Vance County Henderson, North Carolina Financial Statements June 30, 2017
VANCE COUNTY, NORTH CAROLINA BOARD AND OFFICERS June 30, 2017 BOARD OF COUNTY COMMISSIONERS Thomas S. Hester Jr., Chairman Archie B. Taylor, Jr., Vice Chairman Dan Brummitt Carolyn Faines Yolanda J. Feimster Leo Kelly, Jr. Gordon Wilder OFFICERS County Manager Finance Director Jordan McMillen David C. Beck
COUNTY OF VANCE, NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30, 2017 Exhibit(s) Page(s) INDEPENDENT AUDITORS' REPORT 1-3 MANAGEMENT S DISCUSSION AND ANALYSIS 4-9 BASIC FINANCIAL STATEMENTS: Government-wide Financial Statements: Statement of Net Position 1 10 Statement of Activities 2 11 Fund Financial Statements: Balance Sheet Governmental Funds 3 12 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 3a 13 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds 4 14 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 4a 15 Statement of Revenues, Expenditures and Changes in Fund Balances Budget And Actual General Fund 5 16-17 Statement of Net Position Proprietary Funds 6 18 Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds 7 19 Statement of Cash Flows Proprietary Funds 8-8a 20-21 Statement of Fiduciary Net Position Fiduciary Funds 9 22 NOTES TO THE FINANCIAL STATEMENTS 23-64 REQUIRED SUPPLEMENTAL FINANCIAL DATA Other Post Employment Benefits - Schedule of Funding Progress A-1 65 Other Post Employment Benefits - Schedule of Employer Contributions A-2 66 Schedule of County's Proportionate Share of Net Pension Asset (LGERS) A-3 67 Schedule of County Contributions (LGERS) A-4 68
COUNTY OF VANCE, NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30, 2017 Exhibit(s) Page(s) Schedule of County's Proportionate Share of Net Pension Asset (ROD) A-5 69 Schedule of County Contributions (ROD) A-6 70 Schedule of Changes in Total Pension Liability (LEOSSA) A-7 71 Schedule of Total Pension Liability as a Percentage of Covered-Employee Payroll (LEOSSA) A-8 72 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES Combining Balance Sheet - General Funds B-1 73 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Funds B-2 74 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund B-3 75-82 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Revaluation Fund B-3a 83 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Debt Service Fund B-3b 84 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - School Debt Service Fund B-3c 85 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Facility Fee Fund B-3d 86 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - LEOSSA Pension Fund B-3e 87 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - School Capital Projects Fund B-4 88 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - School Capital Reserve Fund B-4a 89 Combining Balance Sheet Non-Major Governmental Funds C-1 90 Combining Statement of Revenues, Expenditures, and Changes in C-2 91 Fund Balances - Non-Major Governmental Funds Combining Balance Sheets Non-Major Special Revenue Funds C-3 92
COUNTY OF VANCE, NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30, 2017 Exhibit(s) Page(s) Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Special Revenue Funds C-4 93 Combining Balance Sheet Nonmajor Capital Projects Funds C-5 94 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Capital Projects Funds C-6 95 Emergency Telephone System - Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual C-7 96 Fire District Fund - Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-8 97 Economic Development Fund Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual C-9 98 Community Development Fund Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual C-10 99 Neighborhood Stabilization Fund Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual C-11 100 Community Development Fund - Scattered Sites - Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual C-12 101 Capital Projects Fund - General Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (Non-GAAP) C-13 102 Capital Projects Fund - General Capital Reserve Fund - Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Non-GAAP) C-14 103 Enterprise Funds: Solid Waste Fund Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (Non-GAAP) D-1 104 Water District Fund Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual (Non-GAAP) D-2 105 Water District - Capital Projects Fund Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) D-2a 106 Agency Funds: Combining Statement of Fiduciary Assets and Liabilities Agency Funds E-1 107
COUNTY OF VANCE, NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30, 2017 Exhibit(s) Page(s) Combining Statement of Changes in Fiduciary Assets and Liabilities Agency Funds E-2 108 OTHER SCHEDULES Schedule of Ad Valorem Taxes Receivable F-1 109 Analysis of Current Tax F-2,F-2a 110-111 Ten Largest Taxpayers F-2b 112 Schedule of Cash and Investment Balances F-3 113 COMPLIANCE SECTION Report On Internal Control Over Financial Reporting And On Compliance and Other Matters Based On An Audit Of Financial Statements Performed In Accordance With Government Auditing Standards. 114-115 Independent Auditors Report on Compliance with Requirements Applicable to each Major Federal Program and Internal Control over Compliance in Accordance with Uniform Guidance and the State Single Audit Implementation 116-117 Independent Auditors Report on Compliance with Requirements Applicable to each Major State Program and Internal Control over Compliance in Accordance with OMB Uniform Guidance and the State Single Audit Implementation Act 118-119 Schedule of Findings and Questioned Costs 120-123 Summary Schedule of Prior Audit Findings 124 Schedule of Expenditures of Federal and State Awards 125-128
Thompson, Price, Scott, Adams & Co, P.A. P.O Box 398 1626 S. Madison Street Whiteville, NC 28472 Telephone (910) 642-2109 Fax (910) 642-5958 Alan W. Thompson, CPA R. Bryon Scott, CPA Gregory S. Adams, CPA INDEPENDENT AUDITORS REPORT To the Board of County Commissioners County of Vance Henderson, North Carolina Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the County of Vance, North Carolina, as of and for the year ended June 30, 2017, and the related notes to the financial statements which collectively comprise the County of Vance's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Vance County ABC Board. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Vance County ABC Board, is based solely on the report of the other auditors. 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 financial statements are free from material misstatement. The financial statements of Vance County ABC Board were not audited in accordance with Government Auditing Standards. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. Members American Institute of CPAs - N.C. Association of CPAs - AICPA Division of Firms 1
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based upon our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the County of Vance, North Carolina as of June 30, 2017, 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 accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, the Law Enforcement Officers' Special Separation Allowance, the other Postemployment Benefits' Schedules of Funding Progress and Employer Contributions, the Local Government Employees' Retirement System Schedules of the County's Proportionate Share of the Net Pension Asset and County Contributions, and the Register of Deeds' Supplemental Pension Fund Schedule of the County's Proportionate Share of the Net Pension Asset and Schedule of County Contributions on pages 4 through 15 and 75 through 81, respectively, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We and other auditors have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the County of Vance's basic financial statements. The combining and individual fund statements, budgetary schedules, other schedules as well as the accompanying Schedule of Expenditures of Federal and State Awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards are presented for purpose of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements, budgetary schedules, other schedules and the Schedule of Expenditures of Federal and State Awards are the responsibility of management and were derived from and related directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America by us and other auditors. In our opinion, based on our audit, the procedures performed as described above, and the report of the other auditors, the combining and individual fund financial statements, budgetary schedules, other schedules, and the Schedule of Expenditures of Federal and State Awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. 2
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards,wehavealsoissuedour report dated November 30, 2016 on our consideration of the County of Vance's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of the 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County of Vance's internal control over financial reporting and compliance. Thompson, Price, Scott, Adams & Co., P.A. Whiteville, NC January 25, 2018 3
VANCE COUNTY, NORTH CAROLINA MANAGEMENT S DISCUSSION AND ANALYSIS Management's Discussion and Analysis As management of Vance County, we offer readers of Vance County s financial statements this narrative overview and analysis of the financial activities of Vance County for the fiscal year ended June 30, 2017. We encourage readers to read the information presented here in conjunction with additional information that we have furnished in the County s financial statements, which follow this narrative. Financial Highlights The assets and deferred outflows of resources of Vance County exceeded its liabilities and deferred inflows of resources at the close of the fiscal year by $16,987,259 ( net position). The government's total net position increased by $3,174,661 primarily due to increases in net position in the Governmental-Type Funds. As of the close of the current fiscal year, Vance County s governmental funds reported combined ending fund balances of $26,572,971, an increase of $2,011,082 in comparison with the prior year. Approximately 24.19 percent of this total amount, or $6,427,979 is restricted or non-spendable. At the end of the current fiscal year, unassigned fund balance for the General Fund was $17,443,815, or 36.59 percent of total general fund expenditures for the fiscal year. Vance County's total long-term liabilities for governmental activities decreased by $1,143,391 during the current fiscal year. This is primarily due to amortization payments. Vance County maintains a Moody's Investor Service A1 bond ratings as well as an A+ bond rating from Standard and Poor's which was reaffirmed on May 13, 2013. Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to Vance County s basic financial statements. The County s basic financial statements consist of two components; 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements (see Figure 1). 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 Vance County. Required Components of Annual Financial Report Figure 1 Management s Discussion and Analysis Basic Financial Statements Government-wide Financial Statements Summary Fund Financial Statements Detail Notes to the Financial Statements 4
VANCE COUNTY, NORTH CAROLINA MANAGEMENT S DISCUSSION AND ANALYSIS Basic Financial Statements The first two statements (Exhibits 1 and 2) 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 3 through 9) 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 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. After the notes, supplemental information is 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 General Statutes also can be found in this part of the statements. Following the notes is the required supplemental information. This section contains funding information about the County s pension plans. Government-wide Financial Statements The government-wide financial statements are designed to provide the reader with a broad overview of the County 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 position and how it has changed. Net position is the difference between the County s total assets and deferred outflows of resources and the total liabilities and deferred inflows of resources. Measuring net position is one way to gauge the County s financial condition. The government-wide statements are divided into three categories: 1) governmental activities; 2) business-type activities; and 3) component units. The governmental activities include most of the County s basic services such as public safety, human services, and general administration. Property taxes, sales taxes, and state and federal grant funds finance most of these activities. The business-type activities are those that the County charges customers to provide. These include the water and solid waste management services offered by Vance County. The final category is the component units. Although legally separate from the County, the ABC Board is important to the County because the County is financially accountable for the Board by appointing its members and because the Board is required to distribute its profits to the County. The other component unit is the Vance County Tourism Development Authority, a public authority operating under the development of travel, tourism, and conventions in Vance County through advertising and promotions. The Authority is funded by a specific allocation of the county-wide occupancy tax authorized by House Bill 765, Ratified Bill, 2001 session of the North Carolina General Assembly. The government-wide financial statements are on Exhibits 1 and 2 of this report. 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. Vance 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 Statues or the County's budget ordinance. All of the funds of Vance County can be divided into three categories: governmental funds, proprietary funds, and fiduciary 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 governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds is described in a reconciliation that is a part of the fund financial statements. 5
VANCE COUNTY, NORTH CAROLINA MANAGEMENT S DISCUSSION AND ANALYSIS Vance County 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 as 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. Proprietary Funds Vance County has one kind of proprietary fund. Enterprise Funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Vance County uses enterprise funds to account for its water and solid waste management service operations. These funds are the same as those separate activities shown in the business-type activities in the Statement of Net Position and the Statement of Activities. Fiduciary Funds Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Vance County has five 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 follow Exhibit 9 of this report. Other Information In addition to the basic financial statements and accompanying notes, this report includes certain required supplementary concerning Vance County's progress in funding it obligation to provide pension benefits to its employees. Required supplementary information can be found following the notes to the financial statements section of this report. Government-Wide Financial Analysis As noted earlier, net position may serve over time as one useful indicator of a government s financial condition. The liabilities and deferred inflows of resources of Vance County s primary government exceeded its liabilities by $16,987,259 as of June 30, 2017. The County s net position increased by $3,174,661 for the fiscal year ended June 30, 2017. In addition, there was a restatement of fund balance that decreased the fund balance by $231,333. One of the largest portions is the County's net investment in capital assets (e.g. land, buildings, machinery, and equipment) totaling $3,060,102. Vance County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although Vance 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. Vance County s Net Position Figure 2 Governmental Business-type Activities Activities Total 2017 2016 2017 2016 2017 2016 Current and Other assets $ 29,411,313 $ 28,191,096 $ 2,299,729 $ 2,369,530 $ 31,711,042 $ 30,560,626 Capital Assets 14,654,840 13,625,570 15,144,301 15,416,864 29,799,141 29,042,434 Net Pension Assets 67,524 85,850 - - 67,524 85,850 Total Assets 44,133,677 41,902,516 17,444,030 17,786,394 61,577,707 59,688,910 Total deferred outflows of resources 3,699,537 812,671 1,587,618 1,621,743 5,287,155 2,434,414 Long-term liabilities 19,984,472 29,761,087 13,160,000 14,991,058 33,144,472 44,752,145 Other liabilities 14,708,805 2,413,418 1,768,815 325,739 16,477,620 2,739,157 Total Liabilities 34,693,277 32,174,505 14,928,815 15,316,797 49,622,092 47,491,302 Total deferred inflows of resources 254,746 586,132 765 1,959 255,511 588,091 Net Position Net investment in capital assets 1,075,801 7,537,194 1,984,301 3,656,864 3,060,102 11,194,058 Restricted 6,427,979 8,268,326-526,535 6,427,979 8,794,861 Unrestricted 5,381,411 (5,850,970) 2,117,767 (94,018) 7,499,178 (5,944,988) Total Net Position $ 12,885,191 $ 9,954,550 $ 4,102,068 $ 4,089,381 $ 16,987,259 $ 14,043,931 Several aspects of the County's financial operations both positively and negatively influenced the total unrestricted governmental net position: Continued strong collection rate for property taxes. Increased in sales tax collections, a major source of revenue for the County. Continued low cost of debt due to the County s high bond rating. Aggressive pursuit of grants funding for County projects. Diligent collection efforts on past due bills for taxes, utilities, and service. Maintaining expenditures within budgeted amounts. 6
VANCE COUNTY, NORTH CAROLINA MANAGEMENT S DISCUSSION AND ANALYSIS Vance County's Changes in Net Position Figure 3 Governmental Business-type Activities Activities Total 2017 2016 2017 2016 2017 2016 Revenues: Program revenues: Charges for services $ 3,827,691 $ 3,208,273 $ 3,096,192 $ 2,469,490 $ 6,923,883 $ 5,677,763 Operating grants and contributions 9,740,337 10,958,042-162,492 9,740,337 11,120,534 Capital grants and contributions 2,310,383 1,726,084-2,390,849 2,310,383 4,116,933 General revenues: - - Property taxes 24,843,277 23,986,395 - - 24,843,277 23,986,395 Other taxes 8,479,137 8,552,560 - - 8,479,137 8,552,560 Grants and contributions not - - restricted to specific programs 282,596 366,741 - - 282,596 366,741 Other 246,626 14,290 1,267 506 247,893 14,796 Total revenues 49,730,047 48,812,385 3,097,459 5,023,337 52,827,506 53,835,722 Expenses: Administrative - - - - - - General government 4,531,684 5,372,467 - - 4,531,684 5,372,467 Public safety 14,123,059 12,301,744 - - 14,123,059 12,301,744 Transportation 33,503 28,750 - - 33,503 28,750 Environmental protection 108,136 15,200 - - 108,136 15,200 Economic and physical development 1,127,342 1,269,343 - - 1,127,342 1,269,343 Human service 13,555,588 13,017,571 - - 13,555,588 13,017,571 Cultural and recreation 1,651,194 1,719,080 1,651,194 1,719,080 Education 10,597,631 11,599,124 10,597,631 11,599,124 Interest on long-term debt 479,605 786,155 - - 479,605 786,155 Solid waste management - - 2,105,487 2,549,069 2,105,487 2,549,069 Water - - 1,339,616 1,168,113 1,339,616 1,168,113 Total expenses 46,207,742 46,109,434 3,445,103 3,717,182 49,652,845 49,826,616 Increase (decrease) in net position before transfers and special items 3,522,305 2,702,951 (347,644) 1,306,155 3,174,661 4,009,106 Transfers and special items (360,331) (2,472,662) 360,331 369,402 - (2,103,260) Increase (Decrease) in net position after transfers and special items 3,161,974 230,289 12,687 1,675,557 3,174,661 1,905,846 Net position, beginning 9,954,550 9,705,348 4,089,381 2,413,824 14,043,931 12,119,172 Net position, beginning (restated) 9,723,217 9,724,261 4,089,381 2,413,824 13,812,598 12,138,085 Net position, ending $ 12,885,191 $ 9,954,550 $ 4,102,068 $ 4,089,381 $ 16,987,259 $ 14,043,931 Governmental activities. Governmental activities increased the County s net position by $3,161,974. Key elements of this increase are as follows: Increase in cash and cash equivalents due to stronger than anticipated revenues. Increase in tax collections, which is a major source of revenues. Maintained expenditures in most categories. Business-type activities: The net position of business-type activities increased by $12,687. Key elements of this increase are as follows: Increased revenues in both the Water Fund and Solid Waste Fund. Decreased expenses in the Solid Waste Fund. Financial Analysis of the County s Funds As noted earlier, Vance County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds. The focus of Vance County s governmental funds is to provide information on near-term inflows, outflows, and balances of usable resources. Such information is useful in assessing Vance County s financing requirements. Specifically, fund balance available for appropriation can be a useful measure of a government s net resources available for spending at the end of the fiscal year. 7
