IREDELL COUNTY NORTH CAROLINA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED

Transcription

1 IREDELL COUNTY NORTH CAROLINA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED June 30, 2008

2 Exhibit IREDELL COUNTY, NORTH CAROLINA Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2008 Introductory Section: TABLE OF CONTENTS Page Letter of Transmittal 1-9 GFOA Certificate of Achievement for Excellence 10 in Financial Reporting Organizational Chart 11 List of Principal Officials 12 Financial Section: Independent Auditors' Report Management's Discussion and Analysis Basic Financial Statements: Government-Wide Financial Statements: A Statement of Net Assets 29 B Statement of Activities Fund Financial Statements: C Balance Sheet - Governmental Funds D E F Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 34 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds to the Statement of Activities 35 General Fund - Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 36

3 Exhibit IREDELL COUNTY, NORTH CAROLINA Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2008 TABLE OF CONTENTS Page Fund Financial Statements (continued): G Statement of Net Assets - Proprietary Funds 37 H Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds 38 I Statement of Cash Flows - Proprietary Funds 39 J Statement of Fiduciary Net Assets - Fiduciary Fund 40 Notes to the Financial Statements Schedule Required Supplemental Financial Data: A-1 Law Enforcement Officers' Special Separation Allowance - Required Supplementary Information 76 A-2 Law Enforcement Officers' Special Separation Allowance - Required Supplementary Information - Notes to the Required Schedules 77 Supplementary Information: General Fund: B-1 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Major Governmental Fund: C School Capital Fund - Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 88 C-2 School Projects 2008 COPS - Major Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 89

4 Schedule IREDELL COUNTY, NORTH CAROLINA Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2008 TABLE OF CONTENTS Page Nonmajor Governmental Funds: D-1 Combining Balance Sheet - 90 D-2 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 91 Nonmajor Special Revenue Funds: E-1 Combining Balance Sheet E-2 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances E-3 Emergency Telephone System Fund: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 96 E-4 Transportation Services Fund: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 97 E-5 Parks Reserve Fund: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 98 E-6 Fire District Fund: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 99 E-7 Capital Reserve Fund: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 100 E-8 Juvenile Crime Prevention Grant Fund: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 101 E-9 CDBG Pratt Industries Fund: Schedule of Revenues, Expenditures, and and Changes in Fund Balance - Budget and Actual 102

5 Schedule IREDELL COUNTY, NORTH CAROLINA Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2008 TABLE OF CONTENTS Page Nonmajor Capital Project Funds: F-1 Combining Balance Sheet 103 F-2 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 104 Nonmajor Capital Project Funds (continued): F-3 Department of Social Services Facility Project: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 105 F-4 Iredell County North Iredell Park: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 106 F-5 Community College Construction Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 107 Enterprise Fund: G-1 Solid Waste Disposal Facility: Schedule of Revenues and Expenditures, and Other Financing Sources (Uses) - Budget and Actual (Non-GAAP) G-2 Expansion Project -COPS 2008 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 110 G-3 Phase IV Construction and Land Purchase Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 111 Internal Service Funds: H-1 Combining Statement of Net Assets 112 H-2 Combining Statement of Revenues, Expenses, and Changes in Net Assets 113

6 Schedule IREDELL COUNTY, NORTH CAROLINA Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2008 TABLE OF CONTENTS Page Internal Service Funds (continued): H-3 Combining Statement of Cash Flows 114 H-4 Employee Health Care Benefits: Schedule of Revenues and Expenditures - Financial Plan and Actual (Non-GAAP) 115 H-5 Workers' Compensation Benefits: Schedule of Revenues and Expenditures - Financial Plan and Actual (Non-GAAP) 116 Agency Funds: I-1 Combining Statement of Changes in Assets and Liabilities Additional Financial Data: J-1 Schedule of Ad Valorem Taxes Receivable 119 J-2 Analysis of Current Year Levy 120 Statistical Section: 1 Net Assets by Component, Last Six Fiscal Years Changes in Net Assets, Last Six Fiscal Years Fund Balances, Governmental Funds, Last Six Fiscal Years Changes in Fund Balances, Governmental Funds, Last Ten Fiscal Years Assessed Value and Actual Values of Taxable Property, Last Ten Fiscal Years Direct and Overlapping Property Tax Rates, Last Ten Fiscal Years 127

