Douglas County, Colorado 100 Third Street Castle Rock, CO (303) Douglas County Citizens, Table of Contents

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2 Description Douglas County, Colorado 100 Third Street Castle Rock, CO (303) Table of Contents Page To Our Citizens 2 Governmental Profile 3 Douglas County Board Goals 4 Revenues & Expenditures 5-8 Fund Balances 9-10 Debt 11 Financial Reporting Awards 12 Demographics & Statistics 13 Long-Term Outlook 13 Prepared by: The Douglas County Finance Department Member of Government Finance Officers Association of the United States and Canada To View Douglas County s Financial Reports go to: /transparency/financial Douglas County Citizens, It is the County s goal to ensure that you are kept up to date and informed on the County s financial position. Your confidence in us is directly related to the transparent and accurate availability of financial information. Therefore, it is with pride that we present to you, the citizens, our first Popular Annual Financial Report (PAFR) to provide you with an opportunity to learn more about the County s finances and our financial position. By reading this report, you are taking your first step toward understanding and participating in Douglas County s financial future. This report includes condensed and simplified information taken directly from the 2014 Comprehensive Annual Financial Report (CAFR). It is important for you to know that the information in this report is unaudited and is presented on a non-gaap (Generally Accepted Accounting Principles) basis. The financial information presented represents only the County s governmental fund and excludes proprietary and fiduciary fund information. The financial information provided is condensed and does not provide all of the financial statements and note disclosures required by GAAP. The CAFR is a more detailed and complete financial presentation which is prepared in conformity with GAAP and was audited by the County s independent auditors and received an unmodified (clean) audit opinion. We would like to thank you for your partnership and commitment to making sure that Douglas County remains a great place to live and raise your families. Your quality of life is the most important outcome of our work. We are committed to the diligent management of financial affairs in order to ensure the County s long-term financial health. We believe that together, we have established a strong financial foundation that will sustain the quality of life deserved by you, our citizens. Through continued diligence and hard work we remain optimistic and extremely positive about the future of Douglas County. Respectfully, The Douglas County Finance Department Page 2

3 Douglas County Commissioners About Douglas County Douglas County was formed in 1861 as one of the 16 original Colorado counties. The County covers 844 square miles along the I-25 corridor between Denver and Colorado Springs. A majority of residents live in urban designated areas, such as unincorporated Highlands Ranch, the City of Lone Tree, the City of Castle Pines, and the towns of Castle Rock (county seat), Parker and Larkspur. The County has a population of about 308,000; representing an increase of approximately 1.8 percent over the previous year. The County provides a wide range of services that include law enforcement and public safety, planning and zoning, parks and open space, highways and streets, culture and recreation, public health and human services, elections, and general administrative services. Roger Partridge, Jill Repella, David Weaver The three-member Board of County Commissioners (BOCC) serves as the legislative, policy-making, and administrative body governing the unincorporated areas of Douglas County. The commissioners are elected at large from one of three geographical districts and serve staggered four-year terms (term-limited to two terms). The BOCC is charged with the responsibility of providing adequate budget appropriations to fund statutory functions, as well as responding to the service needs of the citizens. The BOCC is required to adopt a final budget by Dec. 15 of each year. The adopted budget becomes the County s annual financial plan and mechanism to control spending. Map of Colorado (With DC Inset) Interesting Facts Douglas County Douglas County s surrounding counties are: Jefferson County to the west, Arapahoe County to the north, Elbert County to the east, and Teller County and El Paso County to the south. Elevations range from 5,400 feet along the prairies in the northeast, to 9,836 feet, the highest point, at Thunder Butte in the Pike National Forest. Page 3