VANCE COUNTY, NORTH CAROLINA MANAGEMENT S DISCUSSION AND ANALYSIS The general fund is the chief operating fund of Vance County. At the end of the current fiscal year, Vance County's fund balance available in the General Fund was $19,205,420 while total fund balance reached $22,173,948. The County currently has an available fund balance of 37.46% of general fund expenditures, while total fund balance represents 43.25% of that same amount. At June 30, 2017, the governmental funds of Vance County reported a combined fund balance of $26,572,971, a 8.19 % increase over last year. The primary reason for this increase is net income in the General Fund. 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. Total amendments to the General Fund increased revenues by $2,472,491 for the fiscal year ending June 30, 2017. Proprietary Funds. The County of Vance s proprietary funds provide the same type of information found in the government-wide statements, but in more detail. Total net position of the Solid Waste Fund at the end of the fiscal year was $469,504, and for the Water Fund equaled $3,632,564. The change in net position before any prior period adjustments for the Solid Waste Fund was $144,359 white the change in net position before prior period adjustments for the Water Fund was ($131,672). Other factors concerning the finances of these funds have already been addressed in the discussion of Vance County's Business-Type activities. Capital Asset and Debt Administration Capital assets. Vance County s capital assets for its governmental and business type activities as of June 30, 2017, totals $29,799,141 (net of accumulated depreciation). These assets include buildings, land, machinery and equipment, vehicles and construction in progress. Major capital asset transactions during the year include: Purchased a number of new vehicles for public safety departments. Completed construction of the Animal Shelter. Various other building improvements. Vance County s Capital Assets Figure 4 Governmental Business-type Activities Activities Total 2017 2016 2017 2016 2017 2016 Land $ 784,119 $ 784,119 $ 872,857 $ 872,857 $ 1,656,976 $ 1,656,976 Building & Improvements 11,469,112 10,130,753 55,907 65,602 11,525,019 10,196,355 Equipment & Vehicles 1,945,900 1,998,869 99,126 3,600 2,045,026 2,002,469 Computer Software 41,153 69,425 - - 41,153 69,425 Water Distribution system - - 14,106,411 14,474,805 14,106,411 14,474,805 Construction in Progress 414,556 642,404 10,000-424,556 642,404 Total $ 14,654,840 $ 13,625,570 $ 15,144,301 $ 15,416,864 $ 29,799,141 $ 29,042,434 Additional information on the County s capital assets can be found in notes to the financial statements. Long-term Debt. As of June 30, 2017, Vance County had total long-term debt obligations of $33,144,472 all of which is backed by the full faith and credit of the County. Vance County s Outstanding Debt Figure 5 Governmental Business-type Activities Activities Total 2017 2016 2017 2016 2017 2016 General obligation bonds $ 865,000 $ 1,305,000 $ 11,585,000 $ 11,760,000 $ 12,450,000 $ 13,065,000 Capitalized leases 1,263,039 1,543,376 - - 1,263,039 1,543,376 Installment purchase loans 17,856,433 18,060,737 - - 17,856,433 18,060,737 Note Payable - - 1,575,000 1,618,750 1,575,000 1,618,750 Total $ 19,984,472 $ 20,909,113 $ 13,160,000 $ 13,378,750 $ 33,144,472 $ 34,287,863 Vance County s total debt decreased by $1,143,391 during the past fiscal year due to the continued amortization of debt. 8
VANCE COUNTY, NORTH CAROLINA MANAGEMENT S DISCUSSION AND ANALYSIS As mentioned in the financial highlights section of this document, Vance County maintained for the 25th consecutive year, its A1 bond rating from Moody's Investor Service and A+ rating from Standard and Poor's Corporation. This bond rating is a clear indication of the sound financial condition of Vance County. This achievement is a primary factor in keeping borrowing costs low when the County issues debt. The State of North Carolina limits the amount of general obligation debt that a unit of government can issue to 8 percent of the total assessed value of taxable property located within that government s boundaries. The legal debt limit for Vance County is $217,312,827. Additional information regarding Vance County s long-term debt can be found in the notes to the financial statements. Economic Factors and Next Year s Budgets and Rates The following key economic indicators reflect the current economic condition of Vance County: The local economy shows signs of recovery from the recent recession. Unemployment rates have been on a steady decline. As of June 2017, the unemployment rate was 5.7% compared to 7.5% for the same period in the prior year. Several existing businesses announced plans to expand operations in Vance County through additional investment in facilities and equipment Vance County has two industrial parks with existing capacity to attract new industry As of January 1, 2017 the sales assessment ratio of real property was 97.87. This follows a revaluation of all real property in the county in 2016. Sales tax distributions which are a major source of revenue for the county increased by 12% primarily due to an expansion of taxable services enacted by the North Carolina General Assembly. Overall, sales tax revenues have increased by 30% from fiscal year 2010-11 to fiscal year 2016-17. Budget Highlights for the Fiscal Year Ending June 30, 2018 Governmental Activities: The ad valorem tax rate remains at 89.0 cents per $100.00. Ad valorem tax revenues are expected to be nearly identical to the prior fiscal year. The fire tax rate will remain at 4.4 cents per $100.00. Sales tax collections are projected to increase by approximately 2% resulting in an additional $155,000 in revenue. ABC revenue distributions to the county from the local ABC Board are anticipated to increase by $100,000 over the prior year due to early retirement of debt on the ABC retail store facility. The County continues to appropriate $200,000 on an annual basis from its fund balance to be used for critical building maintenance needs during the fiscal year. Remaining revenue sources are projected to remain fairly constant compared to prior year amounts. The County will use these revenues to provide services at the same level as the prior year. Budgeted expenditures in the General Fund are expected to increase approximately 2.44% to $49,266,653 from the original fiscal year 2016-17 budget. A salary and benefits study was performed and salary revisions were instituted as a result of the study. The revisions are being implemented in two phases with the first phase in FY 2017-18 costing a total of $577,000. Other increases in the General Fund budget include additional capital outlay funding for public schools at a cost of $500,000 as well as an increase of $200,000 for operations. Additionally, funding for operations at Vance-Granville Community College was increased by $110,000. The County is not expected to incur any significant new debt during fiscal year 2017-18. Business-type Activities: The solid waste rates in the County will remain at $105.00 per household. Upgrades to our solid waste convenience sites are being performed by our contracted solid waste handler at no cost to the County. The Water Fund is expected to generate additional revenue in fiscal year 2017-18 in part because of a 13% increase in water usage rates. An expansion of the water system which is estimated to add 80 new customers will begin construction late in the fiscal year. The Water Fund continues the need to be subsidized by the General Fund but the amount of support should decrease by $100,000. Requests for Information This report is designed to provide an overview of the County s finances for those with an interest in this area. Questions concerning any of the information found in this report or requests for additional information should be directed to the Director of Finance, Vance County, 122 Young Street, Suite B, Henderson, NC 27536.. 9
BASIC FINANCIAL STATEMENTS
Exhibit 1 Vance County, North Carolina Statement of Net Position June 30, 2017 Primary Government Component Units Business Total Vance Vance Governmental Type Primary ABC Tourism Activities Activities Government Board Development ASSETS Cash and cash equivalents $ 21,616,884 $ 1,493,435 $ 23,110,319 $ 792,416 $ 468,155 Receivables (net): Property Taxes 1,409,364-1,409,364 - - Accounts 2,771,892 334,173 3,106,065-3,061 Notes 16,500-16,500 - - Interest 108,181-108,181 - - Inventories - - - 255,684 - Due from other governments 288,352 21,167 309,519 - - Prepaid items - - - 7,494 - Restricted assets: Cash and cash equivalents 3,200,140 450,954 3,651,094 - - Net Pension Asset 67,524-67,524 - - Capital assets: Land, improvements, and construction in process 1,198,675 882,857 2,081,532-461,267 Other capital assets, net of depreciation 13,456,165 14,261,444 27,717,609 781,302 - Total Capital assets 14,654,840 15,144,301 29,799,141 781,302 461,267 Total assets 44,133,677 17,444,030 61,577,707 1,836,896 932,483 DEFERRED OUTFLOWS OF RESOURCES Purchase of water capacity - 1,575,000 1,575,000 - - Pension deferrals 2,748,286 9,425 2,757,711 - - Contributions to pension plan in current year 951,251 3,193 954,444 - - Total deferred outflows of resources 3,699,537 1,587,618 5,287,155 85,166 33,673 LIABILITIES Accounts payable and accrued liabilities 1,293,643 211,661 1,505,304 176,848 4,474 Taxes Payable - - - 85,721 - Accrued Vacation - - - 33,799 19,736 Accrued Expense - - - 4,705 - Accrued interest 214,275 28,861 243,136 - - Distribution Payable - - - 76,945 Due to other governments 9,272-9,272 - - Customer deposits - 292,643 292,643 - - Long-term liabilities: Due within one year Long-term debt 2,547,787 177,000 2,724,787 - - Due in more than one year Accrued postclosure liability - 1,188,759 1,188,759 - - Long-term debt 17,436,685 12,983,000 30,419,685 - - Compensated absences 834,644 5,023 839,667 - - Net Pension Liability- LGERS 4,248,667 14,680 4,263,347 73,857 40,502 Net Pension Liability- LEOSSA 745,443-745,443 - - OPEB Obligation 7,362,861 27,188 7,390,049 353,822 46,738 - - - - 277 Total liabilities 34,693,277 14,928,815 49,622,092 805,697 111,727 DEFERRED INFLOWS OF RESOURCES Prepaid taxes 1,382-1,382 - - Note receivable 16,500-16,500 - - Pension deferrals 236,864 765 237,629 - - Total deferred outflows of resources 254,746 765 255,511 2,588 2,109 NET POSITION Net investment in capital assets 1,075,801 1,984,301 3,060,102 781,302 460,990 Restricted: Stabilization by State Statute 3,232,973-3,232,973-3,061 General Government 243,210-243,210 - - Education 2,951,796-2,951,796 - - Working Capital - - - 114,938 - Tourism - - - 33,098 Unrestricted 5,381,411 2,117,767 7,499,178 217,537 355,171 Total net position $ 12,885,191 $ 4,102,068 $ 16,987,259 $ 1,113,777 $ 852,320 The Notes to the Financial Statements are an Integral Part of this Statement. 10
Exhibit 2 Vance County, North Carolina Statement of Activities For the Fiscal Year Ended June 30, 2017 Program Revenues Net (Expense) Revenue and Changes in Net Position Operating Capital Primary Government Vance Vance Total Charges for Grants and Grants and Governmental Business-type ABC Tourism Reporting Expenses Services Contributions Contributions Activities Activities Total Board Development Unit Functions/Programs Primary government: Government activities: General government $ 4,531,684 $ 455,635 $ - $ - $ (4,076,049) $ - $ (4,076,049) $ - $ - $ (4,076,049) Public safety 14,123,059 3,039,225 531,910 648,883 (9,903,041) - (9,903,041) - - (9,903,041) Economic and physical development 1,127,342 233,366-224,091 (669,885) - (669,885) - - (669,885) Environmental Protection 108,136 17,117 - - (91,019) - (91,019) - - (91,019) Transportation 33,503 - - - (33,503) - (33,503) - - (33,503) Human services 13,555,588 82,348 9,082,919 - (4,390,321) - (4,390,321) - - (4,390,321) Cultural and recreational 1,651,194 - - 571,633 (1,079,561) - (1,079,561) - - (1,079,561) Education 10,597,631-125,508 865,776 (9,606,347) - (9,606,347) - - (9,606,347) Interest on debt 479,605 - - - (479,605) - (479,605) - - (479,605) Total governmental activities 46,207,742 3,827,691 9,740,337 2,310,383 (30,329,331) - (30,329,331) - - (30,329,331) Business-type activities: Water 1,339,616 846,671 - - - (492,945) (492,945) - - (492,945) Landfill 2,105,487 2,249,521 - - - 144,034 144,034 - - 144,034 Total business-type activities 3,445,103 3,096,192 - - - (348,911) (348,911) - - (348,911) Total primary government 49,652,845 6,923,883 9,740,337 2,310,383 (30,329,331) (348,911) (30,678,242) - - (30,678,242) Component units: Vance ABC Board 3,760,640 3,869,789 - - - - - 109,149 $ - 109,149 Vance County TDA 337,320 - - - - - - - (337,320) (337,320) Total component units $ 4,097,960 $ 3,869,789 $ - $ - - - - 109,149 (337,320) (228,171) General Revenues: Taxes: Ad valorem taxes 24,843,277-24,843,277 - - 24,843,277 Local option sales tax 8,419,426-8,419,426 - - 8,419,426 Other taxes 59,711-59,711-450,437 59,711 Unrestricted intergovernmental 282,596-282,596 - - 282,596 Investment income 12,862 1,267 14,129 301 474 14,430 Gain/Loss of sale/disposal of assets (19,740) - (19,740) - - (19,740) Miscellaneous 253,504-253,504-30,547 253,504 Transfers (360,331) 360,331 - - - - Total general revenues and transfers 33,491,305 361,598 33,852,903 301 481,458 33,853,204 Change in net position 3,161,974 12,687 3,174,661 109,450 144,138 3,284,111 Net position - beginning 9,954,550 4,089,381 14,043,931 1,004,327 708,182 15,048,258 Restatement (231,333) - (231,333) - - (231,333) Net position - beginning (as restated) 9,723,217 4,089,381 13,812,598 1,004,327 708,182 14,816,925 Net position - ending $ 12,885,191 $ 4,102,068 $ 16,987,259 $ 1,113,777 $ 852,320 $ 18,101,036 The Notes to the Financial Statements are an Integral Part of this Statement. 11
Vance County, North Carolina Governmental Funds Balance Sheet June 30, 2017 Exhibit 3 ASSETS Major Non-Major School Other Total Bond Governmental Governmental General Fund Funds Funds Cash and cash equivalents $ 20,234,552 $ - $ 1,382,332 $ 21,616,884 Restricted cash 243,210 1,716,076 1,240,854 3,200,140 Receivables (net): Taxes 1,365,769-43,595 1,409,364 Accounts 2,595,992-175,900 2,771,892 Due from other governments 216,307 28,097 43,948 288,352 Due from other funds 156,229 - - 156,229 Note receivable - - 16,500 16,500 Total assets $ 24,812,059 $ 1,744,173 $ 2,903,129 $ 29,459,361 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities 1,261,688-31,955 1,293,643 Due to other funds - - 156,229 156,229 Due to other governments 9,272 - - 9,272 Total liabilities 1,270,960-188,184 1,459,144 DEFERRED INFLOWS OF RESOURCES Prepaid Taxes 1,382 - - 1,382 Taxes receivable 1,365,769-43,595 1,409,364 Note receivable - - 16,500 16,500 Total deferred inflows of resources 1,367,151-60,095 1,427,246 Fund balances: Nonspendable Prepaid items - - - - Restricted Stabilization by State Statute 2,968,528 28,097 236,348 3,232,973 Capital Projects - Schools - 1,716,076 1,235,720 2,951,796 Tax revaluation 243,210 - - 243,210 Committed LEOSSA Pension and OPEB benefits 358,438 - - 358,438 Public Safety - - 157,067 157,067 Emergency services - - 457,396 457,396 Assigned Subsequent year's expenditures 1,159,957 - - 1,159,957 Unassigned 17,443,815-568,319 18,012,134 Total fund balances 22,173,948 1,744,173 2,654,850 26,572,971 Total liabilities, deferred inflows of resources, and fund balances $ 24,812,059 $ 1,744,173 $ 2,903,129 $ 29,459,361 The Notes to the Financial Statements are an Integral Part of this Statement 12
Exhibit 3a VANCE COUNTY, NORTH CAROLINA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION June 30, 2017 Amounts reported for governmental activities in the statement of net position are different because: Total fund balance - governmental funds $ 26,572,971 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 33,172,897 Less accumulated depreciation (18,518,057) Net capital assets 14,654,840 Net pension asset (Register of Deeds) 67,524 Deferred outflows of resources: Contributions to the pension plan in the current fiscal year LGERS 924,058 ROD 4,123 Benefit payment and administration costs for LEOSSA are deferred outflows of resources on the 23,070 Statement of Net Position Pension related deferrals LGERS 2,727,639 ROD 20,647 Accrued interest receivable less the amount claimed as unearned revenue in the government-wide statements as these funds are unavailable in the fund statements 108,181 Deferred inflows of resources reported in the government-wide statements but not in the fund statements Deferred inflows of resources for taxes receivable 1,409,364 Pension deferrals LGERS (221,283) ROD (1,282) LEOSSA (14,299) Liabilities that, because they are not due and payable in the current period, do not require current resources to pay and are therefore not reported in the fund statements: Compensated absences (834,644) Other Post Employment Benefits (7,362,861) Total pension liability - LEOSSA (745,443) Net pension liability - LGERS (4,248,667) Bonds, leasing, and installment financing (19,984,472) Accrued interest payable (214,275) Total adjustment (13,687,780) Net position of governmental activities $ 12,885,191 The Notes to the Financial Statements are an Integral Part of this Statement. 13
Exhibit 4 Vance County, North Carolina Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2017 Governmental Fund Types Major Non-Major School Other General Capital Project Governmental Fund Fund Funds Total Revenues Ad valorem taxes $ 23,935,307 $ - $ 776,542 $ 24,711,849 Local option sales taxes 8,419,426 - - 8,419,426 Other taxes and licenses 59,711 - - 59,711 Unrestricted intergovernmental 282,596 - - 282,596 Restricted intergovernmental 10,259,177 991,285 1,056,240 12,306,702 Sales and services 3,571,710 - - 3,571,710 Investment earnings 6,664 3,230 2,968 12,862 Miscellaneous 253,504 - - 253,504 Total revenues 46,788,095 994,515 1,835,750 49,618,360 Expenditures Current: General government 4,157,626 - - 4,157,626 Public safety 12,608,992-2,387,019 14,996,011 Transportation 28,750 28,750 Environmental protection 108,136 108,136 Economic and physical development 1,041,267-39,021 1,080,288 Human services 13,217,036 - - 13,217,036 Cultural and recreational 1,645,923 - - 1,645,923 Education 10,270,768 274,316 52,548 10,597,632 Debt service: Principal retirement 4,106,666-141,475 4,248,141 Interest and fees 488,182-3,796 491,978 Total expenditures 47,673,346 274,316 2,623,859 50,571,521 Revenues over (under) expenditures (885,251) 720,199 (788,109) (953,161) Other financing sources (uses): Transfers in 4,064,577 2,222,044 44,576 6,331,197 Transfers out (3,601,536) (2,860,244) (229,748) (6,691,528) Proceeds from issuance of debt 1,703,000-1,298,000 3,001,000 Proceeds from lease obligations 322,500 - - 322,500 Sale of fixed assets 1,074 - - 1,074 Total other financing sources (uses) 2,489,615 (638,200) 1,112,828 2,964,243 Net Change in Fund Balance 1,604,364 81,999 324,719 2,011,082 Fund balances, beginning of year 20,569,584 1,662,174 2,330,131 24,561,889 Fund balances, end of year $ 22,173,948 $ 1,744,173 $ 2,654,850 $ 26,572,971 The Notes to the Financial Statements are an Integral Part of this Statement. 14
Exhibit 4a VANCE COUNTY, NORTH CAROLINA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year Ended June 30, 2017 Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balance - total governmental funds $ 2,011,082 Capital Outlay Expenditures recorded in the fund statements but capitalized as assets in the statement of activities. 2,336,858 Depreciation Expense, the allocation of those assets over their useful lives, that is recorded on the statement of activities but not in the fund statements. (1,286,774) Gain on Disposal of assets during the year. (20,814) Contributions to the pension plan in the current fiscal year are not included on the Statement of Activities. LGERS 924,058 ROD 4,123 Benefit payment and administration costs for LEOSSA are deferred outflows of resources on the Statement of Net Position 23,070 New debt issued during the year is recorded as a source of funds on the fund statements; it has not effect on the statement of activities -- it affects only the government-wide statement of net position. (3,323,500) Principal payments on debt owed are recorded as a use of funds on the fund statements but again affect only the statement of net position in the government-wide statements. 4,248,141 Expenses reported in the statement of activities that do not require the use of current resources to pay are not recorded as expenditures in the fund statements. Difference in interest expense between fund statements (modified accrual) and government-wide statements (full accrual) 12,373 Compensated absences are accrued in the government-wide statements but not in the fund statements because they do not use current resources. (38,943) Increase in Other Post Employment Benefits Liability (682,602) Pension expense LGERS (1,113,883) ROD (4,366) LEOSSA (58,277) Revenues reported in the statement of activities that do not provide current resources are not recorded as revenues in the fund statements. Increase (Decrease) in deferred inflows of resources - taxes receivable - at year end 23,247 Increase (Decrease) in accrued interest receivable at year end 108,181 Change in net position of governmental activities $ 3,161,974 The Notes to the Financial Statements are an Integral Part of this Statement. 15
Exhibit 5 Vance County, North Carolina Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund For the Fiscal Year Ended June 30, 2017 Variance With Final Original Final Positive Budget Budget Actual (Negative) Revenues Ad valorem taxes $ 23,592,507 $ 23,998,807 $ 23,935,307 $ (63,500) Local option sales tax 8,016,424 8,510,424 8,419,426 (90,998) Other taxes and licenses 65,750 67,750 59,711 (8,039) Unrestricted intergovernmental 294,500 294,500 282,596 (11,904) Restricted intergovernmental 9,735,181 10,661,871 10,186,462 (475,409) Sales and services 3,413,687 3,590,787 3,571,710 (19,077) Investment earnings 2,300 1,000 2,210 1,210 Miscellaneous 547,020 235,731 253,504 17,773 Total revenues 45,667,369 47,360,870 46,710,926 (649,944) Expenditures Current: General government 4,086,861 4,578,748 4,131,040 447,708 Public safety 13,654,909 13,513,374 12,608,992 904,382 Transportation - 28,750 28,750 - Environmental protection 97,000 108,836 108,136 700 Economic and physical development 2,623,827 1,209,295 1,041,267 168,028 Human services 13,723,341 14,779,740 13,217,036 1,562,704 Cultural and recreational - 1,675,535 1,578,743 96,792 Intergovernmental: Education 10,257,700 10,271,200 10,270,768 432 Debt service: Principal retirement - 491,030 461,361 29,669 Interest and other charges - 26,828 34,237 (7,409) Total expenditures 44,443,638 46,683,336 43,480,330 3,203,006 Revenues over (under) expenditures 1,223,731 677,534 3,230,596 2,553,062 Other financing sources (uses): Transfers to other funds (3,651,169) (3,815,298) (3,538,955) 276,343 Transfers from other funds 1,317,773 1,598,029 1,540,681 (57,348) Proceeds from lease obligation - 322,500 322,500 Sale of fixed assets - 35,000 1,074 Contingency - (68,664) - Appropriated fund balance 1,109,665 1,250,899 - (1,250,899) Total other financing sources (uses) (1,223,731) (677,534) (1,674,700) (997,166) Net change in fund balance $ - $ - 1,555,896 $ 1,555,896 Fund balance, beginning 20,016,110 Fund balance, ending $ 21,572,006 16
Exhibit 5 Vance County, North Carolina Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund For the Fiscal Year Ended June 30, 2017 General fund balance, ending $ 21,572,006 A legally budgeted Tax Reassessment Fund is consolidated into the General Fund for reporting purposes: Investment Earnings 1,430 Transfer in 60,625 Fund Balance, beginning 181,449 A legally budgeted Debt Service Fund is consolidated into the General Fund for reporting purposes: Investment Earnings 159 Transfer in 859,223 Expenditures (859,382) Fund Balance, beginning - A legally budgeted School Debt Service Fund is consolidated into the General Fund for reporting purposes: Transfer in General Fund 1,604,048 Expenditures (1,604,048) Fund Balance, beginning - A legally budgeted Facility Fees Fund is consolidated into the General Fund for reporting purposes: Restricted intergovernmental 72,715 Investment Earnings 74 Transfer out (62,581) Expenditures (26,586) Fund Balance, beginning 16,378 A legally budgeted LEOSSA Fund is consolidated into the General Fund for reporting purposes: Investment Earnings 2,791 Fund Balance, beginning 355,647 Fund Balance, ending (Exhibit 4) $ 22,173,948 The Notes to the Financial Statements are an Integral Part of this Statement 17
