JEFFERSON COUNTY, MISSOURI

Transcription

1 June 22, 2018 ANNUAL DISCLOSURE REPORT For the Fiscal Year Ended December 31, 2017 OF JEFFERSON COUNTY, MISSOURI IN CONNECTION WITH RECOVERY ZONE ECONOMIC DEVELOPMENT LEASE CERTIFICATES OF PARTICIPATION, SERIES 2010 (Base CUSIP ) REFUNDING CERTIFICATES OF PARTICIPATION (JEFFERSON COUNTY MISSOURI, LESSEE), SERIES 2010B (Base CUSIP ) REFUNDING CERTIFICATES OF PARTICIPATION (JEFFERSON COUNTY MISSOURI, LESSEE), SERIES 2017 (Base CUSIP ) GENERAL OBLIGATION NEIGHBORHOOD IMPROVEMENT BONDS (BRETHOLD ESTATES, CLARNED HEIGHTS, FENTON FOREST, PRIMROSE LAND AND SAN MARION SEWER PROJECT) SERIES 2010C (Base CUSIP ) and NEIGHBORHOOD IMPROVEMENT DISTRICT REFUNDING BONDS (BUENA VISTA PROJECT), SERIES 2012 (Base CUSIP )

2 COUNTY EXECUTIVE Ken Waller JEFFERSON COUNTY COUNCIL MEMBERS Don Bickowski Daniel Darian Charles Groeteke Phil Henrickson Renee Reuter Dan Stallman James Terry COUNTY CLERK Randy B. Holman DIRECTOR OF ADMINISTRATION David Courtway

3 TABLE OF CONTENTS GENERAL INFORMATION RELATING TO THE COUNTY... 2 Description... 2 Employees... 2 Employment... 2 Building And Construction Data... 3 Housing... 3 Income... 3 Population... 4 FINANCIAL MATTERS... 4 Accounting and Reporting Practices... 4 The General Fund... 5 General Fund Revenue Sources... 6 Sales Taxes... 6 PROPERTY TAXATION... 7 Tax Procedures... 7 Assessed Valuation... 7 Tax Rates... 8 Tax Levies and Collection... 8 Major Taxpayers... 9 DEBT OF THE COUNTY... 9 General... 9 Outstanding Debt... 9 Legal Debt Limit and Debt Margin Direct and Overlapping Debt Lease and Other Obligations Debt Service Requirements Future Debt FINANCIAL ADVISOR NO LITIGATION ADDITIONAL INFORMATION... 14

4 ANNUAL DISCLOSURE REPORT of JEFFERSON COUNTY, MISSOURI Relating to RECOVERY ZONE ECONOMIC DEVELOPMENT LEASE CERTIFICATES OF PARTICIPATION, SERIES 2010 REFUNDING CERTIFICATES OF PARTICIPATION (JEFFERSON COUNTY MISSOURI, LESSEE), SERIES 2010B REFUNDING CERTIFICATES OF PARTICIPATION (JEFFERSON COUNTY MISSOURI, LESSEE), SERIES 2017 GENERAL OBLIGATION NEIGHBORHOOD IMPROVEMENT BONDS (BRETHOLD ESTATES, CLARNED HEIGHTS, FENTON FOREST, PRIMROSE LAND AND SAN MARION SEWER PROJECT) SERIES 2010C and NEIGHBORHOOD IMPROVEMENT DISTRICT REFUNDING BONDS (BUENA VISTA PROJECT), SERIES 2012 This Annual Disclosure Report is provided by Jefferson County, Missouri (the County ) to furnish information in connection with the above referenced Certificates of Participation (the Certificates ) and the above referenced Neighborhood Improvement District Bonds (the NID Bonds ). At the time of issuance of the obligations described above, the County agreed, pursuant to a Continuing Disclosure Agreements to provide the following within 180 days after each fiscal year: (1) The audited financial statements of the County for the prior Fiscal Year, prepared in accordance with a system of accounting conforming to the cash basis and budget laws of the State of Missouri (which is a comprehensive basis of accounting other than generally accepted accounting principles), and (2) Certain operating data and financial data of the County, updated for the fiscal year then ended as described in the respective Official Statement. 1