4 Douglas County Government Goals: Personal and Public Safety When asked what tops the list for achieving a high quality of life, our citizens and business community report that living and working in a safe community is what they value most. That s why our investment in this goal is among the Board of Douglas County Commissioners highest priorities. Whether it s our proven and innovative solutions for wildfire preparation, mitigation, response and recovery; child and adult protection; road, bridge and building construction; our data-driven approach to crime and traffic safety; our combined efforts to enhance security in the safeguarding of students in the Douglas County School system; or the region s most-respected web-based systems to register and track sex offenders, millions of dollars are continually invested to keep you safe. Multimodal Transportation When you ask people what they love about Douglas County, they rave about the communities and the homes, the beauty of the views, the schools and the recreation opportunities all the very definition of quality of life. What never makes the list is traffic. No one talks about the great views of the car in front of them. The Board of Douglas County Commissioners understands that better than most. That s why millions of dollars are continually invested in maintaining and improving our transportation network. Because the way we see it, the only time your commute should seem like it s taking forever, is on those days when you decide to take the long way home. And breathe. Economic Foundation It is one thing to say you re pro-business and quite another to prove it by making it easier to do business within Douglas County than ever before. Douglas County is proud of its reputation for intentional and strategic commitments to effective partnerships with the business community. We re also proud of our commitment to wise and responsible investments in the foundational elements for a strong economy, as well as sustaining an environment where business can succeed. Because when barriers are eliminated, things tend to get done and business tends to succeed. Natural Resources For Douglas County to stay the great place we know and love, quality of life requires the County Commissioners focus on the high quality of our land, air, and water and protecting our wildlife by protecting their habitat. With that in mind, did you know that today through some exceptional partnerships more than 40 percent of all the land in Douglas County is public or protected land? And keeping with our belief that water is one of our most precious resources, 98 percent of residents and businesses served by central water service are covered by an approved water conservation plan accomplished through some additional, extraordinary partnerships with the County s many water providers. Protecting our natural resources does protect our quality of life. Community Services Working in partnership with others in our communities, we take on the tough issues of poverty and homelessness for our most vulnerable populations. Local non-profits, the faith-based community, as well as the state and federal governments work with us to help create the path for individuals and families to return to self-sufficiency. Helping to ensure that people have food on the table, a roof over their heads providing the resources and the path they need to become self-sufficient again, this is the outcome we celebrate. Page 4

5 Governmental Fund Summary: Statement of Revenues & Expenditures for Fiscal Year Ending Dec. 31, 2014 Revenue Net Change in Fund Balance $ (8,364,682) $ (1,810,393) $ 15,556,942 *Other Financing Sources/ (Uses) include items such as sale of assets, debt proceeds, transfers, etc. Millions Property Tax $ 104,190,283 $ 100,984,182 $ 99,238,977 Sales and Use Tax $ 54,909,390 $ 51,385,159 $ 47,557,212 Ownership Tax $ 9,470,132 $ 8,590,265 $ 7,780,022 Other Taxes $ 120,655 $ 151,314 $ 176,248 Licenses and Permits $ 7,785,314 $ 6,590,133 $ 7,645,470 Intergovernmental $ 35,220,636 $ 35,628,804 $ 36,644,437 Charges for Services $ 17,917,362 $ 17,952,604 $ 17,459,568 Fines and Forfeits $ 1,122,490 $ 1,256,052 $ 1,862,296 Interest on Investments $ 2,915,400 $ 2,510,957 $ 2,864,649 Miscellaneous $ 4,210,629 $ 3,483,575 $ 2,935,113 Total Revenue $ 237,862,291 $ 228,533,045 $ 224,163,992 Expenditures General Government $ 49,561,245 $ 43,827,881 $ 42,052,192 Judicial $ 7,589,062 $ 7,549,724 $ 7,540,303 Public Safety $ 53,724,887 $ 50,538,509 $ 49,301,586 Highways and Streets $ 62,063,479 $ 58,796,714 $ 43,560,700 Sanitation $ 77,667 $ 67,268 $ 69,989 Health and Human Services $ 26,088,002 $ 25,214,277 $ 25,490,751 Culture and Recreation $ 7,047,465 $ 6,938,468 $ 7,114,076 Conservation of Natural Resources $ 302,504 $ 306,514 $ 290,681 Economic Development $ 601,464 $ 432,237 $ 403,815 Developmental Disabilities $ 4,680,494 $ 4,515,393 $ 4,654,172 Community Services $ 275,316 $ 303,400 $ 327,079 Capital Outlay $ 30,050,783 $ 27,548,905 $ 15,955,990 Debt Service $ 4,576,485 $ 4,491,925 $ 24,234,535 Total Expenditures $ 246,638,853 $ 230,531,215 $ 220,995,869 Other Financing Sources / ( Uses)* $ 411,880 $ 187,777 $ 12,388,819 Revenues Expenditures Explaining the Statement of Revenues & Expenditures The Statement of Revenues and Expenditures provides a detailed account of all revenues and expenditures for governmental operations in Douglas County. The chart at the bottom left reports aggregate revenues and expenditures for all of Douglas County s 19 governmental funds (General, Road and Bridge, Human Services, Law Enforcement Authority, Road Sales and Use Tax, Justice Center Sales and Use Tax, Open Space Sales and Use Tax, Parks Sales and Use Tax, Conservation Trust, Developmental Disabilities, Sheriffs Forfeiture, Lincoln Station LID, Solid Waste Disposal, Woodmoor Mountain GID, Rocky Mountain High Intensity Drug Taskforce, Debt Service, Capital Expenditures, LID Capital Construction, and Capital Replacement Funds). This chart is presented on a non-gaap basis. More detailed GAAP basis financial statements can be found in the County s CAFR. Revenues represent dollars received and expenditures can be thought of as the costs of providing services to the citizens of Douglas County. The three-year history of revenues and expenditures show that both have increased. Revenues increased $13.8 million from 2012 to The largest increase came from increased Sales and Use Tax revenue due to an improving economy. Property tax revenue also increased over this time period mainly due to new construction as the population in Douglas County increased 4.2 percent from 2012 to Property tax revenue increased 5 percent during this same time frame. Expenditures have increased $37.7 million in total, over the same time period. The largest increases were in the categories of Highways and Streets and Capital Outlay. The large increases in these categories were due to a commitment by the BOCC to invest resources in improving the County s transportation network both through partnering opportunities with other agencies and by committing a significant amount of resources to the maintenance and repair of County-owned roads and bridges. Page 5