7 Schedule IREDELL COUNTY, NORTH CAROLINA Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2008 TABLE OF CONTENTS Page Statistical Section (continued): 7 Principal Property Taxpayers, Current Year and Nine Years Ago Property Tax Levies and Collections, Last Ten Fiscal Years Ratios of Outstanding Debt by Type, Last Ten Fiscal Years Ratios of Net General Bonded Debt Outstanding, Last Ten Fiscal Years Legal Debt Margin Information, Last Ten Fiscal Years Pledged-Revenue Coverage, Last Ten Fiscal Years Demographics and Economic Statistics, Last Ten Fiscal Years Principal Employers, Current Year and Five Years Ago Full-Time Equivalent County Government Employees by Function, Last Ten Fiscal Years Operating Indicators by Function/Program, Last Ten Fiscal Years Capital Assets Statistics by Function/Program, Last Ten Years 138

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18 Iredell County Organizational Chart **Board of Commissioners **Sheriff *County Manager **Register of Deeds *Clerk to Board *County Attorney Deputy County Manager Assistant County Manager Finance & Admin Human Resources EMS Finance Personnel Purchasing Safety Fire Marshal ISM Veterans Service Dept of Planning ECOM/Emergency Mgt & Development Tax Administration Planning Animal Control & Land Records Zoning *County Assessor Addressing Solid Waste Mgt *Tax Collector Erosion Control Landfill Mapping Transfer Stations Revaluation Dept of Code Enforcement Recycling & Special Projects Social Services Bldg Code Enforcement Vehicle Services Special Projects Health ICATS Facility Services Elections Parks & Recreation NC Cooperative Extension Service Library 11

19 Board of County Commissioners Marvin Norman, Chairman Sara Haire Tice, Vice-Chairman R. Godfrey Williams Stephen D. Johnson Kenneth M. Robertson, Jr. County Officials Joel R. Mashburn County Manager William P. Pope County Attorney Jean C. Moore Clerk to the Board Phillip H. Redmond Sheriff Brenda D. Bell Register of Deeds Susan G. Blumenstein Director of Finance & Administration W. Tracy Jackson Asst. County Manager William E. Doolittle Director of Tax Administration & Land Records F. William Furches, Jr. Tax Collector Carolyn H. Harris Director of Human Services Ron Smith Director of Planning & Development Lynn S. Niblock Director of Code Enforcement & Special Projects Donna Campbell Director of Health Donald C. Wall Director of Social Services 12

20 INDEPENDENT AUDITOR S REPORT Board of County Commissioners Iredell County Statesville, North Carolina We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Iredell County, North Carolina, as of and for the year ended June 30, 2008, which collectively comprise the County s basic financial statements, as listed in the table of contents. These financial statements are the responsibility of Iredell County, North Carolina s management. Our responsibility is to express opinion on these basic financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the basic financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, based upon our audit, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of Iredell County, North Carolina as of June 30, 2008, and the respective changes in financial position and cash flows, where applicable, thereof, and the respective budgetary comparison for the General Fund 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 October 23, 2008 on our consideration of Iredell County, North Carolina s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. 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 read in conjunction with this report in considering the results of our audit. 13

21 Management s Discussion and Analysis, Law Enforcement Officers Special Separation Allowance, Schedule of Funding Progress, Schedule of Employer Contributions and related notes are not required parts of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion thereon. Our audit was performed for the purpose of forming an opinion on the financial statements that collectively comprise the basic financial statements of Iredell County, North Carolina. The introductory section, combining and individual fund financial statements and schedules, individual nonmajor fund financial statements and schedules, the statistical tables, and additional financial data are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated, in relation to the basic financial statements taken as a whole. The introductory section and statistical section 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. Martin Starnes & Associates, CPAs, P.A. Hickory, North Carolina October 23,

22 Iredell County, North Carolina Management s Discussion and Analysis June 30, 2008 As management of Iredell County, North Carolina, we offer readers of the County s financial statements this narrative overview and analysis of the financial activities of the County for the fiscal year ended June 30, We encourage readers to read the information presented here in conjunction with additional information that we have furnished in the County s financial statements following this narrative. Financial Highlights The assets of Iredell County, North Carolina exceeded its liabilities at the close of the fiscal year by $149,556,541 (net assets). The government s total net assets increased by $22,696,481 primarily due to increased net assets in the governmental type activities net assets. As of the close of the current fiscal year, Iredell County, North Carolina s governmental funds reported combined ending fund balances of $150,213,482, an increase of $81,642,333 in comparison with the prior year. Of the Fund Balances in the Major Funds, the General Fund increased $5,413,879 and the 2006 School Capital Fund decreased $12,674,564. A new major fund, the 2008 COPs School Project Fund has a $82,908,931 fund balance. Non- Major Funds increased $5,994,087. The total amount of the increase in the General Fund, $5,413,879, includes an increase of $1,387,311 in the amount available for spending at the government s discretion (unreserved fund balance). At the end of the current fiscal year, unreserved fund balance for the General Fund was $26,777,097 or 17.18% of total general fund expenditures and transfers to other funds for the fiscal year. In early 2008 the County issued COPs in the amount of $111,375,000. Proceeds from this debt issuance are being used to fund renovation and construction of facilities in the Iredell-Statesville School System ($80,960,000) and the Mooresville Graded School District ($25,670,000). $4,745,000 of the proceeds were used in the Solid Waste Disposal Facility Fund to purchase land for future expansion of the landfill. In early 2008 the County issued $5,300,000 in General Obligation Bonds to fund the construction of a Student Services Building on the Mitchell Community College campus. The County made a $2 million transfer from the General Fund to the Capital Reserve Fund to pay for capital projects for facilities. Land was purchased for $2.2 million to provide future expansion for the Iredell-Statesville School System. The County continued its public school construction and renovation projects at a cost of over $21.2 million. In October, 2007 the County issued $4,500,000 in Special Obligation Bonds for lined cell construction and the purchase of land adjacent to the existing landfill in the Solid Waste Disposal Facility Fund. This increases the estimated life of the landfill 24 years. Iredell County maintained its Moody s Investors Service Aa3 general obligation bond ratings for the ninth consecutive year, and increased the Fitch rating to AA as well as increasing the January, 2004 Standard & Poor s general obligation bond rating to AA. 15