5 GENERAL INFORMATION RELATING TO THE COUNTY Description The County is a charter county comprising approximately 668 square miles and is located approximately 17 miles southwest of the City of St. Louis, Missouri and is part of the St. Louis metropolitan area. The area was originally settled by the French in 1771 and grew rapidly with the founding of mining operations by the end of the 18 th Century. The County was organized in 1818, and was named after President Thomas Jefferson. The city of Hillsboro became the County seat in In 2010 the County s population was 218,733 compared to 103,636 in The County s close links with the St. Louis metropolitan area have helped the County become an important regional center. In the past forty years the County has changed from a rural to a suburban area. Of the 114 counties in Missouri, Jefferson County is one of only six to achieve firstclass status (based upon assessed valuation) and is the fifth largest county in Missouri. Fifteen municipalities are located within the County, including the cities of Hillsboro (the county seat), Arnold (largest in population), Festus, Pevely, De Soto, Crystal City and Herculaneum and several small municipalities. Most of the recent growth in the County has occurred in its northern sector, with growth currently working its way south along Interstate 55 and Highway 30. The County s economy is diverse and comprised primarily of small businesses, which make up approximately 90% of all business establishments in the County. Nearly one-quarter of employed workers within the County are self-employed with many working in the construction industry. Services provided by the County include judicial, tax collection, public safety, road and bridge maintenance, animal control, document recording, administration of elections and the administration of several federal and state programs. Employees The County has approximately 640 full-time, 40 part-time and 11 seasonal employees in 15 departments. The International Union of Operating Engineers, Local 148 is the bargaining unit for employees of the Jefferson County Highway Divisions and the Department of Parks and Recreation. The contracts expire on December 31, Employment According to the U.S. Bureau of Labor Statistics, the County s average annual labor force in 2016 was 118,729. The total number of people that were unemployed was 5,083 which was an unemployment rate of 4.3%. 2

6 Building and Construction Data The following table sets forth the number of units and value of building permits issued by the County for construction within its boundaries (excluding incorporated cities that issue their own permits), excluding tenant finishes and permits for miscellaneous purposes, for the fiscal years ended December 31, 2013 through 2017: Residential Commercial Fiscal Number Number Total Year of Units Value of Units Value Value $51,333, $ 8,552,274 $ 59,886, ,431, ,122,906 51,554, ,033, ,616,630 56,650, ,371, ,426,474 65,798, ,472, ,551, ,023,532 Source: Jefferson County Code Enforcement Division. Housing The following table sets forth statistics relating to housing for the County and, for comparative purposes, the State of Missouri: Median Value of Owner % Built in Units Built Occupied Housing 2000 or Later Before 1940 Jefferson County $152, % 4.9% State of Missouri 141, Source: U.S. Census Bureau, American Community Survey, 5-Year Estimates. Income The following table sets forth certain income statistics for the County and, for comparative purposes, the State of Missouri: % People Per Capita Median Family Below Income Income Poverty Level Jefferson County $26,021 $66, % State of Missouri 27,044 62, Source: U.S. Bureau of Census, American Community Survey, 5-Year Estimates. 3

7 The following table sets forth personal income (in thousands of dollars) and per capita personal income for the County: Per Capita Personal Personal Year Income Income 2012 $7,627,344 $34, ,791,957 35, ,071,180 36, ,445,050 37, ,577,608 38,254 Source: Economic Research Division, Federal Reserve Bank of St. Louis. Population The County s population has been growing at a steady pace. The following table sets forth population statistics for the County: Year Population , , , ,226 Source: United States Department of Commerce, Bureau of Census official census counts except for 2016 which is a July 1 estimate. Accounting and Reporting Practices FINANCIAL MATTERS The accounts of the County are organized on the basis of funds, each of which is considered accounting entity with self-balancing accounts that comprise its assets, liabilities, fund balances/net assets, revenues and expenditures, or expenses. The Government-wide financial statements and governmental fund financial statements are prepared using the modified cash basis of accounting, which differs from generally accepted accounting practices. This basis of accounting recognizes assets, liabilities, net assets/fund equity, revenues, and expenditures/expenses when they result from cash transactions except that the purchase of investments are recorded as assets; funds collected through the agency funds, not yet remitted, are recorded as liabilities and as receivables and revenue in the fund statements as applicable; and as applicable, the receipts of proceeds of tax anticipation notes are recorded as liabilities. As a result of this modified cash basis of accounting, certain assets, certain revenues, certain liabilities and certain expenses are not recorded in these financial statements. The County annually engages an independent certified public accountant for the purpose of performing an audit of the books of account, financial records, and transactions of the County. 4