6 Douglas County, Colorado Tax Revenue by Source Douglas County, Colorado Additional Revenue Sources Millions Millions Property Tax Sales and Use Tax Specific Auto Ownership Tax Other Taxes Licenses and Permits Intergovernmental Charges for Services Fines and Forfeits Interest on Investments Miscellaneous 2012 Tax Revenues Douglas County s governmental revenues totaled $237,862,291 in The majority of total revenue (70.9 percent) was generated through taxes. Property taxes ($104.2 million) fund not only the majority of all general governmental expenses, but also assist with the construction/maintenance of roads and bridges within the County, help to support various community service programs and fund the majority of the patrol functions within the Sheriff s office through the dedicated Law Enforcement Authority property tax. Douglas County collects a sales/use tax of one cent on each dollar. These funds support additional road and bridge projects, construction and maintenance of the Justice Center and the purchase and maintenance of open space and parks within the County. The County collected $54.9 million in sales and use taxes in Finally, through the auto ownership tax, the County collected an additional $9.5 million in taxes which is used in the Road and Bridge Fund and the Law Enforcement Authority Fund. Additional Revenue Sources Licenses and Permits Revenues collected for the issuance of various licenses and permits such as building permits, marriage licenses, hand-gun permits, etc. Intergovernmental The County received $35,220,636 through various grant programs in These are funds received from other governments for the purpose of financing the day-to-day costs of a specific program. The largest portion of this revenue source (57.4 percent) is used to support the County s Health and Human Services programs. Charges for Services Charges for services rendered to County customers. The largest collector of this type of revenue is the County Clerk for the recording of documents and the issuance of motor vehicle registrations/titles (the latter of which the State of Colorado pays the County a set rate for). The County Treasurer also collects a significant portion of this revenue source through the fees charged to other governments for the collection and subsequent distribution of their property taxes. Fines and Forfeits Fines collected through the Court system to include traffic fines, parking fines, community services fines, etc. Page 6