23 Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to Iredell County, North Carolina s basic financial statements. The County s basic financial statements consist of three components; 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. The basic financial statements present two different views of the County through the use of government-wide statements and fund financial statements. In addition to the basic financial statements, this report contains other supplemental information that will enhance the reader s understanding of the financial condition of the County. Required Components of Annual Financial Report Management s Discussion and Analysis Basic Financial Statements Government-wide Financial Statements Fund Financial Statements Notes to the Financial Statements Summary Detail Basic Financial Statements The first two statements (Exhibits A and B) in the basic financial statements are the Government-wide Financial Statements. They provide both short and long-term information about the County s financial status. The next statements (Exhibits C through J) are Fund Financial Statements. These statements focus on the activities of the individual parts of the County s government. These statements provide more detail than the government-wide statements. There are four parts to the Fund Financial Statements: 1) the governmental funds statements; 2) the budgetary comparison statements; 3) the proprietary fund statements; and 4) the fiduciary and agency fund statements. The next section of the basic financial statements is the notes. The notes to the financial statements explain in detail some of the data contained in those statements. Required supplemental information is reported immediately after the notes. This section contains funding information about the County s pension plan. The next section is supplemental information provided to show details about the County s non-major governmental funds and internal service funds, all of which are added together in one column on the basic financial statements. Budgetary information required by the NC General Statutes also can be found in this part of the statements. 16

24 Government-wide Financial Statements The government-wide financial statements are designed to provide the reader with a broad overview of Iredell County, North Carolina s finances, similar in format to a financial statement of a private-sector business. The government-wide statements provide short and long-term information about the County s financial status as a whole. The two government-wide statements report the County s net assets and how they have changed. Net assets are the difference between the County s total assets and total liabilities. Measuring net assets is one way to gauge the County s financial condition. The government-wide statements are divided into two categories: 1) governmental activities and 2) business-type activities. The Iredell County Industrial Facility and Pollution Control Financing Authority is a component unit of the County; however, it has no reportable financial transactions or account balances and is not included in the governmentwide statements. The governmental activities include most of the County s basic services such as public safety, human services, parks and recreation, and general administration. Property taxes and state and federal grant funds finance most of these activities. There is one business-type activity provided by the County, landfill services, for which customers are charged. Exhibits A and B of this report are the government-wide financial statements. Fund Financial Statements The fund financial statements provide a more detailed look at the County s most significant activities. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The County, like all other governmental entities in North Carolina, uses fund accounting to ensure and reflect compliance (or non-compliance) with finance-related legal requirements, such as the General Statutes or the County s budget ordinance. All of the funds of Iredell County can be divided into two categories: governmental funds and proprietary funds. Governmental Funds Governmental funds are used to account for those functions reported as governmental activities in the government-wide financial statements. Most of the County s basic services are accounted for in governmental funds. These funds focus on how assets can readily be converted into cash flow in and out, and what monies are left at year-end that will be available for spending in the next year. Governmental funds are reported using an accounting method called modified accrual accounting. This method also has a current financial resources focus. As a result, the governmental fund financial statements give the reader a detailed short-term view that helps him or her determine if there are more or less financial resources available to finance the County s programs. The relationship between government activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds is described in a reconciliation that is a part of the fund financial statements. Iredell County, North Carolina adopts an annual budget for its General Fund, as required by the General Statutes. The budget is a legally adopted document that incorporates input from the citizens of the County, the management of the County, and the decisions of the Board about which services to provide and how to pay for them. It also authorizes the County to obtain funds from identified sources to finance these current period activities. The budgetary statement provided for the General Fund demonstrates how well the County complied with the budget ordinance and whether or not the County succeeded in providing the services as planned when the budget was adopted. The budgetary comparison statement uses the budgetary basis of accounting and is presented using the same format, language, and classifications as the legal budget document. The statement shows four columns: 1) the original budget adopted by the board; 2) the final budget as amended by the board; 3) the actual resources, charges to appropriations, and ending balances in the General Fund; and 4) the difference or variance between the final budget and the actual resources and charges. To account for the difference between the budgetary basis of accounting and the modified accrual basis, a reconciliation showing the differences in the reported activities is shown at the end of the budgetary statement. 17

