 8,839,449 Plan members 46,830 525,871 572,701 Total contributions 4,919,291 4,492,859 9,412,150 Investment earnings: Net increase in fair value of investments 5,350,808 386,671 5,737,479 Interest 1,308,880 94,585 1,403,465 Dividends 309,140 22,340 331,480 Total investment earnings (loss) 6,968,828 503,596 7,472,424 Less investment expenses 344,790 24,916 369,706 Net investment earnings (loss) 6,624,038 478,680 7,102,718 Total additions 11,543,329 4,971,539 16,514,868 DEDUCTIONS Pension benefits 7,386,972 – 7,386,972 Post retirement benefits – 2,373,312 2,373,312 Administrative expenses 293,112 21,181 314,293 Total deductions 7,680,084 2,394,493 10,074,577 Change in net assets 3,863,245 2,577,046 6,440,291 Net assets – July 1, 2009 62,705,375 3,382,407 66,087,782 Net assets – June 30, 2010 $ 66,568,620 $ 5,959,453 $ 72,528,073 The accompanying notes are an integral part of the basic financial statements. -42- -43- CITY OF CHARLOTTESVILLE, VIRGINIA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2010 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Charlottesville, Virginia (the City), named for Queen Charlotte of England, was established as a town in 1762 and incorporated as a city by an act of the Virginia General Assembly in 1888. The City has an area of 10.4 square miles and a population of 40,745, according to the 2000 Census, revised October, 2005. The City provides a full range of municipal services, including general government administration, public safety and administration of justice, education, health, welfare, housing and human services programs, transportation, recreation, and gas, water and wastewater utilities. The City is a political subdivision of the Commonwealth of Virginia operating under the Council-Manager form of government. The Council consists of a mayor and four other members elected at large. The Council has responsibility for appointing the City Manager. The City has taxing powers subject to statewide restrictions and tax limits. The financial statements of the City of Charlottesville are prepared in accordance with U.S. generally accepted accounting principles (GAAP) applicable to governmental units, as prescribed by the Governmental Accounting Standards Board (GASB). The following is a summary of the City’s more significant accounting policies. (a) The Financial Reporting Entity As required by GAAP, these financial statements present the City (the Primary Government) and its component units. As such, the City of Charlottesville Public Schools (the School Board or Schools) and the Charlottesville Economic Development Authority (the CEDA) are reported as separate and discretely presented component units in the City’s reporting entity. The Primary Government is hereafter referred to as the “City” and the reporting entity, which includes the City and its component units, is hereafter referred to as the “City Reporting Entity”. The accompanying financial statements include all activities of the City, such as general operations and support services. The component units discussed below are included in the City Reporting Entity because the City appoints a majority of the board members, approves the budgetary request of the School Board and provides a significant amount of funding for each of these entities. Discretely Presented Component Units The component unit columns in the government-wide financial statements include the financial data of the City’s two component units. Each is presented in a separate column to emphasize that these units are legally separate from the City and each represents a functionally independent operation. These component units are fiscally dependent on the City and provide services primarily to the citizens of Charlottesville. A description of the discretely presented component units follows: (i) School Board: The City provides education through its own school system administered by the Charlottesville School Board (the School Board). The School Board has been classified as a discretely presented component unit in the financial reporting entity because it is legally separate, but financially dependent. The City Council administers the School Board’s appropriation of funds at the category level, approves transfers between categories, and authorizes school debt. School Board members are elected. Financial statements of the School Board are included in a discretely presented component unit column and/or row of the government-wide financial statements, as well as in the supplementary information section. The School Board does not issue separate financial statements. -44- (ii) Economic Development Authority: The Charlottesville Economic Development A
uthority (the CEDA) was created to promote industry and develop trade by inducing manufacturing, industrial, and commercial enterprises to locate or remain in the City. City Council appoints the 7 board members of the CEDA. By statute, the CEDA has the power to cause the issuance of tax-exempt industrial revenue bonds to qualifying enterprises wishing to utilize that form of financing. The City is involved in the day-to-day operations of the CEDA, the determination of its operating budget and annual service fee rates. Financial statements of the CEDA are included in a discretely presented component unit column and/or row of the government-wide financial statements. Complete audited financial statements of the CEDA can be obtained from the Office of Economic Development, City of Charlottesville, PO Box 911, Charlottesville, VA 22902 or Room B230 at City Hall. (b) Financial Reporting Model Management’s Discussion and Analysis – GAAP requires that financial statements be accompanied by a narrative introduction and analytical overview of the government’s financial activities in the form of “management’s discussion and analysis” (MD&A). This analysis is comparable to analysis the private sector provides in their annual reports. Government-wide financial statements – The reporting model includes financial statements prepared using full accrual accounting for all of the government’s activities (i.e., reports all of the revenue and cost of providing services each year, not just those received or paid in the current year or soon thereafter). Government-wide financial statements do not provide information by fund, but distinguish between the City’s governmental activities, business-type activities and activities of its discretely presented component units on the Statement of Net Assets and Statement of Activities. Significantly, the City’s Statement of Net Assets includes both noncurrent assets and noncurrent liabilities of the City. Depreciation expense on the City’s capital assets, including infrastructure, is reflected in the government-wide Statement of Activities. Statement of Net Assets – The Statement of Net Assets is designed to display the financial position of the primary government (governmental and business-type activities) and it’s discretely presented component units. The City reports all capital assets, including infrastructure, in the government-wide Statement of Net Assets and reports depreciation expense – the cost of “using up” capital assets – in the Statement of Activities. The net assets of the City are reported in three categories – 1) invested in capital assets, net of related debt; 2) restricted; and 3) unrestricted. Statement of Activities – The government-wide Statement of Activities reports expenses and revenues in a format that focuses on the cost of each of the City’s functions. The expense of individual functions is compared to the revenues generated directly by the function (for instance, through user charges or intergovernmental grants). The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segments are offset by specific program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. All taxes, and other items not properly included among program revenues, are reported instead as general revenues. The government-wide Statement of Activities reflects both the gross and net cost per functional category (public safety, health and welfare, etc.) which are not otherwise being supported by general government revenues (property, sales and use taxes, certain intergovernmental revenues, fines, permits and charges, etc.). The Statement of Activities reduces gross expenses (including depreciation) by related program revenues and operating and capital grants and contributions. The program revenues must be directly associated with the function (public safety, health and welfare, etc.) or a business-type activity. -45- Fund Statements – In addition to the government-wide financial statements, the City reports governmental fund financial statements using the modified accrual basis of accounting and the current financial resources measurement focus, and proprietary and fiduciary fund financial statements using the accrual basis of accounting and the flow of economic resources measurement focus. (c) Measurement Focus, Basis of Accounting, and Basis of Presentation The government-wide financial statements, as well as the proprietary fund and fiduciary fund financial statements, report all their activities using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Agency funds have no measurement focus. In applying the susceptible to accrual concept to intergovernmental revenues, the legal and contractual requirements of the numerous individual programs are used as guidance. There are, however, essentially two types of these revenues. In the first type, monies must be expended on the specific purpose or project before any amounts will be paid to the City; therefore, revenues are recognized based upon the expenditures recorded. In the second type, monies are virtually unrestricted as to time of expenditure and are usually revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenues at the time of receipt or earlier if the accrual criteria are met. Governmental fund financial statements are reported using the current financial resource measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Reporting Entity considers revenues to be available if they are collected within 45 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments in lieu of taxes and other charges between the City’s gas, water and wastewater functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed. Real and personal property taxes are recorded as revenues and receivables when levied, net of allowances for uncollectible amounts. Property tax receivables not collected within 45 days after year-end are reflected as deferred revenue. Sales and utility taxes,
which are collected by the Commonwealth or utility companies by year-end and subsequently remitted to the City, are recognized as revenues and receivables upon collection by the Commonwealth of Virginia or utility company, which is generally in the month preceding receipt by the City. Fees and permits, fines, charges for services and miscellaneous revenues, except interest on temporary investments, are recorded as revenues when received because they are generally not measurable until actually received. Investment earnings are recorded when earned since they are measurable and available. Unbilled accounts receivable are recorded in the Enterprise Funds when earned. -46- The governmental funds financial statements are presented on a current financial resources measurement focus and modified accrual basis of accounting. This is the manner in which these funds are normally budgeted. A summary reconciliation of the difference between total fund balances as reflected on the governmental funds balance sheet and total net assets for governmental activities as shown on the government-wide Statement of Net Assets is presented in a schedule accompanying the governmental funds balance sheet. The assets and liability elements which comprise the reconciliation differences stem from the governmental funds using the current financial resources measurement focus and the modified accrual basis of accounting while the government-wide financial statements use the economic resources measurement focus and the accrual basis of accounting. A summary reconciliation of the differences between net change in total fund balances as reflected on the governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances, and the change in net assets for governmental activities as shown on the government-wide Statement of Activities, is presented in a schedule accompanying the governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances. The revenue and expense elements which comprise the reconciliation differences stem from the governmental funds using the current financial resources measurement focus and the modified accrual basis of accounting while the government-wide financial statements use the economic resources measurement focus and the accrual basis of accounting. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and delivering goods in connection with a proprietary fund’s principal ongoing operations. Operating revenues for the City’s enterprise and internal service finds are charges to customers for goods and services. Operating expenses for these funds include the cost of sales and service, administrative expenses and depreciation of capital assets. Any revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. The City’s fiduciary (pension) funds are presented in the Fiduciary Fund financial statements. Since by definition these assets are being held for the benefit of a third party and cannot be used to address activities or obligations of the government, these funds are not incorporated into the government-wide statements. The focus of the Reporting Model is on the City as a whole and the fund financial statements, including the major individual funds of the governmental and proprietary categories, as well as the fiduciary funds, and the component units. Each presentation provides valuable information that can be analyzed and compared (between years and between governments) to enhance the usefulness of the information. In the fund financial statements, financial transactions and accounts of the City are organized on the basis of funds, the operations of which are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and all of the individual enterprise funds are reported as separate columns in the fund financial statements. The City reports the following major governmental funds: The General Fund is the City’s primary operating fund. It is used to account for all financial transactions and resources except those required to be accounted for in another fund. Revenues are derived primarily from property and other local taxes, state and federal distributions, licenses, permits, charges for service, and interest income. A significant portion of the General Fund’s revenue is transferred to other funds and component units, principally to finance the operations of the Schools. The Capital Projects Fund accounts for all financial resources used for the acquisition or construction of major capital facilities not being financed by proprietary or fiduciary funds. The Social Services Fund accounts for the financial resources associated with the Social Services Department of the City. Social Services provide state and federal income support, employment, and social work service programs to alleviate poverty and other social problems. -47- Proprietary Fund Types Proprietary Funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The City reports the following enterprise funds as proprietary fund types, all of which are considered major funds: The Water Fund accounts for the operations of the City’s water distribution system. The Sewer Fund accounts for the operations of the City’s wastewater collection system. The Gas Fund accounts for the operations of the City’s natural gas distribution system. The Golf Course Fund accounts for the operations of the City’s 18-hole municipal golf course. GASB Statement No. 20 requires enterprise activities to apply all applicable GASB pronouncements as well as Financial Accounting Standards Board (“FASB”) pronouncements, Accounting Principles Board Opinions, and Accounting Research Bulletins issued on or before November 30, 1989, unless these pronouncements conflict with or contradict GASB pronouncements. In accordance with GASB No. 20, management has elected not to apply FASB pronouncements issued after November 30, 1989. Additionally, the City reports the following fund types and individual non-major funds: Special Revenue Funds are used to account for proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. The City has established Special Revenue Funds to account for Community Development Block Grant funds, Community Attention Programs, Comprehensive Services Act funds, the transit operations and various other grants to support projects undertaken. The Debt Service Fund is used to account for the resources accumulated and payments made for principal, interest and other debt-related costs on long-term general obligation debt of governmental funds. The Internal Service Funds are used to account for the financing of goods and services provided by one department primarily or solely to other departments of the City. Information Technology, Risk Management, Warehouse and Departmental Services are accounted for and reported as Internal Service Funds. In the government-wide Statement of Net Assets, the assets and liabilities of these funds are allocated to both governmental and business-type activities, based on the predominate use of the fund’s services. Specifically, the assets and liabilities of the Warehouse Internal Service Fund are allocated completely to the City’s Enterprise Funds based on predominate usage. The remaining Internal Service Fund balances are allocated to governmental activities. In the government-wide Statement of Activities, certain transactions are assigned directly to governmental activities and the remaining net income or loss is allocated to
both governmental and business-type activities, based on actual charges for services. Fiduciary Funds account for assets held by the City in a trustee capacity. The City maintains pension trust funds to account for assets accumulated and payments made to retired City employees and for postemployment benefits for qualified retirees. The pension trust fund is accounted for and reported similarly to proprietary funds since the economic resources measurement focus is also the same. An agency fund accounts for assets held by City as fiscal agent for the Comprehensive Services Act Trust Fund. (d) Encumbrances Encumbrance accounting is employed in the General and Capital Projects Funds. Encumbrances (e.g., purchase orders and contracts) outstanding at year end are reported as reservations of fund balances and do not constitute expenditures or liabilities. (e) Cash, Cash Equivalents and Trust Fund Investments Cash and cash equivalents are stated at amortized cost, which approximates fair value, and the investments of the Pension Trust Funds are stated at fair value. Securities traded on a national securities exchange are valued at the closing price at the end of the business day. Cash and cash equivalents include savings accounts, certificates of deposit and repurchase agreements, which generally have maturities of less than three months at the time of acquisition. -48- (f) Internal Balances Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” (g) Allowance for Uncollectibles The City calculates its allowances for uncollectible accounts using historical collection data and, in certain cases, specific account analysis. At June 30, 2010, the allowances approximated $960,817 in the General Fund and $1,415,006 in the Proprietary Funds ($260,564, $247,246, and $907,196 for the Water, Sewer and Gas Funds, respectively). (h) Inventory of Supplies Inventories are valued at cost using the weighted average method. Inventories consist of expendable materials and supplies held for future consumption. They are accounted for by the consumption method. (i) Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., streets and bridges) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. The City’s storm drainage system was inventoried and valued and is included in the basic financial statements as detailed in Note 2 for Governmental Activities in accordance with GAAP. All other infrastructure has been inventoried, valued and included in the basic financial statements. Capital assets are defined as assets with an initial, individual cost of $5,000 or more and an estimated useful life of at least two years. All capital assets are valued at historical cost or estimated historical cost if actual cost was not available. Donated capital assets are valued at their estimated fair market value on the date donated. In fiscal year 2010 the City implemented GASB 51, Accounting and Financial Reporting for Intangible Assets. These assets can include easements, water rights, timber rights, patents, trademarks, and computer software. They are reported in the applicable governmental or business-type activities column in the government-wide financial statements. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Capital assets of the primary government, as well as the component units, are depreciated using the straightline method over the following estimated useful lives: Assets Years Building/building improvements 40-50 Streets and bridges 30-50 Infrastructure (storm structures and storm pipe) 50-75 Utility transmission lines and mains 20-40 Furniture and equipment 5-10 Vehicles 5-7 (j) Compensated Absences City employees are granted vacation and sick leave in varying amounts as services are provided. Employees may accumulate, subject to certain limitations, unused vacation and sick leave earned. Vacation leave can be accrued for up to the amount earned in one year, plus an additional week. Upon retirement, termination or death, employees may be compensated for certain amounts of unused vacation leave earned at their then current rates of pay. In addition, unused sick leave becomes credited service for pension benefit calculations, for one-half of the accumulated amount, up to a maximum of two thousand hours. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. Sick leave earned, but not taken by City and School Board employees at June 30, 2010, approximated $13,068,871 and $13,222,173 respectively. Upon retirement, no cash payments are made for sick leave. Therefore, the accrued balance is not recorded in the financial statements. (k) Fund equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. (l) Defined Benefit Pension Plans Defined benefit pension plan contributions are actuarially determined and consist of current service costs and amortization of past service costs over a 20-year period for the City retirement plan and 30-year period for post-employment benefits plan. The Virginia Retirement System (VRS) plans, to which the Schools’ employees belong amortizes past service costs over a 20-year period and the post-employment medical plan over a 30-year period. The City’s policy is to fund pension cost as it accrues. (m) Risk Management The City is exposed to various risks of loss related to torts; errors and omissions; injuries to and illnesses of employees; theft of, damage to, and destruction of assets; and natural disasters. The City employs a variety of risk management techniques, including the purchase of commercial insurance, participation in insurance pools and self-insurance. All funds of the City participate in the risk program and make payments to the Risk Management Internal Service Fund in a manner that is appropriate in allocating the costs associated with the risk involved. Claims, including incurred but not reported (IBNR) claims, are recognized as expense when incurred. There have been no significant changes in coverage from the prior year, nor have settlements exceeded coverage in the past five fiscal years. 2. EQUITY For government-wide, proprietary funds and fiduciary funds financial statements, equity is described as net assets (total assets minus total liabilities) and is broken down into three components: (1) amount invested in capital assets, net of related debt, (2) restricted and (3) unrestricted net assets. For governmental funds, equity is described as fund balance (current assets minus current liabilities), which is broken down into reserved and unreserved fund balance. The unreserved fund balance can also be further broken down into designated and undesignated fund balance. (a) Net Assets-Restricted – Government-wide financial statements: Restricted net assets on the government-wide Statement of Net Assets are limited to governmental activities and are composed of the following funds: Expendable Nonexpendable Total Other governmental activities $ 162,501 10,000 $ 172,501 $ Total restricted net assets $ 162,501 10,000 $ 172,501 $ (b) Net Assets – Proprietary and Fiduciary Funds: The net assets