Exhibit 6 Vance County, North Carolina Statement of Net Position Proprietary Funds June 30, 2017 Solid Waste Water Fund Fund Total ASSETS Current assets: Cash and cash equivalents $ 571,829 $ 921,606 $ 1,493,435 Accounts Receivable (net) 276,612 57,561 334,173 Due from other governments 6,792 14,375 21,167 Total current assets 855,233 993,542 1,848,775 Noncurrent assets: Restricted cash and investments - 450,954 450,954 Capital Assets: Land 872,857-872,857 Construction in process - 10,000 10,000 Building and improvements 65,602-65,602 Water distribution system - 14,735,776 14,735,776 Vehicles and equipment 258,051-258,051 Less accumulated depreciation (168,620) (629,365) (797,985) Capital assets, net 1,027,890 14,116,411 15,144,301 Total noncurrent assets 1,027,890 14,567,365 15,595,255 Total assets 1,883,123 15,560,907 17,444,030 DEFERRED OUTFLOWS OF RESOURCES Contributions to pension plan 12,618-12,618 Purchase of water capacity - 1,575,000 1,575,000 Total deferred outflows of resources 12,618 1,575,000 1,587,618 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 189,822 21,839 211,661 Accrued interest payable - 28,861 28,861 Current maturities of long-term debt - 177,000 177,000 Total current liabilities 189,822 227,700 417,522 Long-term liabilities: Accrued landfill closure and postclosure 1,188,759-1,188,759 General obligation bonds payable - 11,408,000 11,408,000 Notes payable - 1,575,000 1,575,000 Net Pension Liability 14,680-14,680 Other Post Employment Benefits 27,188-27,188 Compensated absences payable 5,023-5,023 Customer deposits - 292,643 292,643 Total noncurrent liabilities 1,235,650 13,275,643 14,511,293 Total liabilities 1,425,472 13,503,343 14,928,815 DEFERRED INFLOWS OF RESOURCES 765 765 NET POSITION Net investment in capital assets 1,027,890 956,411 1,984,301 Restricted - - - Unrestricted (558,386) 2,676,153 2,117,767 Total net position $ 469,504 $ 3,632,564 $ 4,102,068 The Notes to the Financial Statements are an Integral Part of this Statement. 18
Exhibit 7 Vance County, North Carolina Statement of Revenues, Expenses, and Changes in Fund Net Position All Proprietary Fund Types For the Fiscal Year Ended June 30, 2017 Solid Waste Water Fund Fund Total Operating revenues: Charges for services $ 2,054,614 $ 829,380 $ 2,883,994 Other operating revenues 9,659 17,291 26,950 Total operating revenues 2,064,273 846,671 2,910,944 Operating expenses: Cost of operations 2,164,437 575,006 2,739,443 Landfill closure and postclosure care costs (66,341) - (66,341) Depreciation and amortization 7,391 412,144 419,535 Total operating expenses 2,105,487 987,150 3,092,637 Operating income (loss) (41,214) (140,479) (181,693) Nonoperating revenues (expenses): Investment earnings - 1,267 1,267 Federal, state, and local grants 78,565-78,565 Intergovernmental taxes and other revenues 106,683-106,683 Interest and other charges - (352,466) (352,466) Total nonoperating revenues (expenses) 185,248 (351,199) (165,951) Income (loss) before transfers and contributions 144,034 (491,678) (347,644) Transfers in 325 360,006 360,331 Change in net position 144,359 (131,672) 12,687 Total net position, beginning 325,145 3,764,236 4,089,381 Total net position, ending $ 469,504 $ 3,632,564 $ 4,102,068 The Notes to the Financial Statements are an Integral Part of this Statement. 19
Exhibit 8 Vance County, North Carolina Statement of Cash Flows All Proprietary Fund Types For the Fiscal Year Ended June 30, 2017 Solid Waste Water Fund Fund Total Cash Flows From Operating Activities Cash received from customers $ 2,047,847 $ 842,366 $ 2,890,213 Cash paid for goods and services (2,079,985) (680,710) (2,760,695) Cash paid to employees for services (61,956) - (61,956) Other operating revenues 9,659 17,291 26,950 Net cash provided by (used in) operating activities (84,435) 178,947 94,512 Cash Flows From Noncapital Financing Activities Transfers from other funds 325 360,006 360,331 Net cash provided by (used in) financing activities 325 360,006 360,331 Cash Flows From Capital and Related Financing Activities Capital contributions - Federal, state and local grants 78,565-78,565 Intergovernmental taxes and fees 106,683-106,683 Interest and bond issuance costs - (351,535) (351,535) Acquisition of capital assets (93,222) (10,000) (103,222) Repayment of debt obligations - (218,750) (218,750) Net cash provided by (used in) capital and related financing activities 92,026 (580,285) (488,259) Cash Flows From Investing Activities Investment Income - 1,267 1,267 Net cash provided by (used in) investing activities - 1,267 1,267 Net increase (decrease) in cash and cash equivalents/investments 7,916 (40,065) (32,149) Cash and cash equivalents/investments Beginning of year 563,913 1,412,625 1,976,538 End of year $ 571,829 $ 1,372,560 $ 1,944,389 The Notes to the Financial Statements are an Integral Part of this Statement. 20
Exhibit 8a Vance County, North Carolina Statement of Cash Flows All Proprietary Fund Types For the Fiscal Year Ended June 30, 2017 Solid Waste Water Fund Fund Total Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Operating income (loss) $ (41,214) $ (140,479) $ (181,693) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and Amortization 7,391 412,144 419,535 Change in assets and liabilities: (Increase) decrease in: Accounts receivable (6,767) 44,419 37,652 Deferred outflows of resources for pensions (9,625) - (9,625) Increase (decrease) in: Compensated absences payable 75-75 Utility deposits - (31,433) (31,433) Accounts payable and accrued expenses 19,556 (105,704) (86,148) Net Pension Liability 11,305-11,305 Deferred inflows of resources (1,194) - (1,194) Other Post Employment Benefits 2,379-2,379 Landfill closure and postclosure care costs (66,341) - (66,341) Total adjustments (43,221) 319,426 276,205 Net cash provided by (used in) operating activities $ (84,435) $ 178,947 $ 94,512 The Notes to the Financial Statements are an Integral Part of this Statement. 21
Exhibit 9 Vance County, North Carolina Statement of Fiduciary Net Position Fiduciary Funds June 30, 2017 Assets Agency Funds Cash and investments $ 221,850 Total assets 221,850 Liabilities and Net Position Accounts payable 221,850 Total liabilities 221,850 Net Position Held in trust (Fiduciary net assets) $ - The Notes to the Financial Statements are an Integral Part of this Statement. 22
COUNTY OF VANCE, NORTH CAROLINA NOTES TO BASIC FINANCIAL STATEMENTS For the Year Ended June 30, 2017 Note 1: Summary of Significant Accounting Policies The accounting policies of the County of Vance, North Carolina and its component units conform to generally accepted accounting principles as applicable to governments. The following is a summary of the more significant accounting policies: A. Reporting Entity Component Unit Vance County- Water District Vance County- ABC Board Vance County Tourism Development Authority Vance County Industrial Facility and Pollution Control Financing Authority Reporting Method Blended Discrete Discrete Discrete Criteria for Inclusion Under State law (NCGS 162-A-89), the County's board of commissioners also serve as the governing board for the District. The members of the ABC Board's governing board are appointed by the County. The ABC Board is required by State statute to distribute its surpluses to the General Fund of the County. The Authority exists to promote travel and tourism within the County. The members of the Tourism Authority's Board are appointed by the County. The Financing Authority is governed by a seven member board of commissioners that is appointed by the County commissioners. The County can remove any commissioner of the Authority with or without a cause. Separate Financial Statements None issued Vance County ABC Board PO Box 1417 Henderson NC, 27536 Vance County Tourism Development Authority 943 Andrews Ave. Henderson, NC 27536 None issued The County, which is governed by a seven-member board of commissioners, is one of the 100 counties established in North Carolina under North Carolina General Statute 153A-10. As required by generally accepted accounting principles, these financial statements present the County and its component units, legally separate entities for which the County is financially accountable. The blended component unit, although it is a legally separate entity, is, in substance, part of the County's operations. The discretely presented component units presented below are reported in separate columns in the County's combined financial statements in order to emphasize that they are legally separate from the County. The Authority has no financial transactions or account balances; therefore, it is not presented in the basic financial statements. Vance County Water District exists to provide and maintain water systems for the County residents within the district. The District is reported as an enterprise fund in the County's financial statements. The blended presentation method presents component units as a department or unit of the County, and it offers no separate presentation as within the discrete method. 23
B. Basis of Presentation Basis of Accounting Government-wide Statements : The statement of net position and the statement of activities display information about the primary government net position (the County) and its component units. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the County. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. The statement of activities presents a comparison between direct expenses and program revenues for the different business-type activities of the County and for each function of the County s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expense allocations that have been made in the funds have been reversed for the statement of activities. Program revenues include (a) fees and charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements: The fund financial statements provide information about the County s funds, including its fiduciary funds and blended component units. Separate statements for each fund category governmental, proprietary, and fiduciary are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as non-major funds. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies, result from non-exchange transactions. Other non-operating items such as investment earnings are ancillary activities. The County reports the following major governmental funds: General Fund - This is the County s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Tax Revaluation Fund is a legally budgeted fund under North Carolina General Statutes; however, for statement presentation in accordance with GASB Statement No. 54 it is consolidated in the General Fund. School Capital Projects and Capital Reserve Funds These funds account for the construction of the new elementary school and construction of multipurpose rooms at three of the elementary schools, HVAC and mechanical renovations at Northern Vance High School, science lab renovations at Northern Vance High School, plumbing renovations at New Hope Elementary School, and renovations to eleven school facilities. The County reports the following major enterprise funds: Solid Waste Fund - This fund is used to account for the operations, maintenance and development of the County's landfill and various disposal sites. Water Fund - This fund accounts for the development and operations of the new water systems within the Vance County Water District. 24
Note 1- Summary of significant accounting policies (continued) B. Basis of Presentation Basis of Accounting (continued) The County reports the following fund types: Agency Funds. Agency funds are custodial in nature and do not involve the measurement of operating results. Agency funds are used to account for assets the County holds on behalf of others. The County maintains five agency funds: the Social Service Fund, which accounts for money deposited with in the Social Services department for the benefits of certain individuals; the Vance County Jail Inmates Trust Fund, which accounts for funds on behalf of inmates; the Fines and Forfeitures Fund, which accounts for various legal fines and forfeitures that the County is required to remit to Vance County Board of Education; the City Ad Valorem and Motor Vehicle Tax Fund which accounts for the three percent interest on the first month of delinquent motor vehicle taxes that the County is required to remit to North Carolina Department of Motor Vehicles and the property taxes collected on behalf of various municipalities within the Count; and Register of Deeds Trust Fund which accounts for the five dollars of each fee collected by the register of deeds for registering or filing a deed of trust or mortgage. Non-major Funds. The County maintains eight legally budgeted funds. The Emergency Telephone Systems Fund, Fire District Fund, Economic Development Fund, Community Development Fund, Neighborhood Stabilization Program Fund, Community Development Fund- Scattered Sites are reported as non-major capital project fund. The Capital Reserve Fund- General is consolidated into the General Capital Projects Fund in accordance with GASB Statement No. 54. Measurement Focus, Basis of Accounting In accordance with North Carolina General Statutes, all funds of the County are maintained during the year using the modified accrual basis of accounting. Government-wide, Proprietary, and Fiduciary Fund Financial Statements The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus, except for the agency funds which have no measurement focus. The government-wide, proprietary fund and fiduciary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Non-exchange transactions, in which the County gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Amounts recorded as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund s principal ongoing operations. The principal operating revenues of the County enterprise funds are charges to customers for sales and services. The County also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the water and sewer system. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Governmental Fund Financial Statements Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. 25
Note 1- Summary of significant accounting policies (continued) B. Basis of Presentation Basis of Accounting (continued) The County considers all revenues available if they are collected within 90 days after year-end, except for property taxes. Ad valorem property taxes are not accrued as revenue because the amount is not susceptible to accrual. At June 30, taxes receivable for property other than motor vehicles are materially past due and are not considered to be an available resource to finance the operations of the current year. As of September 1,2013, State law altered the procedures for the assessment and collection of property taxes on registered motor vehicles in North Carolina. Effective with this change in the law, the State of North Carolina is responsible for billing and collecting the property taxes on all registered motor vehicles on behalf of all municipalities and special tax districts. Property taxes are due when vehicles are registered. The billed taxes are applicable to the fiscal year in which they are received. Uncollected taxes that were billed in periods prior to September 1, 2013 and for limited registration plates are shown as a receivable in these financial statements and are offset by deferred inflows of resources. Sales taxes and certain intergovernmental revenues, such as the utilities franchise tax, collected and held by the State at yearend on behalf of the County are recognized as revenue. Intergovernmental revenues and sales and services are not susceptible to accrual because generally they are not measurable until received in cash. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been satisfied. Under the terms of grant agreements, the County funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants, and general revenues. Thus when program expenses are incurred, there are both restricted and unrestricted net position available to finance the program. It is the County s policy to first apply cost-reimbursement grant resources to such programs, followed by categorical block grants, and then by general revenues. C. Budgetary Data The County's budgets are adopted as required by the North Carolina General Statutes. An annual budget is adopted for the General, Emergency Telephone, Facilities Fees Fund, Revaluation Fund, Fire District Fund, and the Enterprise Funds. All annual appropriations lapse at the fiscal year end. Project ordinances are adopted for the project and grant funds. The Enterprise Capital Projects Fund is consolidated with the enterprise operating funds for reporting purposes. All budgets are prepared using the modified accrual basis of accounting. Expenditures may not legally exceed appropriations at the functional level for the multi-year funds. Expenditures may not exceed appropriations at the fund level for the enterprise fund. Amendments are required fro any appropriations that alter total expenditures of any fund or that change departmental appropriations by more then $5,000. All revisions to the budget and transfer appropriations must be approved by the governing board. During the year, several amendments to the original budget were necessary, the effects of which were not material. The budget ordinance must be adopted by July 1 of the fiscal year or the governing body must adopt an interim budget that covers the time until the annual ordinance can be adopted. A budget calendar is included in the North Carolina General Statutes, which prescribes the last day on which certain steps of the budget procedure are to be performed. The following schedule lists the task to be performed and the data by which each is required to be completed. A budget calendar is included in the North Carolina General Statutes, which prescribes the last day on which certain steps of the budget procedure are to be performed. The following schedule lists the tasks to be performed and the date by which each is required to be completed. April 30 - Each department head will transmit to the budget officer the budget requests and revenue estimates for their June 1 - The budget and the budget message shall be submitted to the governing board. The public hearing on the budget July 1 - The budget ordinance shall be adopted by the governing board. As required by the State law [ G.S. 159-26(d)], the County maintains encumbrances accounts, which are considered to be "budgetary accounts". Encumbrances outstanding at year-end represents the estimated amounts of the expenditures ultimately to result if unperformed contracts in progress at year-end are completed. Encumbrances outstanding at year-end do not constitute expenditures or liabilities. The County has no encumbrances outstanding at year-end and any unencumbered appropriations lapse at year-end. 26
Note 1- Summary of significant accounting policies (continued) D. Assets, Liabilities, Deferred Inflows and Outflows of Resources, and Fund Equity Deposits and Investments All deposits of the County, the Vance County ABC Board, and the Vance County Tourism Development Authority are made in board-designated official depositories and are secured as required by G.S. 159-31. The County, the ABC Board, and the Authority may designate as an official depository any or savings association whose principal office is located in North Carolina. Also, the County, the ABC Board, and the Authority may establish time deposit accounts such as NOW and SuperNOW accounts, money market accounts, and certificates. State law (G.S. 159-30 (c)) authorizes the County, the ABC Board, the Tourism Development Authority, and the Airport to invest in obligations of the United States or obligations fully guaranteed both as to principle and interest by the Unites States; obligations of the State of North Carolina; bonds and notes of any North Carolina local government or public authority; obligations of certain non-guaranteed federal agencies; certain high quality issues of commercial paper and bankers' acceptances and the North Carolina Capital Management Trust ("NCCMT"). The majority of the County, the Tourism Development Authority, and the ABC Board's investments are carried at fair value. Non-participating interest earnings contracts are accounted for at cost. The NC Capital Management of Trust Government Portfolio, a SEC-registered (2a-7) external investment pool, is measured at amortized costs, which the NCCMT's share price. The NCCMT Term Portfolio's securities are valued at fair value. Cash and cash equivalents The County pools monies from several funds to facilitate disbursements and investments and maximize investments income. Investment earnings are allocated to all funds based on the cash balance outstanding at the end of the month. Therefore, all cash and investments are essentially demand deposits and are considered cash and cash equivalents. The ABC Board considers all highly liquid investments (including restricted assets) with an original maturity of three months or less to be cash and cash equivalents, and records them at cost. The funds of the Tourism Development Authority are pooled with those of the County. Restricted assets Unexpended loan and bond anticipation note proceeds are classified as restricted assets on the balance sheet because their use is completely restricted to the purpose for which the loans and bonds were originally issued. Customer deposits held by the County before any services are supplied are restricted to the service for which the deposit is collected. Money in the Tax Revaluation Fund is classified as restricted assets because its use is restricted per North Carolina General Statue 153A-150. Money in the School Capital Projects Fund is classified as restricted assets because its use is restricted per North Carolina General Statute 159-18 through 22. Restricted Cash Governmental Activities Tax Revaluation Fund Tax revaluation $ 243,210 Unexpended Public School Building School Capital Projects Fund funds 1,716,076 General Capital Project Fund Unexpended loan proceeds 1,240,854 Total Governmental Activities 3,200,140 Business-Type Activities Water Fund Water Fund Total Business-type Activities Total Restricted Cash Customer deposits 292,643 USDA Reserve debt service 158,311 450,954 $ 3,651,094 27