25 Proprietary Funds The County has two kinds of proprietary funds. Enterprise Funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The County uses enterprise funds to account for its solid waste landfill operations. This fund is the same as the functions separate activity shown in the business-type activities in the Statement of Net Assets and the Statement of Activities. Internal Service Funds are an accounting device used to accumulate and allocate costs internally among the functions of Iredell County, North Carolina. The County uses an internal service fund to account for two activities the self-insured employee health care benefits fund and self-insured workers compensation benefits fund. Because these activities benefit predominantly governmental rather than business-type activities, the internal service funds have been included within the governmental activities in the government-wide financial statements. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Iredell County, North Carolina has eight fiduciary funds all of which are agency funds. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements start on page 42 of this report. Other Information In addition to the basic financial statements and accompanying notes, this report includes certain required supplementary information concerning Iredell County, North Carolina s progress in funding its obligation to provide pension benefits to its employees. Required supplementary information can be found beginning on page 78 of this report. Government-Wide Financial Analysis As noted earlier, net assets may serve over time as one useful indicator of a government s financial condition. The assets of Iredell County exceeded liabilities by $149,556,541 as of June 30, One of the largest components of net assets $107,093,469 (71.60%) reflects the County s investment in capital assets (e.g. land, buildings, equipment, and vehicles), less any related debt still outstanding that was used to acquire those items. Iredell County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although Iredell County s investment in its capital assets is reported net of the outstanding related debt, the resources needed to repay that debt must be provided by other sources since the capital assets cannot be used to liquidate these liabilities. 18

26 Iredell County, North Carolina's Net Assets Governmental Business-type Activities Activities Total Current and other assets $ 176,144,831 $ 91,823,845 $ 12,114,713 $ 9,909,007 $ 188,259,544 $ 101,732,852 Capital assets 267,459, ,333,428 25,879,737 15,720, ,339, ,054,062 Total assets 443,604, ,157,273 37,994,450 25,629, ,599, ,786,914 Long-term liabilities outstanding 267,908, ,829,784 16,595,181 7,969, ,504, ,799,325 Other liabilities 26,139,172 12,493,226 1,849,120 84,154 27,988,292 12,577,380 Total liabilities 294,048, ,323,010 18,444,301 8,053, ,492, ,376,705 Net assets: Invested in capital assets, net of related debt 107,093,469 90,576,258 15,372,700 13,469, ,466, ,045,869 Restricted 2,231,652 3,687, ,231,652 3,687,548 Unrestricted 40,231,420 34,570,457 4,177,449 4,106,335 44,408,869 38,676,792 Total net assets $ 149,556,541 $ 128,834,263 $ 19,550,149 $ 17,575,946 $ 169,106,690 $ 146,410,209 An additional portion of Iredell County s net assets $2,231,652 (1.50%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $40,231,420 (26.90%) is unrestricted and may be used to meet the government s ongoing obligations to citizens and creditors. At the end of the current fiscal year, Iredell County is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business type-activities. The same situation was true for the prior fiscal year. Of the $1,455,896 net decrease in restricted net assets reported for Iredell County s governmental activities, $1,815,512 resulted from not reporting the fund balances of the fire tax districts as reserved for public safety. This decrease was offset by the following increases of $201,531 in restricted revenue for Health and DSS, $146,754 restricted for Transportation and $11,351 in the total cash balances on deposit with the County s bond Trustee. The County s net assets increased by $22,696,481 for the fiscal year ended June 30, About 41.34% of this increase, $9,384,068, represents the degree to which increases in ongoing revenues have surpassed similar increases in ongoing expenses. Another 38.45%, $8,725,762, represents one-time capital grants, and approximately 20.21% of the increase, $4,586,651, represents investment earnings. Governmental Activities. Governmental activities increased Iredell County s net assets by $20,722,278, thereby accounting for 91.31% of the total growth in the net assets of Iredell County. Key elements of this increase are as follows: 19