in the fiduciary funds are all in the pension trust funds and are therefore all held in trust for pension and other post- employment benefits. The Golf Course Fund’s First Tee Program net assets ($39,581) are reserved per agreement. (c) Fund Balances: • Reserved – Represents that portion of fund balance not available for appropriation or expenditure. -49- • Designated – Represents amounts that the City Council has identified for future debt service and continuing projects. • Undesignated – Represents the remainder of the City’s equity in governmental type fund balances. Fund balances are composed of the following at June 30, 2010: Capital Social Other General Projects Services Governmental Fund Fund Fund Funds Total Reserved for: Loans receivable $ 880,000 – $ $ – $ 10,000 $ 890,000 Encumbrances 1,180,647 13,665,925 – 14,846,572 – Cemetery Perpetual Care – – – 162,501 162,501 Total reserved 1,180,647 14,545,925 172,501 – 15,899,073 Unreserved, designated for: Continuing appropriations 8,082,999 6,866,651 – 14,949,650 – Landfill remediation reserve 2,280,173 – – 2,280,173 – Social Services Fund – 483,543 – 483,543 – Debt Service Fund – – 9,547,048 – 9,547,048 Grants Fund – – 109,533 – 109,533 Comprehensive Services Act Fund – – – 18,238 18,238 Community Attention Fund – – – 1,200,437 1,200,437 Total unreserved, designated 10,363,172 6,866,651 483,543 10,875,256 28,588,622 Unreserved, undesignated for: General Fund 24,271,261 – – 24,271,261 – Capital Projects Fund – – – – – Total unreserved, undesignated 24,271,261 – – – 24,271,261 Total fund balance $ 21,412,576 35,815,080 $ 483,543 $ 11,047,757 $ 68,758,956 $ 3. CASH EQUIVALENTS AND TRUST FUND INVESTMENTS (a) Primary Government At June 30, 2010, the carrying value of the City’s deposits and investments, including City agency funds other than that of the City’s Pension Trust Funds, with their respective credit ratings, was as follows: Deposit and Investment Type Fair Value Credit Rating Demand deposits $ 89,381,253 N/A Commonwealth LGIP 449,395 AAAm Commonwealth Non-Arbitrage Program (SNAP) 12,379,577 AAAm Cash on hand 7,630 N/A Total deposits and investments $ 102,217,855 Exhibit A – Total Primary Government $ 101,586,426 Exhibit F-1 – Fiduciary Funds – Agency Fund 631,429 Total deposits and investments $ 102,217,855 Credit Risk: The City follows a deposit and investment policy (the Policy) as approved by City Council and in accordance with statutes of the Commonwealth of Virginia. Accordingly, the City is authorized to hold cash and cash equivalents, obligations of the United States and its agencies, checking and savings accounts, certificates of deposit, prime quality commercial paper, certain repurchase agreements, bankers acceptances, and the Commonwealth Treasurer’s Local Government Investment Pool (the Commonwealth LGIP, a 2a-7 like pool). -50- -51- The Commonwealth of Virginia State Non-Arbitrage Program (SNAP) was established pursuant to the Local Government Non-Arbitrage Investment Act to make available to Virginia counties, cities and towns assistance with the investment of and accounting for bond proceeds and related funds in compliance with rebate requirements of the Internal Revenue Code of 1986, as amended. The program consists of a professionally managed money market investment pool which provides local governments with a convenient method of pooling proceeds of bonds and notes for temporary investment pending their capital project expenditures. The Policy establishes limitations by type of instrument, excluding bond proceeds deposited with SNAP. The maximum percentage of the portfolio (book value at the date of acquisition) permitted in each security is as follows: Bankers’ acceptances 40% maximum Commercial paper 35% maximum Commonwealth LGIP 75% maximum Money market mutual funds 25% maximum Negotiable certificates of deposit – commercial banks 100% maximum Negotiable certificates of deposit – saving and loan associations 10% maximum Repurchase agreements 25% maximum U.S. Treasury obligations 70% maximum U.S. government agency securities and instruments of government sponsored organizations 70% maximum As required by Commonwealth statute, the Policy requires that commercial paper have a short-term debt rating of no less than “A-1” or “A-2” (or its equivalent) from at least one of the following: Moody’s Investor Service, Standard & Poor’s, Fitch Investor Service, and Duff and Phelps, Inc. Corporate notes, negotiable certificates of deposit and bank deposit notes maturing in less than one year must have a short-term debt rating of at least “A- 1” by Standard & Poor’s and “P-1” by Moody’s Investor Service. Notes having a maturity of greater than one year must be rated “AA” by Standard & Poor’s and “Aa” by Moody’s Investment Service. Deposits and investments not exposed to credit quality risk, as defined by GAAP, are designated as “N/A” in the credit rating column. All cash of the City is maintained in accounts collateralized in accordance with the Virginia Security for Public Deposits Act, Section 2.2-4400 et. seq. of the Code of Virginia or covered by federal depository insurance. Concentration of Credit Risk: The Policy establishes limitations on portfolio composition by issuer in order to control concentration of credit risk as follows: Certificates of deposit – commercial banks 45% maximum Certificates of deposit – collateralized deposits – commercial banks No maximum Certificates of deposit – saving and loan associations $100,000 Commercial paper 25% maximum Commonwealth LGIP $75 million Each repurchase agreement counterparty 10% maximum Each federal agency No maximum U.S. Treasury No maximum At June 30, 2010, the portion of the City’s portfolio, excluding demand deposits, the Commonwealth LGIP, and cash on hand that exceeds 5% of the total portfolio was zero. Interest Rate Risk: As a means of limiting exposure to fair value arising from rising interest rates, the Policy limits the investment of operating funds to investments with a stated maturity of no more than two years from the date of purchase. Proceeds from the sale of bonds must be invested in compliance with the specific requirements of the bond covenants and may be invested in securities with longer maturities. At June 20, 2010, all investments in the City’s portfolio had a maturity of six months or less. (b) City of Charlottesville Pension Trust Funds At June 30, 2010, the carrying value of the City Retirement Plan Pension Trust Fund’s (Plan) deposits and investments, with the respective credit ratings, was as follows: Deposit and Investment Type Fair Value Credit Rating Demand deposits $ N/A 1,199,680 Common stock 25,141,958 N/A Corporate fixed income securities 7,542,719 Aaa-BA1 U.S. government and agency fixed income securities Explicitly guaranteed by U.S. government $ 14,351,666 N/A Implicitly guaranteed by U.S. government Aaa 5,392,206 Total U.S. government fixed income securities 19,743,872 Mutual funds – domestic 8,730,543 N/A Mutual funds – international N/A 9,969,184 Total investments 71,128,276 Total deposits and investments $ 72,327,956 Credit Risk: Investments in the Plan are managed in accordance with a Statement of Investment Policy (Statement). This Statement sets target allocations of 40% to 60% for domestic equities, 30% to 50% for fixed income, and 5% to 15% for international equities, and authorizes investments in cash equivalents, fixed income securities, equity securities and mutual funds. The Statement specifically addresses the credit quality rating requirements on fixed income investments, permitting the purchase of investment grade bonds rated BBB or better. Credit ratings in the above table are ratings by Moody’s Investment Service. Unrated deposits and investments are designated as “N/A” in the credit rating column in the above table. The following table summarizes the Plan’s credit risk for corporate fixed income securities at June 30, 2010: Credit Rating Fair Value Aaa $ 2,779,122 AA2 372,1
78 A1 1,256,753 A2 279,559 A3 717,310 BAA1 299,456 BAA2 839,996 BA1 254,375 N/A 743,970 Total $ 7,542,719 Concentration of Credit Risk: The Statement establishes limitations on portfolio composition by issuer in order to control concentration of credit risk as follows: Company Not to exceed 5% of the total fund Government agency Not to exceed 5% of the total fund Industry Not to exceed 20% of the total fund The Plan has no investment that is greater than 5% of the total portfolio, excluding mutual funds and government securities. -52- Interest Rate Risk: The Plan has no specific limits on the maximum maturity for any security held. There is a 5% limit on holding fixed income securities in any issuer, excluding government and government agency securities. At June 30, 2010, the Plan had the following investments and maturities: Fair Value 0-5 Years 6-10 Years 11-40 Years Corporate fixed income $ 7,542,719 $ 1,965,359 $ 1,174,089 $ 4,403,271 Government fixed income 19,743,872 818,115 4,026,713 14,899,044 Total $ 2,783,474 27,286,591 $ 5,200,802 $ 19,302,315 $ (c) School Board Component Unit At June 30, 2010, the carrying value of the School Board component unit deposits and investments, with their respective credit ratings, was as follows: Deposit and Investment Type Fair Value Credit Rating Demand deposits $ 3,820,871 N/A Commonwealth LGIP 1,742,226 AAAm Total deposits and investments $ 5,563,097 School Board deposits are invested in accordance with the City’s investment policy. At June 30, 2010, excluding the demand deposits and Commonwealth LGIP, there were no investments. Accordingly, there is no credit risk, concentration of credit risk, or interest rate risk. (d) Charlottesville Economic Development Authority (CEDA) At June 30, 2010, the carrying value of the CEDA component unit deposits and investments, with their respective credit ratings, was as follows: Deposit and Investment Type Fair Value Credit Rating Demand deposits $ 592,615 N/A US government fixed income security N/A 856,380 Total deposits and investments $ 1,448,995 The City serves as fiscal agent for the CEDA. However, the CEDA is not subject to the City’s investment policy. The CEDA does not have a formal investment policy that addresses credit risk, concentration of credit risk or interest rate risk. At June 30, 2010, excluding the demand deposits and U.S. government agency securities, there were no investments. Accordingly, based on this minimal risk, the Authority does not have a policy. 4. GENERAL PROPERTY TAXES The two major sources of general property taxes are as follows: (a) Real Estate The City levies real estate taxes on all real estate within its boundaries, except that exempted by statute. These levies are assessed each year as of January 1 on the estimated market value of the property. January 1 is also the date an enforceable, legal claim to the asset applies. The City reassesses all property annually. -53- -54- Real estate taxes are collected in equal semiannual payments due June 5 and December 5. During the fiscal year, the real estate taxes budgeted for and reported as revenue in the fund financial statements are the second half of the January 1, 2009 assessment due December 5, 2009 and the first half of the January 1, 2010 assessment due June 5, 2010 less an allowance for uncollectibles and less taxes not considered to be available for current expenditures plus collections on previously delinquent taxes. The tax rate for both 2009 and 2010 was $.95, per $100 of assessed value. Real estate taxes receivable, assessed as of January 1, 2010 and due December 5, 2010, are reflected in the accompanying fund financial statements as a receivable and are offset by deferred revenue, which is consistent with the City’s budget ordinance. In the government-wide financial statements, real estate taxes that are not due as of June 30, 2010 are included in unearned revenue, since they are not due for the current fiscal year. (b) Personal Property The City levies personal property taxes on motor vehicles and tangible personal business property. These levies are assessed as of January 1 and prorated for motor vehicles acquired or sold during the year, with payment in equal semiannual installments due June 5 and December 5. During fiscal year 2010, the personal property taxes budgeted for and reported as revenue in the fund financial statements are the second half of the January 1, 2009 assessment due December 5, 2009 and the first half of the January 1, 2010 assessment due June 5, 2010, less an allowance for uncollectibles and less taxes not considered to be available for current expenditures plus collections on previously delinquent taxes. The tax rate for both 2009 and 2010 was $4.20 per $100 of assessed value. Personal property taxes receivable, assessed during 2010 and due December 5, 2010, are reflected in the accompanying fund financial statements as a receivable and are offset by deferred revenue, which is consistent with the City’s budget ordinance. In the government-wide financial statements, personal property taxes that are not due as of June 30, 2010 are included in unearned revenue, since they are not due for the current fiscal year. In April 1998, the Virginia General Assembly passed S.B.4005, the Personal Property Tax Relief Act of 1998. In its original form, PPTRA in essence was a vehicle-based entitlement. Beginning 2006, changes to PPTRA made by SB 5005 marked an end to this vehicle-based entitlement. SB 5005 establishes what amounts to a fixed, annual block grant to localities, the proceeds of which must be used to provide relief to the owners of qualifying vehicles. Localities determine how relief is to be distributed, within the guidelines established. As a necessary consequence of this approach, the proportion of individuals’ PPT bills that is satisfied by the state relief will shrink over time, since the relief “grant” is fixed, but the value of the statewide fleet eligible for relief grows (because of population growth, increasing car ownership and tendency of buyers to purchase higher valued vehicles than they are replacing). The 53% relief provided during 2009 increased to 56% for 2010. Vehicles below $1,000 assessed value are given 100% relief. 5. LOANS RECEIVABLE The Community Development Block Grant (CDBG) Special Revenue Fund has loans outstanding of $70,967. The CDBG loans represent monies advanced to qualified property owners under a Federally-funded housing renovation and rehabilitation project. These loans, having terms of up to 15 years and bearing interest at 3%, are fully offset on the combined balance sheet by an amount due to the federal government. The Grants Special Revenue Fund has loans outstanding totaling $10,000. The loans to property owners have terms of 5 years and bear interest of 3%. Payment of the principal amount is due in 5 years and the notes may be extended for up to two additional five-year periods. If the property owner sells, transfers or disposes of the property within the first five-year period, the full principal amount with 3% interest is due. The Capital Projects Fund had loans outstanding totaling $880,000, consisting of a loan to the Albemarle Housing Improvement Program (AHIP) for $30,000 and a loan for $850,000 to Piedmont Housing Alliance (PHA). The loan to AHIP is a non-interest bearing, revolving loan due upon demand. The loan to PHA is a non-interest bearing loan, due in 5 years from the date of the PHA’s closing in December, 2007 or if the property is sold. The loan can be extended, if both the City and PHA agree, for an additional 5 years. 6. NOTES RECEIVABLE The City Link note is due in 2014 and bears interest at 1.49%, with annual payments. The note is due to the City’s Water and Sewer Funds ($507,165 and $1,067,665, respectively) of the Enterprise Funds. Because the City executed this note on an arms-length basis, this note has not been eliminated at the government-wide level. The note was executed during Fiscal Year 2004, with $950,000 due to Water Fund and $2,000,000 due to Sewer Fund. 7. DUE FROM OTHER GOVERNMENTS Amounts due from other governments at June 30, 2010 are present
ed below: Federal State Other Total City Government Activities: Major funds: General Fund $ 4,750 $ 2,960,072 $ 4,391 $ 2,969,213 Capital Projects Fund 965,886 256,982 155,398 1,378,266 Social Services Fund 752,007 – 33,623 785,630 Total major funds 3,969,061 970,636 193,412 5,133,109 Non-major funds 2,634,541 186,528 1,057,354 3,878,423 Total Primary Government 1,157,164 $ 6,603,602 $ 1,250,766 $ 9,011,532 $ Component Unit – Schools $ 3,396,427 – $ 99,376 $ 3,495,803 $ 8. DUE TO/FROM OTHER FUNDS AND INTERFUND TRANSFERS (a) Individual fund deficits in the consolidated pooled cash are considered short term receivables of the General Fund. Individual fund interfund receivable and payable balances of the City at June 30, 2010: Due From Due to Other Funds Other Funds Major funds: General Fund $ 1,256,022 $ – Golf Course Fund 446,127 – Total major funds 446,127 1,256,022 Non-major funds: Special Revenue Funds: Community Development Block Grant Fund – 14,889 Grants Fund – 12,840 Comprehensive Services Act Fund – 725,558 Transit 56,608 – Total non-major funds 809,895 – Totals $ 1,256,022 1,256,022 $ -55- (b) Transfers are primarily used to 1) transfer revenues that have been collected in the required fund per state law to the funds and activities that state law allows for expenditures; 2) transfer of “payment in lieu of taxes” contributions from the utility funds to the General Fund; 3) transfer funding from governmental funds to debt service and capital project funds; and 4) transfer matching funds from the General Fund and Special Revenue Funds for various grant programs. Interfund transfers for the year ended June 30, 2010 consisted of the following: Capital Social Nonmajor Internal Total to General Projects Services Governmental Service Proprietary other funds Transfers from other funds: General Fund $ 8,452,009 – $ $ 2,642,198 $ 13,125,717 $ 67,318 $ 24,287,242 – $ Capital Projects Fund 64,773 – – 89,299 40,169 43,905 238,146 Nonmajor governmental funds 162,520 – 23,539 21,667 – – 207,726 Water Fund 678,047 – – – – – 678,047 Sewer Fund 619,718 – – – – – 619,718 Gas Fund 3,762,094 – – – – 3,762,094 – Internal Service Funds 592,000 – – 408,495 25,272 – 1,025,767 Total from other funds $ 9,206,529 5,124,632 $ 2,665,737 $ 13,645,178 $ 132,759 $ 43,905 $ 30,818,740 $ Reconciliation to exhibits: Transfer to: Transfer from: Net transfers Governmental Funds Exhibit D 30,642,076 $ $ 24,733,114 $ 5,908,962 Proprietary Funds Exhibit E-3 43,905 5,059,859 (5,015,954) Internal Service Funds Exhibit L-2 132,759 1,025,767 (893,008) Total $ 30,818,740 30,818,740 $ – $ Transfers to other funds -56- 9. CAPITAL ASSETS (a) Primary Government Balance Balance July 1, 2009 Increases Decreases June 30, 2010 Governmental activities: Capital assets not being depreciated: Land and improvements $ 11,570,477 $ 1,039,606 -$ $ 12,610,083 Infrastructure right of way 2,153,276 – – 2,153,276 Total capital assets not being depreciated 1,039,606 13,723,753 – 14,763,359 Other capital assets: Building and improvements 135,953,103 23,833,106 159,786,209 – Vehicles 23,096,071 2,800,942 541,758 25,355,255 Mobile equipment 2,511,691 123,584 14,681 2,620,594 Furniture and equipment 16,013,658 914,119 23,342 16,904,435 Streets 51,527,094 3,739,771 – 55,266,865 Bridges 3,365,527 165,583 – 3,531,110 Infrastructure – 56,446,371 – 56,446,371 Total other capital assets at historical cost 31,577,105 288,913,515 579,781 319,910,839 Less accumulated depreciation: Building and improvements 38,444,684 3,489,428 – 41,934,112 Vehicles 15,744,980 1,777,728 527,627 16,995,081 Mobile equipment 