Note 1- Summary of Significant Accounting Policies (continued) D. Assets, Liabilities, Deferred Inflows and Outflows of Resources, and Fund Equity (continued) Ad Valorem Taxes Receivable In accordance with State law (G.S. 105-347 and G.S. 159-13(a)), the County levies ad valorem taxes other than motor vehicles on July 1, the beginning of the fiscal year. The taxes are due on September 1 (lien date); however, penalties and interest do not accrue until the following January 6. These taxes are based on the assessed values as of January 1, 2016. Allowance for Doubtful Accounts All receivables that historically experience uncollectible accounts are shown net of an allowance for doubtful accounts. This amount is estimated by analyzing the percentage of receivables that were written off in prior years. Inventories and Prepaid Items The inventory of the ABC Board is valuable at the lower cost (FIFO) or market, and consists of products held for consumption or resale. The cost of this inventory is charged to cost of sales or operating expenses as the inventory is sold or consumed. Occasionally, certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. Capital assets Purchased or constructed capital assets are reported at cost or estimated historical cost. Donated capital assets received prior to July 1, 2015 are recorded at their estimated fair value at the date of the donation. Donated capital assets received after July 1, 2015 are recorded at acquisition value. All other purchased or constructed capital assets are reported at cost or estimated historical cost. the minimum capitalization costs are $5,000. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extended assets' lives are not capitalized. The County holds title to certain Vance County Board of Education properties that have not been included in capital assets. The properties have been deeded to the County to permit installment purchase financing of acquisition and construction costs and to permit the County to receive refunds of sale tax paid fro construction costs. Agreements between the County and the Board of Education give the Board of Education full use of the facilities, full responsibility for maintenance of facilities, and provide the County will convey title to the property back to the Board of Education once all restrictions of the financing agreements and all sales tax reimbursements have been met. The properties are reflected as capital assets in the financial statements of the Vance County Board of Education. Any interest incurred during the construction phase of proprietary fund type capital assets is reflected in the capitalized value of the asset constructed. Capital assets of the County are depreciated on a straight-line basis over the following estimated useful lives: Estimated Description Useful Lives Furniture and office equipment 7 years Computer equipment and software 5 years Building 40 years Improvements 15-40 years Water distribution systems 40 years Automobiles and trucks 5 years 28
Note 1- Summary of significant accounting policies (continued) D. Assets, Liabilities, Deferred Inflows and Outflows of Resources, and Fund Equity (continued) Capital assets (continued) Property, plant and equipment of the ABC Board are depreciated over their useful lives on a straight-line basis as follows: Buildings Furniture and equipment Leasehold Improvements Description Estimated Useful Lives 30 years 5-15 years 10-15 years Deferred Outflows / Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflow of resources. This separate financial statement element, Deferred Outflows of Resources, represents a consumption of net position that applies to a future period and so will not be recognized as an expense or expenditure until then. The County has three items that meets this criterion - a charge on refunding that had previously been classified as an asset, pension related deferrals, and contributions made to the pension plan in the current fiscal year. In addition to liabilities, the statement of financial position can also report a separate section for deferred inflows of resources. This separate financial statement element, Deferred Inflows of Resources, represents an acquisition of net position that applies to a future period and so will not be recognized as revenue until then. The County has three items that meet the criterion for this category - prepaid taxes, property taxes receivable, and other pension related deferrals. Long-Term Obligations In the government-wide financial statements and in the proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. In the fund financial statements for governmental fund types, the face amount of debt issued is reported as other financial sources. Compensated Absences The vacation policies of the County, the ABC Board, and the Tourism Development Authority provide for the accumulation of up to thirty days earned vacation leave with such leave being fully vested when earned. For the County's government-wide and proprietary funds, the ABC Board, and the Tourism Development Authority, an expense and a liability for compensated absences and the salaryrelated payments are recorded as the leave is earned. The sick leave policies of the County, ABC Board, and the Tourism Development Authority provide for an unlimited accumulation of earned sick leave. Sick leave does not vest, but any unused sick leave accumulated at the time of retirement may be used in the determination of length of service of retirement benefit purposes. Since neither entity has any obligation fro accumulated sick leave until it is actually taken, no accruals for sick leave have been made. Net Position/Fund Balances Net Position Net position in government-wide and proprietary fund financial statements are classified as net investment in capital assets; restricted; and unrestricted. Restricted net position represent constraints on resources that are either a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or b) imposed by law through state statute. 29
Note 1- Summary of significant accounting policies (continued) D. Assets, Liabilities, Deferred Inflows and Outflows of Resources, and Fund Equity (continued) Net Positions/Fund Balance (continued) Fund Balances In the governmental fund financial statements, fund balance is composed of five classifications designed to disclose the hierarchy of constraints placed on how fund balance can be spent. The governmental fund types classify fund balance as follows: Nonspendable Fund Balance - This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. The County does not report any nonspendable fund balance. Restricted Fund Balance - This classification includes revenue sources that are restricted to specific purposes externally imposed by creditors or imposed by law. Restricted for Stabilization of State Statute - portion of fund balance that is restricted by State Statute [G.S. 159-8(a)]. Restricted for Facility improvements-portion of fund balance that is restricted by revenue source to pay for the facility enhancements. Restricted Public Safety- portion of fund balance that is restricted by revenue source for emergency service expenditures. Restricted for Emergency services- portion of fund balance that is restricted by revenue source for emergency service expenditures. Restricted for School Capital Projects - portion of fund balance that is restricted by revenue source for community development expenditures. Committed Fund Balance - Portion of fund balance that can only be used for specific purpose imposed by majority vote of Vance County's governing body (highest level of decision-making authority). Any changes or removal of specific purposes requires majority action by governing body. Committed for LEO pension and OPEB obligation-portion of fund balance that will be used for the Law Enforcement Officers' Special Separation Allowance and other Post-Employment Benefit obligations. Assigned Fund Balance - portion of fund balance that the Vance County governing board has budgeted. Subsequent year's expenditures- portion of fund balance that is appropriated in the next year's budget that is not already classified in restricted or committed. Unassigned Fund Balance - portion of fund balance that has not been restricted, committed, or assigned to specific purposes or other funds. Vance County has a revenue spending policy that provides guidance for programs with multiple revenue sources. The Finance Director will use resources in the following hierarchy: bond proceeds, Federal funds, State funds, and local funds, and county funds. For purposes of fund balance classification, expenditures are to be spent from restricted fund balance first, followed by committed fund balance, assigned fund balance and lastly unassigned fund balance. The Finance Officer had the authority to deviate from his policy if it is in the best interest for the County. 30
Note 1- Summary of significant accounting policies (continued) D. Assets, Liabilities, Deferred Inflows and Outflows of Resources, and Fund Equity (continued) Defined Benefit Pension Plans The County participates in three cost-sharing, multiple-employer, defined benefit pension plans that are administered by the State; the Local Governmental Employees' retirement System (LGERS), the Registers of Deeds' Supplemental Pension Fund (RODSPF), and the Law Enforcement Officers' Special Separation Allowance (LEOSSA) (collectively, the "state-administered defined benefit pension plans"). For purposes of measuring the net pension asset, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net positions of the state-administered defined benefit pension plans and additions to/deductions from the state-administered defined benefit pension plans' fiduciary net positions have been determined on the same basis as they are reported by the state-administered defined benefit pension plans. For this purpose, plan member contributions are recognized in the period in which the contributions are due. The County's employer contributions are recognized when due and the County has a legal requirement to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the state-administered defined benefit pension plans. Investments are reported at fair value. Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from these estimates. Note 2 Stewardship, Compliance, and Accountability Deficit Fund Balance or Net position of Individual Funds For the fiscal year ended June 30, 2017 the following funds had a deficit fund balance: Neighborhood Stabilization Fund $ 159,847 The deficit fund balance is due to expenditures in excess of grant reimbursements received as of the fiscal year end for the grant project funds. The County will appropriate and transfer money from other funds in fiscal year 2018 to remove deficit fund balance. Excess of Expenditures over Appropriations None 31
Note 3 Detail Notes on All Funds 1 ASSETS 1. Deposits All of the County, ABC Board, and the Tourism Development Authority deposits are either insured or collateralized by using one of two methods. Under the Dedicated Method, all deposits exceeding the federal depository insurance coverage and collateralized with securities held by the County, ABC Board, and the Authority. Under the Pooling Method, which is a collateral pool, all uninsured deposits are collateralized with securities help by the state Treasurer's agent in the name of the State Treasurer. Since the State Treasurer is acting in a fiduciary capacity for the County, the ABC Board, and the Authority, these deposits are considered to be held by their agents in the entities' names. The amount of the pledge collateral is based on an approved averaging method fro noninterest bearing deposits and the actual current balance for interest-bearing deposits. Depositories using the Pooling Method report to the State Treasurer the adequacy of their pooled collateral covering uninsured deposits. The State Treasurer does not confirm this information with the County, the ABC Board, the Authority, or the escrow agent. Because of the inability to measure the exact amount of the collateral covering pledge from the County, the ABC Board, or the Authority under the Pooling Method, the potential exists for under collateralization, and this risk may increase in periods of high cash flows. However, the State Treasurer of North Carolina enforces strict standards of financial stability for each depository that collateralizes public deposits under the Pooling Method. The County has no formal policy regarding custodial credit risk. The State Treasurer enforces standards of minimum capitalization for all pooling method financial situations. The County analyzes the financial soundness of any other financial institution used by the County. The County complies with the provisions of G.S. 159-31 when designating official depositories and verifying that deposits are properly secured. The County and Tourism Development Authority adopted a policy regarding custodial credit risk for deposits in May of 2015. The ABC Board has no formal policy regarding custodial credit risk for deposits. At June 30, 2017, the carrying amount of the County's deposits was $24,649,714 and the bank balance was $24,842,063. Of the bank balance, $1,000,000 was covered by federal depository insurance and $19,686,444 in non-interest bearing deposits and $4,155,619 in interest bearing deposits were covered by collateral held under the Pool Method. At June 30, 2017, the County had $950 cash on hand. At June 30, 2017, the carrying amount of deposits of Vance County ABC Board was $790,152 and the bank balance was $766,058. Of this balance $250,000 was covered by the federal depository insurance and $516,058 was maintained in financial institutions utilizing the Pooling Method of collateralization. At June 30, 2017, the carrying amount of deposits for the Vance County Tourism Development Authority was $356,599 and the bank balance was $356,599. Since the Authority's deposits are pooled with those of Vance County, none of the bank balance was covered by federal depository insurance. Of the bank balance, $325,095 in non-interest bearing deposits and $31,504 in interest bearing deposits were covered by collateral held under the Pooling Method. Additionally, the Authority had $111,556 invested with the North Carolina Cash Management Trust's Government Portfolio. 2. Investments At June 30, 2017, the County had the following investments and maturities: Investment Type NC Capital Management Trust - Government Portfolio NC Capital Management Trust - Term Portfolio Total Valuation Measurement Method Amortized Cost Fair Value- Level 1 Fair Value Less than 6 Months $ 1,572,345 N/A N/A 6-12 Months $ 760,253 $ 760,253 $ - 2,332,598 760,253-32
Note 3 Detail Notes on All Funds (continued) 1. ASSETS (continued) 2. Investments (continued) Because the NC Capital Management Trust Term Portfolio has a weighted average maturity of les. 90 days, it was presented as an investment with a maturity of less than 6 months. All investments are measured using the market approach: using prices and other relevant information generated by market transactions involving identical or comparable assets or group of assets. Level of fair value hierarchy: Level 1: Debt securities valued using directly observable, quoted prices (unadjusted) in active markets for identical assets. Level two debt securities are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices. The County adopted a policy regarding custodial credit risk for deposit in May of 2015. Interest Rate Risk: As a means of limiting the exposure to fair value losses arising from rising interest rates, the County's investment policy limits at least half of the County's investment portfolio to maturities of less than 12 months. Also, the County's investment policy requires purchases of securities to be tiered with staggered maturity dates and limits all securities to a final maturity of no more than three years. Credit Risk: The County limits investments to the provisions of the G.S. 159-30 and restricts the purchase of the securities to the highest possible ratings whenever particular types of securities are rated. State law limits investments in commercial paper to the top rating issued by nationally recognized statistical rating organization (NRSROs). The County's investments in the NC Capital Management Trust Government Portfolio carried a credit rating AAAm by Standard & Poor's as of June 30, 2017. The County's investments in the NC Capital Management Trust Term Portfolio is unrated. The Term Portfolio is authorized to invest in obligations of the US government and agencies, and in high grade money market instruments as permitted under North Carolina General Statute 159-30 as amended. At June 30, 2017, the Vance County Tourism Development Authority had the following investments and maturities. The Authority adopted a policy regarding custodial credit risk for deposits in May of 2015. Investment Type NC Capital Management of Trust - Cash Portfolio Total Measurement Method Fair Value Less than 6 Months 6-12 Months Amortized Cost $ 111,556 N/A N/A $ 111,556 - - All investments are measured using the market approach: using prices and other relevant information generated by market transactions involving identical or comparable assets or group of assets. Credit Risk: The Authority's investments in the NC Capital Management Trust Government Portfolio carried a credit rating of AAAm by Standard & Poor's as of June 30, 2017 At June 30, 2017 the ABC Board had no investments 3. Property tax - use value assessment on certain lands In accordance with the general statutes, agriculture, horticulture, and forestland may be taxed by the County at the present use-value as opposed to market value. When the property loses its eligibility for use-value taxation, the property tax is re-computed at market value for the current year and the three preceding fiscal years along with accrued interest from the original due date. This tax is immediately due and payable. The following are property taxes that could become due if present use-value eligibility is lost. These amounts have not been recorded in the financial statements. Year Levied 2013 2014 2015 2016 Tax Interest Total $ 1,197,876 $ 500,115 $ 1,697,991 1,210,109 396,405 1,606,514 1,202,023 285,548 1,487,571 1,069,685 157,779 1,227,464 $ 4,679,693 $ 1,339,847 $ 6,019,540 33
Note 3 Detail Notes on All Funds (continued) 1. ASSETS (continued) 4. Receivables Receivables at the government-wide level at June 30, 2017, were as follows: Accounts Taxes Total Governmental Activities: General $ 2,771,892 $ 1,690,104 $ 4,461,996 Other Governmental 288,352 43,595 331,947 Total Receivables 3,060,244 1,733,699 4,793,943 Allowance for Doubtful Accounts - (324,335) (324,335) Total Governmental Activities $ 3,060,244 $ 1,409,364 $ 4,469,608 Business Type Activities: Solid Waste $ 276,612 $ - $ 276,612 Water 57,561-57,561 Total Receivables 334,173-334,173 Total Business-Type Activities $ 334,173 $ - $ 334,173 Notes receivable The County s note receivables are as follows: Receivables From Purpose of Note Receivable Maturity Date Annual Payment Balance as of 6/30/17 Town of Middleburg Economic Development February, 2022 $ 3,600 $ 16,500 Total $ 16,500 Note receivable from the Town of Middleburg in the amount of $24,000 payable to Vance County in 80 month installments of $300 without interest, beginning in July 2015 through February 2022. 34
Note 3 - Detailed Notes on All Funds (continued) 1. ASSETS (continued) 5. Capital assets Capital asset activity for the year ended June 30, 2017, was as follows: Beginning Balance Additions Decreases Governmental Activities Capital assets not being depreciated: Land $ 784,119 $ - - Transfers & Adjustments Ending Balance $ $ - $ 784,119 Construction in Progress 642,404 414,556 - (642,404) 414,556 Total capital assets not being depreciated 1,426,523 414,556 - (642,404) 1,198,675 Depreciable property: Buildings 22,423,480 1,276,800 (116,269) 642,404 24,226,415 Vehicles 4,580,951 338,966 (68,215) - 4,851,702 Equipment 2,435,181 306,536 (84,915) - 2,656,802 Computer software 239,303 - - - 239,303 Total other capital assets being depreciated 29,678,915 1,922,302 (269,399) 642,404 31,974,222 Total Capital Assets 31,105,438 2,336,858 (269,399) - 33,172,897 Less accumulated depreciation for: Buildings 12,292,727 580,845 (116,269) - 12,757,303 Vehicles 3,257,016 450,315 (47,401) - 3,659,930 Equipment 1,760,247 227,342 (84,915) - 1,902,674 Software 169,878 28,272 - - 198,150 Total other capital assets at historical cost 17,479,868 1,286,774 (248,585) - 18,518,057 Other capital assets, net 12,199,047 635,528 (20,814) 642,404 13,456,165 Governmental activities capital assets, net $ 13,625,570 $ 1,050,084 $ (20,814) $ - $ 14,654,840 Primary Government - Depreciation expense was charged to functions of the primary government as follows: Governmental Activities General Government $ 435,465 Public Safety 771,710 Human Services 57,400 Economic and physical development 22,199 Total depreciation expenses $ 1,286,774 35
Note 3 Detail Notes on All Funds (continued) 1. ASSETS (continued) 5. Capital assets (continued) The summary for the Proprietary Funds of the County at June 30, 2017 are composed as follows: Business-type activities: Balances Increases Decreases Transfers Balances SOLID WASTE Capital assets not being depreciated: Land 872,857 - - - 872,857 Total capital assets not being depreciated 872,857 - - 872,857 Capital assets being depreciated Land improvements 65,602 - - - 65,602 Equipment 129,601 93,222 - - 222,823 Vehicles 35,228 - - - 35,228 Total capital assets being depreciated 230,431 93,222-323,653 Total capital assets being depreciated 1,103,288 93,222-1,196,510 Less accumulated depreciation for: Land improvements 5,596 4,099 - - 9,695 Equipment 120,405 3,292 - - 123,697 Vehicles 35,228 - - - 35,228 Total accumulated depreciation 161,229 7,391-168,620 Solid Waste capital assets, net $ 942,059 $ 85,831 $ - $ 1,027,890 Beginning Balances Increases Decreases Transfers Ending Balances WATER Capital assets not being depreciated: Construction in progress - 10,000 - - 10,000 Total capital assets not being depreciated - 10,000-10,000 Capital assets being depreciated Water lines 14,735,776 - - - 14,735,776 Total capital assets being depreciated 14,735,776 - - - 14,735,776 Less accumulated depreciation for: Improvements 260,971 368,394 - - 629,365 Total accumulated depreciation 260,971 368,394-629,365 Water capital assets, net $ 14,474,805 $ (358,394) $ - $ 14,116,411 Business activities capital assets, net $ 15,416,864 $ (272,563) $ - $ - $ 15,144,301 36