27 Iredell County, North Carolina's Changes in Net Assets Governmental Business-type Activities Activities Total Revenues: Program revenues: Charges for services $ 14,495,108 $ 13,773,132 $ 8,383,118 $ 7,240,697 $ 22,878,226 $ 21,013,829 Operating grants and contributions 21,070,121 18,687,667 47, ,052 21,117,479 18,798,719 Capital grants and contributions 8,725, ,840 3,006-8,728, ,840 General revenues: Property taxes 91,318,487 77,221, ,318,487 77,221,015 Local option sales taxes 35,889,205 35,035, ,889,205 35,035,437 Other taxes 2,302,954 2,423, ,302,954 2,423,213 Grants and contributions not restricted to specific programs 774, ,402-6, , ,055 Other 4,921,627 5,494, , ,674 5,593,236 5,931,147 Total revenues 179,498, ,044,179 9,105,091 7,795, ,603, ,839,255 Expenses: General government 19,798,121 19,124, ,798,121 19,124,366 Public safety 30,435,181 26,388, ,435,181 26,388,015 Transportation 1,940,723 1,507, ,940,723 1,507,463 Economic & physical development 3,478,300 1,915, ,478,300 1,915,544 Human services 31,749,585 31,107, ,749,585 31,107,903 Cultural and recreation 4,955,101 4,567, ,955,101 4,567,907 Education 61,135,689 44,141, ,135,689 44,141,014 Interest on long-term debt 5,283,114 7,847, ,283,114 7,847,933 Landfill - - 7,130,888 5,657,532 7,130,888 5,657,532 Total expenses 158,775, ,600,145 7,130,888 5,657, ,906, ,257,677 Increase in net assets before transfers and special items 20,722,278 16,444,034 1,974,203 2,137,544 22,696,481 18,581,578 Transfers Increase in net assets 20,722,278 16,444,034 1,974,203 2,137,544 22,696,481 18,581,578 Net assets, July 1, ,834, ,390,229 17,575,946 15,438, ,410, ,828, Net assets, June 30, 2008 $ 149,556,541 $ 128,834,263 $ 19,550,149 $ 17,575,946 $ 169,106,690 $ 146,410,209 20

28 Several particular aspects of the County s financial operations positively influenced the total unrestricted governmental net assets: The total property tax base increased from $15,565,209,859 for the fiscal year to $19,118,557,342 at June 30, 2008, a 22.83% increase due to revaluation. Growth in the receipt of capital grants and contributions. The total receipts for the year, $8,725,762, exceed prior fiscal year receipts by $8,585,922 or 37.79% of the increase. Continued low cost of debt due to the County s high bond rating. Reducing employee turnover by providing a 2.5% across-the-board salary increase to existing employees, and continuation of employee benefits such as County funded health insurance and 401(K). Increases in expenses closely parallel inflation and the growth in service demands. For the fiscal year ended June 30, 2008, areas of increase are as follows: Adding full-time personnel as follows: Finance 1; Mapping 1; Tax Reappraisal 1; Facility Services 1; Sheriff s Office 8; Jail 5; Animal Control 1; Emergency Management Services 3; Fire Marshal 1; Department of Planning & Code Enforcement 1; Health Department 7; Department of Social Services 11; and Recreation 1. The County s Pay Plan was adjusted to reflect a 2.5% across-the-board salary increase for all existing employees, and a merit award program was continued for employees with salary increases ranging from 1-4% based on an annual performance review. Increasing the County s contribution to the Health Care Benefits Fund for each full-time employee from $6,120 to $6,760. The total General Fund contribution for Employee Health Care Benefits was $5,927,479, a $1,118,269 increase over the prior fiscal year. Increasing total expenses for Public Safety. Expenses of the Sheriff s Office and Jail total $18,316,624, an increase of $1,286,278 or 7.6% over the prior year. Thirteen new positions, across-the-board salary adjustments and merit awards along with the requisite increased benefits cost $1,169,267 or about 91% of the departments total increases. Operating costs increased $378,401, almost 29% of the total increase, and Capital Outlay decreased $261,390, or 20% net against the total increase. The Sheriff s Office is responsible for all law enforcement activities within the non-municipal areas of Iredell County, detention of arrestees awaiting trial and adjudicated criminals sentenced to six months or less, and security of the State courts. The Sheriff s Office handled 13,262 civil and criminal processes, investigated 5,628 crimes, and made 7,229 arrests or a slight case decrease over the prior fiscal year. Increasing expenses for Emergency Medical Service by $503,408 or 11%. Increasing the level of service from a Quick Response Vehicle to a paramedic staffed Advanced Life Support Ambulance at a base co-located with a volunteer fire department contributed to the increase. Call volume increased 7% from 13,872 in 2007 to 14,781 in 2008 resulting in increased vehicle operating and medical supplies. Increasing expenses within the Department of Planning and Enforcement by $636,805, or 23%. About 23%, $522,180, of the increase resulted from the full year s operation of a new division of the Department, Erosion Control. Staff of the new division spent the first year developing policies, procedures, and local ordinances, and did not formally begin Erosion Control oversight until the very end of the fiscal year. Increasing Human Services expenses by almost $1,237,636. Of the total, expenses for the Health Department increased 12% over the prior year or $797,366. Operating costs increased $291,487, 37% of the Health Department s total increase and 21% over the prior year. Increased operating costs are attributable to the growth in patient clinical services and a newly expanded dental clinic. Salaries & Benefits increased 9.5%, or 61.5% of the total net increase due to new positions, across-the-board and merit awards, and reclassifications of existing positions. 21