2,025,895 96,782 15,282 2,107,395 Furniture and equipment 10,995,879 1,509,020 28,876 12,476,023 Streets 39,489,059 565,828 – 40,054,887 Bridges 1,314,050 63,090 – 1,377,140 Infrastructure 1,016,828 18,828,357 – 19,845,185 Total accumulated depreciation 8,518,704 126,842,904 571,785 134,789,823 Other capital assets, net 23,058,401 162,070,611 7,996 185,121,016 Governmental activities capital assets, net $ 175,794,364 $ 24,098,007 $ 199,884,375 7,996 $ -57- Balance Balance July 1, 2009 Increases Decreases June 30, 2010 Business-type activities: Capital assets not being depreciated: Land and improvements $ 1,921,723 $ – $ – $ 1,921,723 Easements ** 26,800 78,100 – 104,900 Total capital assets not being depreciated 1,999,823 26,800 – 2,026,623 Other capital assets: Building and improvements 1,743,755 – – 1,743,755 Vehicles 2,420,986 117,873 125,757 2,413,102 Equipment 3,509,283 5,476 292,866 3,221,893 Distribution and collection systems 66,928,774 1,870,464 – 68,799,238 Total other capital assets at historical cost 1,993,813 74,602,798 418,623 76,177,988 Less accumulated depreciation: Building and improvements 1,079,432 43,628 – 1,123,060 Vehicles 1,717,400 136,501 125,757 1,728,144 Equipment 2,505,841 190,790 292,866 2,403,765 Distribution and collection systems 28,640,115 1,667,608 – 30,307,723 Total accumulated depreciation 2,038,527 33,942,788 418,623 35,562,692 Other capital assets, net (44,714) 40,660,010 – 40,615,296 Business-type activities capital assets, net $ 42,659,833 $ (17,914) $ 42,641,919 – $ **Infrastructure-easements balance at July 1, 2009 has been restated consistent with details in note 18. (b) School Board Component Unit Balance Balance July 1, 2009 Increases Decreases June 30, 2010 Governmental activities: Capital assets not being depreciated: Land $ – 982,889 $ – $ 982,889 $ Other capital assets: Building and improvements 20,973,627 – – 20,973,627 Vehicles 121,576 – – 121,576 Furniture and equipment 221,377 971,770 69,730 1,123,417 Total other capital assets at historical cost 221,377 22,066,973 69,730 22,218,620 Less accumulated depreciation: – Building and improvements 15,515,464 338,024 – 15,853,488 Vehicles 102,129 7,988 – 110,117 Furniture and equipment 73,126 660,740 69,730 664,136 Total accumulated depreciation 16,278,333 419,138 69,730 16,627,741 Other capital assets, net (197,761) 5,788,640 – 5,590,879 Governmental activities capital assets, net $ 6,771,529 $ (197,761) $ 6,573,768 – $ -58- (c) Allocation of Depreciation Expense Depreciation expense was charged to functions/programs of the Primary Government as follows: Governmental activities: General government $ 1,477,122 Public safety 929,872 Community services, including depreciation 2,537,809 of general infrastructure assets Health and welfare 75,791 Parks, recreation and culture 657,042 Capital assets held by the City’s internal service funds are charged to the various functions based on their usage of the assets 833,858 Education 1,360,461 Conservation and development 639,524 Total depreciation expense – governmental activities $ 8,511,479 Business-type activities: Water $ 480,669 Sewer 277,278 Gas 1,185,860 Golf course 94,720 Total depreciation expense – business-type activities $ 2,038,527 Depreciation expense was charged to functions/programs of the Schools component unit as follows: Instruction and instruction-related service $ 310,161 Support services – student based 83,828 Administrative support services 25,149 Total depreciation expense $ 419,138 (d) Tenancy in Common – School Board Capital Assets In FY 2002, the Commonwealth of Virginia General Assembly passed a law to respond to GASB 34 which established a local option of creating, for financial reporting purposes, a tenancy in common with the local school board when a city or county issues bonds. The sole purpose of the law was to allow cities and counties the ability to record together school assets and related debt liabilities. As a result, certain assets purchased with the City’s general obligation bonds and literary loans are recorded as part of the Primary Government. According to the law, the tenancy in common ends when the associated obligation is repaid; therefore, the assets will revert to the School Board when the debt is repaid. Nothing in the law alters the authority or responsibility of the local school board or control of the assets. As a result of this change, the City has included certain sch
ool buildings in its capital assets balance at June 30, 2010. -59- 10. LONG-TERM DEBT (a) City At June 30, 2010, the City’s long-term debt consisted of: Annual Original Interest Amount Amount Governmental Activities: Rates of Debt Outstanding General obligation bonds and literary loans: Public Improvement, Series 2000 5.125 – 5.50 9,000,000 $ $ 300,000 General Improvement, Series 2001 3.625 – 4.70 2,600,000 130,000 General Improvement Refunding, Series 2003 2.00 – 4.125 15,555,000 6,895,000 General Improvement Refunding, Series 2004 1.75 – 4.25 19,913,333 15,530,000 General Improvement, Series 2006 3.45 – 4.12 12,500,000 10,625,000 General Improvement Refunding, Series 2008 3.25 – 5.00 15,617,500 13,545,000 General Improvement Refunding, Series 2009 2.00 – 5.00 15,875,700 15,135,850 General Improvement, Series 2010 2.00 – 5.67 9,956,200 9,956,200 Total bonds 72,117,050 State Literary Fund Loan, 1991 5.00 131,386 14,386 State Literary Fund Loan, 1995 5.00 193,121 57,937 State Literary Fund Loan, 1996 5.00 207,244 72,538 Total literary loans 144,861 Total bonds and literary loans 72,261,911 Notes payable 2,086,798 Total bonds, literary loans and notes payable 74,348,709 Compensated absences 1,966,148 Total $ 76,314,857 * Business-Type Activities: General obligation bonds: Public Improvement, Series 2000 5.125 – 5.50 3,000,000 $ $ 150,000 General Improvement, Series 2001 3.625 – 4.70 6,900,000 345,000 General Improvement Refunding, Series 2003 2.00 – 4.125 8,295,000 4,930,000 General Improvement Refunding, Series 2004 1.75 – 4.25 1,456,667 1,390,002 General Improvement, Series 2006 3.45 – 4.12 3,000,000 2,550,000 General Improvement Refunding, Series 2008 3.25 – 5.00 5,222,500 4,630,000 General Improvement Refunding, Series 2009 2.00 – 5.00 6,494,300 6,314,150 General Improvement, Series 2010 2.00 – 5.67 4,903,800 4,903,800 Total bonds 25,212,952 Notes payable 151,791 Total bonds and notes payable 25,364,743 Compensated absences 237,355 Total $ * 25,602,098 The Water, Sewer, and Gas Funds are responsible for $9,402,250, $10,298,100 and $5,512,602, respectively, of the Business-Type Activities bonds payable. *Amounts exclude premium and deferred amounts on bonds. -60- (b) School Board Component Unit At June 30, 2010, the School Board’s long-term debt consisted of $1,204,181 of compensated absences payable and $190,159 unfunded liability for post-employment medical benefits. (c) Changes in Long-Term Debt The following is a summary of the long-term debt transactions for the City and the Schools component unit for the year ended June 30, 2010: Balance Balance Due Within July 1, 2009 Additions Reductions June 30, 2010 One Year Governmental activities: Bonds payable: General obligation bonds 67,492,366 $ $ 9,956,200 $ 5,331,516 $ 72,117,050 $ 5,539,950 Add unamortized premium 1,056,420 93,887 80,268 1,070,039 – Less deferred amounts on refunding 314,074 – 62,464 251,610 – Total bonds payable 68,234,712 10,050,087 5,349,320 72,935,479 5,539,950 Compensated absences 1,981,118 1,898,424 1,913,394 1,966,148 235,938 State literary loans: 1991 – Greenbrier 20,886 – 6,500 14,386 6,500 1995 – Johnson 67,593 – 9,656 57,937 9,656 1995 – Burnley Moran 82,900 – 10,362 72,538 10,362 Total literary loans 171,379 – 26,518 144,861 26,518 Notes payable: Fire truck – 2007 281,538 – 90,155 191,383 93,797 CityLink note 1,954,194 – 379,364 1,574,830 385,016 Fire brush truck – 2008 95,878 – 30,693 65,185 31,943 Police cruisers – 2008 68,150 – 68,150 – – Police cruisers – 2010 – 255,400 – 255,400 84,586 Total notes payable 2,399,760 255,400 568,362 2,086,798 595,342 Total governmental activity 72,786,969 $ $ 12,203,911 $ 7,857,594 $ 77,133,286 $ 6,397,748 Compensated absences are paid by General Fund, Social Services Fund and Non-Major Governmental Funds responsible for salary costs. The City Link note originated in 2004, has a life of 10 years and bears interest at 1.49%. Annual payments are due to City’s Water and Sewer Funds of $507,165 and $1,067,665, respectively. Because the City executed this note on an arms-length basis, this note has not been eliminated at the government-wide level. -61- Balance Balance Due Within July 1, 2009 Additions Reductions June 30, 2010 One Year Business-type activities: Bonds payable: General obligation bonds $ 22,187,636 $ 1,878,484 4,903,800 $ 25,212,952 $ 2,110,050 $ Add unamortized premium 417,537 46,243 28,807 434,973 – Less deferred amounts on refunding 304,903 52,337 – 252,566 – Total bonds payable 22,300,270 4,950,043 1,854,954 25,395,359 2,110,050 Compensated absences 237,716 296,418 296,779 237,355 28,482 Notes payable: Golf carts & paving – golf fund 21,192 21,192 – – – Boring maching – gas fund 223,264 71,473 – 151,791 74,382 Total notes payable 244,456 92,665 – 151,791 74,382 Total business-type activity $ 22,782,442 $ 2,244,398 5,246,461 $ 25,784,505 $ 2,212,914 $ Compensated absences are paid by business – type activities that are responsible for salary costs. The Golf Fund note bears interest at 4%. Components Units: Payments Balance Increase in in Balance Due within July 1, 2009 2009-10 2009-10 June 30, 2010 one year Compensated absences $ 1,193,956 $ 1,383,274 $ 1,204,181 1,373,049 $ $ 144,502 Unfunded liability for postemployment medical benefits 100,773 89,386 – 190,159 – Total $ 1,472,660 1,294,729 $ 1,373,049 $ 1,394,340 $ 144,502 $ Total notes payable $ – 56,413 $ 56,413 $ – $ – $ Schools: CEDA: The CEDA note was due to the Capital Projects Fund and bears interest at 2%. -62- -63- (d) Debt Compliance and Repayment The governmental activities general improvement bonds and public improvement refunding bonds are secured by the full faith and credit of the City and are payable from taxes levied on all property located within the City. Governmental activities installment notes payable are payable from General Fund revenues. Literary loans from the Commonwealth of Virginia are for the construction or renovation of school buildings and are collateralized by such buildings and are payable by the City from General Fund resources. The Gas, Water and Sewer Funds general obligation and public improvement refunding bonds are payable from revenues generated by the facilities constructed from the bond proceeds, although they are also backed by the full faith and credit of the City should the facilities not provide sufficient revenues to meet bond obligations. The City has complied with all significant financial bond covenants. The City has no overlapping debt with other jurisdictions. At June 30, 2010, the City had a legal debt limit of $525,718,270 and a debt margin of $435,703,657. The annual requirements to amortize to maturity all long-term obligations outstanding of the City, except for compensated absences payable for which the payment dates cannot be estimated are presented on note 11 (g). (e) General Obligation Public Improvement Bonds On June 22, 2010, the City issued $14,860,000 in General Obligation Public Improvements Bonds. $3,730,000 were issued as Series 2010A, qualified tax-exempt obligations. $11,130,000 were issued as Series 2010B, Build America Bonds and are taxable to the bondholder. Pursuant to the American Recovery and Reinvestment Act of 2010 (the “ARRA”), the City will receive a cash subsidy payment from the United States Treasury equal to 35% of the interest payable on the Series 2010B Bonds on each of the interest payable dates. The cash payment does not constitute a guarantee by the United States Treasury or a pledge of the faith and credit of the United States of America, but is required to be paid by the United States Treasury under the ARRA. $9,956,200 is general governmental debt to fund capital projects and $4,903,800 is to fund water ($1,486,000) and sewer ($3,417,800) capital projects. (f) Disclosure of Outstanding Balance of Refunded Bonds The amount outstanding at June 30, 2010 for bonds which have been in-substance defeased or refunded was $8,800,000. This was the same amount outstanding at June 30, 2009. (g) Debt Service Requirements to Maturity General Obligation Bon
ds: Year Ending June 30, Principal Interest Principal Interest 2011 $ 5,539,950 $ 2,504,156 $ 2,110,050 $ 833,741 2012 5,257,367 2,477,962 2,107,633 833,472 2013 5,206,850 2,300,896 2,088,150 765,976 2014 4,880,816 2,147,098 2,064,183 707,380 2015 4,652,300 1,985,670 1,867,700 646,309 2016 – 2020 21,005,567 7,540,221 7,834,436 2,348,837 2021 – 2025 17,385,200 3,774,228 4,599,800 1,110,463 2026 – 2030 8,189,000 853,140 2,541,000 304,330 Total bonds $ 23,583,371 72,117,050 $ 25,212,952 $ 7,550,508 $ Literary Loans: Year Ending June 30, Principal Interest 2011 $ 26,518 $ 7,243 2012 27,904 5,917 2013 20,018 4,522 2014 20,018 3,521 2015 20,018 2,521 2016 – 2020 2,037 30,385 Total literary loans 144,861 $ 25,761 $ Notes Payable: Year Ending June 30, Principal Interest Principal Interest 2011 $ 595,342 $ 36,577 $ 74,382 $ 6,178 2012 605,872 26,047 77,409 3,151 2013 483,100 14,199 – – 2014 5,997 402,484 – – Total notes payable 2,086,798 $ 82,820 $ 151,791 $ 9,329 $ Governmental Activities Business-Type Activities Governmental Activities Governmental Activities Business-Type Activities -64- 11. PENSION AND POST-EMPLOYMENT BENEFIT PLANS (a) City Pension Plan – Defined Benefit Plan description – The City administers a single-employer, defined benefit plan, which includes both pension and post-employment healthcare and life insurance benefits for eligible employees. Benefits are established by City Council, as provided in Article III and IV of Chapter 19 of the Code of the City of Charlottesville. A Post-Employment Benefits Trust was established and adopted by City Council on July 1, 2007. The City Pension Plan is considered part of the City’s Reporting Entity and is included in the City’s financial statements as the Pension Trust Fund (Exhibits F-1 and F-2). There is no separately issued City Pension Plan-Defined Benefit report. The City’s Pension Plan covers all regular employees and provides retirement and disability benefits. The City’s post-employment benefits plan provides a contribution towards healthcare and life insurance coverage to all retired employees who were employed by the City on December 31, 1984, and who continue to work for the City until retirement. Effective July 1, 1997, post-employment benefits coverage was extended to all current, eligible City employees, regardless of date of hire, who continue to work for the City until they retire. Benefits vest after five years of service for employees hired prior to December 3, 2002; for employees hired on or after that date, vesting is at the rate of 4% for each full year of service completed at retirement. The Pension Plan does not provide automatic annual increases in benefits. Benefit increases require approval of City Council. Healthcare plan provisions may be amended by City Council at any time. Life insurance benefits are provided to eligible beneficiaries. Membership in the City’s Pension Plan and Post-Employment Benefits Plan (OPEB) consists of the following at June 30, 2010, and date of the most recent actuarial valuation: Pension OPEB Retirees and beneficiaries currently receiving benefits 456 406 Vested terminated employees 431 – Current employees: Vested 527 998 Nonvested – 205 Total 1,404 1,619 -65- A summary of pension provisions follows: Public Safety General Normal Retirement Benefits: Eligibility All Police, Firefighters, Sheriff and deputies who work 20 hours a week for at least 36 weeks per year All regular employees who work 20 hours a week for at least 36 weeks per year Age/Years of Service-Normal Age 60 with 5 years of service Age 65 with 5 years of service Age/Years of Service-Early Age 55 with 5 years of service Age 55 with 5 years of service or 50 with 25 years of service or 50 with 30 years of service Normal The greater of: 2% of average final compensation (AFC), times credited service, minus 2 ½% of estimated social security benefit at age 65 times years of credited service (20 years maximum) or AFC times 1.6% times years of credited service Early Same as Normal except reduced by 0.5% times number of months early to reach 30 years of service or months to normal retirement age, whichever is less Years to vest 5 5 Disability Benefits: Service Incurred Accrued benefit, years of creditable service not necessary Eligibility 5 or more years of credited service totally and permanently disabled Benefit Accrued benefit, but the years of service is smaller of 2 times the years of service or number of years to age 60 Pre-Retirement Death Benefits: Death-in-service Accrued/reduced benefit payable to surviving spouse if member was eligible for early retirement or had 30 years of service Summary of significant accounting policies – basis of accounting and valuation of investments. The financial statements of the Pension Trust Fund are prepared using the accrual basis of accounting. The City’s contributions are recognized when due and a formal commitment to provide the contributions has been made. Benefits are recognized when due and payable in accordance with the provisions of the plan. All plan investments are reported at fair value. Securities traded on a national exchange are valued at the last reported sales price on the City’s balance sheet date. Securities without an established market are reported at estimated fair value. Funding policy – Employees make no contributions to the City Pension Plan, although retirees may purchase family healthcare coverage. The City’s contribution rates, authorized by City Council, are actuarially determined and consist of current costs and amortization of prior service costs. For fiscal years ending June 30, 2010, 2009 and 2008 retirement plan contributions were $4,872,461, $4,570,157 and $5,917,199. For fiscal years ending June 30, 2010, 2009 and 2008 post-employment benefits plan contribution was $3,966,988, $4,477,475 and $3,242,000. The costs of administering the plans are borne primarily by the plans. The contribution rates for 2010, based on the July 1, 2008 actuarial report were: Public Combined Safety General Rate Pension % 12.60 21.51 % 15.39 % Post-Employment 12.53 12.53 12.53 Total 34.04 % 25.13 % 27.92 % -66- -67- Annual pension cost – The City has traditionally contributed the annual required contribution (ARC) and thus has never actually had or been required to report a net pension obligation (NPO). In accordance with GAAP, the City calculated the potential for a NPO and reaffirmed that none existed at June 30, 2010. Schedules of funding progress are presented as required supplementary information in Exhibit I. Both contributions and benefits are recognized in accordance with GAAP and actuarial requirements; benefits are paid to retirees as they become due. The pension and post-employment benefits contribution was determined as part of the July 1, 2008, actuarial valuation using the Projected Unit Credit actuarial cost method. For purposes of determining contribution rates, the net realized and unrealized appreciation or depreciation in the market value of assets is recognized over a four-year period, designed to reduce short-term volatility in actuarial accrued liabilities and actuarial value of assets. Pension Plan amortization is over a 20-year closed period, with contributions increasing 4% per year. Postemployment benefits plan is amortized over 30-year closed group based on a level percentage of payroll method and assumes a 2.5% payroll growth. The actuarial assumptions include 7.5% investment rate of return per annum compounded annually, net of expenses projected. Trends for medical benefits (including prescription drugs) are 8% decreasing to 5.5% from 2008-2013 and 5% after 2014. Dental benefits are 5% per year. Non grandfathered retirees will pay 4% of the employer portion of the rate for each year of service at retirement that is less than 25 years. Pension plan assumes Social Security wage base was recognized and assumed to increase 4% per annum. Pension and post-employment benefits plan funding requirements are based on the benefits provided under the terms of the plan in effect at the time of each annual valuation and on the pattern of sharing between the emplo