Note 3 Detail Notes on All Funds (continued) 1. ASSETS (continued) 5. Capital assets (continued) Net Investment in Capital Assets The total net investment in capital assets at June 30, 2017 is composed of the following elements: Governmental Activities Business-Type Activities Capital assets $ 14,654,840 $ 15,144,301 Total debt, gross 19,984,472 13,160,000 Less: Other non-capital related debt 6,405,433 - Capital related unspent debt proceeds - - Total capital debt 13,579,039 13,160,000 Net investment in capital assets $ 1,075,801 $ 1,984,301 Activity for the Tourism Development Authority for the year ended June 30, 2017, was as follows: Beginning Balances Increases Decreases Transfers Tourism Development Authority Capital assets not being depreciated: Land $ 403,455 $ - $ - - Ending Balances $ $ 403,455 Construction in progress 57,812 - - - 57,812 Total capital assets not being depreciated $ 461,267 $ - $ - $ - $ 461,267 37
Note 3 Detail Notes on All Funds (continued) 1. ASSETS (continued) 5. Capital assets (continued) Activity for the ABC Board for the year ended June 30, 2017, was as follows: Beginning Ending ABC Board Balances Increases Decreases Transfers Balances Capital assets not being depreciated: Land 192,898 - - - 192,898 Total capital assets not being depreciated 192,898 - - 192,898 Capital assets being depreciated: Building 659,416 - - - 659,416 Land Improvements 92,930 - - - 92,930 Furniture and equipment 161,701 5,480 - - 167,181 Total capital assets being depreciated 914,047 5,480-919,527 Total 1,106,945 5,480 - - 1,112,425 Less accumulated depreciation for: Building 150,201 21,981 - - 172,182 Land improvement 45,192 7,058 - - 52,250 Furniture and equipment 96,243 10,448 - - 106,691 Total accumulated depreciation 291,636 39,487-331,123 Total capital assets being depreciated, net 622,411 (34,007) - - 588,404 ABC - capital assets, net $ 815,309 $ (34,007) $ - $ 781,302 The ABC Board enters into annual contracts with the North Carolina Department of Crime Control and Public Safety, Division of Alcohol Law Enforcement to provide enforcement services. Contract payments are due quarterly. Commitments- The County has active general and school construction projects at June 30, 2017. At year-end, the County's commitments with contractors are as follows: County Spend To Commitment Date Vance Granville Community College $ 934,010 $ 596,155 Admin & Courthouse Buildings 1,298,000 414,556 Total Commitment $ 2,232,010 $ 1,010,711 38
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES 1. Payables Payables at the government-wide level at June 30, 2017 were as follows: Vendors Other Total Governmental Activities: General $ 1,261,688 $ - $ 1,261,688 Other Governmental 31,955-31,955 Total Governmental Activities $ 1,293,643 $ - $ 1,293,643 Business-type Activities Solid Waste 189,822-189,822 Water Fund 21,839-21,839 Total Business-Type Activities $ 211,661 $ - $ 211,661 2. Pension Plan and Other Postemployment Obligations a. Local Governmental Employees' Retirement System Plan Description. The County is participating employer in the statewide Local Governmental Employees' Retirement System (LGERS), a cost-sharing multiple-employer defined benefit pension plan administered by the State of North Carolina. LGERS membership is comprised of general employees and local law enforcement officers (LEOs) of participating local government entities. Article 3 of G.S. Chapter 128 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. Management of the plan is vested in the LGERS Board of Trustees, which consist of 13 members- nine appointed by the Governor, one appointed by the state Senate, on appointed by the state House of Representatives, and the State Treasurer and the State Superintendent, who serve as ex-office members. The Local Government Employees' Retirement System is included in the Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The State's CAFR includes financial statements and required supplementary information for LGERS. That report may be obtained by writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699-1410, by calling (919) 981-5454, or at www.osc.nc.gov. Benefits Provided. LGERS provides retirement and survivor benefits. Retirement benefits are determined as 1.85% of the member s average final compensation times the member s years of creditable service. A member s average final compensation is calculated as the average of a member s four highest consecutive years of compensation. Plan members are eligible to retire with full retirement benefits at age 65 with five years of creditable service, at age 60 with 25 years of creditable service, or at any age with 30 years of creditable service. Plan members are eligible to retire with partial retirement benefits at age 50 with 20 years of creditable service or at age 60 with five years of creditable service (age 55 for firefighters). Survivor benefits are available to eligible beneficiaries of members who die while in active service or within 180 days of their last day of service and who have either completed 20 years of creditable service regardless of age (15 years of creditable service for firefighters and rescue squad members who are killed in the line of duty) or have completed five years of service and have reached age 60. Eligible beneficiaries may elect to receive a monthly Survivor s Alternate Benefit for life or a return of the member s contributions. The plan does not provide for automatic postretirement benefit increases. Increases are contingent upon actuarial gains of the plan. 39
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 2. Pension Plan and Other Postemployment Obligations (continued) a. Local Governmental Employees' Retirement System (continued) LGERS plan members who are LEOs are eligible to retire with full retirement benefits at age 55 with five years of creditable service as an officer, or at any age with 30 years of creditable service. LEO plan members are eligible to retire with partial retirement benefits at age 50 with 15 years of creditable service as an officer. Survivor benefits are available to eligible beneficiaries of LEO members who die while in active service or within 180 days of their last day of service and who also have either completed 20 years of creditable service regardless of age, or have completed 15 years of service as a LEO and have reached age 50, or have completed five years of creditable service as a LEO and have reached age 55, or have completed 15 years of creditable service as a LEO if killed in the line of duty. Eligible beneficiaries may elect to receive a monthly Survivor's Alternate Benefit for life or a return of the member's contributions. Contributions. Contribution provisions are established by General Statute 128-30 and may be amended only by the North Carolina General Assembly. County employees are required to contribute 6% of their compensation. Employer contributions are actuarially determined and set annually by the LGERS Board of Trustees. The County's contractually required contribution rate for the year ended June 30, 2017, was 7.15% of compensation for law enforcement officers and 6.67% for general employees and firefighters, actuarially determined as an amount that, when combined with employee contributions, is expected to finance the costs of benefits earned by employees during the year. Contributions to the pension plan from the ABC Board and the Tourism Development Authority were $22,906 and $7,671, respectively, for the year ended June 30, 2017. Refunds of Contributions County employees who have terminated service as a contributing member of LGERS, may file an application for a refund of their contributions. By state law, refunds to members with at least five years of service include 4% interest. State law requires a 60 day waiting period after service termination before the refund may be paid. The acceptance of a refund payment cancels the individual s right to employer contributions or any other benefit provided by LGERS. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to At June 30, 2017, the County reported a liability of $4,263,347, for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2016. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2015. The total pension liability was then rolled forward to the measurement date of June 30, 2016 utilizing update procedures incorporating the actuarial assumptions. The County s proportion of the net pension liability was based on a projection of the County s long-term share of future payroll covered by the pension plan, relative to the projected future payroll covered by the pension plan of all participating LGERS employers, actuarially determined. At June 30, 2016, the County s proportion was 0.2009%, which was a decrease of 0.0017% from its proportion measured as of June 30, 2015. For the year ended June 30, 2017, the County recognized pension expense of $1,117,732. At June 30, 2017, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $ 80,101 $ 149,392 Changes of assumptions 292,001 - Net difference between projected and actual earnings on pension plan investments 2,357,094 - Changes in proportion and differences between County Contributions and proportionate share 7,868 72,656 of contributions County contributions subsequent to the measurement date 927,251 - Total $ 3,664,315 $ 222,048 40
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 2. Pension Plan and Other Postemployment Obligations (continued) a. Local Governmental Employees' Retirement System (continued) Subsequent to the measurement date, $927,251 reported as deferred outflows of resources related to pensions resulting from the County contributions and will be recognized as an increase of the net pension asset in the year ended June 30, 2018. Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended June 30: 2018 $ 366,682 2019 367,190 2020 1,111,954 2021 669,198 2022 - Thereafter - $ 2,515,024 Actuarial Assumptions. The total pension liability in the December 31, 2014 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary Increases Investment Rate of 3.0 Percent 3.50 to 7.75 percent, including inflation and productivity factor 7.25 percent, net of pension plan investment expense, including inflation The plan currently uses mortality tables that vary by age, gender, employee group (i.e. general, law enforcement officer) and health status (i.e. disabled and healthy). The current mortality rates are based on published tables and based on studies that cover significant portions of the U.S. population. The healthy mortality rates also contain a provision to reflect future mortality improvements. The actuarial assumptions used in the December 31, 2015 valuation were based on the results of an actuarial experience study for the period January 1, 2010 through December 31, 2014. Future ad hoc COLA amounts are not considered to be substantively automatic and are therefore not included in the measurements. The projected long-term investments returns and inflation assumptions are developed though review of current and historical capital market data, sell-side investments research, consultant whitepapers, and historical performance of investments strategies. Fixed income return projections reflect current yields across the U.S. Treasury yield curve and market expectations of forward yields projected and interpolated for multiple tenors and over multiple year horizons. Global public equity return projections are established through analysis of the equity risk premium and the fixed income return projections. Other asset categories and strategies' return projections reflect the foregoing and historical data analysis. These projections are combined to produce the longterm expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major assets class of June 30, 2017 are summarized in the following table: Long-Term Expected Real Rate Asset Class Target Allocation of Return Fixed Income 29.0% 1.4% Global Equity 42.0% 5.3% Real Estate 8.0% 4.3% Alternatives 8.0% 8.9% Credit 7.0% 6.0% Inflation Protection 6.0% 4.0% 100.0% 41
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 2. Pension Plan and Other Postemployment Obligations (continued) a. Local Governmental Employees' Retirement System (continued) The information above is based on 30 year expectations developed with the consulting actuary for the 2016 asset, liability, and investment policy study for the North Carolina Retirement Systems, including LGERS. The long-term nominal rates of return underlying the real rates of return are arithmetic annualized figures. The real rates of return are calculated from nominal rates by multiplicatively subtracting a long-term inflation assumption of 3.00%. All rates of return and inflation are annualized. Discount rate. The discount rate used to measure the total pension liability was 7.25%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rate and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on these assumptions, the pension plan s fiduciary net position was projected to be available to make all projected future benefit payments of the current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the County s proportionate share of the net pension asset to changes in the discount rate. The following presents the County s proportionate share of the net pension asset calculated using the discount rate of 7.25 percent, as well as what the County s proportionate share of the net pension asset or net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.25 percent) or 1-percentage-point higher (8.25 percent) than the current rate: County's proportionate share of the net pension liability (asset) 1% Decrease (6.25%) Discount Rate (7.25%) 1% Increase (8.25%) $ 10,118,910 $ 4,263,347 $ (627,656) Pension plan fiduciary net position. Detailed information about the pension plan s fiduciary net position is available in the separately issued Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The Vance County ABC Board and the Tourism Development Authority are also participating employers in the statewide Local Governmental Employee's Retirement System (LGERS). The ABC Board's and Tourism Development Authority's proportionate share of the net pension assets is not material relative to the primary government, Vance County. Therefore, pension disclosures for the ABC Board and Authority are not included in this report. Detailed information about the ABC Board's and the Authority's pension plans are included in the separately issued audit reports of the Vance County ABC Board and Vance County Tourism Development Authority. b. Law Enforcement Officers' Special Separation Allowance Plan Description - The County administers a public employee retirement system (the "Separation Allowance"), a single-employer defined benefit pension plan that provides retirement benefits to the County's qualified sworn law enforcement officers under the age of 62 who have completed at least 30 years of creditable service or have attained 55 years of age and have completed five or more years of creditable service. The Separation Allowance is equal to.85 percent of the annual equivalent of the base rate of compensation most recently applicable to the officer for each year of creditable service. The retirement benefits are not subject to any increases in salary or retirement allowances that may be authorized by the General Assembly. Article 12D of G.S. Chapter 143 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. There are no separate financial statements issued for the Separation Allowance. All full-time law enforcement officers of the County are covered by the Separation Allowance. At December 31, 2016, the Separation Allowance's membership consisted of: Retirees receiving benefits 2 Terminated plan members entitled to but not yet receiving benefits 0 Active plan members 28 Total 30 A separate report was not issued for the plan. 42
Note 3 - Detailed Notes on All Funds (continued) 2. LIABILITIES (conintued) 2. Pension Plan and Other Postemployment Obligations (continued) b. Law Enforcement Officers' Special Separation Allowance (continued) Summary of Significant Accounting Policies Basis of Accounting - The County has chosen to fund the Separation Allowance on a pay as you go basis. Pension expenditures are made from the General Fund, which is maintained on the modified accrual basis of accounting. Benefits are recognized when due and payable in accordance with the terms of the plan. The Separation Allowance has no assets accumulated in a trust fund that meets the following criteria which are outlined in GASB Statement 73: Actuarial Assumptions The entry age actuarial cost method was used in the December 31, 2015 valuation. The total pension liability in the December 31, 2015 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary Increase Discount Rate 3.0 percent 3.50 to 7.35 percent, including inflation and productivity 3.86 percent The discount rate is based on the yield of the S&P Municipal Bond 20 Year High Grade Rate Index as of December 31, 2016. Mortality rates are based on the RP-2000 Mortality tables with adjustments for mortality improvements based on Scale AA. Contributions - The County is required by Article 12D of G.S. Chapter 143 to provide these retirement benefits and has chosen to fund the amounts necessary to cover the benefits earned on a pay as you go basis through appropriations made in the General Fund operating budget. There were no contributions made by employees. The County's obligation to contribute to this plan is established and may be amended by the North Carolina General Assembly. Administration costs of the Separation Allowance are financed through investment earnings. The County paid $23,070 as benefits came due for the reporting period. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2017, the reported a total pension liability of $745,443 The total pension liability was measured as of December 31, 2016 based on a December 31, 2015 actuarial valuation. The total pension liability was then rolled forward to the measurement date of December 31, 2016 utilizing update procedures incorporating the actuarial assumptions. For the year ended June 30, 2017, the County recognized pension expense of $58,277. Differences between expected and actual experience Changes of assumptions County benefit payments and plan administrative expense made subsequent to the measurement date Total Deferred Outflows Deferred Inflows of Resources of Resources $ - $ - - 14,299 23,070 - $ 23,070 $ 14,299 43
Note 3 - Detailed Notes on All Funds (continued) 2. LIABILITIES (conintued) 2. Pension Plan and Other Postemployment Obligations (continued) b. Law Enforcement Officers' Special Separation Allowance (continued) $23,070 reported as deferred outflows of resources related to pensions resulting from benefit payments made and administrative expenses incurred subsequent to the measurement date will be recognized as a decrease of the total pension liability in the year ended June 30, 2018. Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 30: 2018 $ (2,745) 2019 (2,745) 2020 (2,745) 2021 (2,745) 2022 (2,745) Thereafter $ (574) (14,299) $23,070 paid as benefits came due and $0 of administrative expenses subsequent to the measurement date are reported as deferred outflows of resources. Sensitivity of the County s total pension liability to changes in the discount rate. The following presents the County s total pension liability calculated using the discount rate of 3.86 percent, as well as what the County's total pension liability would be if it were calculated using a discount rate that is one percentage point lower (2.86 percent) or one percentage point higher (4.86 percent) than the current rate: 1% Discount 1% Decrease Rate Increase (2.86%) (3.86%) (4.86%) Total pension liability $ 806,028 $ 745,443 $ 689,874 Schedule of Changes in Total Pension Liability Law Enforcement Officers' Special Separation Allowance Beginning Balance $ 728,452 Service Cost 35,498 Interest on the total pension liability 25,524 Changes of benefit terms Differences between expected and - - Changes of assumptions or other inputs (17,044) Benefit payments (26,987) Other changes - Ending balance of the total pension liability $ 745,443 The plan currently uses mortality tables that vary by age, and health status (i.e. disabled and healthy). The current mortality rates are based on published tables and based on studies that cover significant portions of the U.S. population. The healthy mortality rates also contain a provision to reflect future mortality improvements. The actuarial assumptions used in the December 31, 2016 valuation were based on the results of an actuarial experience study for the period January 1, 2010 through December 31, 2014. 44