7 Interest on Investments Income derived from the investment of County funds in securities allowed by the County s investment policy. Investment earnings are dependent on market conditions and the cash available for investment. Miscellaneous Includes revenues received that are not otherwise categorized, such as refunds, reimbursements, donations, recycling revenue, etc. For a more complete listing of revenue sources, please refer to the Douglas County Revenue Manual included in the County s annual budget, which is located here: Douglas County Expenditures 2.86% 1.90% 1.86% 0.51% Highways and Streets 3.08% 10.58% 12.18% 20.09% 25.16% 21.78% Public Safety General Government Capital Outlay Health and Human Services Judicial Culture and Recreation Developmental Disabilities Debt Service Other Expenditures The County provides a wide range of services that include law enforcement and public safety, planning and zoning, parks and open space, highways and streets, culture and recreation, public health and human services, elections and general administrative services. Governmental fund expenditures increased $16.4 million (7.2 percent) in 2014 compared to With the consistent improvement of the economy and through prudent planning, the Commissioners have assigned the fund balance to be strategically reinvested in the community in alignment with the board goals of Personal and Public Safety, Multimodal Transportation, Economic Foundations, Natural Resources and Community Services. Highways and Streets Expenditures in this category provide for the construction and maintenance of roads and bridges located in the County. Public Safety Expenditures for the Sheriff s office administration, patrol, investigations and detentions, the County Court and the Coroner s office. General Government Expenditures incurred by administrative departments such as the Board of Page 7

8 County Commissioners, the County Manager, Human Resources, Finance Department, County Attorney, Information Technology, Facilities, and Fleet. Capital Outlay Expenditures used to acquire or upgrade capital assets. Capital assets include property, buildings, equipment and infrastructure (e.g., roads, bridges) with a cost of $5,000 or more and a useful life of more than one year. Health and Human Services Expenditures associated with providing various public assistance programs and welfare activities. Judicial The cost to the County for their portion of the expenses related to the 18 th Judicial District Attorney, an elected official responsible for the prosecution of all criminal case filings. The County shares the 18 th Judicial District costs with Arapahoe, Elbert and Lincoln counties. Culture and Recreation Expenditures used for the maintenance and administrative functions of the County s open space, parks, fairground facilities and the Douglas County Fair and Rodeo. Developmental Disabilities These expenditures must be used for the benefit of County citizens with developmental disabilities and their families. Debt Service Expenditures incurred for outstanding debt obligations held by the County. Other This includes expenditures not otherwise listed above such as sanitation, economic development, natural resources and community services Expenditures Per Capita The County completed work on several capital projects in 2014, including the completion of the second phase of expansion at the Robert Christensen Justice Center, construction of the Quebec Street Pedestrian Bridge, the purchase of 295 acres of land to facilitate the construction of the Roxborough/U.S. 85 southern connector, and the purchase and preservation of an additional 440 acres of open space. The County plans to continue using its strong financial position to benefit citizens and taxpayers in 2015 and beyond. To improve public safety, $8.9 million is budgeted in 2015 for improvements at the existing Douglas County Justice Center, and for the beginning phases of constructing an Emergency Vehicle Operators Course. Some of the plans to improve transportation include $14.9 million budgeted to facilitate ongoing road repair and maintenance. Additionally, in an ongoing effort to improve overall transportation infrastructure, the County has set aside $5.2 million to take advantage of partnering opportunities by leveraging available funds with other local entities and governments to fund projects such as a new light rail station, a new pedestrian/bicycle bridge in Lone Tree and various improvements to the C-470 corridor. The County continues its ongoing commitment to open space, regional parks and trail systems. There were 440 acres of additional land purchased in 2014 for conservation purposes. The County currently manages 48,741 acres of public open space land and our Open Space department continues to evaluate the benefits of additional land that may become available for purchase. Page 8