8 The General Fund In accordance with established accounting procedures for governmental units, the County records its financial transactions under various funds. The largest is the General Fund, from which all general operating expenses are paid and to which taxes and all other revenues not specifically allocated by law or contractual agreement to other funds are deposited. The following table indicates the County s General Fund revenues, expenditures and changes in fund balance for the fiscal years ended December 31, 2014 through SUMMARY OF OPERATIONS GENERAL FUND (Modified Cash Basis) Fiscal Year Ended December REVENUES Taxes $12,599,851 $13,504,643 $12,771,414 $13,707,568 Grants, Distributions and Reimbursements 1,586,326 1,654,156 1,327,872 1,387,828 Fees, Licenses and Permits 10,090,139 9,781,602 9,430,846 8,747,643 Interest 35,929 52,271 92, ,027 Other 15,336 12,154 30,146 21,657 Total Revenues 24,327,581 25,004,826 23,653,186 24,002,723 EXPENDITURES Governmental 12,017,234 11,655,813 12,218,499 12,257,485 Financial Administration 573, , , ,832 Property Valuation and Recording 272, , , ,095 Justice 6,750,368 7,019,781 6, ,873,035 Health & Welfare 27,670 20,424 22,085 17,690 Debt Service 642, , , ,590 Capital Expenditures 1,198,238 1,257,340 1,698, ,885 Total Expenditures 21,482,222 21,038,908 22,066,037 21,667,612 REVENUES OVER (UNDER) EXPENDITURES 2,845,359 3,965,918 1,587,149 2,335,111 OTHER FINANCING SOURCES (USES) Net Transfers in (out) (1) (2,901,853) (2,886,428) (2,904,264) (3,149,269) Lawsuit Settlement 1 Proceeds from Loan 327,590 Proceeds from the Sale of Property 25,043 30, ,091 Total Other Financing Sources (Uses) (2,901,853) (2,855,469) (2,575,870) (3,148,178) NET CHANGE IN FUND BALANCE (31,451) 1,110,449 (988,721) (813,067) FUND BALANCE Beginning of Year 10,652,421 (2) 10,620,970 11,731,419 10,742,698 FUND BALANCE End of Year $10,620,970 $11,731,419 $10,742,698 $ 9,929,631 5

9 Footnotes to Prior Page (1) Transfers primarily represent annually budgeted transfers to the Law Enforcement Fund. (2) Reflects a prior period adjustment. Source: Audited financial statements of the County. General Fund Revenue Sources The County derives its revenues from a variety of sources. The following list sets forth the primary sources of general fund revenues for the 2017 Fiscal Year: Percentage of Revenue Source Revenues Total Revenues Property Taxes (1) $ 193, % Sales Taxes 12,185, Other Taxes 1,327, Licenses, Fees And Permits 8,747, Grants, Distributions and Reimbursements 1,387, Interest 138, Other Revenue 21, $24,002, % (1) See the subcaption Sales Taxes below. Source: Audited financial statements of the County. Sales Taxes On November 6, 1979 the voters of the County approved a ½ cent county-wide sales tax for the operation of the County. The ballot language provided that the sales tax would be imposed and the county property tax would be reduced annually by fifty percent of the total amount of sales tax revenue collected. From 1980, the first year the tax was collected, until 1983, both a property tax and a sales tax were collected. However, from 1984 to 2008, sales tax receipts were sufficient to roll back the property tax levy to zero. For the 2010 through 2016 Fiscal Years, sales tax receipts were sufficient to fully roll back the property tax levy. As a result, pursuant to the 1979 authorization, the County did not levy a general revenue property tax. See PROPERTY TAXATION Tax Rates herein. The following table sets forth the amount of revenue from the general sales tax for the past five Fiscal Years: Year Revenue 2013 $10,311, ,019, ,603, ,811, ,185,621 Source: Audited financial statements of the County. In addition to the foregoing, the County has a ½ cent county-wide law enforcement sales tax and a ½ cent county-wide road sales tax that may be used for the purpose of general road maintenance. 6