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 2. Pension Plan and Other Postemployment Obligations (continued) c. Supplemental Retirement Income Plan for Law Enforcement Officers Plan Description - The County contributes to the Supplemental Retirement Income Plan (the "Plan"), a defined contribution pension plan administered by the Department of State Treasurer and a Board of Trustees. The Plan provides retirement benefits to law enforcement officers employed by the County. Article 5 of G.S. Chapter 135 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. The Supplemental Retirement Income Plan for Law Enforcement Officers is included in the Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The State s CAFR includes the pension trust fund financial statements for the Internal Revenue Code Section 401(k) plan that includes the Supplemental Retirement Income Plan for Law Enforcement Officers. That report may be obtained by writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699-1410, or by calling (919) 981-5454. Funding Policy - Article 12E of G.S. Chapter 143 requires the County to contribute each month an amount equal to 5% of each officer's salary, and all amounts contributed are vested immediately. Also, the law enforcement officers may make voluntary contributions to the Plan. Contributions for the year ended June 30, 2017 were $173,586, which consisted of $65,360 from the County and $108,226 from the law enforcement officers. e. Register of Deeds' Supplemental Pension Fund Plan Description. also contributes to the Registers of Deeds' Supplemental Pension Fund (RODSPF), a noncontributory, defined benefit plan administered by the North Carolina Department of State Treasurer. RODSPF provides supplemental pension benefits to any eligible county register of deeds who is retired under the Local Government Employees' Retirement System (LGERS) or an equivalent locally sponsored plan. Article 3 of G.S. Chapter 128 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. Management of the plan is vested in the LGERS Board of Trustees, which consists of 13 members nine appointed by the Governor, one appointed by the state Senate, one appointed by the state House of Representatives, and the State Treasurer and State Superintendent, who serve as ex-officio members. The Local Governmental Employees Retirement System is included in the Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The State s CAFR includes financial statements and required supplementary information for LGERS. That report may be obtained by writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699-1410, by calling (919) 981-5454, or at www.osc.nc.gov. Benefits Provided. An individual s benefits for the year are calculated as a share of accumulated contributions available for benefits for that year, subject to certain statutory limits. An individual s eligibility is based on at least 10 years of service as a register of deeds with the individual s share increasing with years of service. Because of the statutory limits noted above, not all contributions available for benefits are distributed. Contributions. Benefits and administrative expenses are funded by investment income and 1.5% of the receipts collected by each County Commission under Article 1 of Chapter 161 of the North Carolina General Statutes. The statutory contribution currently has no relationship to the actuary s required contribution. The actuarially determined contribution this year and for the foreseeable future is zero. Registers of Deeds do not contribute. Contribution provisions are established by General Statute 161-50 and may be amended only by the North Carolina General Assembly. Contributions to the pension plan from the County were $4,123 for the year ended June 30, 2017. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions 45
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 2. Pension Plan and Other Postemployment Obligations (continued) e. Register of Deeds' Supplemental Pension Fund (continued) At June 30, 2017, the County reported an asset of $67,524 for its proportionate share of the net pension asset. The net pension asset was measured as of June 30, 2016. The total pension liability used to calculate the net pension asset was determined by an actuarial valuation as of December 31, 2015. The total pension liability was then rolled forward to the measurement date of June 30, 2016 utilizing update procedures incorporating the actuarial assumptions. The County s proportion of the net pension asset was based on a projection of the County s long-term share of future payroll covered by the pension plan, relative to the projected future payroll covered by the pension plan of all participating RODSPF employers, actuarially determined. At June 30, 2016, the County s proportion was 0.36117%, which was a decrease of 0.00929% from its proportion measured as of June 30, 2015. For the year ended June 30, 2017, the County recognized pension expense of $4,366. At June 30, 2017, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual experience Changes of assumptions Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between County Contributions and proportionate share of contributions County contributions subsequent to the measurement date Total Deferred Outflows of Resources Deferred Inflows of Resources $ 72 $ 874 17,990-115 - 2,470 408 4,123 - $ 24,770 $ 1,282 $4,123 reported as deferred outflows of resources related to pensions resulting from County contributions subsequent to the measurement date will be recognized as an increase of the net pension asset in the year ended June 30, 2018. Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended June 30: 2018 2019 2020 2021 2022 Thereafter $ 8,240 8,483 3,400 (756) - - $ 19,367 Actuarial Assumptions. The total pension liability in the December 31, 2015 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary Increases Investment Rate of Return 3.0 Percent 3.5 to 7.75 percent, including inflation and productivity factor 3.75 percent, net of pension plan investment expense, including inflation The plan currently uses mortality tables that vary by age, gender, employee group (i.e. general, law enforcement officer) and health status (i.e. disabled and healthy). The current mortality rates are based on published tables and based on studies that cover significant portions of the U.S. population. The healthy mortality rates also contain a provision to reflect future mortality improvements. The actuarial assumptions used in the December 31, 2015 valuation were based on the results of an actuarial experience study for the period January 1, 2010 through December 31, 2014. 46
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 2. Pension Plan and Other Postemployment Obligations (continued) e. Register of Deeds' Supplemental Pension Fund (continued) Future ad hoc COLA amounts are not considered to be substantively automatic and are therefore not included in the measurement. The projected long-term investment returns and inflation assumptions are developed through review of current and historical capital markets data, sell-side investment research, consultant whitepapers, and historical performance of investment strategies. Fixed income return projections reflect current yields across the U.S. Treasury yield curve and market expectations of forward yields projected and interpolated for multiple tenors and over multiple year horizons. Global public equity return projections are established through analysis of the equity risk premium and the fixed income return projections. Other asset categories and strategies return projections reflect the foregoing and historical data analysis. These projections are combined to produce the longterm expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The adopted asset allocation policy for the RODSPF is 100% in the fixed income asset class. The best estimate of arithmetic real rate of return for the fixed income asset class as of June 30, 2016 is 1.4%. The information above is based on 30 year expectations developed with the consulting actuary for the 2016 asset, liability, and investment policy study for the North Carolina Retirement Systems, including LGERS. The long-term nominal rates of return underlying the real rates of return are arithmetic annualized figures. The real rates of return are calculated from nominal rates by multiplicatively subtracting a long-term inflation assumption of 3.05%. All rates of return and inflation are annualized. Discount rate. The discount rate used to measure the total pension liability was 3.75%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rate and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on these assumptions, the pension plan s fiduciary net position was projected to be available to make all projected future benefit payments of the current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the County s proportionate share of the net pension asset to changes in the discount rate. The following presents the County s proportionate share of the net pension asset calculated using the discount rate of 3.75 percent, as well as what the County s proportionate share of the net pension asset or net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.75 percent) or 1-percentage-point higher (4.75 percent) than the current rate: County's proportionate share of the net pension liability (asset) 1% Decrease (2.75%) Discount Rate (3.75%) 1% Increase (4.75%) $ (54,446) $ (67,524) $ (78,511) Pension plan fiduciary net position. Detailed information about the pension plan s fiduciary net position is available in the separately issued Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. f. Firemen's and Rescue Squad Workers' Pension Fund Plan Description. The State of North Carolina contributes, on behalf of Vance county, to the Firemen's and Rescue Squad Workers' Pension Fund (Fund), a cost-sharing multiple-employer defined benefit pension plan administered by the State of North Carolina. The Fund provides pension benefits to any eligible fire and rescue squad workers that have elected to become members of the fund. Article 86 of G.S. Chapter 58 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. the Firemen's and Rescue Squad Workers' Pension Fund is included in the Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The State's CAFR includes financial statements and required supplementary information for the fund. That report may be obtained by writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699-1410, or by calling (919) 981-5454. 47
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 2. Pension Plan and Other Postemployment Obligations (continued) g. Other Postemployment Benefits Plan Description. Under the terms of a County resolution, the County administers a single-employer defined benefit Healthcare Benefits Plan (the HCB Plan). As of July 1, 2011, this plan provides postemployment healthcare benefits to retirees of the County, provided they participate in the North Carolina Local Governmental Employees' Retirement System (System) and a) have at least 30 year of creditable service with the County or b) have at least 15 years of creditable service with the County. The County pays the full cost of coverage for these benefits for lifetime employees with 30 years of services. Employees with 15 years of service may purchase insurance through the County's plan at their own expense until Medicare eligibility age. Prior to July 1, 2011, employees qualified for lifetime benefits after a minimum of 15 years of creditable service with the County. Retirees who qualify for coverage receive the same benefits as active employees. Coverage for all retirees who are eligible for Medicare will be transferred to a Medicare Supplement Plan after qualifying for Medicare. Also, retirees can purchase coverage for their dependents at the County's group rates. The Board of Commissioners may amend the benefits provisions. A separate report was not issued for the plan. Retired Employees' Years of Creditable Date Hired Service Pre-July 1, 2011 On or after July 1, 2011 Less than 15 years Not eligible for coverage Not eligible for coverage 15-30 years 30+ years Full coverage paid by the County Full coverage paid by the County Plan Membership. At June 30, 2017, the HCB Plan membership consisted of the following: General Employees Retirees and dependents receiving benefits Terminated plan members entitled to but not yet receiving benefits Coverage until Medicare eligibility paid by employee Full coverage paid by the County Law Enforcement Officers 81 13 0 0 Active plan members 268 30 Total 349 43 Funding Policy. The County pays the full cost of coverage for the healthcare benefits paid to qualified retirees under a County resolution that can be amended by the County Commissioners. Dependent coverage costs must be paid in full by the retiree. The County has chosen to fund the healthcare benefits on a pay as you go basis. The current annual required contribution (ARC) rate is 12.47% of annual covered payroll. For the current year, the County contributed $565,191 or 5.28% of annual covered payroll. The County obtains healthcare coverage through private insurers. The County's required contributions, under a County resolution, for employees represented 5.28% of covered payroll. The County's contributions totaled $565,191 in fiscal year 2017. There were no contributions made by employees. The County's obligation to contribute to the HCB Plan is established and may be amended by the Board of Commissioners. Summary of Significant Accounting Policies- Postemployment expenditures are made from the General Fund, which is maintained on the modified accrual basis of accounting. No funds are set to pay benefits and administration costs. These expenditures are paid as they come due. 48
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 2. Pension Plan and Other Postemployment Obligations (continued) g. Other Postemployment Benefits (continued) Annual OPEB Cost and Net OPEB Obligation- The County's annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the County's annual OPEB cost for the current year, the amount actually contributed to the plan, and any changes in the County's net OPEB obligation for the postemployment healthcare benefits: Annual required contribution $ 1,238,186 Interest on net OPEB obligation 268,203 Adjustment to annual required contribution (256,217) Annual OPEB cost (expense) 1,250,172 Contributions made (565,191) Increase in net OPEB obligation 684,981 Net OPEB obligation, beginning of year 6,705,068 Net OPEB obligation, end of year $ 7,390,049 The County's annual OPEB cost, the percent of annual OPEB cost contributed to the plan, and the new OPEB obligation as of June For Year Ended 2014 2015 2016 2017 Annual Percentage of Annual Net OPEB OPEB Cost OPEB Cost Contributed Obligation $ 1,233,651 32% $ 5,299,547 $ 1,271,915 47.8% $ 5,963,619 $ 1,212,782 38.86% $ 6,705,068 $ 1,250,172 45.20% $ 7,390,049 Funded Status and Funding Progress- As of June 30, 2016, the most recent actuarial valuation date, the plan was not funded. The actuarial accrued liability for benefits and, thus, the unfunded actuarial accrued liability (UAAL) was $16,710,551. The covered payroll ( annual payroll of active employees covered by the plan) was $10,700,818, and the ratio of the UAAL to the covered payroll was 156.16%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and healthcare trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions- Projections of benefits fro financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the same time of each valuation and the historical pattern of sharing of benefit costs between employer and plan members at that point. The actuarial methods as assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the June 30, 2016 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions include a 4.00% investment rate of return (net of administrative expenses), which is the expected long-term investment returns on the employer's own investments calculated based on the funded level of the plan at the valuation date. the rate includes a 3.00% inflation assumption. the medical cost trend rate varied between 7.75% to 5.0%. The actuarial value of assets, if any, was determined using techniques that spread the effects of the short-term volatility in the market value of investments over a 5 year period. The UAAL is being amortized as a level percentage of projected unit credit on a level of percent of pay, closed basis. The remaining amortization period at June 30, 2016, was 30 years. 49
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 2. Pension Plan and Other Postemployment Obligations (continued) h. Other Postemployment Benefit - ABC Board Plan Description- The Vance County ABC Board administers a single-employer defined benefit healthcare plan (the Retiree Health Plan). The plan provides postemployment healthcare benefits to retirees of the Board, provided they participate in the North Carolina Local Governmental Employees' Retirement System, have at least 20 years of creditable service with the Board. The Board's retirees cannot purchase spouse or dependent coverage. A separate report was not issued for the plan. Funding Policy- The Board pays the full cost of coverage for the healthcare benefits paid to qualified retirees under a Board resolution that can be amended by the Board. The Board has chosen to fund the healthcare benefits on a pay as you go basis. The current ARC rate is 14.0% of annual covered payroll. For the current year, the Board contributed $12,333 or 3.9% of annual covered payroll. The Board's required contributions, under a Board resolution, were 0.08% of covered payroll. There were no contributions made by employees. The Board obtains healthcare coverage through private insurers. the Board's obligation to contribute to the HCB Plan is established and my be amended by the Board. Summary of Significant Accounting Policies- Postemployment expenditures are made from the General Fund, which is maintained on the modified accrual basis of accounting. No funds are set aside to pay benefits and administration costs. These expenditures are paid as they come due. Annual OPEB Cost and Net OPEB Obligation. The Board's annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the County s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the County s net OPEB obligation for the postemployment healthcare benefits: The following table shows the components of the Board's annual OPEB cost for the year, the amount actually contributed to the plan, and any changes in the Board's net OPEB obligation for the healthcare benefits: Annual required contribution $ 44,113 Interest on net OPEB obligation 363 Adjustment to annual required contribution - Annual OPEB cost (expense) 44,476 Contributions made (12,333) Increase (decrease) in net OPEB obligation 32,143 Net OPEB obligation, beginning of year 321,679 Net OPEB obligation, end of year $ 353,822 h. Other Postemployment Benefit - ABC Board The Board s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2017 were as follows: For Year Ended Annual Percentage of Annual OPEB Cost Net OPEB June 30 OPEB Cost Contributed Obligation 2014 $ 34,051 7.50% $ 263,294 2015 $ 33,244 5.85% $ 296,538 2016 $ 25,141 4.26% $ 321,679 2017 $ 32,143 3.49% $ 353,822 50
Notes 3 - Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 2. Pension Plan and Other Postemployment Obligations (continued) Funded Status and Funding Progress. As of June 30, 2017 the most recent actuarial valuation date, the plan was not funded. The actuarial accrued liability for benefits and the unfunded actuarial accrued liability (UAAL) was $990,498. The covered payroll (annual payroll of active employees covered by the plan) was $315,672 and the ratio of the unfunded actuarial accrued liability to the covered payroll was 112.09%. the projection of future benefit payments fro an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about the future employment, morality, and healthcare trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members at that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value assets, consistent with the long-term perspective of the calculations. The following simplifying assumptions were made: Retirement age for active employees- Based on the historical average retirement age for the covered group, active plan members were assumed to retire at age 65, or at the first subsequent year in which the member would qualify for benefits. Marital status. Marital status of members at the calculation date was assumed to continue through retirement. Mortality. Life expectancies were based on mortality tables from the National Center for Health Statistics. The 2003 United State Life Tables for Males and for Females were used. Turnover. Non-group-specific age-based turnover date from GASB Statement 45 were used as the basis for assigning active members a provability of remaining employed until the assumed retirement age and for development of an expected future working lifetime assumption for purposes of allocating to periods the present value of total benefits to be paid. Healthcare cost trend rate- The expected rate of increase in healthcare insurance premiums was based on calculation of the present value of the total benefit. Health insurance premiums. 2017 health insurance premiums for retirees were used as the basis for calculation of the present value of total benefits to be paid. Inflation rate. The expected long-term inflation assumption of 3.00 percent was used. Payroll growth rate. The expected long-term payroll growth rate was assumed to equal the rate of 4.00%. A discounted rate of 2% was used. In addition, the ARC was calculated using the unit credit cost method with the present value of future normal costs amortized as a level dollar amount. The remaining amortization period at June 30, 2017 was approximately 17 years. f. Other Postemployment Benefit - Vance County Tourism Development Authority Plan Description- Under the terms of the Board resolution, the Authority administers a single-employer defined benefit Healthcare benefits Plan (the HCB Plan). This plan provides postemployment healthcare benefits to retirees of the Authority, provided they participate in the North Carolina Local Government Employees' Retirement System (System) and have at least 5 years of creditable service with the Authority. The Authority pays the full cost of coverage for these benefits. The Authority obtains health care coverage through private insurers. Also, retirees can purchase coverage for their dependents at the County's group rates. The Board may amend the benefit provisions. A separate report was not issued for the plan. 51
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 2. Pension Plan and Other Postemployment Obligations (continued) Funding Policy- The Authority pays the full cost of coverage for the healthcare benefits paid to qualified retirees under a County resolution that can be amended by the Board. Dependent coverage costs must be paid in full by the retiree. The Authority has chosen to fund the healthcare benefits on a pay as you go basis. The current ARC rate is 10.29% of annual covered payroll. For the current year, the Authority contributed $0 or 0% of annual covered payroll. The Authority obtains healthcare coverage through private insurers. The Authority's obligation to contribute to the HCB Plan is established and may be amended by the Board. Summary of Significant Accounting Policies- Postemployment expenditures are made from the General Fund, which is maintained on the modified accrual basis of accounting. No funds are not set aside to pay benefits and administration costs. These expenditures are paid as they come due. Annual OPEB Cost and NET OPEB Obligation- The Authority's annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the Authority's annual OPEB cost for the year, the amount actually contributed to the plan, and any changes in the Authority's net OPEB obligation for the healthcare benefits: Percentage of Annual OPEB Net OPEB For year-end Annual OPEB Cost Cost Contribution Obligation 2014 $ 3,880 0% $ 22,315 2015 $ 6,796 0% $ 29,111 2016 $ 6,808 0% $ 35,919 2017 $ 10,819 0% $ 46,738 f. Other Postemployment Benefit - Vance County Tourism Development Authority Fund Status and Funding Process- As of June 30, 2016, the most recent actuarial valuation date, the plan was not funded. The actuarial accrued liability for benefits and, thus, the unfunded actuarial accrued liability (UAAL) was $98,747. The covered payroll (annual payroll of active employees covered by the plan) was $104,508, and the ratio of the UAAL to the covered payroll was 94.49%. Actuarial valuations of ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, morality, and healthcare trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding process, presented as required supplementary information following the notes to the financial statements, presents information about the actuarial value of plan assets and the actuarial accrued liabilities for the benefit. Actuarial Methods and Assumptions- Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing for benefit cost between employer and plan members at that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. 52