29 $522,169 of the increase in Human Services results from a 2.04% net increase in Department of Social Services costs. $805,902 or 61.5% of the DSS net increase is in Salaries and Employee Benefits due to 11 new positions and across-the-board and merit increases. On average, 45% of the costs of Salaries and Employee Benefits are recovered through State and federal grants. The costs of Child Daycare, fully funded with State and federal grants, increased $417,960 or 8%. These increases and others were offset by a $786,993 reduction in the County s share of Medicaid costs included in the DSS budget. This reduction in local Medicaid costs is part of the State of NC s three-year phase out plan of counties sharing in these costs. In exchange, the County will cede ½ cent of local sales tax over a two year period beginning in fiscal year Increasing Educational expenses. Current expense and capital outlay payments to the two individual public school units and the community college increased actual spending by $8,688,928. Millions Expenses and Program Revenues - Governmental Activities Revenues Expenses General Government Public Safety Transportation Econ & Physical Dev Human Services Cultural & Recreation Education Interest on Long-term Debt Revenues by Source - Governmental Activities Other Taxes 1% Investment Earn i n gs 2% Other <1% Charges for Services 8% Operating Grants & Contributions 12% Property Taxes 54% Sales Taxes 22% 22

30 Business-type activities: This year the Iredell County Solid Waste Disposal Facility, Iredell County, North Carolina s sole Business-type activity, had an increase in net assets of $1,974,203 or $163,341 less than the increase reported last fiscal year. During the year, the Solid Waste Disposal Facility reimbursed $123,929 to Governmental Activities for services provided by Human Resources, Finance, Information Systems Management, Administration, etc. Some of the factors contributing to the change are as follows: A 5% increase in the main source of revenue, Tipping Fees. A 39% increase in the Solid Waste Availability Fees assessed to homeowners on their real property tax bills. A 72% increase in revenues from the sale of recyclables due to expanded markets for glass, plastics, and metals. An increase of 43% in investment earnings due to increased interest rates and an increase in funds available for investment. An 89% increase in debt principal and interest payments to finance current and future expansion needs of the facility. Expenses and Program Revenues - Business-type Activities 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 - Revenues Expenses Transfers Revenues By Source - Business-type Activities Operating Grants & Contributions 1% Charges for Services 91% Investment Earn i n gs 7% Miscellaneous 1% 23