yer and the plan member at that point. At June 30, 2010, current employees make no contribution to the pension plan or post-employment benefits plan. Retirees contribute toward healthcare costs. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and the actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. The actuarial calculations reflect a long-term perspective. Funding progress – The following schedule presents information about the funded status of the City Pension and post-employment benefit plan as of June 30, 2010. i) City Pension Plan Schedule of Funding Progress (dollar amounts in thousands): Actuarial Actuarial Unfunded Annual Actuarial Value of Accrued Actuarial Funded Covered Unfunded Valuation Assets Liability Liability Ratio Payroll Ratio Date (a) (b) (b-a) (a/b) (c) (b-a)/c June 30, 2010 $73,226 $122,821 $49,595 59.6% $31,174 159.1% -68- ii) City Post-Employment Benefits Plan Schedule of Funding Progress (dollar amounts in thousands): Actuarial Actuarial Unfunded Annual Actuarial Value of Accrued Actuarial Funded Covered Unfunded Valuation Assets Liability Liability Ratio Payroll Ratio Date (a) (b) (b-a) (a/b) (c) (b-a)/c June 30, 2010 $5,959 $62,202 $56,243 9.6% $31,174 180.4% (b) City – Defined Contribution Pension Plan Effective July 1, 2001, the City established a defined contribution plan (the “DC plan”) for its employees. All current eligible employees were given a one-time option to switch from the City Pension Plan to the DC plan. If an employee elected to switch, their benefit was frozen under the City Defined Benefit Pension Plan. A total of 159 employees elected to participate at the DC Plan’s inception. All new hires are given a one-time option to choose either the City Pension Plan or the DC plan when they are hired. Under the DC plan, the City will make a contribution of 8% of the electing employee’s base salary to their account, which is administered by a third party. DC plan contributions vest ratably over a three-year period. Employees determine how their account balance is invested from a range of available options. At June 30, 2010, there were 237 contributing employees totaling approximately 370 participants enrolled in the DC plan. During the year the City contributed a total of $756,926. Total net assets available for benefit at June 30, 2010 were $4,504,008. There is also a separate defined contribution plan for senior management to which the City contributes. For the year ended June 30, 2010, a total of $329,859 was contributed on behalf of the 10 members at a rate of 25.13% of eligible compensation. Plan provisions and contribution rates are established and may be amended by City Council. (c) School Board Component Unit – Virginia Retirement System (VRS) The School Board contributes to the VRS, which provides agent and cost-sharing multiple-employer defined benefit pension plans to the City. Professional employees participate in a VRS statewide teacher costsharing pool and non-professional employees participate as a separate group in the VRS. Plan description – All full-time, salaried permanent employees of participating employers must participate in the VRS. Benefits vest after five years of service. Employees are eligible for an unreduced retirement benefit at age 65 with 5 years of service and at age 50 with 30 years of service, payable monthly for life in an amount equal to 1.7 percent of their average final compensation (AFC) for each year of credited service. Benefits are actuarially reduced for retirees who retire prior to becoming eligible for full retirement benefits. In addition, retirees qualify for annual cost-of-living adjustment (COLA) beginning in their second year of retirement. The COLA is limited to 5% each year. AFC is defined as the highest consecutive 36 months of reported compensation. The VRS also provides death and disability benefits. Title 51.1 of the Code of Virginia (1950), as amended, assigns the authority to establish and amend benefit provisions to the General Assembly of Virginia. The VRS also provides death and disability benefits. The VRS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information. A copy of that report may be obtained by writing to the VRS at P.O. Box 2500, Richmond, VA 23218-2500 or downloaded from the VRS website at http://www.varetire.org/Pdf/2007AnnuRept.pdf. -69- Funding policy – Plan members are required by Title 51.1 of the Code of Virginia (1950), as amended, to contribute 5% of their annual reported compensation to the VRS. The employer may assume this 5% member contribution. In addition, the School Board is required to contribute the remaining amounts necessary to fund its participation in the VRS using the actuarial basis specified by the Code of Virginia and approved by the VRS Board of Trustees. The School Board’s contribution rates for teacher cost-sharing pool personnel for the fiscal year ended June 30, 2010 was 15.64%, of annual covered payroll. The School Board has elected to pay the employee’s 5% required contribution. The School Board’s required contribution, equal to the ARC, was as follows: Year Ended June 30 Contribution Dollars Contribution Percentage 2010 $ 3,894,293 15.64 % 2009 4,708,499 14.35 2008 4,820,847 15.30 Annual pension cost – For 2010, the School Board’s annual pension cost for non-professional employees was equal to the School Board’s actual contributions. The required contribution was determined as part of the June 30, 2007 actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a) 7.5% investment rate of return, (b) projected salary increases between 3.75% and 5.60% per year, and (c) 2.5% per year cost-of-living adjustments. Both (a) and (b) included an inflation component of 2.5%. The actuarial value of the School Board’s assets is equal to the modified market value of assets. Funding progress – The following schedule presents information about the funded status of the School Board Virginia Retirement System Plan for non-professional employees as of June 30, 2009. Actuarial Actuarial Unfunded Annual Actuarial Value of Accrued Actuarial Funded Covered Unfunded Valuation Assets Liability (1) Liability Ratio Payroll Ratio Date (a) (b) (b-a) (a/b) (c) (b-a)/c June 30, 2009 $ 10,305 $ 9,739 $ (566) 105.8% $2,150 (26.3) % The School Board’s contribution rates for non-professional employees for the fiscal year ended June 30, 2010 was 6.03% of annual covered payroll. The School Board has elected to pay the employees’ 5% required contribution. The annual required contribution for fiscal years ending June 30, 2009, 2008 and 2007 were $22,143, $21,114 and $21,147. The School Board has contributed the annual required contribution and thus is not required to report a net pension obligation. (d) School Board Component Unit – Post-Employment Medical Plan Subsidy Plan description – The medical plan subsidy covers all full-time employees who have met all requirements of the Virginia Retirement System (VRS) are eligible for full, unreduced retirement benefit if they have 30 years of service credit and have at least 10 consecutive years in a full-time salaried position as of the date of retirement. The retirees are not eligible for Medicare coverage at retirement date. Medical benefits subsidies on or before March 15, 2006 is a monthly benefit fixed at $250 payable to the earlier of: a) is age 65; b) is 60 monthly payments; and c) is the death of the retiree. Employees who retire effective June 30, 2010 and have 10 or more consecutive years of service will receive one of the following annual allotments to assist with paying for individual health insurance with Charlottesville City Schools: Category A: $4,000 for all fulltime employees and Category B $2,000 for all part-time employees. Employees who are eligible for full retirement and are not eligible for or who do n
ot choose health insurance coverage will receive a one-time payment of $5,000 (Category A) or $2,500 (Category B). There are no life insurance benefits. At June 30, 2010 there are 666 active employees under 65 and 43 retirees for a total plan participation of 709 employees. Funding policy – The employer is assumed to make annual contributions to the medical plan equal to the cost of benefits (claim payments plus administrative expenses) not covered by retiree contributions. The plan is unfunded. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far in to the future, and the actuarially determined amounts are subject to continual revision as results are compared to past expectations and new estimates are made about the future. The actuarial calculations reflect a long-term perspective. Schedule of employer contributions: % of Annual Net Fiscal Year Annual Employer OPEB Cost OPEB Ending OPEB Cost Contribution Contributed Obligation 6/30/2010 139,078 $ 80,500$ % 170,346$ 57.9 6/30/2009 136,402 69,500 51.0 111,768 6/30/2008 116,866 72,000 61.6 44,866 Funding progress – The following schedule presents information about the funded status of the School Board Post-employment medical plan of June 30, 2010. Schedule of Funding Progress (dollar amounts in thousands): Actuarial Actuarial Unfunded Annual Actuarial Value of Accrued Actuarial Funded Covered Unfunded Valuation Assets Liability (1) Liability Ratio Payroll Ratio Date (a) (b) (b-a) (a/b) (c) (b-a)/c June 30, 2010 $ – $ 1,659 $ 1,659 0.0% $10,892 15.2% Annual pension cost – For 2010, the School Board’s annual medical cost was $80,500 based on an estimate of direct subsidies (monthly as well as single sum payments) that are expected in the 12-month period following the measurement date. The required annual contribution was determined as part of the June 30, 2010 actuarial valuation using the projected unit credit funding method. Assumptions include 1) assumed retirement age is 58 with 10 years of service 2) Interest rate of 4% 3) Participation rate of 50% of those eligible at retirement are assumed to enter plan; 50% will opt out and take single sum payment and 4) Health Care Cost Trend of 10% for 3 years; 9% for 4 years; 8% for 4 years; 7% for 4 years; 6% for 4 years and 5% thereafter. 12. COMMITMENTS AND CONTINGENT LIABILITIES The City has received a number of Federal and State grants. Although the City has been audited in accordance with the provisions of the U.S. Office of Management and Budget Circular A-133, these grants are still subject to financial and compliance audits by the grantors or their representatives. Such audits could result in requests for reimbursements to the grantor agency for expenditures disallowed under terms of the grants. Based on past experience, City management is of the opinion that disallowances, if any, will be immaterial. 13. REVENUE SHARING AGREEMENT An Annexation and Revenue Sharing Agreement dated February 17, 1982 between the City of Charlottesville, Virginia and the County of Albemarle, Virginia was approved in a public referendum on May 18, 1982. The agreement requires the City and County annually to contribute portions of their respective real property tax bases and revenues to a Revenue and Economic Growth Sharing Fund. Distribution of the fund and the resulting net transfer of funds shall be made on each January 31 while this agreement remains in effect. During the time this agreement is in effect, the City will not initiate any annexation procedures against the County. Also, pursuant to this agreement, a committee was created to study the desirability of combining the governments and the services presently provided by them. -70- -71- This agreement became effective July 1, 1982 and remains in effect until: 1. The City and County are consolidated into a single political subdivision, or 2. The concept for independent cities presently existing in Virginia is altered by State law in such a manner that real property in the City becomes a part of the County’s tax base, or 3. The City and County mutually agree to cancel or change the agreement. During the fiscal year, the County paid $18,038,878 to the City as a result of this agreement which is recorded in intergovernmental revenues. 14. JOINT VENTURES (a) Rivanna Water and Sewer Authority The City is a participant with the Albemarle County Service Authority (ACSA) in a joint venture to provide water and wastewater treatment services to City residents and residents in certain areas of Albemarle County. The Rivanna Water and Sewer Authority (RWSA) was created for that purpose. RWSA is governed by a seven-member board composed of two ex-officio members from the City staff, a member from City Council, one from the County staff, a member of the County Board of Supervisors, and one from ACSA staff, as well as a seventh member who is jointly appointed by the City and County. The City and ACSA have agreed to purchase water and wastewater treatment services for all their customers solely from RWSA, at rates established to cover the operating and debt costs of RWSA, until June 30, 2012. For the year ended June 30, 2010, the City paid a total of $11,120,545 to RWSA. Complete, audited financial statements for RWSA can be obtained at their administrative offices at 200 Franklin Street, Charlottesville, Virginia 22902. (b) Rivanna Solid Waste Authority The City is a participant with Albemarle County in a joint venture to provide solid waste disposal facilities for City and County residents. The Rivanna Solid Waste Authority (RSWA) was created for that purpose. RSWA is governed by a five-member board composed of two ex-officio members from the City and two from the County, as well as a fifth member who is jointly appointed by the City and County. The City has agreed to use RSWA as the sole entity to accept and dispose of all solid waste generated by the City until June 30, 2030, and to pay rates for this service which will cover the costs of disposal, including a reserve for closing the existing landfill and acquiring a new one when deemed necessary. Similar fees are paid by private haulers for County residents. For the year ended June 30, 2010, the City remitted $755,434 to RSWA for its services. The City and County have also entered into a Cost Sharing Agreement for purposes of paying any of the postclosure care and corrective action costs in the event that the Rivanna Solid Waste Authority would not have the financial resources to pay such costs. Although, the City has entered into a Local Government Guarantee on behalf of the Rivanna Solid Waste Authority, the Virginia Department of Environmental Quality (DEQ) has no legal recourse against the City under this guarantee. The City’s percentage of these shared costs is 35.5% of the total. The City share of the local guarantee for the 2010 calendar year is $1,633,452. Annual certificates must be filed every December 30th to DEQ. Complete, audited financial statements for RSWA can be obtained at their administrative offices at 200 Franklin Street, Charlottesville, Virginia 22902. (c) Jefferson-Madison Regional Library The City and several neighboring counties joined together to form a regional library system for the use of their respective residents. The Jefferson-Madison Regional Library (JMRL) is governed by an eleven-member board, four of whom are appointed by the City. The participating localities share the operating costs of JMRL on the basis of the prior year’s book circulation. The City contributed $1,355,385 to JMRL for the year ended June 30, 2010. Complete, audited financial statements for JMRL can be obtained at their administrative offices at 201 East Market Street, Charlottesville, Virginia 22902. -72- (d) Charlottesville – Albemarle Regional Jail The City and Albemarle County share the costs of operating a regional jail. The Jail is governed by a sevenmember board, three of whom are appointed by the City (with one member being ex-officio), three by the County, and one jointly appointed citizen. Under the terms of the operating agreement, either the City or the Count
y can terminate the contract with sixty days notice. The City and County share the costs of operating the Jail (net of any reimbursements from the Federal, state and other local governments) on the ratio of City and County prisoner days of utilization for the prior year. Any excesses or deficits are reimbursed after the end of each fiscal year. For the year ended June 30, 2010, the City’s share of the costs of the Jail was $4,114,585. Complete, audited financial statements for the Jail can be obtained at their administrative offices at Avon Street Extended, Charlottesville, Virginia 22902. (e) Emergency Communications Center The City, Albemarle County and the University of Virginia jointly participate in operating a centralized dispatching facility for law enforcement and emergency services. The Emergency Communications Center (the Center) is governed by an eight-member board, three of whom are ex-officio members from the City. The Center operates under the terms of an agreement whereby any participant may discontinue its participation with one year’s written notice. The operating costs of the Center are shared by the three participants on the basis of population, numbers of calls for service and annual crime statistics. For the year ended June 30, 2010, the City’s share of the costs of the Center was $1,705,008. Complete, audited financial statements for the Center can be obtained at the County Office Building, 401 McIntire Road, Charlottesville, Virginia 22902. (f) Charlottesville Albemarle Convention & Visitors Bureau This is a regional program funded by the City, Albemarle County, Charlottesville Regional Chamber of Commerce and the University of Virginia and revenues generated by the Bureau. Its purpose is to promote tourism in the area. The Bureau is governed by a Management Committee composed of the City Manager, the County Executive, the President of the Charlottesville-Albemarle Chamber of Commerce and one ex-officio, non-voting member from the University of Virginia. The Chamber of Commerce contributes an amount based on its membership dues. The City and the County contributions are based on the year’s sales tax and lodging tax for each compared to total. For the year ended June 30, 2010, the City contributed $619,143 to the Bureau. (g) Darden Towe Park The City and County jointly own and operate a park, known as Darden Towe Park (the Park). The Park is governed by a supervisory committee, consisting of two ex-officio members each from the City and County. The operating costs of the Park are shared between the two based on the average of the populations of the two localities and the relative proportion of park usage by City and County residents. For the year ended June 30, 2010, the City’s share of the Park’s operating costs was $54,533. Complete, audited financial statements for the Park can be obtained at the County Office Building, 401 McIntire Road, Charlottesville, Virginia 22902. 15. RELATED ORGANIZATIONS The City Council is responsible for making appointments for a variety of boards and commissions, some of which are governing boards for agencies that cooperate outside of the authority of city government. These boards include: Albemarle – Charlottesville Regional Jail Authority Board of Architectural Review Building Code Board of Appeals Charlottesville – Albemarle Airport Authority Charlottesville – Albemarle Airport Commission Charlottesville – Albemarle Economic Development Authority Charlottesville – Albemarle Regional Transportation (CHART) Plan Citizen Advisory Committee Charlottesville Redevelopment and Housing Authority Commission for Dialogue on Race Commission on Children and Families Community Development Block Grant Task Force Historic Preservation Revolving Loan Fund Housing Advisory Committee Jefferson Area Board of Aging-Board of Directors Jefferson Area Board of Aging Advisory Council Jefferson Area Community Criminal Justice Board JAUNT (Jefferson Area United Transportation Board) Jefferson-Madison Regional Library Board Metropolitan Planning Organization Policy Board Monticello Area Community Action Agency Board Parks and Recreation Advisory Committee Personnel Appeals Board Piedmont Virginia Community College Board Planning Commission Police Advisory Panel Regional Disability Service Board Region Ten Community Services Board Retirement Commission Rivanna Solid Waste Advisory Committee Rivanna Water and Sewer Authority Sister City Commission Social Services Advisory Board Thomas Jefferson Planning District Commission Vendor Appeals Board 16. RISK MANAGEMENT The Risk Management Fund reports liabilities for claims when it is probable that a loss has been incurred, and also includes independent estimates for claims that have been incurred but not reported. Since these claims are estimates based on currently available information, they are reviewed periodically, and the reported liabilities are revised as necessary. The net asset balance of $5,623,154 at June 30, 2010 is a reserve for future extraordinary claims. Major risks retained by the City include: Worker’s compensation – $400,000 per claim and Employee health care – $100,000 per participant per year. Other insurance policies have deductibles of $25,000 or less per occurrence. The following is reconciliation between the current and prior years’ claims liabilities: 2009-10 2008-09 Accrued claims, July 1 $ 3,428,434 $ 3,144,401 Add claims incurred during the current fiscal year including changes in estimated claim payable 8,244,169 9,374,083 Less payments on claims (8,848,610) (9,090,050) Accrued claims, June 30 $ 3,428,434 2,823,993 $ Claims or judgments due within one year $ 2,676,810 $ 3,324,441 Claims or judgments due in more than one year 103,993 147,183 Total $ 3,428,434 2,823,993 $ -73- Public employee dishonesty coverage, Virginia Municipal League Insurance Program is as follows: Amount Jennifer J. Brown, Treasurer $ 1,000,000 Paul C. Garrett, Clerk of the Circuit Court 1,000,000 R. Lee Richards, Commissioner of the Revenue 1,000,000 James E. Brown, III, Sheriff 1,000,000 Maurice T. Jones, Acting City Manager 1,000,000 Aubrey Watts, Jr., Chief Operating Officer/Chief Financial Officer 1,000,000 Bernard Wray, Director of Finance 1,000,000 Jennifer Luchard, Purchasing Agent 1,000,000 During the normal course of business, the City and its employees have been named as defendants in claims for personal injuries, property damage and specific performances which are being defended by the City Attorney and associated counsel. It is the opinion of the City Attorney that the resolution of such litigation will not involve a substantial liability to the City, other than what is already accrued in the government-wide financial statements. 17. SUBSEQUENT EVENT On September 16, 2010, the City entered into a financing agreement with the Virginia Resources Authority (VRA). The loan was authorized from the Virginia Water Facilities revolving fund. The amount of the loan is $5,030,409, payable over twenty (20) years with 39 semi-annual principal and interest payments of $170,240. The interest rate is 2.93%, with total interest payable of $1,608,949. The loan will be used for the Stadium Road sewer capital project which is expected to be completed by December, 2011. The first payment on the loan is based on the project completion date, with an interest only payment due on March 1, 2012. Principal and interest payments will begin on September 1, 2012 and will be recorded as a liability in the City’s Sewer Fund. 18. RESTATEMENT OF BEGINNING NET ASSETS The City has restated beginning net assets to include capital assets for the Sewer and Gas Fund in the Business-type Activities – Enterprise Fund in compliance with The Government Accounting Standards Board (GASB) Statement No. 51 “Accounting and Financial Reporting for Intangible Assets”. STATEMENT OF NET ASSETS PROPIETARY FUND – EXHIBIT E-3 Sewer Gas Proprietary Fund Fund Funds Total net assets, June 30, 2009 $ 9,971,100 $ 23,865,647 $ 42,468,951 Easements 22,100 56,000 78,100 Total revised net assets, June 30, 2009 $ 23,887,747 10,027,100 $ 42,547,051 $ BASIC FINANCIAL STA