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 2. Pension Plan and Other Postemployment Obligations (continued) In the June 30, 2016 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions include a 4.00% investment rate of return (net of administrative expenses), which is the expected long-term investment returns on the employer s own investments calculated based on the funded level of the plan at the valuation date, and an annual medical cost trend increase of 7.75% and 5.00% annually. Both rates included a 3.00% inflation assumption. The actuarial value of assets, if any, was determined using techniques that spread the effects of short-term volatility in the market value of investments over a 5 year period. The UAAL is being amortized as a level percentage of projected unit credit on a level percent of pay, open basis. The remaining amortization period at June 30, 2016 was 30 years. g. Other Employment Benefits The County has elected to provide death benefits to employees through the Death Benefit Plan for members of the Local Governmental Employees' Retirement System (Death Benefit Plan), a multiple-employer, State-administered, cost-sharing plan funded on a one-year term cost basis. The beneficiaries of those employees who die in active service after one year of contributing membership in the System, or who die within 180 days after retirement or termination of service and have at least one year of contributing membership service in the System at the time of death are eligible for death benefits. Lump sum death benefit payments to beneficiaries are equal to the employee's 12 highest months salary in a row during the 24 months prior to the employee's death, but the benefit will be a minimum of $25,000 and will not exceed $50,000. Because all death benefit payments are made from the Death Benefit Plan and not by the County, the County does not determine the number of eligible participants. The County has no liability beyond the payment of monthly contributions. The contributions to the Death Benefit Plan cannot be separated between the post-employment benefit amount and the other benefit amount. Contributions are determined as a percentage of monthly payroll based upon rates established annually by the State. Separate rates are set for employees not engaged in law enforcement and for law enforcement officers. For the fiscal year ended June 30, 2017, the County made contributions of $12,213 to the State for death benefits. The County s required contributions for employees not engaged in law enforcement and for law enforcement officers represented 0.09% and 0.14% of covered payroll, respectively. 3. Closure and post closure care costs - Vance County Landfill Facility State and federal laws and regulations require the County to place a final cover on its landfill facilities when it stops accepting waste and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and post-closure care costs will be paid only near or after the date that the landfill stops accepting waste, the County reports a portion of these closure and post-closure care costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. The $1,188,759 reported as landfill closure and post-closure care liability at June 30, 2017 represents a cumulative amount reported to date based on the use of 100 percent of the total estimated capacity of the landfill. Final costs may be higher due to inflation, changes in technology, or changes in regulations. All of the above amounts are based on what it would cost to perform all closure and post-closure care in 2017. The landfill was certified as closed in fiscal year 2000. Closure and post closure care costs will end if fiscal year 2030. The County s estimated post closure care cost liability of $1,188,759 is based on estimated annual post closure care costs of $91,443 for the remaining 13 years the County is required to maintain and monitor the landfill. The County has met the requirements of a local government financial test, one option under State and federal laws and regulations to help determine if a unit is financially able to meet closure and post-closure care requirements. The County is not currently required to fund the estimated closure costs of this facility based upon its present financial stability. However, if additional postclosure care requirements are determined (due to changes in technology or applicable laws or regulations, for example), these costs may need to be covered by charges to future landfill users or by future tax revenues. 53
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 4. Deferred Outflows and Inflows of Resources Deferred Deferred Outflows of Inflows of Resources Resources Pensions - difference between expected and actual experience LGERS $ 80,101 $ 149,392 Register of Deeds 72 874 Changes of assumptions LGERS 292,001 - Register of Deeds 17,990 - LEOSSA - 14,299 Pensions - difference between projected and actual investment LGERS 2,357,094 - Register of Deeds 115 408 Pensions - change in proportion and LGERS 7,868 72,656 Register of Deeds 2,470 - Contributions to pension plan in 2016-2017 fiscal year LGERS 927,251 - Register of Deeds 4,123 - LEOSSA 23,070 - Prepaid taxes not yet earned (General Fund) - 1,382 Note receivable 16,500 Taxes receivable, net (General) Purchase water capacity $ 1,575,000 5,287,155 $ 255,511 5. Risk Management The County is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; error and omissions; injuries to employees; and natural disasters. The County obtains property insurance coverage and general liability coverage for these risks. The County participates in two self-funded risk-financing pools administered by the North Carolina Association of County Commissioners. Through these pools, the County obtains property coverage equal to replacement cost values of owned property subject to a limit of $66,370,600 for any one occurrence; general, auto, professional, law enforcement, and employment practices liability coverage of $2 million per occurrence; cyber liability of $1,000,000; and workers compensation coverage up to the statutory limits. The pools are audited annually by certified public accountants, and the audited financial statements are available to the County upon request. Both of the pools are reinsured through a multi-state public entity captive for single occurrence losses in excess of a $500,000 retention up to a $2 million limit for liability coverage, $600,000 of aggregate of annual losses in excess of $50,000 per occurrence for property, auto physical damage, and crime coverage, and single occurrence losses of $350,000 for workers compensation. The County s insurance policy includes shared reinsurance limits with other members of the pool as follows: (Earthquake $5,000,000 per occurrence, Flood $1,000,000 in Zones A and V and $5,000,000 in zones other than A and V, and Named Storm $50,000,000 per occurrence) There have been no losses due to flooding in previous years. In accordance with G.S. 159-29, the County s employees that have access of $100 or more at any given time of the County s funds are performance bonded through a commercial surety bond. The Director of Finance and the Tax Collector are individually bonded for $50,000 and $50,000, respectively. The remaining employees that have access to funds are bonded under a blanket bond for $250,000. The County carries commercial insurance for all other risks of loss. There have been no significant reductions in insurance coverage from the previous year and settled claims from these risks have not exceeded the total commercial insurance coverage in any of the last three fiscal years. 54
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 5. Risk Management (continued) Vance County ABC Board is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The ABC Board has property, general liability, auto liability, workmen's compensation and employee health coverage. The Board also has liquor legal liability coverage. There have been no significant reductions in insurance coverage from the prior year and settled claims have not exceeded coverage in any of the past three fiscal years. In accordance with G.S. 18B-700(i) and G.S. 18B-803(b), each Vance County ABC Board member and the employees designated as the general manager and finance officer are bonded in the amount of $50,000 secured by a corporate surety. Vance County Tourism Development Authority is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Authority does not carry flood insurance. The Authority is covered under a commercial insurance coverage carrier by Vance County, North Carolina. There have been not significant reductions in insurance coverage in the prior year, and settled claims have not exceeded coverage in any of the past three fiscal years. In accordance with G.S. 159-26, the Authority s funds are bonded under a spectrum policy in which a section of the policy covers employee dishonesty up to $10,000. The finance officer is individually bonded in the amount of $50,000. 6. Contingent Liabilities At June 30, 2017, the County's management and the County attorney have no knowledge of any existing outstanding material cases. 7. Long-term obligations General Obligation Indebtedness All general obligation bonds serviced by the County s general fund are collateralized by the full faith, credit and taxing power of the County. The County s general obligation bonds payable at June 30, 2017 are comprised of the following individual issues: $4,140,000 2010 Refunded Courthouse Facility Serial Bonds, in annual installments of $430,000 to $510,000 through February 1, 2019, interest at 2.0 to 3.0 percent. Serviced by the County's Water and Sewer District : $5,627,000 2014 General Obligation Water Bonds due in annual installments of $78,000 to $244,000 June 1, 2054, interest at 3.25% $ $ $ 865,000 865,000 5,549,000 $2,196,000 Series 2015A General Obligation Water Bonds due in annual installments of $35,000 to $89,000 June 1, 2054, interest at 2.75% 2,161,000 $3,937,000 Series 2015B General Obligation Water Bonds due in annual installments of $62,000 to $161,000 June 1, 2054, interest at 2.75% $ 3,875,000 11,585,000 55
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 7. Long-term obligations (continued) Annual debt service requirements to maturity for the County's and the District s general obligation bonds are as follows: Year Ending June 30 2018 2019 2020 2021 2022 2023-2027 2028-2032 2033-2037 2038-2042 2043-2047 2048-2052 2053-2057 Governmental Activities Business-Type Activities Principle Interest Principle Interest Total 435,000 25,950 177,000 346,333 984,283 430,000 12,900 182,000 341,065 965,965 - - 188,000 335,650 523,650 - - 194,000 330,055 524,055 - - 200,000 324,280 524,280 - - 1,089,000 1,528,558 2,617,558 - - 1,259,000 1,356,535 2,615,535 - - 1,457,000 1,157,200 2,614,200 - - 1,688,000 926,250 2,614,250 - - 1,955,000 658,405 2,613,405 - - 2,267,000 347,622 2,614,622 - - 929,000 41,170 970,170 $ 865,000 $ 38,850 $ 11,585,000 $ 7,693,123 $ 20,181,973 Capital Leases The County has entered into agreements to lease certain equipment and vehicles. The lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception. The outstanding balances as of 6/30/17 are as follows: An agreement was entered into on September 27, 2010 with BB&T for the lease of a 2010 E-One Fire tanker for the Fire and Ambulance Department. The agreement was for 10 annual payments of $27,435, including interest at 2.77%. An agreement was entered into on December 15, 2010 with BB&T for the refinancing of the Kerr Lake Volunteer Fire Department s assets for the Fire and Ambulance Department. The refinancing agreement called for 180 month payments of $1,740, including interest at 4.09%. $ 102,543 149,664 An agreement was entered into on June 21, 2016 for the purchase of eight law enforcement vehicles. The agreement was for 16 quarterly payments of $17,884 each including interest at 1.51%. An agreement was entered into on October 24, 2012, effective for March 31, 2013, for the purchase of a Viper 911 system. The agreement was for 19 quarterly payments of $23,454 each including interest at 1.69%. 209,435 46,612 An agreement was entered into on April 18, 2013, effective July 28, 2013, for the purchase of 911 radio consoles. The agreement was for 20 quarterly payments of $10,291 each including interest at 1.77%. 40,714 An agreement was entered into on June 2, 3013, effective December 6, 2013, for the purchase of twelve law enforcement vehicles. The agreement was for 8 semi-annual payments of $41,951 each including interest at 1.59%. The outstanding balance was paid off as of 6/30/17. An agreement was entered into on June 30, 2014 for the purchase of ten law enforcement vehicles. The agreement was for 16 quarterly payments of $18,751 each including interest at 1.59%. - 74,265 56
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 7. Long-term obligations (continued) An agreement was entered into on March 14, 2014 for the purchase of an ambulance. The agreement was for 16 quarterly payments of $10,883 including interest at 1.67%. An agreement was entered into on November 26, 2014 for the purchase of an ambulance and animal control vehicle. The agreement was for 16 quarterly payments of $10,981 including interest at 1.69%. An agreement was entered into on July 28, 2015 for the purchase of nine law enforcement vehicles, an ambulance and cardiac monitor. The agreement was for 16 quarterly payments of $27,089 each including interest at 1.46%. An agreement was entered into on March 24, 2017 for the purchase of an EMS vehicle, Zoll Cardiac Monitor, and four Law Enforcement vehicles. The agreement was for 16 quarterly payments of $21,037 each including interest at 2.03%. 32,377 64,921 239,408 303,100 Total Capital Leases $ 1,263,039 At June 30, 2017 the County leased vehicles and equipment was valued as follows: Accumulated Net Book Cost Depreciation Value Equipment and Vehicles $ 2,386,069 $ 1,343,328 $ 1,042,741 For Vance County, the future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2017 are as follows: Year Ending June 30, 2018 $ Principal 551,997 2019 2020 2021 2022 Thereafter 334,310 231,182 111,420 20,875 73,062 Total minimum lease payment $ 1,322,846 Less: amounts representing interest 59,807 Present value of minimum lease payments $ 1,263,039 At June 30, 2017, the legal debt margin is $184,168,355. Installment Purchases The County has several installment purchase agreements in effect at June 30, 2017. A summary of those are as follows: On March 10, 2009, the County entered into a building installment purchase contract with the proceeds to be used in the construction of a new elementary school building. The installment purchase contract is to be paid in 20 annual payments of $650,000 plus semiannual interest payments of 2.81% beginning on September 1, 2009. $ 8,450,000 On June 9, 2015, the County entered into a jail renovation installment purchase contract with the proceeds to be used for improvements to buildings at Vance Granville Community College totaling $1,018,000 and to refinance a previous loan for the renovation of the County jail complex. The outstanding balance refinanced on the previous loan was $800,000. $980,000 of the new installment purchase contract is to be paid in 15 annual payments of $65,000 to $66,000 plus annual interest payments of 2.75% beginning on September 1, 2015. The remaining balance of $838,000 will be paid in 4 annual installments of 203,000 to $216,000 plus annual interest payments of 1.59% beginning June 1, 2016. 1,259,000 57
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 7. Long-term obligations (continued) On November 12, 2003, the County entered into a QZAB installment purchase contract with proceeds to be used for property improvements by the Vance County Board of Education. The installment purchase contract is to be paid in 15 semiannual installments of $77,487 with no interest. On November 15, 2005, the County entered into a QZAB installment purchase contract with proceeds to be used for property improvements by the Vance County Board of Education. The installment purchase contract is to be paid in 16 annual installments of $101,863 with no interest. On November 9, 2010, the County entered into a QSCB installment purchase contract with proceeds to be used for property improvements by the Vance County Board of Education. The installment purchase contract is to be paid in 15 annual installments of $261,621 plus annual interest payments of 5.09%. On June 26, 2013, the County entered into a QZAB installment purchase contract with proceeds to be used for property improvements by the Vance County Board of Education. The installment purchase contract is to be paid in 15 annual installments of $133,333 with no interest. On June 23, 2017, the County entered into an installment financing agreement with BB&T, with the proceeds to be used to finance the cost of certain improvement, repairs and renovations to certain County buildings and facilities. The installment contract is to be paid in 15 annual principal payments (7 at $86,000 and 8 at $87,000), plus semiannual interest payments at 2.85% beginning on September 1, 2017. 445,669 879,505 2,354,592 1,466,667 1,298,000 On December 22, 2016, the County entered into a $1,703,000 installment financing agreement with USDA, with the proceeds to be used to finance the cost of the Animal Shelter. The installment contract is to be paid in 30 annual payments of $80,024, including interest, beginning on December 22, 2017. 1,703,000 $ 17,856,433 The total future minimum payments of the County s installment purchase obligations as of June 30, 2017, including interest of $2,587,882 were as follows: Annual debt service requirements to maturity for the County s installment purchase loans are as follows: Year Ending June 30 2018 2019 2020 2021 2022 2023-2027 2028-2032 2033-2037 2038-2042 2043-2047 Governmental Activities Principle Interest $ 1,622,883 $ 449,926 1,620,823 414,148 1,418,785 374,082 1,419,667 337,324 1,419,776 300,339 6,383,820 948,092 2,970,636 261,372 294,930 105,190 331,744 68,376 373,369 27,056 $ 17,856,433 $ 3,285,905 Notes Payabl e Vance County entered into an agreement with the City of Henderson on July 23, 2012 to reserve a total of 175,000 gallons per day for Phase 2A and Phase 2B from the City of Henderson s water supply for the exclusive use of the Water District within Vance County and for the District s re-sale to its customers served by said two phases. In consideration of the reservation, Vance County agreed to pay a water allocation reservation fee to the City of Henderson in the amount of $1,750,000, payable over 40 years without interest in equal annual periodic payments of $43,750, due on July 31st of each year. The outstanding principal balance as of June 30, 2017 was $1,575,000. 58
Note 3 Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 7. Long-term obligations (continued) Annual debt service requirements to maturity for the County's note payable are as follows: Installment Purchases Year Ending June 30 Principal Interest Total 2018 $ 43,750-43,750 2019 43,750-43,750 2020 43,750-43,750 2021 43,750-43,750 2022-2026 218,750-218,750 2027-2031 218,750-218,750 2031-2036 218,750-218,750 2037-2041 218,750-218,750 2042-2046 218,750-218,750 2047-2051 218,750-218,750 2052-2053 87,500-87,500 Principal payments $ 1,575,000 $ - $ 1,575,000 8. Summary of Long-term Obligations The following is a summary of changes in the County's long-term obligations for the fiscal year ended June 30, 2017: Balance Balance Current Portion July 1, 2016 Increases Decreases June 30, 2017 of Balance Governmental Activities: General obligation debt $ 1,305,000 $ - $ 440,000 $ 865,000 $ 435,000 Installment purchases 18,060,737 3,001,000 3,205,304 17,856,433 1,583,305 Capital leases 1,543,376 322,500 602,837 1,263,039 529,482 Compensated absences 795,701 38,943-834,644 - Net pension liability (LGERS) 905,882 3,342,785-4,248,667 - Net pension obligation (LEOSSA) 728,452 16,991-745,443 - Other postemployment benefits 6,680,259 1,245,830 563,228 7,362,861 - Total governmental activities $ 30,019,407 $ 7,968,049 $ 4,811,369 $ 33,176,087 $ 2,547,787 Business-Type Activities: Accrued landfill closure and post-closure care cost $ 1,255,100 $ - $ 66,341 $ 1,188,759 $ - General obligation debt 11,760,000-175,000 11,585,000 177,000 Note payable 1,618,750-43,750 1,575,000 43,750 Compensated absences 4,948 75-5,023 - Net pension liability (LGERS) 3,375 11,305-14,680 - Other postemployment benefits 24,809 4,341 1,962 27,188 - Total governmental activities $ 14,666,982 $ 15,721 $ 287,053 $ 14,395,650 $ 220,750 The ABC Board obtained financing from BB&T in 2009 for the purchase and construction of a building and related land for a new retail store operation. The note is due in quarterly payments of $27,593, including interest at 4.49%, beginning June 2009 and maturing in June, 2022. The Board may prepay the outstanding principal component, at its option, on any regularly schedule payment date, in whole but not in part, by paying (a)all payments then due and payable, (b) all interest accrued and unpaid to the prepayment date, and (c) 101% of the outstanding principal amount. BB&T will allow one additional payment per year, at par, on a scheduled payment date. The outstanding principal balance as of June 30, 2017 was $44,966. Annual note requirements to maturity for the ABC Board s notes payable are as follows: Year Ending June 30 2018 Principle Interest 44,966 10,219 $ 44,966 $ 10,219 59