10 PROPERTY TAXATION Tax Procedures Not later than August 31 of each year, the County Council sets the rate of tax for the County and files the tax rate with the County Clerk by September 1. The County Clerk forwards the tax information to the State Auditor who is responsible for reviewing the rate of tax to insure that it does not exceed constitutional rate limits. Taxes are levied on all taxable real and personal property owned as of January 1 in each year. Certain properties, such as those used for charitable, education, and religious purposes, are excluded from ad valorem taxes for both real and personal property. Real property within the County is assessed by the County Assessor. The County Assessor is responsible for preparing the tax rolls each year and for submitting tax rolls to the County Board of Equalization. The Board of Equalization has the authority to question and determine the proper value of property and then adjust and equalize individual properties appearing on the tax rolls. By statute, tax bills are to be mailed in October; however, the volume of assessment complaints required to be reviewed by the County Board of Equalization can affect the date on which bills are actually mailed. Payment of tax on real and personal property is due by December 31 after which date they become delinquent and accrue a penalty of one percent per month. The County Collector of Revenue deducts a commission equal to 1.5% of the taxes collected for this service. Assessed Valuation Assessment of real property pursuant to the Constitution of Missouri requires such property to be classified in subclasses consisting of agricultural, residential or commercial and permitting different assessment ratios for each subclass and requires uniformity in taxation of real property within each subclass. Pursuant to the Constitution, agricultural property is assessed at 12% of its productivity value, residential property is assessed at 19% of true value, and commercial property is assessed at 32% of true value. Personal property is assessed according to book value. In 1986, the State Legislature passed a bill requiring reassessment of all real properties every two years, beginning in The following table indicates the County s assessed valuation, for the past five years: Source: Office of the County Clerk. Year Total 2013 $3,002,480, ,000,739, ,069,154, ,123,403, ,300,760,611 7

11 The following table sets forth the estimated market value of taxable property based on the 2017 assessed valuation and the assessment ratios described hereinbefore: Assessed Assessment Estimated Subclass Valuation (1) Ratio Market Value Personal Property $ 678,736, % $ 2,038,249,093 Residential Property 1,935,739, ,188,103,684 Commercial Property 677,630, ,117,594,884 Agricultural Property 8,653, ,113,333 Total $3,300,760,611 $14,416,060,994 (1) Includes $15,819,400 of property in tax increment financing areas. Source: Assessed Valuations were provided by the Office of the County Clerk. Tax Rates The following table sets forth the County s tax rates per $100 of equalized assessed valuation for the tax years ended December 31, 2013 through 2017: General Revenue $.0290 $.0238 $.0009 $.0000 $.0077 Road and Bridge Parks and Recreation Total $.2688 $.2657 $.2404 $.2267 $.2765 Source: Audited Financial Statements. The County also levies taxes, but does not control the funds, for the County Health Department, Mental Health and Developmentally Disabled. Tax Levies and Collection The following table sets forth tax collections for General Revenue; Road and Bridge; and Parks and Recreation. Levy Total Taxes Year Levied Collected % Collected 2013 $6,386,321 $6,015, % ,296,544 5,966, ,715,859 5,417, ,541,823 5,325, ,188,168 7,162, Source: Office of the County Collector. The table excludes railroad and utility levies and collections. 8