31 Financial Analysis of the County s Funds As noted earlier, Iredell County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds. The focus of Iredell County s governmental funds is to provide information on near-term inflows, outflows, and balances of usable resources. Such information is useful in assessing the County s financing requirements. Specifically, unreserved fund balance can be a useful measure of a government s net resources available for spending at the end of the fiscal year. The General Fund is the chief operating fund of the County. At the end of the current fiscal year, unreserved fund balance of the General Fund was $26,777,097, while total fund balance reached $52,539,217. As a measure of the General Fund s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures and transfers out. Unreserved fund balance represents 17.18% of total General Fund expenditures and transfers out, while total fund balance represents 33.71% of that same amount. At June 30, 2008, the governmental funds of Iredell County, North Carolina reported a combined fund balance of $150,213,482, increasing the prior year s combined fund balance by $81,642,333 or 219%. A $5,413,879 increase in the General Fund and an increase of $5,994,087 in the Non-major Special Revenue and Capital Project Funds was offset by a decrease of $12,674,564 in the 2006 School Capital Project Fund. The 2008 School Capital Project Fund was adopted in the fiscal year ended June 30, 2008 to account for Certificates of Participation issued to finance the construction and renovation of public schools for both the Iredell-Statesville Schools and the Mooresville Graded School District. During the year ended June 30, 2008, $109,027,202 was realized in the Fund for debt proceeds and premium, and $918,023 of investment earnings and other revenues were added to the Fund. $27,036,294 was expended for construction and renovation of schools making the net contribution to fund balance of $82,908,931. The $5,413,879 fund balance increase in the General Fund includes an increase in the amount reserved for school capital of $817,176 while the amount reserved for state statute increased $2,387,675. The contribution back to unreserved fund balance was $1,387,311. Although actual revenues of the General Fund were approximately $850,000 less than budgeted, actual expenditures, adjusting for encumbrances, were almost $17 million less than the budgeted amounts. Fund Balance in Non-major Governmental Funds realized an increase of $5,994,087 for the fiscal year. Net increases in Special Revenue Funds of $1,678,604 and in the Capital Project Funds of $4,315,483 accounted for this change. Some major highlights of Non-major Governmental Funds include the Emergency Telephone System Fund with increased revenues resulting in an increase of $137,545 to the fund balance. The Parks Reserve Fund increased fund balance of $78,892 is attributed to a $90,000 Transfer from the General Fund. With increased tax collections and expenditures less than expected, the fund balance for the Fire District Funds increased $1,164,485. Fund Balance in the County s Capital Reserve Fund increased $409,305 over the prior year. The Capital Reserve Fund will be used to pay for capital projects identified in the 5-year Capital Plan. As multi-year capital project construction and renovation projects continued, fund balances in the individual funds decreased. During the year, a Capital Project Fund was adopted for Mitchell Community College. With General Obligation Bond proceeds and other revenue of $5,346,950 and expenses of $1,046,818 and addition to fund balance of $4,300,132 was realized. General Fund Budgetary Highlights: During the fiscal year, the County revised the budget on several occasions. Generally, budget amendments fall into one of three categories: 1) amendments made to adjust the estimates that are used to prepare the original budget ordinance once exact information is available; 2) amendments made to recognize new funding amounts from external sources, such as federal and State grants; and 3) increases in appropriations that become necessary to maintain services. There were amendments to the originally adopted budget totaling $14,390,794 bringing the final budget to $172,525,074. Those changes are summarized as follows: General government budgeted expenditures realized a net increase of $3,891,146. A major portion of the increase, $3,552,686, resulted from appropriations for services and supplies ordered in fiscal year but not performed or delivered until fiscal year $750,000 of the increase was the appropriation of fund balance for the purchase of land for future capital improvements in the General Governmental Department. The budget for Facility Services was increased $68,000 for the additional cost for a generator, 24

32 and $150,000 was added to the budget for the Iredell County Government Center-South to paint and repair stucco. Both of these projects were funded by operating transfers in from the Capital Reserve Fund. In addition, $606,080 of funds budgeted for employee merit increases were reclassified to other expenditure types as merit increases were awarded. Public safety budgeted expenditures increased $2,648,663. Of this increase, $1,187,089 resulted from appropriations for services and supplies ordered in fiscal year but not performed or delivered until this fiscal year. The other increases resulted, for the most part from the following changes: Salaries and Benefits in the Sheriff s budget were increased by $45,117 for an additional school resource officer position at the Iredell-Statesville Alternative School. Funding for the new position is being provided by the Iredell- Statesville Schools through Safe Schools grants. The Department of Justice provided funds of $24,108 to purchase a stereo microscope, E-ticket printers and 800 mhz radios. Federal Equity money of $52,720 was appropriated to purchase a Lake Patrol boat and digital video recorders. Seized funds of $36,120 were appropriated to begin a community program entitled Project Lifesaver that aids in the rescue of Alzheimer patients. Other appropriations of seized funds included $40,600 for two law enforcement K-9 s, $43,000 for a roll-back truck, and $25,100 for a ballistic research software for the crime lab. An appropriation of Contingency funds $70,000 were appropriated to purchase a new computer switch and router. Additionally, accumulated proceeds form the operations of the Jail Commissary totaling $66,200 were appropriated to lease Vehicle Tracking devices and to add $50,000 to commissary supplies. An award from the State increasing the Community Justice Partnership Program by $64,759, and the funds were appropriated to expand the contract with the CJPP provider. Funds were transferred from the Capital Reserve Fund for a generator at an emergency shelter in the Emergency Management Department of $165,000, building improvements at Animal Control in the amount of $235,000 and at Emergency Medical Services in the amount of $225,000. Additional funds of $56,712 were appropriated for a Voice Interoperability Plan for Emergency Responders grant to provide mhz radios and a control station. Emergency Communications received a supplemental Emergency Management Preparedness Grant in the amount of $13,429 that required a 50% match. These funds were used to purchase radiological monitoring and decontamination equipment. Contingency funds appropriated in the amount of $37,700 were needed for the continually soaring gas prices for the EMS and Fire Marshal departments. In addition to the increases mentioned above, $220,064 resulted from increases in Salaries & Benefits line items to fund the cost of position reclassifications and merit awards. Economic and Physical Development budgeted expenditures increased $134,266. Of this increase, $72,565 resulted from appropriations for services and supplies ordered in fiscal year but not performed or delivered until this fiscal year. An additional appropriation to the Department of Planning and Code Enforcement totaled $5,055 resulted recognizing and appropriating $1,321 in insurance proceeds. The remaining additions to this expenditure type $55,325, resulted from increases in Salaries & Benefits line items to fund the cost of position reclassifications and merit awards. Human Services budgeted expenditures increased $2,588,236. Of this increase, $548,441 resulted from appropriations for services and supplies ordered in fiscal year but not performed or delivered until this fiscal year. Social Services expenditure budget was increased $1,227,821 for estimated additional Child Day Care costs, $191,184 for Crisis Intervention, $63,000 for Special Children s Adoption Funds, and $2,357 for Domestic Violence programs. $115,000 was transferred in from the Capital Reserve Fund to up-fit the 2 nd floor offices at the DSS building. The Health Department budget was increased more than $132,088 for specific program costs for WIC Administration, NC Public Health, Healthy Carolinians, Community Awareness, Women s Preventive Health, and Dental Services. In addition, $18, 500 was appropriated for a new server and switch along with $4,714 in insurance proceeds. Salaries & Benefits line items were increased by $293,020 to fund the cost of position reclassifications and merit awards. Cultural and recreation budgeted expenditures increased $103,047. Of this increase, $52,876 resulted from appropriations for services and supplies ordered in fiscal year but not performed or delivered until this fiscal year. A State Library Strengthening Public and Academic Collections for children s materials was appropriated in the amount of $12,500. Appropriations were increased by $37,671 for position reclassifications and merit awards. 25