TEMENTS – EXHIBIT B Total net assets, June 30, 2009 as previously reported Business-Type Activities $ 42,733,988 Easements 78,100 Total revised net assets, June 30, 2009 $ 42,812,088 -74- -75- REQUIRED SUPPLEMENTARY INFORMATION – 5 5 CI F TY O CHARLOTTE LLE V RG SVI , I INIA EXHIBIT G Page 1 of 5 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL – BUDGET BASIS GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2010 Variance Budgeted Amounts Actual-Budget Positive Original Final Basis (see note 1) (Negative) Revenues Taxes: Real estate $ 50,437,398 $ 50,437,398 $ 49,876,136 $ (561,262) Personal property 6,273,000 6,273,000 6,094,538 (178,462) Public service corporation 1,075,000 1,075,000 1,119,657 44,657 Penalties and interest on delinquent taxes 350,000 350,000 429,863 79,863 Sales and use 9,925,000 9,925,000 9,312,664 (612,336) Business license 5,700,000 5,700,000 6,502,949 802,949 Utilities 4,643,072 4,643,072 4,419,303 (223,769) Communicati s ax on t 3,580,000 3,580,000 3,352,581 (227,419) Meals 6,720,000 6,720,000 6,454,663 (265,337) Lodging 2,395,000 2,395,000 2,475,914 80,914 Franchise – – 3,500 3,500 Tax on bank stock 550,000 550,000 975,779 425,779 Tax on wills and deeds 550,000 550,000 403,918 (146,082) Rolling stock 14,938 14,938 17,402 2,464 Short-term rental 64,000 64,000 35,370 (28,630) Cigarette 695,000 695,000 614,725 (80,275) Recordation 142,436 142,436 162,496 20,060 Total taxes 93,114,844 93,114,844 92,251,458 (863,386) Licenses and permits: Vehicle license fees 856,800 856,800 859,706 2,906 Dog licenses 15,000 15,000 22,083 7,083 Electrical, heating and mechanical permits 120,000 120,000 113,685 (6,315) Building and plumbing permits 310,630 310,630 218,870 (91,760) Erosion control fees – – 10,807 10,807 Sign permits – – 5,325 5,325 Other permits 366,100 366,100 410,251 44,151 Total licenses and permits 1,668,530 1,668,530 1,640,727 (27,803) Intergovernmental revenues: Revenue r f om Federal government – 4,750 4,750 – Revenue from State agencies: State highway assistance 3,081,035 3,081,035 3,288,834 207,799 Reimbursement for constitutional officers 1,670,560 1,670,560 1,463,019 (207,541) Police assistance 2,288,070 2,288,070 2,012,149 (275,921) Trailer titling tax 1,200 1,200 1,939 739 PPTRA revenue 3,498,256 3,498,256 3,498,256 – Other State assistance 172,000 187,473 226,264 38,791 Revenue from other local governments: Revenue sharing – Albemarle County 18,038,878 18,038,878 18,038,878 – Fire Department operations 742,000 742,000 721,249 (20,751) Juvenile and Domestic Relations Court 150,076 150,076 150,076 – Court revenue 500,000 500,000 345,149 (154,851) Circuit Court reimbursement – – 16,594 16,594 University of Virginia service charge 25,000 25,000 32,476 7,476 Payment in lieu of taxes – CRHA 15,000 15,000 31,515 16,515 Other 333,462 410,362 631,429 221,067 Total intergovernmental revenues 30,515,537 30,612,660 30,462,577 (150,083) (continued) -76- CI F TY O CHARLOTTE LLE V RG SVI , I INIA EXHIBIT G Page 2 of 5 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL – BUDGET BASIS GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2010 Variance Budgeted Amounts Actual-Budget Positive Original Final Basis (see note 1) (Negative) Charges for services: Recreation income 782,500 803,673 830,547 26,874 City Sheriff fees 6,200 6,200 – (6,200) Parking meter receipts 100,000 100,000 89,666 (10,334) Parking garage revenue 1,150,000 1,150,000 1,097,942 (52,058) Solid waste collection fees 1,000,000 1,000,000 939,277 (60,723) Tax abatement application fees – – 1,300 1,300 Other 1,806,039 1,899,689 1,610,271 (289,418) Total charges for services 4,844,739 4,959,562 4,569,003 (390,559) Fines: Parking fines 405,000 405,000 392,515 (12,485) Miscellaneous revenues: Interest Income 395,167 395,167 643,892 248,725 Rent 306,955 306,955 247,896 (59,059) Proceeds from drug seizures – 237,835 252,291 14,456 Contributions 9,211 9,211 33,277 24,066 Refund of prior year expenditures 5,000 5,000 285 (4,715) Indirect cost recovery 165,000 165,000 101,568 (63,432) Other 300,000 421,493 550,266 128,773 Total miscellaneous revenues 1,181,333 1,540,661 1,829,475 288,814 Total evenues r 131,729,983 132,301,257 131,145,755 (1,155,502) Expenditures – Current General government: Legislative: Mayor and Council 234,561 235,851 222,605 13,246 Reserve for Council 120,344 116,101 9,985 106,116 First Cities 18,000 18,000 17,194 806 Sister Cities 15,000 34,975 – 34,975 Judicial: City Circuit Court 733,247 767,530 740,121 27,409 General District Court 29,307 35,680 18,746 16,934 Court Services Unit 9,920 9,920 8,670 1,250 Juvenile and Domestic Relations Court 285,515 320,605 249,981 70,624 Commonwealth’s Attorney 973,550 1,055,716 794,488 261,228 City Sheriff 1,013,107 1,296,437 988,245 308,192 Executive: City Manager 1,266,421 1,282,654 1,158,542 124,112 Citywide Reserve – 313,250 15,304 297,946 Legal: City Attorney 706,094 734,149 711,682 22,467 Financial administration: Commissioner of Revenue 1,043,369 1,050,995 929,519 121,476 Real Estate Assessor 738,277 766,334 677,232 89,102 Treasurer 1,150,125 1,166,247 1,150,168 16,079 Finance – Administration 1,236,288 1,238,819 1,197,808 41,011 Purchasing 299,203 311,286 305,826 5,460 Personnel Administration: Human Resources Department 1,005,275 1,075,612 895,571 180,041 Elections: Office of the Registrar 365,829 400,096 397,850 2,246 General government buildings and plant: Public Works – Administration 789,079 828,730 779,302 49,428 Custodial 481,950 507,583 461,774 45,809 Maintenance 953,622 2,661,715 1,045,899 1,615,816 Total eneral overnment g g 13,468,083 16,228,285 12,776,512 3,451,773 (continued) -77- CI F TY O CHARLOTTE LLE V RG SVI , I INIA EXHIBIT G Page 3 of 5 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL – BUDGET BASIS GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2010 Variance Budgeted Amounts Actual-Budget Positive Original Final Basis (see note 1) (Negative) Public Safety: Police Protection: Police Department 13,470,701 14,101,255 13,889,353 211,902 Drug investigation 78,000 457,502 358,595 98,907 Fire Protection: Fire Department 8,718,424 8,854,743 8,733,608 121,135 Emergency Management Services (EMS) – 50,000 – 50,000 Volunteer Fire Company 14,390 14,390 9,883 4,507 Other Protection: Contribution – Charlottesville-Albemarle Regional Jail 3,927,391 3,927,391 4,114,585 (187,194) Blue Ridge Juvenile Detention Center 931,911 931,911 887,566 44,345 Office of the Magistrate 9,600 9,600 6,630 2,970 Traffic Engineering 729,154 1,118,965 716,434 402,531 Contribution – Emergency Communications Center 1,705,008 1,705,008 1,705,008 – Police Explorer Post #606 – 2,088 – 2,088 Total public safety 29,584,579 31,172,853 30,421,662 751,191 Community Services Highways and streets: Public Service – Administration 473,916 504,398 503,324 1,074 Streets and sidewalks 3,287,812 3,562,548 3,045,241 517,307 Public Works – Stormwater 444,319 651,766 441,975 209,791 Street lighting 738,861 738,861 558,151 180,710 Sanitation: Refuse collection and disposal 2,080,146 2,063,910 1,880,680 183,230 Contribution to Ivy Landfill 750,000 750,000 433,696 316,304 Transportation: Contribution to JAUNT 708,066 708,066 708,066 – Total community services 8,483,120 8,979,549 7,571,133 1,408,416 Health and Welfare: Health: Thomas Jefferson Health Department 417,573 434,910 434,910 – Region Ten Community Services Board 959,365 959,365 959,365 – Contributions to community organizations 591,533 640,097 640,097 – Welfare: Tax relief for the elderly 534,000 534,000 519,408 14,592 Rent relief for the elderly 10,000 10,000 15,101 (5,101) Tax relief for the disabled 137,000 137,000 135,031 1,969 Rent relief for the disabled 85,000 85,000 81,840 3,160 Education Extension Program 41,406 41,406 41,406 – Contributions to community organizations 2,400,347 2,772,950 2,420,327 352,623 Total health and welfare 5,176,224 5,614,728 5,247,485 367,243 (continued) -78- CI F TY O CHARLOTTE LLE V RG SVI , I INIA EXHIBIT G Page 4 of 5 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALAN
CE – BUDGET AND ACTUAL – BUDGET BASIS GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2010 Variance Budgeted Amounts Actual-Budget Positive Original Final Basis (see note 1) (Negative) Parks, Recreation and Culture: Culture: Contribution to Jefferson – Madison Regional Library 1,355,385 1,355,385 1,355,385 – Contributions to community organizations 172,346 224,746 198,768 25,978 Contributions to festivals 112,100 94,200 79,833 14,367 Recreation: Administration 701,042 631,094 617,724 13,370 Athletics 324,040 327,040 319,425 7,615 Aquatics 1,017,139 1,242,976 1,228,769 14,207 Recreation centers 599,211 604,221 542,014 62,207 Special activities 851,158 943,829 819,988 123,841 Therapeutic programs 295,798 349,990 284,793 65,197 Parks: Park maintenance 3,874,264 4,169,150 3,475,101 694,049 Towe Park operations 66,418 66,418 54,533 11,885 Total parks, recreation and culture 9,368,901 10,009,049 8,976,333 1,032,716 Education: Contribution to School Board component unit 34,553,321 34,553,321 34,553,321 – School pupil transportation 2,332,687 2,588,411 2,442,882 145,529 School maintenance 1,318,757 1,439,118 1,388,331 50,787 School energy management 1,961,614 2,000,880 1,895,647 105,233 Piedmont Virginia Community College 12,150 12,150 12,150 – WVPT-TV 2,480 2,480 2,480 – African American Teaching Fellows 7,500 7,500 7,500 – Total education 40,188,509 40,603,860 40,302,311 301,549 Conservation and Development: Economic development: Office of Economic Development 699,589 774,591 604,614 169,977 Chamber of Commerce 2,500 2,500 1,260 1,240 Contribution to Convention and Visitors Bureau 619,143 619,143 619,143 – Urban redevelopment and housing: Parking garages 263,002 265,151 259,443 5,708 Neighborhood Development Services Department 2,877,487 3,055,347 2,765,658 289,689 Historic Preservation Task Force 5,000 25,811 8,229 17,582 Community Design Center 27,560 27,560 27,560 – Thomas Jefferson Planning District 65,407 65,407 65,407 – Albemarle Housing Improvement Program 95,546 95,546 95,546 – Small Business Development Center 10,000 10,000 10,000 – Total conservation and development 4,665,234 4,941,056 4,456,860 484,196 Other activities Virginia Municipal League 13,447 13,447 13,072 375 Employee Benefits 410,000 907,945 227,169 680,776 Corporate training program 35,000 41,400 31,430 9,970 Thomas Jefferson Soil & Water 10,000 10,000 10,000 – Virginia Institute for Government 2,500 2,500 2,500 – Alliance for Innovation 2,500 2,500 2,500 – Streamwatch 10,000 10,000 10,000 – Total other activities 483,447 987,792 296,671 691,121 Total tures y is expendi – budgetar bas 111,418,097 118,537,172 110,048,967 8,488,205 Less encumbrances at June 30, 2010 – – (1,180,647) 1,180,647 Total tures expendi 111,418,097 118,537,172 108,868,320 9,668,852 Revenues over expenditures 20,311,886 13,764,085 22,277,435 8,513,350 (continued) -79- CI F TY O CHARLOTTE LLE V RG SVI , I INIA EXHIBIT G Page 5 of 5 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL – BUDGET BASIS GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2010 Variance Budgeted Amounts Actual-Budget Positive Original Final Basis (see note 1) (Negative) Other Financing Sources (Uses) Issuance of debt – 255,400 255,400 – Transfers in: Transfer from Water Fund 678,047 678,047 678,047 – Transfer from Sewer Fund 619,718 619,718 619,718 – Transfer from Gas Fund 3,762,094 3,762,094 3,762,094 – Transfer from Capital Projects Fund – 64,773 64,773 – Total transfers in: 5,059,859 5,124,632 5,124,632 – Transfers out: Transfer to Capital Projects Fund (4,575,000) (8,452,009) (8,452,009) – Transfer to Social Services Fund (3,361,806) (3,361,806) (2,642,198) 719,608 Transfer to Grants Fund – (5,222) (5,222) – Transfer to Community Attention Programs Fund (238,763) (238,763) (238,763) – Transfer to Community Services Act Fund (2,950,058) (2,950,058) (2,601,214) 348,844 Transfer to Transit Fund (1,768,834) (2,184,237) (1,903,977) 280,260 Transfer to Debt Service Fund (8,417,000) (8,417,000) (8,376,541) 40,459 Transfer to Departmental Services Fund – (66,107) (66,107) – Transfer to Warehouse Fund – (1,211) (1,211) – Total transfers out: (21,311,461) (25,676,413) (24,287,242) 1,389,171 Total other financing sources (uses), net (16,251,602) (20,296,381) (18,907,210) 1,389,171 Net ch ge n und ce an i f balan $ 4,060,284 $ (6,532,296) $ 3,370,225 $ 9,902,521 Fund Balance – July 1, 2009 $ 32,444,855 Fund Balance – June 30, 2010 $ 35,815,080 See accompanying Note to Required Supplementary Information on page 83. -80- CI F HARLO TY O C TTESVILLE, VIRGINIA EXHIBIT H SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL – BUDGET BASIS SOCIAL SERVICES FUND FOR THE YEAR ENDED JUNE 30, 2010 Variance Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Intergovernmental $ 10,743,676 $ 10,801,683 $ 10,028,497 $ (773,186) Miscellaneous – – 42,390 42,390 Total revenues 10,743,676 10,801,683 10,070,887 (730,796) Expenditures – health and welfare 14,156,263 14,214,270 12,736,520 1,477,750 Other financing sources – transfers in 3,412,587 3,412,587 2,665,737 (746,850) Net change in fund balance – – 104 104 Fund balance, July 1, 2009 – – 483,439 483,439 Fund balance, June 30, 2010 $ – $ – $ 483,543 $ 483,543 See accompanying Note to Required Supplementary Information on page 83. -81- CITY OF CHARLOTTESVILLE, VIRGINIA EXHIBIT I SCHEDULE OF FUNDING PROGRESS AND SCHEDULE OF EMPLOYER CONTRIBUTIONS FOR THE YEAR ENDED JUNE 30, 2010 1. City Retirement Plan Schedule of Funding Progress (dollar amounts in thousands) Actuarial Actuarial Unfunded Annual Value of Accrued Actuarial Funded Covered Unfunded Actuarial Valuation Assets Liability Liability Ratio Payroll Ratio Date (a) (b) (b-a) (a/b) ( c ) (b-a)/c June 30, 2010 $ 73,226 $ 122,821 $ 49,595 59.6 % $ 31,174 159.1 % June 30, 2009 68,976 115,533 46,557 59.7 31,968 145.6 June 30, 2008 84,507 111,925 27,418 75.5 30,388 90.2 June 30, 2007 81,174 105,117 23,943 77.2 28,791 83.2 June 30, 2006 50,731 98,735 48,004 51.4 27,489 174.6 June 30, 2005 52,065 95,109 43,044 54.7 28,121 153.1 Schedule of Employer Contributions Annual Required Percentage Fiscal Year Ended Contribution Contributed June 30, 2010 $ 4,872,461 100.0 % June 30, 2009 4,570,157 100.0 June 30, 2008 5,917,199 100.0 June 30, 2007 4,566,143 100.0 June 30, 2006 3,871,341 100.0 June 30, 2005 4,031,287 100.0 2. City Post-Employment Benefits Plan Actuarial Actuarial Unfunded Annual Value of Accrued Actuarial Funded Covered Unfunded Actuarial Valuation Actuarial Valuation Assets Liabilit iability Liabilit Liability Ratio Payroll Ratio Date (a) (b) (b-a) (a/b) ( c ) (b-a)/c June 30, 2010 $ 5,959 $ 62,202 $ 56,243 9.6 % $ 31,174 180.4 % June 30, 2009 3,382 53,803 50,421 6.3 31,968 157.7 June 30, 2008 1,292 46,110 44,818 2.8 30,388 147.5 Schedule of Employer Contributions Annual Required Percentage Fiscal Year Ended Contribution Contributed June 30, 2010 $ 3,966,988 100.0 % June 30, 2009 4,477,475 100.0 June 30, 2008 3,242,000 100.0 3. School Board Component Unit – Virginia Retirement System Plan for non-professional employees (June 30, 2010 is not available) Actuarial Actuarial Unfunded Annual Value of Accrued Actuarial Funded Covered Unfunded Actuarial Valuation Assets Liability Liability Ratio Payroll Ratio Date (a) (b) (b-a) (a/b) ( c ) (b-a)/c June 30, 2009 $ 10,305 $ 9,739 $ (566) 105.8 % $ 2,150 (26.3) % June 30, 2008 10,495 9,069 (1,426) 115.7 2,050 (69.6) June 30, 2007 9,781 8,742 (1,039) 111.9 2,053 (50.6) June 30, 2006 8,935 8,012 (923) 111.5 1,906 (48.4) June 30, 2005 8,573 8,287 (286) 103.5 1,928 (14.8) June 30, 2004 8,489 7,038 (1,451) 120.6 1,844 (78.7) Schedule of Employer Contributions Annual Required Percentage Fiscal Year Ended Contribution Contributed June 30, 2009 $ 22,143 100.0 % June 30, 2008 21,114 100.0 June 30, 2007 21,147 100.0 4. School Board Component Unit – Post-Employment Medical Benefit Plan Subsidy Actuarial Actuarial Unfunded Annual Value of Accrued Actuarial Funded Covered Unfunded Actuarial Valuation Assets Liability Liability Ratio Payroll Ratio Da
te (a) (b) (b-a) (a/b) ( c ) (b-a)/c June 30, 2010 $ – $ 1,659 $ 1,659 0.0 % $ 10,892 15.2 % June 30, 2009 No evaluation prepared as of this measurement date June 30, 2008 – 1,417 1,417 0.0 10,443 13.6 -82- -83- CITY OF CHARLOTTESVILLE, VIRGINIA NOTE TO REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED JUNE 30, 2010 1. BUDGETARY ACCOUNTING Demonstrating compliance with the adopted budget is an important component of a government’s accountability to the public. Many citizens participate in the process of establishing the annual operating budgets of state and local governments, and have a keen interest in following the actual financial progress of their governments over the course of the year. The City and many other governments revise their original budgets over the course of the year for a variety of reasons. Accordingly, GAAP requires that governments include the original budget with the comparison of final budget and actual results. The City’s budget process begins in December with the preparation of estimated revenue forecasts. Departmental budget requests are submitted to the City Manager in early January. By early March the Manager’s proposed budget is presented to City Council. A series of City Council work sessions and public hearings are held. The budget is formally adopted by April 15. An annual operating budget is adopted for the General Fund and the Social Services Fund. Within the General Fund, budgets are legally adopted at the departmental level. The City Manager is authorized to transfer the budget for personnel cost (salaries and fringe benefits) between departments if necessary; however, any other revisions that alter the total expenditures of any department or agency must be approved by City Council. Unexpended appropriations lapse at the end of the fiscal year unless carried over by Council action. Budgets for special revenues funds and the Debt Service Fund are adopted on an annual basis. The Capital Projects Fund budget is adopted on a project life basis. The budgets are integrated into the accounting system and the budgetary data, as presented in the Required Supplementary Information for all major funds with annual budgets, compares the expenditures with the amended budgets. All budgets are presented on the modified accrual basis of accounting. Accordingly, the Budgetary Comparison Schedules for the General and Social Services Funds present actual expenditures in accordance with GAAP on a basis consistent with legally adopted budgets as amended. Original, final budget and actual revenues and expenditures, including encumbrances, for the General Fund and Social Services Fund are presented on Exhibits G and H, respectively. -84- SUPPLEMENTARY SECTION -85- NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Community Development Block Grant (CDBG) Fund – to account for revenues and expenditures under the Community Development Block Grant program that is funding a number of projects. Grants Fund – to account for revenues and expenditures related to various grant programs. Community Attention Fund – to account for the residential and outreach programs for delinquent youths. Comprehensive Services Act (CSA) Fund – to account for the City’s portion of the activities of the multi-jurisdictional CSA Team, which provides services to at-risk troubled youth and families. Transit Fund – to account for the operations of the City’s bus system. DEBT SERVICE FUND The debt service fund is used to account for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds. PERMANENT FUND Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government’s programs. Cemetery Perpetual Care Permanent Fund – This fund is used to account for principal trust amounts received and related interest income. The interest portion of the trust can be used to maintain the City cemetery. CITY HARL T OF C OT ESVILLE, VIR IN G IA EXHIBIT J COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2010 Permanent Fund Special Revenue Funds Debt Cemetery Comm t uni y Service Perpetual CDBG Grants Attention CSA Transit Fund Care Total ASSETS Cash and cash equivalents $ – $ 26,249 $ 415,885 $ – $ – $ 9,608,691 $ 162,199 $ 10,213,024 Accounts receivable 42,014 – 9 87 3 3,329 16,219 – 302 92,851 Loans receivable 70,967 10,000 – – – – 80,967 – Due from other governments 33,406 134,777 1,047, 337 2,19 4,158 468,745 – 3,878,423 – Total assets $ 146,387 $ 171,026 $ 1,464,209 $ 2,227,487 $ 484,964 $ 162,501 9,608,691 $ $ 14,265,265 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable $ 57,687 $ 31,268 $ 140,745 $ $ – 230,036 $ 61,643 $ 521,379 – $ Accrued liabilities 2,844 7,247 123, 027 1,48 3,691 198,320 – 1,815,129 – Due to other governments 70,967 138 – – – – 71,105 – Due to other funds 14,889 12,840 72 – 5,558 56,608 – 809,895 – Total liabilities 146,387 51,493 263, 772 2,20 9,249 484,964 61,643 3,217,508 – FUND BALANCES Reserved for loans receivable – 10,000 – – – – 10,000 – Reserved for cemetery perpetual care – – – – – 162,501 – 162,501 Unreserved – Designated – 109,533 1,200, 437 18,238 – 9,547,048 10,875,256 – Total fund balances – 119,533 1,200, 437 18,238 – 9,547,048 162,501 11,047,757 Total liabilities and fund balances $ 146,387 $ 171,026 $ 1,464,209 $ 2,227,487 $ 484,964 $ 162,501 9,608,691 $ $ 14,265,265 -86- – ( 09 CITY OF CHARLOTTESVILLE, VIRGINIA EXHIBIT K COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2010 Permanent Fund Special Revenue Funds Debt Cemetery Community Service Perpetual CDBG Grants Atte o nti n CSA Transit Fund Care Total REVENUES Intergovernmental $ 287,270 $ 1,096,718 $ 668,961 $ 6,951,020 $ 5,880,205 $ – $ 14,884,174 – $ Charges for services – – 2,719,628 – 779,799 – 3,499,427 – Investment earnings – – – – – 27,061 – 27,061 Miscellaneous 166,132 6,304 8,149 – 345,326 – 1,797 527,708 Total revenues 453,402 1,103,022 3,396,7 38 6,951,020 7,005,330 27,061 1,797 18,938,370 EXPENDITURES Current: Public safety – 548,660 – – – – – 548,660 Community services – 341,827 – 8,7 – 90,903 – 9,132,730 – Health and welfare 92,876 11,667 3,836,018 9,556,693 – – 1,797 13,499,051 Parks, recreation and culture – 51,953 – – – – – 51,953 Conservation and development 360,526 189,233 – – – – 549,759 – Debt service: Retirement of principal – – – – – 5,926,396 5,926,396 – Interest – – – – – 2,407,670 2,407,670 – Miscellaneous – – – – – 107,867 107,867 – Total expenditures 453,402 1,143,340 3,836,0 18 9,556,693 8,790,903 8,441,933 1,797 32,224,086 Revenues over (under) expenditures – (40,318) (439,280) (2,605,673) (1,785,573) (8,414,872) – (13,285,716) OTHER FINANCING SOURCES (USES) Transfers from other funds – 52,072 238,763 2,601,214 1,9 48,093 8,805,036 13,645,178 – Transfers to other funds – (20,000) (25,206) ( – 162,520) – (207,726) – Total other financing sources, net – 32,072 213,557 2,601,214 1,785,573 8,805,036 13,437,452 – Net change in fund balance – (8,246) (225,723) 4,459) – 390,164 151,736 – FUND BALANCE – JULY 1, 20 – 127,779 1,426,160 22,697 – 9,156,884 162,501 10,896,021 FUND BALANCE – JUNE 30, 2010 $ – $ 119,533 $ 1,200,437 $ 18,238 $ – $ 9,547,048 $ 162,501 $ 11,047,757 -87- CITY OF CHARLOT ESVILLE, VIRGINI T A EXHIBIT K-1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL COMMUNITY DEVELOPMENT BLOCK GRANT FUND YEAR ENDED JUNE 30, 2010 Variance Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Intergovernmental $ 1,130,403 $ 1,130,403 $ 287,270 $ (843,133) Miscellaneous 54,840 54,840 166,132 111,292 Tota