12 Major Taxpayers The following table sets forth information regarding the top taxpayers in the County: % of Total Assessed Assessed Taxpayer Business Valuation Valuation (1) River Cement Cement Manufacturer $46,811, % Metal Container Corp Can Manufacturer 13,042, Wal-Mart Retailer 11,737, Dow Chemical Chemical Manufacturer 7,550, Saint Gobain/Ball Foster Glass Container Co. Glass Containers 5,849, Ardogh Glass Inc. Packaging Manufacturer 5,745, Joyce Meyer Ministries Religious Services 5,652, THF Arnold Triangle Shopping Center 4,684, Missouri American Water Utility 4,162, Lowes Home Centers Home Improvememt Retailer 3,629, _ (1) Based on 2017 real and personal property tax assessment. Source: Office of the Jefferson County Assessor. General DEBT OF THE COUNTY A proposition to issue general obligation bonds payable from unlimited ad valorem taxes requires the approval of four-sevenths (4/7) of the qualified voters voting thereon for elections held at the general municipal election day, primary or general elections and two-thirds (2/3) of the qualified voters voting on the specific general obligation bond proposition at all other elections. The Missouri Constitution provides that the amount of bonds payable out of tax receipts can not exceed 10% of the total assessed valuation of the taxable property of the County. Certificates of Participation representing interests in rental payments under lease purchase agreements payable from annual appropriations do not require voter approval and do not count against the constitutional debt limitation. Outstanding Debt The County s only outstanding bonds are neighborhood improvement district bonds ( NID Bonds ). In 1994 legislation was adopted permitting the formation of special assessment areas, known as Neighborhood Improvement Districts, to finance local public improvements (the NID Act ). The improvements are financed by bonds which are retired by assessments levied on those specific properties which benefit from the improvements. To the extent assessments are insufficient to retire the NID Bonds, the County is obligated to pay for debt service with available funds of the County. The County is not authorized to levy a County-wide property tax to pay the NID Bonds. 9

13 The following is a list of the County s NID Bonds as of December 31, Amount Issue Issue Date Outstanding Neighborhood Improvement Bonds (Brethold Estates, Clarned Heights, Fenton Forest, Primrose Land And San Marion Sewer Project) Series 2010C October 29, 2010 $1,205,000 Neighborhood Improvement District Refunding Bonds (Buena Vista Project), Series 2012 September 10, ,000 Neighborhood Improvement District Bonds (Mark Drive Neighborhood Improvement District Project), Series 2013 August 26, ,000 Total $2,225,000 Legal Debt Limit and Debt Margin The following table sets forth the County s legal debt limit and debt margin based on the 2017 assessed valuation certified on December 31, 2017 and deemed final for State and local government purposes: 2017 Assessed Value $3,300,760,611 Debt Limit - 10% of Assessed Value $330,076,061 Less: General Obligation Bonds (1) 2,225,000 Legal Debt Margin $327,851,061 (1) The table includes the NID Bonds and notes. The NID Act and the constitutional provision authorizing neighborhood improvement districts expressly provide a debt limitation of 10% of the issuer s thencurrent assessed valuation. The court in Spradlin v. Fulton raised, but did not answer, the question of whether the NID Act and constitutional authorization established a debt limit independent of other general obligation debt limitations. Accordingly, at this time, NID Bonds and notes are computed as part of the general debt limitation. 10

14 Direct and Overlapping Debt The following table sets forth information relating to the County s current direct and overlapping general obligation debt as of December 31, 2017: Percent County s Direct Outstanding Applicable to and Overlapping Bonds (1) The County (2) Debt Jefferson County $ 2,225, % $ 2,225,000 City of Festus 330, ,008 Eureka Fire Protection District 5,232, ,088 High Ridge Fire Protection District 890, ,792 Pacific Fire Protection District 1,485, ,880 Rock Community Fire Protection District 8,005, ,005,000 Crystal City 47 School District 2,115, ,115,000 Desoto 73 School District 24,963, ,963,082 Dunklin R-V School District 25,016, ,016,910 Festus R-VI School District 1,300, ,300,000 Fox C-6 School District 33,995, ,995,000 Grandview R-II School District 5,756, ,756,178 Hillsboro R-III School District 30,674, ,674,551 Jefferson Co. R-VII School District 29,400, ,400,000 Meramec Valley R-3 School District 31,800, ,580,960 Northwest R-I School District 30,790, ,790,000 Rockwood R-6 School District 160,415, ,908,220 Sunrise R-IX School District 996, ,277 Windsor C-1 School District 25,970, ,970,000 $421,360,627 $254,942,946 (1) General Obligation bonds of overlapping taxing districts with less than 1% of assessed valuation in the County are excluded from the table above. Lease and loan obligations which are subject to annual appropriation for payment and for which a tax levy cannot be imposed without voter approval are excluded from the above table. The table includes Neighborhood Improvement District Bonds and notes that are a general obligation of the issuer but are expected to be paid from special assessments and for which the issuer may not levy a general property tax. (2) Estimate based on 2017 real and personal property assessed value. Source: Offices of the political subdivisions, Jefferson County Clerk and other public records. Lease and Other Obligations The following is a list of the County s Certificates of Participation as of December 31, 2017: Issue Date Amount Lease Certificates of Participation, Series 2010 March 25, 2010 $1,130,000 Refunding Certificates of Participation, Series 2010B June 15, ,280,000 Refunding Certificates of Participation, Series 2018 June 15, ,150,000 $15,560,000 11