33 Educational budgeted expenditures increased $5,025,436. Of this increase, $1,689,769 resulted from Iredell- Statesville Schools capital outlay appropriations for fiscal year carried over to the fiscal year. Capital outlay appropriations to Iredell-Statesville Schools and Mooresville Graded School District were increased $865,892 and $236,564 respectively. Additional appropriations were made to Mitchell Community College of $13,175 for other capital outlay. $2,220,040 was transferred to Iredell-Statesville Schools capital outlay appropriation for the purchase of land for a future school. Revenues for the fiscal year were $849,159 under the amount budgeted. The major variances are as follows: Ad Valorem Taxes exceed budget by $2,967,093 due to greater than anticipated growth in valuation. The positive variance was offset by negative variances in Permits and Fees, $(1,105,691), Restricted Intergovernmental Revenues, $(565,236) and Other Taxes and Licenses $(2,399,195). Actual expenditures were $16,666,739 less than budget. Of this amount, $7,537,543 represents encumbrances that are reserved in Fund Balance and will be paid for in the subsequent fiscal year and $3,016,079 represents funds budgeted for Salaries & Benefits that were unspent due to vacancies. Of the total amount budgeted for the local share of Medicaid costs, $1,396,672 remained unspent at the end of the year. $4,716,445 or 2.94% of expenditures budgeted for all other purposes remained unspent and unencumbered at year end. Proprietary Funds. Iredell County, North Carolina s proprietary funds provide the same type of information found in the government-wide statements but in more detail. Unrestricted net assets of the Solid Waste Disposal Enterprise Fund at the end of the fiscal year amounted to $4,177,449. Capital Asset and Debt Administration Capital assets. Iredell County, North Carolina s capital assets for its governmental and business type activities as of June 30, 2008, totals $293,339,472 (net of accumulated depreciation). These assets include buildings, land, machinery and equipment, and vehicles. During the fiscal year, the County - Purchased new equipment for Governmental and Business-type activity departments. Purchased new vehicles for the Sheriff s Department. Disposed of old vehicles in the Sheriff s Department. Continued construction of multi-year capital projects. Iredell County Capital Assets (net of depreciation) Governmental Business-type Activities Activities Total Land $ 1,849,609 $ 1,796,671 $ 8,371,721 $ 3,586,412 $ 10,221,330 $ 5,383,083 Land Improvements 1,756,544 1,794,719 5,958,869 6,273,671 7,715,413 8,068,390 Buildings and system 253,084, ,534,907 3,576,208 3,789, ,660, ,324,671 Equipment 4,993,516 4,455,941 1,559,481 1,475,470 6,552,997 5,931,411 Vehicles and motorized equipment 3,399,045 3,226, , ,317 4,004,790 3,821,985 Construction in progress 2,376,596 4,524,522 5,807,713-8,184,309 4,524,522 $ 267,459,735 $ 226,333,428 $ 25,879,737 $ 15,720,634 $ 293,339,472 $ 242,054,062 Additional information on the County s capital assets can be found in Note 5 beginning on page 54 of the Basic Financial Statements. 26