ev l r enues 1,185,243 1,185,243 453,402 (731,841) EXPENDITURES Health and welfare 112,167 112,167 92,876 19,291 Conservation and development 1,073,076 1,073,076 360,526 712,550 Total expenditures 1,185,243 1,185,243 453,402 731,841 Revenues over (under) expenditures – – – – Net change in fund balance – – – – Fund Balance – July 1, 2009 – – – – Fund Balance – June 30, 2010 $ – $ – $ – $ – -88- Ba J 1 CITY OF CHARLOT ESVILLE, VIRGINI T A EXHIBIT K-2 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL GRANTS FUND YEAR ENDED JUNE 30, 2010 Variance Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Intergovernmental $ 1,946,338 $ 1,946,338 $ 1,096,718 $ (849,620) Miscellaneous – – 6,304 6,304 Total revenues 1,946,338 1,946,338 1,103,022 (843,316) EXPENDITURES Public safety 975,625 975,625 548,660 426,965 Community services 406,082 406,082 341,827 64,255 Health and welfare 11,667 11,667 11,667 – Parks, recreation and culture 146,268 146,268 51,953 94,315 Conservation and development 592,709 592,709 189,233 403,476 Total expenditures 2,132,351 2,132,351 1,143,340 989,011 Revenues over (under) expenditures (186,013) (186,013) (40,318) 145,695 OTHER FINANCING SOURCES Transfers from other funds 88,234 88,234 52,072 (36,162) Transfers to other funds (20,000) (20,000) (20,000) – Total other financing sources, net 68,234 68,234 32,072 (36,162) Net change in fund balance (117,779) (117,779) (8,246) 109,533 Fund Balance -July 1, 2009 127,779 127,779 127,779 – Fund Balance – June 30, 2010 $ 10,000 $ 10,000 $ 119,533 $ 109,533 -89- $ 1 $ 1 $ 1 7 $ CITY OF CHARLOT ESVILLE, VIRGINI T A EXHIBIT K-3 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL COMMUNITY ATTENTION FUND YEAR ENDED JUNE 30, 2010 Variance Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Intergovernmental $ 591,685 $ 629,748 $ 668,961 $ 39,213 Charges for service 2,894,201 3,144,596 2,719,628 (424,968) Miscellaneous – – 8,149 8,149 Total revenues 3,485,886 3,774,344 3,396,738 (377,606) EXPENDITURES Health and welfare 3,701,123 4,059,781 3,836,018 223,763 Revenues over (under) expenditures (215,237) (285,437) (439,280) (153,843) OTHER FINANCING SOURCES (USES) Transfers from other funds 238,763 238,763 238,763 – Transfers to other funds (23,539) (23,539) (25,206) (1,667) Total other financing sources (uses) 215,224 215,224 213,557 (1,667) Net change in fund balance (13) (70,213) (225,723) (155,510) Fund Balance – July 1, 2009 1,426,160 1,426,160 1,426,160 – Fund Balance – June d B l J 30, 2010 $ 1,426,147 $ 1,355,947 $ 1,200,437 $ (155,510) -90- CITY OF CHARLOT ESVILLE, VIRGINI T A EXHIBIT K-4 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL COMPREHENSIVE SERVICES ACT FUND YEAR ENDED JUNE 30, 2010 Variance Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Intergovernmental $ 8,539,712 $ 8,539,712 $ 6,951,020 $ (1,588,692) EXPENDITURES Health and welfare 11,489,770 11,489,770 9,556,693 1,933,077 Revenues over (under) expenditures (2,950,058) (2,950,058) (2,605,673) 344,385 OTHER FINANCING SOURCES Transfers from other funds 2,950,058 2,950,058 2,601,214 (348,844) Net change in fund balance – – (4,459) (4,459) Fund Balance – July 1, 2009 – – 22,697 22,697 Fund Balance – June 30, 2010 $ – $ – $ 18,238 $ 18,238 -91- CITY OF CHARLOT ESVILLE, VIRGINI T A EXHIBIT K-5 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL TRANSIT FUND YEAR ENDED JUNE 30, 2010 Variance Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Intergovernmental $ 6,494,943 $ 10,671,142 $ 5,880,205 $ (4,790,937) Charges for services 744,127 744,127 779,799 35,672 Miscellaneous 59,969 351,969 345,326 (6,643) Total revenues 7,299,039 11,767,238 7,005,330 (4,761,908) EXPENDITURES Community services 9,434,768 14,169,086 8,790,903 5,378,183 Revenues over (under) expenditures (2,135,729) (2,401,848) (1,785,573) 616,275 OTHER FINANCING SOURCES Transfers from other funds 2,114,736 2,380,855 1,948,093 (432,762) Transfers to other funds – – (162,520) (162,520) Total other financing sources (uses) 2,114,736 2,380,855 1,785,573 (595,282) Net change in fund balance (20,993) (20,993) – 20,993 Fund Balance – July 1, 2009 – – – – Fund Balance – June 30, 2010 $ (20,993) $ (20,993) $ – $ 20,993 -92- CITY OF CHARLOT ESVILLE, VIRGINI T A EXHIBIT K-6 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL DEBT SERVICE FUND YEAR ENDED JUNE 30, 2010 Variance Budgeted Amounts Actual Positive Original Final Amounts (Negative) REVENUES Investment earning $ – $ 27,061 $ 27,061 $ – Total revenues – 27,061 27,061 – EXPENDITURES Retirement of principal 6,347,764 5,926,396 5,926,396 – Interest 3,049,652 2,407,670 2,407,670 – Miscellaneous 100,000 107,867 107,867 – Total expenditures 9,497,416 8,441,933 8,441,933 – Revenues over (under) expenditures (9,497,416) (8,414,872) (8,414,872) – OTHER FINANCING SOURCES Transfers from other funds 8,916,358 8,805,024 8,805,036 12 Total other financing sources, net 8,916,358 8,805,024 8,805,036 12 Net change in fund balance (581,058) 390,152 390,164 12 Fund Balance – July 1, 2009 9,156,884 9,156,884 9,156,884 – Fund Balance – June 30 2010 $ 8,575,826 $ 9,547,036 $ 9,547,048 $ 12 -93- -94- (This page intentionally left blank) -95- INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the government and to other government units, on a cost reimbursement basis. Information Technology Fund – to account for the costs of operations of the City’s information technology department. Departmental Services Fund – to account for the costs of operations of the City’s vehicle repair shop, fuel system, telephone system, and heating and air conditioning services. Warehouse Fund – to account for the costs of operations of the City’s central warehouse. Risk Management Fund – to account for the administration of the City’s insurance and selfinsurance programs for healthcare, general liability and property insurance and worker’s compensation claims. CITY F HARLOTT LE G O C ESVIL , VIR INIA EXHIBIT L-1 COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2010 Information Departmental Risk Technology Services Warehouse Management Total ASSETS Current assets: Cash and cash equivalents $ 1,709,086 $ 175,421 $ 94,083 $ 8,289,376 $ 10,267,966 Accounts receivable, net – 631 – – 631 Inventories – 204,462 307,482 – 511,944 Prepaid expenses – 2,661 – 386,466 389,127 Total current assets 1,709,086 383,175 401,565 8,675,842 11,169,668 Noncurrent assets: Capital assets: Vehicles – 35,724 – – 35,724 Equipment 7,904,777 1,017,439 – – 8,922,216 Total capital assets 7,904,777 1,053,163 – – 8,957,940 Less accumulated depreciation (7,025,955) (991,084) – – (8,017,039) Net noncurrent assets 878,822 62,079 – – 940,901 Total assets 2,587,908 445,254 401,565 8,675,842 12,110,569 LIABILITIES Current liabilities: A t ccouns payable 45,966 106,956 14,386 114,844 282,152 Accrued liabilities 69,333 57,912 5,693 113,851 246,789 Compensated absences 6,248 5,690 114 – 12,052 Insurance claims payable – – – 2,676,810 2,676,810 Total current liabilities 121,547 170,558 20,193 2,905,505 3,217,803 Noncurrent liabilities: Compensated absences 45,815 41,722 836 – 88,373 Insurance claims payable – – – 147,183 147,183 Total noncurrent liabilities 45,815 41,722 836 147,183 235,556 Total liabilities 167,362 212,280 21,029 3,052,688 3,453,359 NET ASSETS Invested in capital assets 878,822 62,079 – – 940,901 Unrestricted (deficit) 1,541,724 170,895 380,536 5,623,154 7,716,309 Total net assets $ 2,420,546 $ 232,974 $ 380,536 $ 5,623,154 $ 8,657,210 -96- CITY F HARLOTT LE G O C ESVIL , VIR INIA EXHIBIT L-2 COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSE
TS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2010 Information Departmental Risk Technology Services Warehouse Management Total OPERATING REVENUES Charges for services $ 3,904,713 $ 3,121,934 $ 640,096 $ 12,730,779 $ 20,397,522 Total operating revenues 3,904,713 3,121,934 640,096 12,730,779 20,397,522 OPERATING EXPENSES Purchases for resale – 1,270,223 475,618 – 1,745,841 Personnel costs 1,501,250 1,156,641 89,294 85,368 2,832,553 Materials and supplies 326,875 113,930 9,437 3,648 453,890 Contractual services and charges 1,161,450 527,016 39,852 747,064 2,475,382 Depreciation 802,034 31,824 – – 833,858 Claims incurred – – – 8,848,610 8,848,610 Insurance premiums – – – 1,830,660 1,830,660 Total operating expenses 3,791,609 3,099,634 614,201 11,515,350 19,020,794 Operating income 113,104 22,300 25,895 1,215,429 1,376,728 NONOPERATING REVENUES (EXPENSES) Tr ers r ansf f om other funds – 131,548 1,211 – 132,759 Tr ers o ansf t other funds (1,025,767) – – – (1,025,767) Total r ers, t ansf net (1,025,767) 131,548 1,211 – (893,008) Change in net assets (912,663) 153,848 27,106 1,215,429 483,720 Total net assets – July 1, 2009 t l t t J l 1 2009 3,333,209 3 333 209 79,126 353,430 4,407,725 407 725 8,173,490 173 490 Total net assets – June 30, 2010 $ 2,420,546 $ 232,974 $ 380,536 $ 5,623,154 $ 8,657,210 -97- CITY F HARLOTT LE G O C ESVIL , VIR INIA EXHIBIT L-3 COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2010 Information Departmental Risk Technology Services Warehouse Management Total CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 3,904,713 $ 3,124,421 $ 640,096 $ 13,140,289 $ 20,809,519 Payments to suppliers (1,519,192) (1,888,839) (456,549) (11,635,788) (15,500,368) Payments to employees (1,500,485) (1,146,280) (89,209) (181,934) (2,917,908) Net cash provided by (used for) operating activities 885,036 89,302 94,338 1,322,567 2,391,243 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfer to other funds (1,025,767) – – – (1,025,767) Transfer from other funds – 131,548 1,211 – 132,759 Payments received from other funds – (168,020) (1,466) – (169,486) Net cash provided by (used for) noncapital financing activities (1,025,767) (36,472) (255) – (1,062,494) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets (157,224) – – – (157,224) Net cash used for capital and related financing activities (157,224) – – – (157,224) Net increase (decrease) in cash and cash equivalents (297,955) 52,830 94,083 1,322,567 1,171,525 Cash and cash equivalents, July 1, 2009 2,007,041 122,591 – 6,966,809 9,096,441 Cash and cash equivalents, June 30, 2010 $ 1,709,086 $ 175,421 $ 94,083 $ 8,289,376 $ 10,267,966 Reconciliation of operating income (loss) to net cash provided by (used for) operating activities Operating income $ 113,104 $ 22,300 $ 25,895 $ 1,215,429 $ 1,376,728 Adjustments to reconcile operating loss to net cash provided by (used for) operating activities: Depreciation expense 802,034 31,824 – – 833,858 Decrease in accounts receivable – 2,487 – 409,510 411,997 (Increase) decrease in inventories – (37,292) 99,288 – 61,996 Decrease in prepaid expenses – 688 – 271,789 272,477 Increase (decrease) in accounts payable (30,867) 58,934 (30,930) 13,653 10,790 Increase (decrease) in accrued liabilities (2,856) 8,616 1,469 19,997 27,226 Increase (decrease) in compensated absences 3,621 1,745 (1,384) (3,370) 612 Decrease in insurance claims payable – – – (604,441) (604,441) Net cash provided by (used for) operating activities $ 885,036 $ 89,302 $ 94,338 $ 1,322,567 $ 2,391,243 -98- CITY OF CHARLOTTESVILLE, VIRGINIA EXHIBIT L-4 SCHEDULE TO ASSIGN INTERNAL SERVICE FUND ASSETS AND LIABILITIES IN THE STATEMENT OF NET ASSETS June 30, 2010 Total ASSIGNED TO Internal Service Business-type Governmental Funds Activities Activities Assets Cash and cash equivalents $ 10,267,966 $ 94,083 $ 10,173,883 Accounts receivables (net) 631 – 631 Internal balances – 83,155 (83,155) Inventories 511,944 307,482 204,462 Prepaid expenses 389,127 – 389,127 Capital assets, net 940,901 – 940,901 Total assets 12,110,569 484,720 11,625,849 Liabilities Accounts payable 282,152 14,386 267,766 Accrued liabilities 246,789 5,693 241,096 Compensated absences 100,425 950 99,475 Insurance claims payable 2,823,993 – 2,823,993 Total liabilities 3,453,359 21,029 3,432,330 Net Assets Invested in capital assets 940,901 – 940,901 Unrestricted 7,716,309 463,691 7,252,618 Total net assets $ 8,657,210 $ 463,691 $ 8,193,519 -99- -100- (This page intentionally left blank) COMPREHENSIVE SERVICE ACT TRUST FUND Comprehensive Service Act Fund is used to account for cash received for Comprehensive Services for At-Risk-Youth & Families to be distributed to Albemarle County and City of Charlottesville. City is the fiscal agent for this fund. -101- CITY OF CHARLOTTESVILLE, VIRGINIA EXHIBIT M COMPREHENSIVE SERVICES ACT TRUST FUND YEAR ENDED JUNE 30, 2010 Balance Balance July 1, 2009 Additions Deductions July 1, 2010 ASSETS Cash and cash equivalents 16,572 $ 3,470,239 $ 2,855,382 $ 631,429 $ LIABILITIES Due to other governments 16,572 $ 3,470,239 $ 2,855,382 $ 631,429 $ STATEMENT OF CHANGES IN ASSETS AND LIABILITIES – AGENCY FUND -102- -103- (This page intentionally left blank) -104- CHARLOTTESVILLE SCHOOL BOARD COMPONENT UNIT CITY OF CHARLOT ESVILLE, VIRGI T NIA EXHIBIT N-1 DISCRETELY PRESENTED COMPONENT UNIT – CHARLOTTESVILLE SCHOOL BOARD STATEMENT OF NET ASSETS JUNE 30, 2010 Governmental Activities ASSETS Cash and cash equivalents $ 5,563,097 Accounts receivables (net) 751,921 Due from other governments 3,495,803 Inventories 78,658 Capital assets: Land 982,889 Depreciable assets, net 5,590,879 Total assets 16,463,247 LIABILITIES Accounts payable 466,445 Accrued liabilities 5,158,333 Unearned revenue 34,886 Insurance claims incurred but not reported 452,927 Noncurrent liabilities: Amounts due within one year one year 144,502 Amounts due in more than one year 1,249,838 Total liabilities 7,506,931 NET ASSETS Invested in capital assets, net of related debt 6,573,768 Unrestricted 2,382,548 Total net assets $ 8,956,316 -105- EXHIBIT N-2 DISCRETELY PRESENTED COMPONENT UNIT – CHARLOTTESVILLE SCHOOL BOARD STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2010 Operating Capital Revenue and Charges for Grants and Grants and Changes in FUNCTIONS/PROGRAMS Expenses Services Contributions Contributions Net Assets Governmental activities: Instruction and instruction related services 46,204,038 $ 2,351,164 $ 10,829,141 $ – $ (33,023,733) $ Support services – student based 12,209,987 272,186 – – (11,937,801) Administrative support services 3,622,871 273,279 – – (3,349,592) Total School Board 62,036,896 $ 2,896,629 $ 10,829,141 $ – $ (48,311,126) $ General Revenues: State aid – formula grants 14,015,506 $ Payments from City 34,553,321 Investment earnings 4,016 Total general revenues 48,572,843 Change in net assets 261,717 Net assets July 1 2009 8 694 599 Program Revenues Net (Expense) CITY OF CHARLOTTESVILLE, VIRGINIA -106- Net assets – July 1, 2009 8,694,599 Net assets – June 30, 2010 8,956,316 $ -106- CITY OF O LE CHARL TTESVIL , VIRGINIA EXHIBIT N-3 DISCRETELY PRESENTED COMPONENT UNIT – CHARLOTTESVILLE SCHOOL BOARD BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2010 Grant and Other General Governmental Fund Funds Total ASSETS Cash and cash equivalents $ 3,793,881 $ – $ 3,793,881 Accounts receivable, net 723,843 28,078 751,921 Due from other governments 361,228 3,134,575 3,495,803 Due from other funds 285,187 – 285,187 Inventory of supplies – 78,658 78,658 Total assets $ 5,164,139 $ 3,241,311 $ 8,405,450 LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable $ 346,322 $ 120,123 $ 466,445 Accrued liabilities 4,317,700 726,966 5,044,666 Due from other funds – 285,187 285,187 Deferred revenue 14,600 20,286 34,886 Total liabilities 4,678,622 1,152,562 5,831,184 FUND BALANCES Unreserved-designated for special revenue funds – 2,088,749 2,088,749 Unreserved-undesignated 485,517 – 485,517 Total fund balances 4
85,517 2,088,749 2,574,266 Total liabilities and fund balances $ 5,164,139 $ 3,241,311 $ 8,405,450 Total fund balances per Balance Sheet for Governmental Funds $ 2,574,266 Amounts reported for governmental activities in the Statement of Net Assets (Exhibit N-1) are different because: Capital assets used in government activities are not financial resources and therefore are not reported in the funds. The Statement of Net Assets, however, includes these assets, net of accumulated depreciation. 6,573,768 Internal service funds are used by management to charge the cost of certain activities. The assets and liabilities of the Healthcare Fund are included in governmental activities in the Statement of Net Assets. Healthcare Fund equity 1,202,622 Some liabilities are not due and payable in the current period and therefore are not reported as fund liabilities. All liabilities are included in the Statement of Net Assets. Compensated absences (1,204,181) Unfunded liability for post-employment medical benefits (190,159) Net assets of governmental activities $ 8,956,316 -107- CITY F OTT LLE, INIA O CHARL ESVI VIRG EXHIBIT N-4 DISCRETELY PRESENTED COMPONENT UNIT – CHARLOTTESVILLE SCHOOL BOARD STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2010 Grant and Other General Governmental Fund Funds Totals REVENUES City contribution (net of transfers to City) $ 32,510,611 $ 2,042,710 $ 34,553,321 Intergovernmental 14,015,506 10,829,141 24,844,647 Charges for services 940,932 982,518 1,923,450 Miscellaneous 273,279 699,900 973,179 Total revenues 47,740,328 14,554,269 62,294,597 EXPENDITURES Current: Instruction and instruction related services 39,459,569 6,271,605 45,731,174 Support services – student based 4,696,230 7,607,332 12,303,562 Administrative support services 3,584,529 – 3,584,529 Total expenditures 47,740,328 13,878,937 61,619,265 REVENUES OVER (UNDER) EXPENDITURES – 675,332 675,332 Net change in fund balance – 675,332 675,332 FUND BALANCE – JULY 1, 2009 485,517 1,413,417 1,898,934 FUND BALANCE – JUNE 30, 2010 $ 485,517 $ 2,088,749 $ 2,574,266 Net change in fund balances – total governmental funds $ 675,332 Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report the cost of equipment and facilities acquired as current expenditures while the Statement of Activities reports depreciation expense to allocate those expenditures over the life of the assets. Cost of equipment and facilities capitalized for the year (net of disposals) 221,377 Depreciation expenses (419,138) The net expense of internal service funds is combined with governmental activities on the Statement of Activities (116,243) 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. Change in compensated absences (10,225) Change in unfunded liability for post-employment medical benefits (89,386) Change in Net Assets of Governmental Activities $ 261,717 -108- CITY OF CHARLOTTESVILLE, VIRGINIA EXHIBIT N-5 DISCRETELY PRESENTED COMPONENT UNIT – CHARLOTTESVILLE SCHOOL BOARD STATEMENT OF NET ASSETS FOR THE YEAR ENDED JUNE 30, 2010 Healthcare ASSETS Current assets: Cash and cash equivalents 1,769,216 $ Total assets 1,769,216 Current liabilities: Accrued liabilities 113,667 Insurance claims payable 452,927 INTERNAL SERVICE FUND LIABILITIES Total liabilities 566,594 NET ASSETS Unrestricted 1,202,622 Total net assets $ 1,202,622 -109- CITY OF CHARLOTTESVILLE, VIRGINIA EXHIBIT N-6 DISCRETELY PRESENTED COMPONENT UNIT – CHARLOTTESVILLE SCHOOL BOARD STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FOR THE YEAR ENDED JUNE 30, 2010 Healthcare Charges for services 4,930,108 $ Total operating revenues 4,930,108 Claims incurred 5,050,367 Total operating expenses 5,050,367 Operating income (loss) (120,259) NONOPERATING REVENUES (EXPENSES) Interest income 4,016 INTERNAL SERVICE FUND OPERATING EXPENSES OPERATING REVENUES Change in net assets (116,243) Total net assets – July 1, 2009 1,318,865 Total net assets – June 30, 2010 1,202,622 $ -110- CITY OF CHARLOTTESVILLE, VIRGINIA EXHIBIT N-7 DISCRETELY PRESENTED COMPONENT UNIT – CHARLOTTESVILLE SCHOOL BOARD STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2010 Healthcare Receipts from customers 4,930,108 $ Payments to suppliers (5,064,566) Net cash provided by (used for) operating activities (134,458) Interest income 4,016 Net cash provided by noncapital financing activities 4,016 N ti i h d h i l t (130 442) CASH FLOWS FROM OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES INTERNAL SERVICE FUND Net increase in cash and cash equivalents (130,442) Cash and cash equivalents, July 1, 2009 1,899,658 Cash and cash equivalents, June 30, 2010 1,769,216 $ Reconciliation of operating income (loss) to net cash provided by (used for) operating activities Operating income (loss) (120,259) $ Adjustments to reconcile operating loss to net cash provided by (used for) operating activities: Decrease in accrued liabilities (30,126) Increase in insurance claims payable 15,927 Net cash provided by (used for) operating activities $ (134,458) -111- -112- (This page intentionally left blank) STATISTICAL SECTION STATISTICAL SECTION This section of the City of Charlottesville’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s financial health. Contents Financial Trends Tables I-IV These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. Revenue Capacity Tables V-X These schedules contain trend information to help the reader assess the City’s significant local revenue sources, the property tax, as well as other revenue sources. Debt Capacity Tables XI-XIV These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. Economic and Demographic Information Tables XV-XVII These schedules offer economic and demographic indicators to help the reader understand the environment within which the City’s financial activities take place and to help make comparisons over time and with other governments. Operating Information Tables XVIII-XX These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial system relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in this section is derived from the City’s Comprehensive Annual Financial Reports for the relevant year. The City implemented GASB 34 in the fiscal year ending June 30, 2002; schedules presenting government-wide information include information beginning in that year. – 113 – CITY HARL T LE G OF C OT ESVIL , VIR INIA TABLE I NET ASSETS BY COMPONENT LAST NINE FISCAL YEARS 2010 2009* 2008 2007 2006 2005 2004 2003 2002 Government Activities: Invested in Capital Assets, Net of Related Debt 132, $ 614,182 $ 117,881,979 $ 115,142,637 $ 108,689,166 $ 118,361,416 $ 65,523,294 60,6$ 48,256 50,012,052 $ $ 50,466,989 Restricted For: Expendable 10,000 10,000 10,000 30,000 2,466,388 626,296 432,659 342,980 102,353 Nonexpendable 162,501 162,501 162,501 162,501 162,501 162 ,501 162,532 162,492 161,542 Unrestricted 66,615,275 62,894,787 54,793,780 56,864,574 29,414,068 29,670 ,212 20,1 63,046 22,874,989 25,074,086 Total Governmental Activities Net Assets 199, $ 401,958 $ 180,949,267 $ 170,108,918 $ 165,746,241 $ 150,404,373 $ 95,982,303 81,4$ 06,493 73,392,513 $ $ 75,804,970 Business-type activities: Invested in Capital Assets, Net of Related Debt 21, $ 576,238 $ 20,928,347 $ 20,644,310 $ 19,766,913 $ 19,678,522 18,506$ ,715 17,9$ 79,148 17,536,769 $ $ 15,961,411 Unrestricted 22,368,111 21,883,741 20,455,061