9 Fund Balance: What is it and why is it important? Fund Balance is the difference between what the County owns (assets) and what the County owes (liabilities) in each fund. There are several reasons why it is important to maintain a healthy fund balance. A healthy fund balance is a critical factor in the County s ability to plan for the future and budget for necessary improvements to, or growth of, the infrastructure needed to provide residents with the services they need. A healthy fund balance also provides funds for unforeseen expenses or emergencies. Fund balance also reduces the need for short-term borrowing by assuring sufficient cash flow. Finally, fund balance demonstrates financial stability, which enhances the County s bond rating and keeps debt issuance costs lower should the need arise to issue debt to fund projects/improvements. All of the County governmental funds combined have a fund balance of $226.6 million. Fund balances in all funds, except the General Fund, are already dedicated for a specific use due to restrictions on the revenue collected by those funds or by the type of fund. The first graph below details the total fund balance by function. The County s chief operating fund is the General Fund, which accounts for all revenues and expenditures applicable to the general operations of the government. Revenues in this fund are derived primarily from property taxes. Throughout the year, the fund balance for the County s general fund is monitored to assure that adequate levels are maintained to mitigate risks and provide back up for possible revenue shortfalls. The Government Finance Officers Association (GFOA) recommends, at the very minimum, general purpose governmental funds should maintain an unrestricted fund balance of no less than two months of general fund operating expenses. For fiscal year 2014 this amount equates to $17.5 million Total Douglas County Governmental Fund Balance: $226,578,299 Open Space/Parks 19,062,525 Capital Projects 23,155,090 General 58,973,377 Public Safety, 40,674,988 Roads and Bridges 78,581,266 Community Services 6,131,053 Page 9

10 On Dec. 31, 2014 the General Fund had a total fund balance of $59 million, a decrease of just more than $900,000 from 2013 year-end. Of the total fund balance, $6.7 million is either non-spendable (prepaid expenses) or restricted by entities outside of the County (e.g. state, federal grant funds, TABOR emergency requirements). An additional $4.6 million has already been committed to various projects through contracts and/or purchase orders already approved by the BOCC. can be attributed to conservative budget practices and careful planning for the future. This leaves $46.6 million of assigned and $1 million in unassigned funds available for use by the County. The assigned portion of the fund balance contains $11.2 million, which was immediately utilized on Jan. 1, 2015 to account for subsequent year expenditures. The assigned fund balance also consists of $1.5 million in smaller purchase orders previously approved by directors or managers and $4.9 million required to be held as working capital per County policy. This leaves the County with about $30 million that can be used to facilitate new projects and/or partnering efforts in the future, such as necessary technology upgrades and the planned light rail station at RidgeGate Boulevard. The strong fund balances in Douglas County 2014 Douglas County General Fund Balance Breakdown $58,973,377 Unassigned Funds $1,021,015 Non-Spendable and Restricted Funds $6,744,927 Committed Funds $4,580,709 Assigned Funds $46,626,726 Page 10

11 Douglas County Debt Douglas County s current total debt is $31.9 million (interest included). The County s current debt is solely dedicated to road improvements ($7.9 million), and open space/parks ($24 million). These are special revenue obligations secured by pledged revenues from voter-approved sales and use tax. We have leveraged this debt by using it to gain funding from partners, such as the Colorado Department of Transportation (CDOT) and Great Outdoors Colorado (GOCO). The U.S. 85/C-470 flyover, RidgeGate Boulevard, and Greenland Ranch project are all excellent examples of leveraging these dollars. GOCO has provided almost $39 million in grants to Douglas County since In August 2014, Standard and Poors (a national rating agency) raised the Douglas County implied general obligation bond rating from AA+ to AAA with a stable outlook. In Standard and Poors press release, they noted the following factors as affecting their assessment. Douglas County s local economy is very strong. Douglas County s management conditions are strong with good financial practices. Very strong liquidity supports Douglas County s finances. Douglas County s debt and contingent liabilities profile is very strong. Douglas County has no general obligation debt and no outstanding certificates of participation. Total Total Debt Final Year End New Debt Year End Revenue Bonds Maturity 2013 Debt Payments 2014 Open Space ,877,248-1,981,412 11,895,836 Open Space ,047, ,860 12,054,944 26,925,052-2,974,272 23,950,780 Road Improvement ,506,037-1,601,662 7,904,375 Total Revenue Bonds 36,431,089-4,575,934 31,855,155 Page 11