15 In addition to the foregoing, the County periodically leases vehicles and equipment. See the Notes to the financial statements that accompany this Annual Disclosure Report. Debt Service Requirements Neighborhood Improvement District ( NID ) Bonds The following table sets forth the debt service requirements of the County s NID Bonds: Series 2010C Series 2012 Series 2013 Total Debt Year Principal Interest Principal Interest Principal Interest Service 2018 $ 65,000 $ 39,441 $ 85,000 $ 13,563 $ 20,000 $ 14,438 $ 237, ,000 37,669 90,000 11,813 20,000 13, , ,000 35,831 90,000 9,956 20,000 12, , ,000 33,741 95,000 7,931 20,000 12, , ,000 31,397 95,000 5,734 20,000 11, , ,000 28,975 95,000 3,419 20,000 10, , ,000 26,475 85,000 1,116 20,000 9, , ,000 23,738 25,000 8, , ,000 20,763 25,000 7, , ,000 17,700 25,000 7, , ,000 14,438 25,000 6, , ,000 10,969 25,000 5, , ,000 4,594 30,000 4, , ,000 2,888 32, ,000 1,733 31, , ,578 Total $1,205,000 $325,731 $635,000 $53,532 $385,000 $129,269 $2,733,532 12

16 Certificates of Participation The following table sets forth the Basic Rent payable on the County s outstanding Certificates of Participation as of December 31, 2017: US Treasury Total Basic Year Principal Interest Interest Subsidy (1) Rent 2018 $ 1,315,000 $ 407,730 $ (26,229) $ 1,696, ,300, ,719 (23,574) 1,704, ,350, ,966 (20,666) 1,705, ,400, ,056 (17,336) 1,703, ,405, ,213 (13,649) 1,654, ,460, ,981 (9,833) 1,663, ,485, ,906 (5,951) 1,656, ,520, ,284 (2,005) 1,659, ,400, ,325 1,501, ,440,000 58,725 1,498, ,485,000 18,563 1,503,563 Totals $15,560,000 $2,506,468 $(119,243) $17,947,225 (1) The Series 2010 Certificates are Recovery Zone Economic Development Bonds, for which issuers were to receive a 45% interest subsidy from the U.S. Treasury. The interest above is net of a 45% US Interest Subsidy however, under the automatic budget sequestration provisions of the Budget Control Act of 2011, the County expects to receive a reduction from its payment subsidies. Absent Congressional action, the sequester will continue through September Future Debt The County has no immediate additional borrowing plans. FINANCIAL ADVISOR WM Financial Strategies, St. Louis, Missouri, Financial Advisor to the County assisted in the preparation of this Annual Disclosure Report. NO LITIGATION The County represents that there is no controversy, suit or other proceeding of any kind pending or to their knowledge, threatened in any court that would materially affect the finances of the County. 13

17 ADDITIONAL INFORMATION For clarification of information contained in this Annual Disclosure Report contact the following: Mr. David Courtway Department of Administrative Services Director of Administration Jefferson County 729 Maple St. P.O. Box 100 Hillsboro, MO