15,218,780 13,668,411 13,630 ,856 13,2 66,122 11,930,092 11,865,771 Total Business-Type Activities Net Assets 43, $ 944,349 $ 42,812,088 $ 41,099,371 $ 34,985,693 $ 33,346,933 32,137$ ,571 31,2$ 45,270 29,466,861 $ $ 27,827,182 Primary Government: Invested in Capital Assets, Net of Related Debt 154, $ 190,420 $ 138,810,326 $ 135,786,947 $ 128,456,079 $ 138,039,938 $ 84,030,009 78,6$ 27,404 67,548,821 $ $ 66,428,400 Restricted For: Expendable 10,000 10,000 10,000 30,000 2,466,388 626,296 432,659 342,980 102,353 Nonexpendable 162,501 162,501 162,501 162,501 162,501 162 ,501 162,532 162,492 161,542 Unrestricted 88,983,386 84,778,528 75,248,841 72,083,354 43,082,479 43,301 ,068 33,4 29,168 34,805,081 36,939,857 Total Primary Government Net Assets $ 243,346,307 $ 223,761,355 $ 211,208,289 $ 200,731,934 $ 183,751,306 128,119$ ,874 112,6$ 51,763 102,859,374 $ 103,632,152 $ Source: City of Charlottesville Comprehensive Annual Financial Report – Exhibit A *Certain amounts have been restated consistent with detail in note 18. -114- , CITY OF CHARLOTTESVILLE, VIRGINIA TABLE II CHANGE IN NET ASSETS LAST NINE FISCAL YEARS 2010 2009* 2008 2007 2006 2005 2004 2003 2002 Expenses Governmental activities: General government $ 20,575,390 $ 25,817,176 $ 23,238,056 $ 18,533,324 $ 18,319,280 $ 14,900,857 $ 14,001,612 $ 12,429,416 $ 12,430,358 Public safety 30,547,357 30,527,165 30,542,176 27,839,049 28,091,990 25,230,656 24,601,457 21,830,729 20,416,960 Community services 21,602,923 20,577,112 17,349,631 14,765,927 14,278,057 13,933,297 12,918,012 14,120,524 14,663,583 Health and welfare 31,358,502 30,161,585 29,401,150 27,150,948 24,662,939 25,120,751 24,822,488 24,073,724 23,043,337 Parks, recreation and culture 9,546,796 9,561,694 9,481,960 9,337,786 7,919,330 7,938,374 7,164,786 6,520,555 6,893,085 Education 41,990,709 41,558,411 44,572,403 35,555,941 33,982,207 32,968,653 31,009,445 29,592,668 28,369,905 Conservation and development 6,985,191 8,588,251 9,829,820 6,333,016 5,933,535 7,122,318 5,487,212 5,665,113 4,538,190 Other activities – – – 598,025 324,511 200,663 56,942 359,361 106,859 Interest on long-term debt 2,454,390 2,235,928 1,937,644 2,005,594 1,796,925 1,637,089 1,444,329 1,479,355 1,651,966 Total governmental activities 165,061,258 169,027,322 166,352,840 142,119,610 135,308,774 129,052,658 121,506,283 116,071,445 112,114,243 Business-type activities: Water 8,009,139 7,416,972 7,376,301 6,874,670 6,536,397 6,105,675 6,232,116 6,132,925 4,919,755 Sewer 8,840,500 7,090,366 5,812,810 5,706,981 4,847,558 4,970,624 5,550,440 4,436,624 3,817,772 Gas 25,111,699 34,388,021 36,170,500 32,785,049 35,404,101 28,647,808 25,185,893 22,076,447 16,161,735 Golf course 1,198,157 1,210,638 1,358,023 1,137,337 1,007,426 968,174 877,573 799,404 884,323 Total business-type activities 43,159,495 50,105,997 50,717,634 46,504,037 47,795,482 40,692,281 37,846,022 33,445,400 25,783,585 Total Primary Government Expenses $ 208,220,753 $ 219,133,319 $ 217,070,474 $ 188,623,647 $ 183,104,256 $ 169,744,939 $ 159,352,305 $ 149,516,845 $ 137,897,828 Program Revenues Governmental activities: Charges for Services General government $ 10,624,798 $ 11,048,283 $ 10,862,338 $ 10,810,147 $ 5,304,925 $ 5,746,100 $ 4,763,481 $ 3,984,281 $ 4,155,060 Public safety 42,850 44,907 49,754 14,987 17,875 354,845 212,954 74,362 – Community services 1,945,796 2,122,384 2,224,251 1,965,398 2,246,826 3,375,842 3,614,764 2,583,283 1,876,292 Health and welfare 2,719,628 1,912,596 1,961,441 2,013,793 1,467,335 1,866,435 1,467,335 1,392,781 1,377,975 Parks, recreation and culture 943,705 808,869 811,586 662,459 505,033 586,112 541,740 512,684 442,886 Education 228,853 272,643 228,591 145,050 142,918 78,535 86,000 76,766 – Conservation and development 27,685 43,045 46,424 2,919 20,090 82,242 116,807 153,252 21,382 Operating Grants and Contributions General government 2,099,757 2,161,567 2,156,436 2,486,523 2,704,507 2,206,737 2,106,302 2,270,652 2,150,153 Public safety 1,554,604 1,597,459 1,530,559 1,437,946 1,981,856 4,203,459 3,788,184 1,210,278 1,217,370 Community services 7,947,633 7,010,934 6,758,618 6,032,520 7,026,204 4,945,581 4,884,017 4,414,377 4,253,613 Health and welfare 18,163,600 18,456,403 18,272,330 16,889,348 16,504,644 17,223,996 16,281,799 16,274,441 15,771,601 Parks, recreation and culture 51,953 100,635 77,396 5,000 88,558 118,286 83,351 121,385 35,350 Education 224,203 527,281 – – – – 77,381 800,816 – Conservation and development – 74,216 71,141 213,712 208,137 61,801 27,854 128,694 11,625 Capital Grants and Contributions General government 630,275 4,171,078 1,374,433 1,187,009 – 1,473,258 1,374,252 – – Community services 13,285,028 7,526,581 7,052,770 3,356,968 5,949,633 5,976,430 1,083,793 522,966 1,971,176 Parks,recreation and culture – – 29,760 – – 483 13,098 527,000 – Education 22,432 44,327 408,075 – – 1,695,914 1,048,039 – – Total governmental activities 60,512,800 57,923,208 53,915,903 47,223,779 44,168,541 49,996,056 41,571,151 35,048,018 33,284,483 Business-type activities: Charges for Services Water 9,134,985 9,333,610 8,302,627 8,137,837 7,718,122 7,196,273 7,381,976 6,742,926 5,274,901 Sewer 8,952,616 9,043,516 7,439,184 6,929,038 6,554,472 6,316,155 5,833,202 4,533,801 4,239,992 Gas 29,860,371 36,868,759 43,961,558 36,064,042 38,751,324 31,697,867 29,715,810 26,688,564 17,160,634 Golf course 1,064,929 1,035,709 1,113,089 1,099,640 982,796 996,674 854,344 828,161 1,068,760 Operating Grants and Contributions Golf course 54,667 58,838 106,429 – – – – – – Total business-type activities 49,067,568 56,340,432 60,922,887 52,230,557 54,006,714 46,206,969 43,785,332 38,793,452 27,744,287 Total Primary Government Revenues $ 109,580,368 $ 114,263,640 $ 114,838,790 $ 99,454,336 $ 98,175,255 $ 96,203,025 $ 85,356,483 $ 73,841,470 $ 61,028,770 (continued) -115- CITY OF CHARLOTTESVILLE, VIRGINIA TABLE II, CONTINUED CHANGE IN NET ASSETS LAST NINE FISCAL YEARS 2010 2009* 2008 2007 2006 2005 2004 2003 2002 Net (Expense) Revenue Governmental activities: General government $ (7,220,560) $ (8,436,248) $ (8,844,849) $ (4,049,645) $ (10,309,848) $ (5,474,762) $ (5,757,577) $ (6,174,483) $ (6,125,145) Public safety (28,949,903) (28,884,799) (28,961,863) (26,386,116) (26,092,259) (20,672,352) (20,600,319) (20,546,089) (19,199,590) Community services 1,575,534 (3,917,213) (1,313,992) (3,411,041) 944,606 364,556 (3,335,438) (6,599,898) (6,562,502) Health and welfare (10,475,274) (9,792,586) (9,167,379) (8,247,807) (6,690,960) (6,030,320) (7,073,354) (6,406,502) (5,893,761) Parks, recreation and culture (8,551,138) (8,652,190) (8,563,218) (8,670,327) (7,325,739) (7,233,493) (6,526,597) (5,359,486) (6,414,849) Education (41,515,221) (40,714,160) (43,935,737) (35,410,891) (33,839,289) (31,194,204) (29,798,025) (28,715,086) (28,369,905) Conservation and development (6,957,506) (8,470,990) (9,712,255) (6,116,385) (5,705,308) (6,978,275) (5,342,551) (5,383,167) (4,505,183) Other activities – – – (598,025) (324,511) (200,663) (56,942) (359,361) (106,859) Interest on long-term debt (2,454,390) (2,235,928) (1,937,644) (2,005,594) (1,796,925) (1,637,089) (1,444,329) (1,479,355) (1,651,966) Total governmental activities (104,548,458) (111,104,114) (112,436,937) (94,895,831) (91,140,233) (79,056,602) (79,935,132) (81,023,427) (78,829,760) Business-type activities: Water 1,125,846 1,916,638 926,326 1,263,167 1,181,725 1,090,598 1,149,860 610,001 355,146 Sewer 112,116 1,953,150 1,626,374 1,222,057 1,706,914 1,345,531 282,762 97,177 422,220 Gas 4,748,672 2,480,738 7,791,058 3,278,993 3,347,223 3,050,059 4,529,917 4,612,117 998,899 Golf course (78,561) (116,091) (138,505) (37,697) (24,630) 28,500 (23,229) 28,757 184,437 Total business-type activities 5,908,073 6,234,435 10,205,253 5,726,520 6,211,232 5,514,688 5,939,310 5,348,052 1,960,702 Total Primary Government Net Expense $ (98,640,385) $ (104,869,679) $ (102,231,684) $ (89,169,311) $ (84,929,001) $ (73,541,914) $ (73,995,822) $ (75,675,375) $ (76,869,058) General Revenues and Other Changes in Net Assets Governmental activities: General Revenues General property taxes $ 55,625,137 $ 5
7,299,828 $ 52,783,908 $ 51,813,831 $ 47,031,353 $ 42,645,296 $ 39,800,587 $ 35,042,203 $ 31,383,206 Sales tax 9,312,664 9,588,558 10,221,226 10,298,470 9,565,488 9,001,835 8,294,661 7,850,734 7,825,769 Utility tax 4,419,303 4,644,592 4,466,584 7,440,973 7,124,868 6,863,039 6,750,575 6,632,604 6,300,637 Communications tax 3,352,581 3,338,662 3,674,556 – – – – – – Meals tax 6,454,663 6,522,572 6,741,885 6,441,521 6,115,832 5,745,899 5,412,912 3,855,609 3,832,968 Lodging tax 2,475,914 2,286,843 2,476,572 2,356,436 2,100,084 1,909,540 1,585,307 1,447,252 1,492,003 Other taxes 3,762,710 3,596,854 3,742,319 2,591,960 3,034,587 2,692,632 1,994,088 1,955,570 3,795,553 Business licenses, fees, & permits 6,502,949 7,295,646 5,953,851 5,514,900 7,766,206 5,448,552 5,189,311 4,609,468 4,567,689 Grants and contributions not restricted 25,160,421 21,166,672 20,083,095 17,683,149 15,361,163 13,513,099 13,989,182 12,863,038 19,082,348 Interest and investment earnings 918,853 1,435,592 1,904,366 1,655,643 509,683 119,567 199,430 256,442 567,657 Miscellaneous – – – – – 926,948 402,189 165,099 2,100,602 Gain (loss) from sale of assets – – – – 3,130 4,363 51,186 93,162 – Total governmental activities 117,985,195 117,175,819 112,048,362 105,796,883 98,612,394 88,870,770 83,669,428 74,771,181 80,948,432 Business-type activities: Interest and Investment Earnings 240,142 246,926 409,406 353,056 262,717 139,255 118,783 123,135 134,072 Gain (loss) from sale of assets – – – – – – – 8,281 (14,743) Total business-type activities 240,142 246,926 409,406 353,056 262,717 139,255 118,783 131,416 119,329 Total Primary Government Revenues $ 118,225,337 $ 117,422,745 $ 112,457,768 $ 106,149,939 $ 98,875,111 $ 89,010,025 $ 83,788,211 $ 74,902,597 $ 81,067,761 Change in Net Assets prior to restatement $ 19,584,952 $ 12,553,066 $ 10,226,084 $ 16,980,628 $ 13,946,110 $ 15,468,111 $ 9,792,389 $ (772,778) $ 4,198,703 Restatement – – 250,271 – – – – – – Total change in Net Assets $ 19,584,952 $ 12,553,066 $ 10,476,355 $ 16,980,628 $ 13,946,110 $ 15,468,111 $ 9,792,389 $ (772,778) $ 4,198,703 Source: City of Charlottesville Comprehensive Annual Financial Report – Exhibit B *Certain amounts have been restated consistent with detail in note 18. -116- CITY F TT O CHARLO ESVILLE, VIRGINIA TABLE III FUND BALANCES OF GOVERNMENTAL FUNDS LAST NINE FISCAL YEARS Fiscal Year 2010 2009 2008 2007 2006 2005 2004 2003 2002 General Fund Reserved $ 1,180,647 $ $ 643,413 1,368,723 $ 970,434 71$ 5,230 $ 979,023 $ 548,083 $ 509,665 $ 934,462 Unreserved: Designated 10, 363,172 4,651,197 6,376,108 6,150,417 3,92 1,815 1,118,013 572,500 217,376 2,557,694 Undesignated 24, 271,261 27,150,245 19,563,961 21,694,729 21,65 0,695 17 ,095,548 12,730,626 11,287,004 11,023,394 Total General Fund $ 35,815,080 $ 32,444,855 $ 27,308,792 $ 28,815,580 26,28$ 7,740 19$ ,192,584 $ 13,851,209 $ 12,014,045 $ 14,515,550 All Other Governmental Funds Reserved $ 14,555,925 $ 30,741,006 $ 18,829,365 $ 20,416,889 21,15$ 9,692 $ 6,473,784 $ 4,444,034 $ 7,284,889 $ 4,742,759 Unreserved: Capita rojects l P Funds 6,866,651 (3,843,863) 9,286,536 (2,598,765) (19,45 6,521) 1,515,231 – 878,060 1,099,235 Social Serv e ic Funds 483,543 483,439 484,529 397,142 – – – – – Specia ve l Re nue Funds 1,328,208 1,566,636 1,018,241 1,043,964 – – – – 7,969 Debt Serv e ic Funds 9, 547,048 9,156,884 7,927,132 5,541,445 4,96 2,807 3,914,959 2,112,688 980,610 807,264 Permanent Fund 162,501 162,501 162,501 162,501 – – – – – Total All Other Governmental Funds 32, $ 943,876 $ 38,266,603 $ 37,708,304 $ 24,963,176 6,66$ 5,978 11$ ,903,974 $ 6,556,722 $ 9,143,559 $ 6,657,227 Source: City of Charlottesville Comprehensive Annual Financial Report – Exhibit C -117- ) CI F TY O CHARLOTTESVILLE, VIRGINIA TABLE IV CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Revenues General Property Taxes $ 92,251,458 $ 94,490,618 $ 90,392,806 86,324$ ,017 80,2 $ 03,931 $ 73,521,654 $ 68,172,692 $ 57,340,694 $ 54,991,385 $ 52,848,964 Fee and Permits 1,640,727 1,836,514 1,915,907 1,837,978 1,594,542 1,553,833 1,427,780 5,115,283 5,076,068 4,852,949 Special Assessments – – – – – – 27,879 17,379 33,628 64,373 Intergovernmental Revenue 67,888,839 62,127,824 57,515,459 48,120 ,385 49,3 18,664 51,217,592 44,565,174 38,912,283 37,735,162 31,433,532 Charges for Services 8,068,430 7,348,673 7,655,338 7,853,305 6,701,437 7,705,664 7,098,121 5,598,785 4,893,530 7,957,504 Fines and Forfeitures 392,515 383,480 475,064 530,007 508,322 541,733 595,895 585,414 574,155 407,202 Miscellaneous Revenues 2,724,433 2,753,583 2,883,321 2,974,966 2,117,750 1,978,995 1,591,096 1,918,569 3,098,130 4,125,382 Total Governmental Revenues 172,966,402 168,940,692 160,837,895 147,640 ,658 140,4 44,646 136,519,471 123,478,637 109,488,407 106,402,058 101,689,906 Expenditures General Government 13,844,581 17,980,145 16,701,263 12,784 ,574 13,5 78,371 10,834,059 10,086,890 9,990,553 9,905,011 10,568,831 Public Safety 30,760,038 29,927,240 30,623,911 27,632 ,491 26,1 89,309 26,350,201 24,461,723 20,991,218 19,661,571 20,361,752 Community Services 21,000,353 22,183,823 16,398,832 14,126 ,876 13,1 17,616 12,805,735 12,576,913 13,315,268 13,830,122 9,319,308 Health and Welfare 31,483,056 30,082,148 29,361,163 27,205 ,434 24,8 79,122 25,021,811 24,681,509 23,823,022 22,942,745 19,775,584 Parks, Recreation and Culture 9,123,591 9,386,707 9,209,286 9,037,193 7,746,830 7,513,978 6,802,315 6,088,126 6,524,544 7,899,807 Education (1) 41,104,359 40,957,870 41,048,697 34,565 ,396 33,4 07,671 31,795,902 29,868,001 29,035,453 26,135,207 25,698,602 Conservation and Development 6,395,913 7,957,922 9,203,474 5,710,481 5,477,804 6,497,278 4,824,237 7,367,636 4,042,160 4,074,449 Debt Service Principal 5,926,396 5,241,154 4,780,080 5,676,011 5,292,120 4,129,049 4,080,654 3,809,508 3,537,985 3,283,331 Interest 2,407,670 2,029,199 1,926,049 1,757,672 1,779,021 1,289,650 1,315,622 1,636,479 1,673,406 1,700,954 Cost of Issuance 107,867 146,910 122,388 145 ,774 3,278 110,991 10,722 77,605 42,331 11,105 Other Activities 276,671 375,443 460,951 193,864 321,233 167,858 46,220 264,352 106,859 372,199 Capital Outlay 28,702,858 17,694,234 7,129,337 6,827,030 8,719,385 23,908,132 9,250,083 5,173,466 11,984,643 5,384,639 Total Governmental Expenditures 191,133,353 183,962,795 166,965,431 145,662 ,796 140,5 11,760 150,424,644 128,004,889 121,572,686 120,386,584 108,450,561 Excess of Revenues over (under) Expenditures (18,166,951) (15,022,103) (6,127,536) 1,977,862 ( 67,114) (13,905,173) (4,526,252) (12,084,279) (13,984,526) (6,760,655) Other Financing Sources (Uses) Transfers from other funds 30,642,076 26,846,844 31,768,783 30,645 ,585 23,4 11,667 22,922,347 21,809,186 18,785,326 17,991,142 17,617,073 Transfers to other funds (24,733,114) (21,669,705) (27,046,086) (26,154 ,813) (19,7 60,389) (18,160,705) (18,032,607) (15,519,194) (14,907,229) (13,840,840) Premium on issuance of debt 93,887 575,073 305,527 – – – – – – – Proceeds from debt issuance 10,211,600 15,017,552 12,434,520 12,629,400 – 19,962,475 – 16,574,431 6,100,000 1,266,774 Refunding bond issued – 1,325,700 3,547,500 – – 2,913,333 – – – – Payment to refunded bond escrow agent – (1,378,999) (3,644,368) – – (3,043,650) – (10,007,006) – – Total Other Financing Sources (Uses) 16,214,449 20,716,465 17,365,876 17,120 ,172 3,651,278 24,593,800 3,776,579 9,833,557 9,183,913 5,043,007 Net Change in Fund Balances $ (1,952,502) $ 5,694,362 $ 11,238,340 19,098$ ,034 3,5 $ 84,164 $ 10,688,627 $ (749,673 $ (2,250,722) $ (4,800,613) $ (1,717,648) Debt service as a percentage of noncapital expenditures Total debt service expenditures $ 8,334,066 $ 7,270,353 $ 6,706,129 7,433$ ,683 7,0$ 71,141 $ 5,418,699 $ 5,396,276 $ 5,445,987 $ 5,211,391 $ 4,984,285 Total governmental expenditures 191,133,353 183,962,795 166,965,431 145,662 ,796 140,511,760 150,424,644 128,004,889 120,386,584 121,572,686 108,450,561 Change in Capital Assets (32,444,266) (22,765,689) (9,371,741) (8,702 ,265
) (9,569,115) (2 6,278,015) (10,938,370) (7,187,897) (13,934,225) (5,384,639) Noncapital Expenditures $ 158,689,087 $ 161,197,106 $ 157,593,690 136,960$ ,531 130,9$ 42,645 1 $ 24,146,629 $ 117,066,519 $ 114,384,789 $ 106,452,359 $ 103,065,922 Debt service as a percentage of 5.25% 4.51% 4.26% 5.43% 5.40% 4.36% 4.61% 4.76% 4.90% 4.84% noncapital expenditures Source: City of Charlottesville Comprehensive Annual Financial Report – Exhibit D (Exhibit B in 2001 and prior). (1) Prior to 2002 transfers to and from component units, including School Board, were treated as other financing sources. They have been included in Education Expenditures for reporting purposes in this document. -118- as l CITY HARLOTT LLE RGINIA OF C ESVI , VI TABLE V TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS Ut y nd ilit a Business Fiscal Total Property Sales and Communications Meals Lodging License Franchise Tax on Tax on Wills Other Year Taxes Taxes (1) Use Taxes Taxes (2) (4) Tax (3) Tax Tax Taxes (4) Bank Stock and Deeds Taxes 2010 $ 92,251,458 57,$ 520,194 $ 9,312,664 $ 7,771,884 6,454,$ 663 2,$ 475,914 $ 6,502,949 3,$ 500 975,779$ $ 403,918 $ 829,993 2009 94,490,618 58, 750,030 9,588,558 7,983,254 6,522, 572 2, 286,843 7,295,646 12,397 639,849 473,913 937,556 2008 90,392,806 54, 596,231 10,221,226 8,141,140 6,741, 885 2, 476,572 5,953,851 8,843 605,562 665,969 981,527 2007 86,324,017 51, 679,757 10,298,470 7,440,973 6,441, 521 2, 356,436 5,514,900 238, 551 569,324 718,396 1,065,689 2006 80,203,931 46, 830,323 9,565,488 7,124,868 6,115, 832 2, 100,084 5,432,749 420, 114 620,707 786,322 1,207,444 2005 73,521,654 42, 612,902 9,001,835 7,280,928 5,745, 899 1, 909,540 4,695,807 403, 128 489,668 507,188 874,759 2004 68,172,692 39, 685,234 8,294,661 6,750,575 5,412, 912 1, 585,307 4,449,915 349, 918 459,424 340,408 844,338 2003 61,429,867 35, 598,925 7,850,734 6,978,210 3,855, 609 1, 447,252 4,089,173 324, 867 517,194 258,803 509,100 2002 59,040,222 33, 354,871 7,825,769 6,666,349 3,832, 968 1, 492,003 4,048,837 340, 066 784,853 202,493 492,013 2001 56,915,800 31, 101,037 8,006,621 6,811,189 3,549, 310 1, 472,075 4,066,836 287, 298 865,160 173,512 582,762 Source: City of Charlottesville Comprehensive Annual Financial Report Exhibit G (1) Beginning in 1998, the Commonwealth of Virginia pays a portion of the personal property tax formerly paid by the property owner; the Commonwealth’s share is reported intergovernmental revenue. (2) From 1995 to 2001, a dedicated tax for improvement of the emergency dispatch system was recorded in the Capital Projects Fund; since 2002, the tax is recorded in the General Fund. (3) In 2004, the City meals tax was increased by 1% to 4%. The additional revenue generated is being dedicated to debt service on debt-financed capital projects. (4) Beginning in January 1, 2007, the Commonwealth of Virginia enacted the Virginia Communication Tax. This new tax replaces most of the current Virginia state and loca communications taxes and fees with a central administered Communications Sales and Use Tax, a uniform statewide E-911 tax on landline telephone service and a cable television provider’s public right-of-way use fee. -119- CITY OF CHARLOTTESVILLE, VIRGINIA TABLE VI ASSESSED AND ESTIMATED MARKET VALUE OF TAXABLE PROPERTY (1) LAST TEN CALENDAR YEARS Total Taxable Taxable Public e S rvice R r eal P operty Real Property Tax Exempt Total Value Year Real Estate Real sta E te Assessed Value Direct Tax Rate Real Property Real Property 2010 $ 5,257,182,700 $ 135,809,935 $ 5,392,992,635 0.95$ $ 1,053,205,500 $ 6,446,198,135 2009 5,251,290,000 116,776,088 5,368,066,088 0.95 1,045,198,200 6,413,264,288 2008 5,181,954,900 114,181,608 5,296,136,508 0.95 885,548,300 6,181,684,808 2007 4,826,991,400 121,343,088 4,948,334,488 0.95 869,720,800 5,818,055,288 2006 4,211,772,300 122,531,726 4,334,304,026 0.99 865,609,200 5,199,913,226 2005 3,595,449,500 127,545,711 3,722,995,211 1.05 767,043,300 4,490,038,511 2004 3,179,150,000 150,021,836 3,329,171,836 1.09 718,612,500 4,047,784,336 2003 2,842,231,400 156,786,517 2,999,017,917 1.09 714,202,500 3,713,220,417 2002 2,541,425,500 149,584,177 2,691,009,677 1.11 685,737,800 3,376,747,477 2001 2,302,594,900 137,762,477 2,440,357,377 1.11 631,643,600 3,072,000,977 Source: Records of the City Assessor and State Corporation Commission (1) Assessed values of all classes of property approximate market value. -120- CITY OF CHARLOTTESVILLE, VIRGINIA TABLE VII PROPERTY TAX RATES (PER $100 OF ASSESSED VALUE) LAST TEN CALENDAR YEARS Public Service Real Personal Machinery Real Personal Year Property Property & Tools Property Property 2010 $ 0.95 $ 4.20 4.20$ 0.95$ 4.20$ 2009 0.95 4.20 4.20 0.95 4.20 2008 0.95 4.20 4.20 0.95 4.20 2007 0.95 4.20 4.20 0.95 4.20 2006 0.99 