12 Financial Reporting Awards The Government Finance Officers Association (GFOA), founded in 1906, represents public finance officials throughout the United States and Canada. The GFOA s mission is to enhance and promote the professional management of governmental financial resources by identifying, developing, and advancing fiscal strategies, policies and practices for the public benefit. The GFOA has established several highly regarded professional recognition programs to encourage and assist state and local governments of all types and sizes to improve the quality of their financial management and to recognize their achievement. This document is the inaugural issue of the Douglas County Government s Popular Annual Financial Report. The GFOA issues an award for Outstanding Achievement in Popular Annual Financial Reporting to governments that publish a Popular Annual Financial Report in which the contents conform to program standards of creativity, presentation, understandability, and reader appeal. We are hopeful that this report will conform to the Popular Annual Financial Reporting requirements, and we will be submitting it to the GFOA to determine its eligibility for an award. Certificate for Achievement for Excellence in Financial Reporting The GFOA awarded Douglas County Government a certificate for achievement for excellence in financial reporting for its Comprehensive Annual report for the fiscal year ended Dec. 31, The County has received this prestigious award each year for more than a quarter of a century. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal regulations. A certification is valid for a period of one year only. The finance department believes that the current comprehensive annual financial report continues to meet the Certification of Achievement Program s requirements and we have submitted it to the GFOA to determine its eligibility for another certificate. Distinguished Budget Presentation Award - Additionally, the GFOA presented a Distinguished Budget Presentation Award to the County for its Annual Budget for the fiscal year beginning Jan. 1, In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communication device. This award is valid for a period of one year only. We believe the 2015 budget document continues to conform to the program requirements, and we have submitted it to the GFOA to determine its eligibility for another award. Page 12

13 2014 Douglas County Demographics and Economic Statistics Top 5 Employers Douglas County School District 5,470 CH2M 2,000 EchoStar Communications 1,930 HealthONE: Sky Ridge Medical 1,300 Western Union 1,100 Population 308,000 Douglas County Employees 1,100 Personal Income Per Capita $77,944 Unemployment Rate 4.5% Public School Enrollment 67,000 Clerk and Recorder Motor Vehicle Registrations 293,593 New and Cancelled Voter Registration 34,617 Registered Voters 221,169 Public Safety Calls for Service 117,980 Total Crimes Reported 10,772 Number of Bookings 4,933 Autopsies Performed 112 Culture and Recreation Long-Term Financial Planning The County currently projects revenues, expenditures and available fund balances for five-year periods to enable strategic planning opportunities and anticipate potential future challenges. No arbitrary balancing entries are made to artificially balance the current or subsequent year s budgets. The County distinguishes between and matches one-time revenues with one-time expenditures and ongoing revenues with ongoing expenditures. This best practice is a key to helping ensure the future financial stability of the County. The BOCC-adopted policy manual specifically states that with respect to strategic planning for projects, services and activities with a fiscal impact, the County Manager may not jeopardize either the programmatic or the fiscal integrity of County Government. The budget process in the County follows a sound and balanced approach and aligns with the BOCC goals of personal and public safety, transportation, community services, economic foundations and natural resources and uses the following guiding principles: Avoid raising fees or taxes. Rely upon realistic revenue forecasts. Maintain stable reserves. Improve the quality of services provided to our community. The 2015 approved budget is $331.2 million for all funds. The budget contains $130.5 million for new onetime initiatives including capital projects and maintenance. Of the total amount budgeted for new initiatives, $73.1 million is budgeted for transportation projects, $8.9 million will go toward improving public safety, and $48.5 million is dedicated to economic programs, open space, parks, vehicle replacements and technology improvements. Park Reservations 4,242 Event Center Bookings 2,170 County Assessor Parcels Assessed 136,994 Human Services 100 Third Street, Castle Rock, Co / TTY Follow Us On: Clients Served (households) 2,660 Individuals Receiving Commodities 9,138 Page 13

14 Finance Department 100 Third Street Castle Rock, CO