4.20 4.20 0.99 4.20 2005 1.05 4.20 4.20 1.05 4.20 2004 1.09 4.20 4.20 1.09 4.20 2003 1.09 4.20 4.20 1.09 4.20 2002 1.11 4.20 4.20 1.11 4.20 2001 1.11 4.20 4.20 1.11 4.20 Source: City of Charlottesville Director of Finance -121- A x V nt(2) Rank – – – – 10 $ % ,985,289 4,035, TABLE VIII Percentage Percentage Valuation (1) of Total Assessed 0.48 CITY OF CHARLOTTESVILLE, VIRGINIA PRINCIPAL TAXPAYERS CURRENT YEAR AND NINE YEARS PRIOR JUNE 30, 2010 2010 of Total 2001 ssessed Tax Assessed Assessed Ta Taxpayer Type of Business aluation (1) Amount Rank Valuation (1) Valuation (1) Amou Federal Realty Investment Trust Shopping Center $ 81,498,600 $ 774,237 1 1.55 % $ 53,374,000 $ 592,451 1 2.32 % Caton, Douglas E. Real Estate 60,972,500 579,239 2 1.16 – – Dominion Virginia Power Company Public Utilities 43,700,147 415,151 3 0.83 34 ,962,419 3 388,083 1.52 Wade Apartments Apartments 42,719,600 405,836 4 0.81 13 ,357,400 5 148,267 0.58 CenturyLink Public Ut y ilit 37,559,490 356,815 5 0.71 48 ,359,712 2 536,793 2.10 Pavilion, LLC Apartments 34,605,700 328,754 6 0.66 – – Towers Limited Partnership, ETAL Real Estate 34,285,000 325,708 7 0.65 11 ,562,700 7 128,346 0.50 Peyton Associates Partnership Real Estate 33,392,400 317,228 8 0.64 – – University of Virginia Foundation Real Estate 30,580,200 290,512 9 0.58 – – JA-Zan Limited Partnership Retail, Office 25,493,400 242,187 Hyperion Telecommunications Telecommunications – – – 14 ,209,358 4 157,724 0.62 Reed Elsevier, Inc. Publisher – – – 12 ,300,800 6 136,539 0.53 Jefferson Court Associates Hotel – – – 11 ,285,000 8 125,264 0.49 Keith O. Woodward Real Estate – – – 10 ,486,100 9 116,396 0.46 Wachovia Bank National Association Bank – – – 10 ,087,800 10 111,975 0.44 $ 424,807,037 667 8.08 $ 219 $ 2,441,837 % 9.55 Source: City Assessor and Commissioner of Revenue, City of Charlottesville, Virginia (1) Represents percentage of total City valuation of taxable property, real estate only. (2) tax rate of $1.11 -122- ) Total Collections as a Percent of Current Levy CITY OF CHARLOTTESVILLE, VIRGINIA TABLE IX PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Fiscal Total Current Tax Percent of Delinquent Tax Total Tax Year Tax Levy Collections L o evy C llected Collections (1) Collections 2010 $ 57,723,007 56,$ 608,265 98.07 % $ 1,752,818 58,361,$ 083 101.11 % 2009 58,033,136 57, 117,222 98.42 1,919,887 59,037,109 101.73 2008 55,670,857 53, 115,813 95.41 2,738,960 55,854,773 100.33 2007 51,474,969 50, 586,848 98.27 1,317,013 51,903,861 100.83 2006 46,625,077 44, 440,033 95.31 1,826,999 46,267,032 99.23 2005 42,781,336 42, 089,865 98.38 1,259,709 43,349,574 101.33 2004 39,321,514 38, 825,366 98.74 1,521,987 40,347,353 102.61 2003 36,129,630 35, 643,434 98.65 1,466,705 37,110,139 102.71 2002 33,524,660 32, 853,442 98.00 1,554,131 34,407,573 102.63 2001 30,888,410 29, 817,511 96.53 2,054,718 31,872,229 103.19 Source: Treasurer of the City of Charlottesville (1 Delinquent Collections include receipts collected within the fiscal year for all prior year levies. -123- CITY F HARLOTT LLE RGINIA O C ESVI , VI TABLE X ESTIMATED VALUE OF TAX-EXEMPT PROPERTY LAST TEN FISCAL YEARS JUNE 30, 2010 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Federal $ 21,652,500 $ 21,652,500 $ 18,828,200 18,828,$ 200 18,82$ 8,200 16$ ,834,000 $ 15,881,200 $ 15,881,200 $ 22,749,500 $ 22,070,100 Stat
e and regional 323,065,400 323,065,400 414,912,500 388,439, 300 390,67 6,700 350 ,604,200 331,839,600 331,839,600 326,495,100 309,809,200 Local 190,835,500 188,028,700 221,429,200 202,665, 400 196,32 1,600 175 ,287,100 165,172,900 163,376,600 147,835,200 134,447,200 Religious, charitable, educational and other 517,652,100 512,451,600 230,378,400 259,787, 900 259,78 2,700 224 ,318,000 205,718,800 203,105,100 188,658,000 165,317,100 Total $ 1,053,205,500 1,$ 045,198,200 $ 885,548,300 $ 869,720,800 $ 865,609,200 $ 767,043,300 $ 718,612,500 $ 685,737,800 714,202,500 $ 631,643,600 $ Source: Office of the Real Estate Assessor, City of Charlottesville, Virginia -124- and Transfers ebt per Expenditures Capita et Bonded General Fund Ratio of Debt Service to Total CITY F TT O CHARLO ESVILLE, VIRGINIA TABLE XI RATIO OF NET BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS General Fund Expenditures Net and Net Other Ratio of Net N Fiscal Real a Est te Gross Bonded Total Debt Financing Bonded Debt to D Year Population (1) Assessed Value Bonded Debt (2) Debt (2) Service (2) Sources Assessed Value 2010 40,745 $ 5,257,182,700 $ 72,117,050 62,570,$ 002 8,441, $ 127, 933 $ 775,530 % 1.19 $ 6.61 1,536 % 2009 40,745 5,251,290,000 67,663,745 58,506, 861 7,417, 263 124, 813,778 1.11 1,436 5.94 2008 40,745 5,181,954,900 57,773,730 49,846, 598 6,828, 517 127, 423,919 0.96 1,223 5.36 2007 40,745 4,826,991,400 49,829,415 44,287, 970 7,579, 457 115, 691,159 0.92 1,087 6.55 2006 40,745 4,211,772,300 40,897,600 35,934, 791 7,074, 417 107, 022,501 0.85 882 6.61 2005 40,745 3,595,449,500 45,135,784 41,220, 825 5,529, 690 100, 130,411 1.15 1,012 5.52 2004 40,099 3,179,150,000 31,353,969 29,241, 281 5,406, 998 96,651,703 0.92 729 5.59 2003 40,099 2,842,231,400 34,651,566 33,670, 956 5,523, 592 91,460,640 1.18 840 6.04 2002 40,099 2,541,425,500 31,563,284 30,756, 020 5,253, 722 84,994,437 1.21 767 6.18 2001 40,099 2,302,594,900 32,136,002 30,767, 002 4,995, 390 86,370,046 1.34 767 5.78 (1) 2000 U.S. Census for FY 05 (revised October 2005) and FY01-04; 1990 U.S. Census for prior years. (2) Excludes self-supporting utility indebtedness, net of balance available in Debt Service Fund. -125- $ Expenditures TABLE XII Ratio of Debt Service to General Governmental CITY OF CHARLOTTESVILLE, VIRGINIA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO GENERAL GOVERNMENTAL EXPENDITURES AND OTHER FINANCING USES LAST TEN FISCAL YEARS General Fiscal Total Governmental Year Prin al cip Interest Deb Service E t xpenditures 2010 $ 5,926,396 $ 2,407,670 $ 8,334,066 178,323,894 % 4.67 2009 5,241,154 2,029,199 7,270,353 174,450,273 4.17 2008 4,780,080 1,926,049 6,706,129 172,263,608 3.89 2007 4,239,294 1,534,641 5,773,935 158,216,806 3.65 2006 4,076,916 1,708,401 5,785,317 142,972,737 4.05 2005 3,804,966 1,249,327 5,054,293 136,982,686 3.69 2004 3,770,342 1,261,527 5,031,869 132,361,768 3.80 2003 3,352,097 1,477,707 4,829,804 123,023,159 3.93 2002 3,094,971 1,553,390 4,648,361 116,966,323 3.97 2001 3,066,718 1,674,285 4,741,003 110,655,950 4.28 Note: Excludes Capital Projects Fund expenditures and payments to escrow agents. -126- Type Activities CITY OF CHARLOTTESVILLE, VIRGINIA TABLE XIII RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Governmental Activities Business- Fiscal Year General Obligation Bonds Liter Loa ary ns N Pa otes yable Gov Total ernmental Debt General Obligation Notes Notes Payable Total Pri Governm mary ent Per Capita Debt 2 Percentage of Personal Income 1 2010 $ 72,117,050 144$ ,861 2,0 $ 86,798 $ 74,348,709 $ 151, 25,212,952 $ 99, 791 $ * 2,447 713,452 $ 2009 67,492,366 171 ,379 2,3 99,760 70,063,505 22,187, 636 244, 456 92,495,597 * 2,270 2008 57,575,833 197 ,897 2,9 55,229 60,728,959 20,874, 169 367,94 5 81,9 71,073 % 2,012 4.41 2007 49,605,000 224 ,415 3,2 22,604 53,052,019 19,495, 002 128,70 9 72, 675,730 4.28 1,784 2006 40,646,666 250 ,933 4,8 78,950 45,776,549 17,948, 331 179,38 6 63, 904,266 3.76 1,568 2005 44,758,333 377 ,451 5,9 32,885 51,068,669 19,461, 667 130,00 0 70,660, 336 4.42 1,734 2004 30,850,000 503 ,969 3,6 80,416 35,034,385 20,875,000 55,909, – 385 3.72 1,372 2003 33,969,000 682 ,566 4,4 63,473 39,115,039 22,236,000 61,351, – 039 4.38 1,530 2002 30,749,000 814 ,284 4,5 65,051 36,128,335 19,276,000 55,404, – 335 4.07 1,382 2001 31,190,000 946 ,002 1,4 30,318 33,566,320 13,605,000 47,171, – 320 3.48 1,176 * Information not available at this time. Source: (1) Regional Economic Information System, Bureau of Economic Analysis (Albemarle County + City of Charlottesville personal income) adjusted for population (2) U.S. Census Bureau population figures -127- CITY F TT O CHARLO ESVILLE, VIRGINIA TABLE XIV COMPUTATION OF LEGAL DEBT MARGIN LAST TEN FISCAL YEARS JUNE 30, 2010 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Assessed value of real property $ 5,257,182,700 5,251,$ 290,000 5,18$ 1,954,900 4$ ,826,991,400 $ 4,211,772,300 $ 3,595,449,500 $ 3,179,150,000 2,842,23$ 1,400 2,541,425,500 $ 2,302,594,900 $ Debt limit – 10% of assessed value 525,718 $ ,270 525,$ 129,000 51$ 8,195,490 $ 482,699,140 $ 421,177,230 $ 359,544,950 317,915, $ 000 284,22$ 3,140 254,142,550 $ $ 230,259,490 Amount of debt applicable to debt limit 90,014,613 83, 094,257 73,675,998 67,005,577 53,883,124 66,615,375 53,796,697 60,37 0,429 54,597,071 46,009,954 Legal debt margin $ 435,703,657 442,$ 034,743 44$ 4,519,492 $ 415,693,563 $ 367,294,106 $ 292,929,575 264,118, $ 303 223,85$ 2,711 199,545,479 $ $ 184,249,536 Total net debt applicable to the limit 17.12% 15.82% 14.22% 13.88% 12.79% 18.53% 16.92% 21.24% 21.48% 19.98% percentage of debt limit Note: The City has no overlapping debt. -128- V 1) on(1) mber of Values(3) tial CITY OF CHARLOTTESVILLE, VIRGINIA TABLE XV PROPERTY VALUES, CONSTRUCTION AND BANK DEPOSITS LAST TEN FISCAL YEARS Institutional and other Commercial Residen Construction(1) Construction( Constructi Fiscal Number of Number of Nu Bank deposits (2) Calendar Property Year Permits Value Permits Value Permits alue (in thousands) Year Taxable Nontaxable 2010 14 $ 1,865,091 39, 396 $ 852,193 977 $ 28,812,651 $ 2,171,455 2010 $ 5,257,182,700 $ 1,053,205,500 2009 5 866,130 51, 411 963,024 1,303 44,220,891 2,029,918 2009 5,251,290,000 1,045,198,200 2008 19 1,591, 554 437 57, 477,674 1,877 64,651,771 2,033,978 2008 5,181,954,900 885,548,300 2007 12 785,502 38, 399 422,556 2,034 82,434,409 2,014,905 2007 4,826,991,400 869,720,800 2006 7 3,618, 401 486 42, 882,837 1,911 91,935,173 1,906,178 2006 4,211,771,400 865,609,200 2005 14 784,092 25, 373 166,409 1,795 63,368,326 1,919,294 2005 3,595,449,500 767,043,300 2004 33 1,749, 581 452 34, 525,328 1,514 34,378,480 1,470,055 2004 3,179,150,000 718,612,500 2003 51 1,859, 381 366 28, 858,612 1,329 32,500,033 1,405,099 2003 2,842,141,400 714,202,500 2002 85 8,726, 805 493 30, 910,925 1,402 22,590,140 1,332,512 2002 2,540,652,400 685,737,800 2001 51 7,210, 779 465 18, 274,678 1,769 24,885,521 1,336,503 2001 2,440,357,377 631,643,600 (1) Department of Neighborhood Planning, City of Charlottesville (2) FDIC Summary of deposits (3) Real property values only -129- CITY F TT O CHARLO ESVILLE, VIRGINIA TABLE XVI DEMOGRAPHIC STATISTICS LAST TEN CALENDAR YEARS Total Taxable Sales School Unemployment Personal Per Capita Sales (5) per Year Population (1) Membership (2) Rate (3) Income (4) Income (4) (thousands) Capita (000s) 2010 40,745 3,915 * * * * * 2009 40,745 3,997 6.4 * * $ 830,895 $ 20,393 2008 40,745 4,089 3.9 $ 46,969 6,383,281 $ 867,331 21,287 2007 40,745 4,084 3.1 6,059,782 45,275 895,967 21,990 2006 40,745 4,130 3.2 5,757,875 43,416 854,623 20,975 2005 40,745 4,224 3.7 5,240,402 39,981 721,660 17,712 2004 40,099 4,224 4.0 4,901,470 37,828 775,827 19,348 2003 40,099 4,230 4.1 4,544,173 35,464 726,123 18,108 2002 40,099 4,256 3.9 4,334,369 33,975 706,597 17,621 2001 40,099 4,305 3.6 4,278,750 33,845 709,893 17,704 * Information not available at this time. Source: (1) U.S. Census Bureau (2) Fall Membership Charlottesville Public Schools (3) Virginia Employment Commission, Local Area Unemployment Statistics, Charlottesville Community Profile and represents unemploymen
t for the calendar year. (4) Regional Economic Information System, Bureau of Economic Analysis, U.S. Department of Commerce: Albemarle County + City of Charlottesville (5) Annual Report, Taxable Sales in Virginia Counties and Cities, Commonwealth of Virginia, Department of Taxation -130- s CITY OF CHARLOTTESVILLE, VIRGINIA TABLE XVII PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS PRIOR JUNE 30, 2010 2010 2001 Employer Rank Number of Employee Rank Number of Employees University of Virginia Medical Center 1 1000+ 1 1000+ Martha Jefferson Hospital 2 1000+ 2 1000+ City of Charlottesville 3 1000+ 3 1000+ Charlottesville City School Board 4 500-999 5 500-999 Aramark Campus 5 500-999 6 500-999 Region Ten Community Services 6 500-999 11 250-499 SNL Security LP 7 250-499 19 100-249 United States Postal Service 8 250-499 10 250-500 Pharmaceutical Research Association 9 250-499 13 250-499 Kroger 10 250-499 12 250-500 Matthew Bender & Company 11 250-499 8 500-999 University of Virginia/Blue Ridge Hospital 4 1000+ U.S. Department of Defense 7 500-999 Wal Mart 9 250-499 Source: Virginia Employment Commission 50 Largest Employers during 4th Quarter (October, November, December) 2009 -131- Total 294.75 299.75 285.75 270.50 270.50 270.00 244.00 243.00 Total 270.50 270.93 270.93 270.93 273.50 277.50 281.00 276.00 City-Wide Total 925.85 933.11 920.86 904.99 909.51 919.96 900.05 897.05 These positions are funded cooperatively with Albemarle County. CITY OF CHARLOTTESVILLE, VIRGINIA TABLE XVIII GOVERNMENT EMPLOYEES BY FUNCTION JUNE 30, 2010 Department 2010 2009 2008 2007 2006 2005 2004 2003 Management Mayor/Council 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 City Manager’s Office/Administration and Communications 8.00 8.00 9.00 9.00 10.00 10.00 9.00 10.00 City Manager’s Office/Office of Economic Development 4.00 4.00 4.00 4.00 4.00 5.00 5.00 5.00 City Attorney 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 Voting Registrar 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 Total 21.50 21.50 22.50 22.50 23.50 24.50 23.50 24.50 Internal Services Finance Department: Purchasing/Risk Management/Warehouse 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 Information Technology 18.00 18.00 18.00 18.00 18.00 18.00 17.66 17.66 Human Resources 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 Total 32.00 32.00 32.00 32.00 32.00 32.00 31.66 31.66 Financial Services Commissioner of Revenue 13.00 13.00 13.00 13.00 13.00 13.00 13.00 13.00 Finance Department: Management/Real Estate Assessment/Gas and Water Collections 34.00 34.00 33.00 33.00 32.00 35.50 35.51 35.51 Treasurer 13.00 13.00 13.00 13.00 13.00 13.00 12.50 12.50 Total 60.00 60.00 59.00 59.00 58.00 61.50 61.01 61.01 Healthy Families & Community Charlottesville/Albemarle Visitors Bureau 1 10.00 10.00 10.00 10.00 8.00 8.00 8.00 8.00 Community Attention 33.00 26.00 26.00 26.00 27.25 27.75 26.45 26.45 Children & Youth Commission/CCF 1.00 1.00 1.00 1.00 5.43 5.43 – – Department of Social Services 98.850 104.925 106.175 106.175 106.675 105.625 101.93 101.93 Neighborhood Development Services 32.00 32.00 31.00 30.00 29.00 29.00 26.50 28.50 Parks and Recreation/Parks Maintenance 38.00 39.00 40.00 40.00 36.00 36.00 33.00 33.00 Parks & Rec/Recreation 25.25 25.50 26.00 26.63 24.65 25.65 40.00 40.00 Parks & Rec/Golf Courses 8.00 9.00 9.00 8.75 9.00 11.00 18.00 18.00 Parks and Recreation/Downtown Mall – – – – 5.00 5.00 5.00 5.00 CDBG/HOME Grant Coordinator (Grant Funded) 1.00 1.00 1.00 1.00 – – – – Weed and Seed Grant 0.00 0.50 0.50 0.50 1.00 1.00 – – Total 247.10 248.925 250.675 250.055 252.01 254.46 258.88 260.88 Infrastructure/Transportation Public Works: Administration, Facilities Management and Maintenance 16.25 16.25 16.25 16.00 17.00 17.00 15.00 15.00 Public Works: School Building Maintenance 16.00 14.00 14.00 13.00 9.00 6.00 – – Public Works: Fleet Management 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 Public Works: Public Service Public Works: CTS/Greyhound Operations 51.00 78.00 51.00 81.50 51.00 70.50 51.00 66.00 51.00 66.00 53.50 68.50 53.50 76.50 54.50 76.50 Public Works: School Pupil Transportation 28.50 32.00 32.00 23.50 23.50 24.00 – – Public Works: Utilities 93.00 93.00 90.00 89.00 90.00 87.00 87.00 85.00 Public Works: Transfer to Schools – – – – 2.00 2.00 – – Public Safety & Justice City Sheriff 11.00 11.00 11.00 11.00 11.00 11.00 12.00 12.00 Commonwealth’s Attorney 13.50 13.50 13.50 13.50 11.50 11.50 10.50 10.50 Courts and Other Support Service 11.00 11.00 11.00 11.00 11.00 11.00 13.50 13.50 Fire Department: Operations 89.00 89.00 89.00 89.00 94.00 94.00 94.00 94.00 Police Department 146.00 146.43 146.43 146.43 146.00 150.00 151.00 146.00 Note: FTE positions. Comparable detailed position schedules are not available for fiscal years prior to 2003. 1 -132- CITY OF CHARLOTTESVILLE, VIRGINIA TABLE XIX OPERATING INDICATORS BY FUNCTION JUNE 30, 2010 2010 2009 2008 2007 2006 General Government Date of incorporation 1888 1888 1888 1888 1888 Form of government Council-Manager Council-Manager Council-Manager Council-Manager Council-Manager Area 10.4 square miles 10.4 square miles 10.4 square miles 10.4 square miles 10.4 square miles Bond rating: Moody’s Investor Services Aaa Aaa Aaa Aaa Aaa Standard & Poor’s Corporation AAA AAA AAA AAA AAA Number of employees: City (full-time) 925.85 933.1 919.9 904.0 905.5 School Board 795 796 793 792 810 Elections: Number of registered voters: Last general election – November, 2008 27,643 28,678 23,506 22,875 22,875 Last municipal election – November, 2009 * 23,506 23,506 23,506 23,059 23,059 Number of votes cast in: Last general election 20,122 20,122 6,086 10,208 10,208 Last municipal election 6,086 6,086 6,086 5,993 5,993 Percentage of registered voters voting in: Last general election 72.8% 70.2% 25.9% 44.7% 44.7% Last municipal election 25.9% 25.9% 25.9% 26.0% 26.0% * Municipal elections held in May were moved to November in 2007. Public Safety Fire protection: Number of firefighters and officers 86 87 87 87 91 (exclusive of volunteer firefighters) (exclusive of volunteer firefighters) Police protection: Number of police officers 117 117 117 117 116 Number of arrests – 2006 (excluding traffic) 5,514 5,773 5,910 6,139 6,492 Traffic Citations Issued 4,887 5,036 4,229 5,759 6,393 911 calls received 47,883 48,776 51,250 50,509 51,447 Cases investigated 1,140 1,268 1,202 1,338 1,224 Parking Violations Violations written 15,501 15,624 19,338 19,483 15,470 Building permits issued 1,387 1,719 2,333 2,445 2,404 Education Schools: Number of teachers 429 431 420 412 418 Number of students 3,915 3,997 4,089 4,063 4,130 Pupil: teacher ratio 9.13:1 9.27:1 9.74:1 9.86:1 9.87:1 (continued) -133- CITY OF CHARLOTTESVILLE, VIRGINIA TABLE XIX, CONTINUED OPERATING INDICATORS BY FUNCTION JUNE 30, 2010 2010 2009 2008 2007 2006 Public Utilities Municipal utilities: Gas: Number of customers 18,062 17,851 17,662 17,419 17,125 Average daily consumption 7,245 DTH 7,318 DTH 7,938 DTH 7,422 DTH 6,809 DTH Water: Number of customers 13,814 13,748 13,660 13,470 13,350 Average daily consumption 601 MCF 602 MCF 579 MCF 618 MCF 635 MCF Sewer: Number of customers 13,688 13,598 13,490 13,300 13,179 Average daily treatment 598 MCF 597 MCF 529 MCF 583 MCF 610 MCF Public Works Refuse disposed at Zion’s’ Transfer Station (City totals): Number of customers 13,200 13,200 13,200 13,200 13,200 Tons of domestic refuse 6,681 7,022 7,659 7,873 7,740 Tons of stumps, demolition material, and street sweeping 1,423 1,250 1,213 1,160 2,286 Note: Comparative data is not available for fiscal years prior to 2006. -134- CITY OF CHARLOTTESVILLE, VIRGINIA TABLE XX CAPITAL ASSET STATISTICS BY FUNCTION JUNE 30, 2010 2010 2009 2008 2007 2006 General Government Miles of streets 156 156 156 156 156 Number of streetlights 5,960 5,960 5,960 5,960 5,960 Public Safety Fire protection: Number of stations 3 3 3 3 3 Police protection: Number of stations 6 5 5 5 5 Number of vehicular patrol units 64 64 64 64 64 Total vehicles 126 126 126 126 126 Motor Cycles 6 6 6 6 6 Unmarked cars 42 42 42 42 42 Bicycle patrol 15 15 15 15 15 Education Number of schools 9 9 9 9 9 Parks, Recreation, & Cultur
e Number of parks 26 (987 acres) 26 (987 acres) 26 (987 acres) 26 (987 acres) 26 (987 acres) Number of golf courses 2 2 2 2 2 Number of swimming pools N b f i i l 5 4 6 6 6 Number of recreation centers 6 5 6 6 6 Number of libraries 3 3 3 3 3 Public Utilities Gas: Miles of gas main lines 315 314 308 302 298 Miles of gas service lines 217 214 211 207 204 Water: Water treatment plant capacity (millions of gallons per day) 19 MGD 19 MGD 19 MGD 19 MGD 19 MGD Miles of water lines 177.7 177 176 179 189 Number of fire hydrants 988 975 967 949 948 Sewer: Sewer treatment plant capacity (millions of gallons per day) 15 15 15 15 15 Miles of sanitary sewers 167 166 164 163 173 Note: Comparative data is not available for fiscal years prior to 2006. -135-
Scenario for Assignments 1-5
For Assignments 1-5, you are the new budgeting and finance administrator for your local government agency. Your first responsibility is to become familiar with the agency, the budget, programs, and capital projects. As the administrator, you will be responsible for analyzing, examining, proposing, and preparing the agency’s budget for the next five (5) years.

Note: Students cannot use New York City as a selected local government
Assignment 5: Multiyear Plans and Analysis
Due Week 10 and worth 100 points

Preparation

  • Review the document titled “City of Charlottesville 2010 Annual Comprehensive Plan” located in the course shell.

Write a three to four (3-4) page paper in which you:

  1. Review the “City of Charlottesville 2010 Annual Comprehensive Plan” and then complete Exercise 1 on page 152 using Exhibits C and D in the Annual Report and Table 9.4 on page 148. Change the title headers to the agency name. Save the Excel File as the agency’s name and include the Multiyear Plan.
  2. Analyze the comparison of ratios.
  3. Analyze the measures of liquidity.
  4. Analyze the long-term solvency.
  5. Analyze asset management rations.

Your assignment must follow these formatting requirements:

  • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA. Check with your professor for any additional instructions.
  • Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

  • Evaluate a budgeting system at any governmental level.
  • Analyze the scope and sequence of budgeting in terms of sources of revenues, purpose of government expenditures, budget cycles, budget preparation, and debt administration.
  • Examine the key components of developing multiyear plans and analyses.
  • Use technology and information resources to research issues in public budgeting and finance.
  • Write clearly and concisely about public budgeting and finance using proper writing mechanics.

 

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