Note 3 - Detail Notes on All Funds (continued) 2. LIABILITIES (conintued) 8. Summary of Long-Term Obligations The following is a summary of changes in the ABC Board s long-term obligations for the fiscal year ended June 30, 2017: Balance Balance Current Portion July 1, 2016 Increases Decreases June 30, 2017 of Balance ABC Board: Notes Net pension liability Compensated absences Other Total ABC Board $ 155,339 $ - $ 155,339 $ - $ - 11,444 62,413 - $ 73,857-32,307 1,492 - $ 33,799-321,679 32,143 - $ 353,822 - $ 520,769 $ 96,048 $ 155,339 $ 461,478 $ - The following is a summary of changes in the Tourism Development Authority s long-term obligations for the fiscal year ended June 30, 2017: Vance County TDA: Balance Balance Current Portion July 1, 2016 Increases Decreases June 30, 2017 of Balance Notes payable Net pension liability Compensated absences Other postemployment Total ABC Board $ 277 $ - $ - $ 277 $ 277 20,169 8,323 8,756 $ - 8,756 8,547 31,955 - $ 20,169-35,919 10,819 - $ 35,919 - $ 64,912 $ 51,097 $ 8,756 $ 56,365 $ 9,033 9. Conduit Debt Vance County Industrial Facility and Pollution Control Authority have issued industrial revenue bonds to provide financial assistance to private businesses for economic development purposes. These bonds are secured by the properties financed as well as letters of credit and are payable solely from payments received from the private businesses involved. Ownership of the acquired facilities is in the name of the private business served by the bond issuance. Neither the County, the Authority, the State, nor any political subdivision thereof is obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of June 30, 2017, there were three series of industrial revenue bonds outstanding, with an aggregate principal amount payable of $1.24 million. 3. FUND BALANCE Interfund Balances and Activity Transfers to/from other funds at June 30, 2017, consist of the following: From the General Capital Reserve Fund to the Debt Service Fund to help pay debt service obligations From the General Fund to the Revaluation fund to provide funding for future revaluation the County s tax base. From the General Fund to the School Capital Reserve Fund to cover capital Expenditures for school facility improvements restricted portion of sales tax $ 792,043 60,625 1,998,027 From the General Fund to the General Capital Reserve Fund to provide funding for maintenance and special projects From the General Fund to the Water Fund to provide funding to cover operating deficit From the General Fund to the Solid Waste Fund to increase for employees originally budgeted in the General Fund 200,000 350,006 325 60
Note 3 - Detail Notes on All Funds (continued) 3. FUND BALANCE (continued) Interfund Balances and Activity (continued) From the General Fund to the Tourism Fund to increase for employees originally budgeted in the General Fund From the General Fund to the Economic Development Fund for future ED land purchase From the General Capital Reserve Fund to the Capital Projects Fund for contribution towards new water system From the General Fund to the Capital Projects Fund for contribution towards new Animal Shelter From the ETS Wireless Fund to the General Fund for salary and benefits for one position From the Facilities Fees Fund to the General Fund to help pay operating costs on County facilities. From the Fire Tax Fund to the General Fund for administrative services, paid volunteers, etc. From the General Capital Reserve Fund to the General Fund for building repairs and other projects From the School Capital Reserve Fund to the School Capital Projects Fund for Lottery proceeds drawn down for school capital project From the School Capital Reserve Fund to the General Fund for school capital outlay budgeted for FY 2017 From the School Capital Reserve Fund to the Debt Service Schools Fund for debt repayment From the School Capital Reserve Fund to the Debt Service Fund for debt repayment 876 100,000 10,000 37,928 53,229 62,581 202,195 257,676 224,016 965,000 1,604,048 67,180 Total Interfund Transfers $ 6,985,755 Balances due to/from other funds as of June 30, 2017, consist of the following: Receivable Fund Payable Fund Amount General Fund Neighborhood Stabilization Fund $ 156,229 The interfund balances resulted from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. Vance County has a revenue spending policy that provides policy for programs with multiple revenue sources. The Finance Officer will use resources in the following hierarchy: bond proceeds, federal funds, State funds, local non-county funds, county funds. For purposes of fund balance classification expenditures are to be spent from restricted fund balance first, followed in order by committed fund balance, assigned bund balance and lastly unassigned fund balance. The Finance Officer had the authority to deviate from this policy if it is in the best interest of the County. The following schedule provides management and citizens with information on the portion of General fund balance that is available for appropriation at June 30, 2017: Total fund balance- General Fund $ 22,173,948 Less: Stabilization by state statute 2,968,528 Restricted for revaluation 243,210 Committed for LEOSSA and OPEB benefits 358,438 Appropriated Fund Balance in 2018 budget 1,159,957 Remaining Fund Balance $ 17,443,815 61
Note 4 - Joint Ventures The Granville-Vance Health District is a district based board of health established under North Carolina General Statute 130A by both Granville County and Vance County to provide public health services. The joint venture is governed by a sixteen-member Board, which is composed of one County Commissioner from each of the two counties; and seven other members appointed by each of the two respective Boards of County Commissioners. The County contributed $575,655 to the Health District during the fiscal year ended June 30, 2017. The participating governments do not have any equity interest in the joint venture, therefore no equity interest has been reflected in the financial statements at June 30, 2017. Complete financial statements for the Health District can be obtained from the Health District s administrative offices at 101 Hunt Drive, Oxford, NC 27565. Cardinal Innovative Healthcare Solutions was established to provide mental health services for five counties: Vance, Warren, Granville, Franklin, and Halifax. Each county has one board member on the Cardinal Innovative Healthcare Solutions Authority Board, but none individually has authority to designate management. The County contributed $86,368 to the Authority during the fiscal year ended June 30, 2017. The participating governments do not have any equity interest in the joint venture, therefore no equity interest has been reflected in the financial statements at June 30, 2017. Complete financial statements for the Five County Mental Health Authority can be obtained from their administrative offices. The County in conjunction with Granville County, Warren County, Franklin County, the State of North Carolina, and the Boards of Education of Vance, Granville, Warren, and Franklin Counties, participates in a joint venture to operate Vance-Granville Community College. Each participant appoints members of the thirteen-member board of trustees of the Community College. No participant appoints a majority. The president of the Community College s student government serves as an ex-officio nonvoting member of the Community College s board of trustees. The Community College is included as a component unit of the State. The County has the basic responsibility for providing funding for the facilities of the Community College and also provides some financial support for the Community College s operations. In addition to providing annual appropriations for the facilities, the County periodically issues general obligation bonds to provide financing for new and restructured facilities. The County has an ongoing financial responsibility for the Community College because of the statutory responsibilities to provide funding for the Community College s facilities. The County contributed $1,041,540 and $71,268 to the Community College for operating and capital purposes, respectively, during the fiscal year ended June 30, 2017. In addition, the County made debt service payments of $91,162 during the fiscal year on installment purchase obligations issued for community college capital facilities. The participating governments do not have any equity interest in the joint venture; therefore, no equity interest has been reflected in the County s financial statements at June 30, 2017. Complete financial statements for the Community College may be obtained form the Community College s administrative offices at P.O. Box 918, Henderson, NC 27536. The Kerr Area Rural Transportation Authority (KARTS) is an association of five county governments, including Vance County. Karts is a joint venture of the participating counties for the purpose of providing a safe, adequate, and convenient transportation system for the jurisdictional area creating the Authority and its immediate environs. The counties served by KARTS, in addition to Vance County, are Granville, Franklin, Warren, and Person. General support of KARTS is provided by Federal, State, and local grants and user fees. Each county appoints two members of the Authority's managing body and this governing body determines the budget and financing requirements of the Authority. The criteria in NCGA Statement 3 were applied to the Authority, and while there were positive responses to some of the criteria, it was determined the County did not have significant influence over the Authority to justify inclusion of the Authority as part of the County reporting entity. The County contributed $ 156,868 to KARTS during the fiscal year ended June 30, 2017. The participating governments do not have any equity interest in the joint venture, therefore no equity interest has been reflected in the financial statements at June 30, 2017. Complete financial statements for KARTS can be obtained from their administrative offices. Note 5- Joint Governed Organization The County has joined with four other counties and fifteen municipalities in the area to establish the Kerr-Tar Regional Council of Governments (Council). The participating governments established the Council to coordinate various funding received from federal and State agencies. Each participating government appoints one member to the Council s governing board. The County paid membership fees of $17,378 to the Council during the fiscal year ended June 30, 2017. The County has no equity interest in the Council. 62
Note- 6 Benefit Payments Issued by the State The amounts listed below were paid directly to individual recipients by the State from federal and state moneys during the year ended June 30, 2017. Vance County personnel are involved with certain functions, primarily eligibility determinations that cause benefit payments to be issued by the state. These amounts disclose the additional aid to County recipients that do not appear in the general-purpose financial statements because they are not revenues and expenditures of the County. Federal State Special Supplemental Food Program for Women Infants, and Children $ 1,145,248 $ - Temporary Assistance for Needy Families 555,384 (9) IV-E Foster Care 435,992 - Medical Assistance 65,889,898 35,713,708 State Children's Insurance Program 927,280 3,296 Note 7- Summary Disclosure of Significant Commitments and Contingencies Unemployment Taxes The County has elected to pay direct costs of employment security benefits in lieu of employment security taxes on payroll. A liability for benefit payments could accrue in the year following discharge of employees. City of Henderson Joint Capital Projects Vance County has entered into several joint capital projects with the City of Henderson. Per the terms of interlocal agreements with the City of Henderson, the City borrowed the funds to finance these projects. Vance County will reimburse the City of its proportionate share of construction costs and debt service expenditures. The outstanding debt and the related principal and interest payments for these projects are recorded in the financial statements of the City of Henderson. The following schedule shows the outstanding commitment for Vance County s share of current fiscal year and future year s debt service payments through the final payment in the fiscal year ending June 30, 2017. City of Henderson Vance County Principal Interest Total Share of Costs Commitment Year ended June 30, 2017: Ruin Creek Road Outfall Line $ 115,285 $ 6,110 $ 121,395 56.34% $ 68,394 Total $ 115,285 $ 6,110 $ 121,395 $ 68,394 63
Note 7- Summary Disclosure of Significant Commitments and Contingencies (continued) Economic Incentives During the fiscal year ended June 30, 2017, Vance County paid an economic incentive of $25,380 to Vescom America, Inc. Per the terms of an agreement between the Vance County Board of Commissioners and Vescom America, Inc., the County shall pay an economic incentive to Vescom America, Inc. equal to the annual ad valorem property taxes paid by the company each year. The cumulative amount of the incentive shall not exceed $224,683, provided, the company meets the following requirements within 24 months of the agreement: The company must invest $6.5 million in taxable improvements in Vance County Company must maintain 62 full time jobs in Vance County with an average annual salary of $44,886. Company must pay Vance County property taxes in full each year. During the fiscal year ended June 30, 2017, Vance County secured a Building Reuse Grant for Profilform/Versatrim in the amount of $100,000. The grant required a 5% match ($5,000) by the county and those funds went to the company. The company has agreed to create at least 20 new jobs at their facility in the county. During the fiscal year ended June 30, 2017, Vance County secured a Building Reuse Grant for Hoyle Tire & Axle in the amount of $150,000. The grant required a 5% match ($7,500) by the county and those funds went to the company. The company has agreed to create at least 12 new jobs at their facility in the county. During the fiscal year ended June 30, 2017, Vance County executed an economic development incentives agreement with Mars Petcare for their existing facility in the county. Mars will make an investment of at least $21,000,000 and retain 125 jobs at their current location. The company must pay Vance County property taxes in full each year. If the company meets the requirements of the agreement they are eligible to receive incentives totaling a not to exceed amount of $412,960 paid out over a five year period. Note 8 - Subsequent Events The County's bond credit rating was upgraded to Aa3 from A1 by Moody's on October 26, 2017. The County's bond credit rating was upgraded to AA- from A+ by Standard & Poor's on December 14, 2017. Subsequent events have been evaluated as of January 25, 2018, the date the financial statements were available for review. Note 9- Change in Accounting Principles / Restatement In accordance with Governmental Accounting Standards Board (GASB) Statement 73, the County reclassified the Law Enforcement Officers' Special Separation Allowance trust fund to the General Fund. As a result, net position for the governmental activities decreased by $231,333. 64
REQUIRED SUPPLEMENTAL FINANCIAL DATA This section contains additional information required by generally accepted accounting principals. - Schedule of Funding Progress for the Other Postemployment Benefits - Schedule of Employer Contributions for the Other Postemployment Benefits - Schedule of Contributions to Local Government Employees' Retirement System (LGERS) - Schedule of Proportionate Share of Net Pension Asset for Register of Deeds Supplemental Pension Fund - Schedule of Contributions to Register of Deeds' Supplemental Pension Fund - Schedule of Changes in Total Pension Liability (LEOSSA) - Schedule of Total Pension Liability as a Percentage of Covered-Employee Payroll (LEOSSA)
Exhibit A-1 Vance County, North Carolina Other Post Employment Benefits Required Supplementary Information Schedule of Funding Progress Year Ended June 30, 2017 Actuarial Accrued Actuarial Liability (AAL) Unfunded UAAL as a Actuarial Value of -Projected Unit AAL Funded Covered % of Covered Valuation Assets Credit (UAAL) Ratio Payroll Payroll Date (a) (b) (b - a) (a/b) (c) ((b - a)/c) 12/31/2008-13,774,646 13,774,646 0.00% 10,665,744 129.15% 12/31/2010-14,660,933 14,660,933 0.00% 11,757,209 124.70% 12/31/2012-14,042,311 14,042,311 0.00% 10,259,576 136.87% 12/31/2014-14,373,793 14,373,793 0.00% 11,020,341 130.43% 6/30/2016-16,710,551 16,710,551 0.00% 10,700,818 156.16% 65
Exhibit A-2 Vance County, North Carolina Other Post Employment Benefits Required Supplementary Information Schedule of Employer Contributions Year Ended June 30, 2017 Year Ended Annual Required Percentage June 30 Contribution Contributed 2012 $ 1,340,183 0.00% 2013 1,225,672 44.49% 2014 1,225,672 32.45% 2015 1,262,442 48.15% 2016 1,202,122 39.21% 2017 1,334,067 42.37% Notes to the Required Schedules: The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation follows. Valuation date 6/30/2016 Actuarial cost method Amortization method Remaining amortization period Projected unit credit Level Percentage of Pay, Closed 30 years Amortization factor 26.1695 Asset valuation method Market value of Assets Actuarial assumptions: Investment rate of return* 4.00% Medical trend assumptions Pre-Medicare Trend Rate 7.75%-5.00% Post-Medicare Trend Rate 5.75% -5.00% Year of ultimate trend rate 2022 *Includes inflation at 3.00% 66
Exhibit A-3 Vance County, North Carolina Schedule of Proportionate Share of Net Pension Liability (Asset) Local Government Employees' Retirement System Last Four Fiscal Years* Local Government Employees' Retirement System 2017 2016 2015 2014 County's proportion of the net pension liability (asset) (%) 0.20088% 0.20260% 0.20307% 0.21170% County's proportion of the net pension liability (asset) ($) $ 4,263,347 $ 909,257 $ (1,197,597) $ 2,551,798 County's covered-employee payroll $ 11,843,244 $ 11,508,246 $ 11,508,246 $ 11,508,426 County's proportionate share of the net pension liability (asset) as a percentage of its covered-employee payroll 36.00% 7.90% -10.41% 22.17% Plan fiduciary net position as a percentage of the total pension liability** 91.47% 98.09% 102.64% 94.35% * The amounts presented for each fiscal year were determined as of the prior fiscal year ending June 30. ** This will be the same percentage for all participant employers in the LGERS plan. 67
Exhibit A-4 Vance County, North Carolina Schedule of County Contributions Local Government Employees' Retirement System Last Four Fiscal Years Local Government Employees' Retirement System 2017 2016 2015 2014 Contractually required contribution $ 792,557 $ 795,724 $ 844,790 $ 813,633 Contributions in relation to the contractually required contribution 792,557 795,724 844,790 813,633 Contribution deficiency (excess) $ - $ - $ - $ - County's covered-employee payroll $ 12,457,196 $ 11,843,244 $ 11,883,802 $ 11,508,246 Contributions as a percentage of covered-employee payroll 6.36% 6.72% 7.11% 7.07% * The amounts presented for each fiscal year were determined as of the prior fiscal year ending June 30. ** This will be the same percentage for all participant employers in the LGERS plan. 68
Exhibit A-5 Vance County, North Carolina Schedule of the County's Proportionate Share of the Net Pension Liability (Asset) Register of Deeds' Supplemental Pension Fund Last Four Fiscal Years* 2017 2016 2015 2014 County's proportionate share of the net pension liability (%) 0.3612% 0.37046 0.381% 0.350% County's proportionate share of the net pension liability ($) $ (67,524) $ (85,850) $ (86,355) $ (74,850) County's covered-employee payroll $ 54,918 $ 53,808 $ 50,853 $ 50,853 County's proportionate share of the net pension liability (asset) as a percentage of its covered-employee payroll -122.95% -159.55% -169.81% -147.19% Plan fiduciary net position as a percentage of the total pension liability 160.17% 197.29% 193.88% 190.50% * The amounts presented for the fiscal year were determined as of June 30. 69
Exhibit A-6 Vance County, North Carolina Schedule of County Contributions Register of Deeds' Supplemental Pension Fund Last Four Fiscal Years* 2017 2016 2015 2017 County's required contribution $ 4,123 $ 2,951 $ 2,964 $ 3,111 Contributions in relation to contractually required contribution 4,123 2,951 2,964 3,111 Contribution deficiency (excess) $ - $ - $ - $ - County's covered-employee payroll $ 56,171 $ 54,918 $ 53,808 $ 50,853 Contributions as a percentage of covered-employee payroll 7.34% 5.37% 5.51% 6.12% 70
Exhibit A-7 Vance County, North Carolina Schedule of Changes in Total Pension Liability Law Enforcement Officers' Special Separation Allowance For the Year Ended June 30, 2017 2017 Beginning Balance $ 728,452 Service Cost 35,498 Interest on the total pension liability 25,524 Changes of benefit terms - Differences between expected and actual experience in the measurement of the total pension liability - Changes of assumptions or other inputs (17,044) Benefit payments (26,987) Other changes - Ending balance of the total pension liability $ 745,443 71
Exhibit A-8 Vance County, North Carolina Schedule of Changes in Total Pension Liability Law Enforcement Officers' Special Separation Allowance For the Year Ended June 30, 2017 2017 Total pension liability $ 745,443 Covered payroll 1,300,214 Total pension liability as a percentage of covered payroll 57.33% Notes to the schedules: Vance County has no assets accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement 73 to pay related benefits. 72
GENERAL FUND The General Fund accounts for resources traditionally associated with government that are not required legally or by sound financial management to be accounted for in other funds.
Vance County, North Carolina General Fund Combining Balance Sheet For the Fiscal Year Ended June 30, 2017 Debt School Facility LEOSSA Totals General Revaluation Service Debt Service Fees Pension June 30, Fund Fund Fund Fund Fund Fund 2017 ASSETS Cash and cash equivalents $ 19,883,003 $ - $ - $ - $ (6,889) $ 358,438 $ 20,234,552 Restricted Cash 243,210 - - - - 243,210 Receivables: Property Tax 1,365,769 - - - - - 1,365,769 Accounts receivable 2,590,018 - - - 5,974-2,595,992 Due from other governments 215,098 294 - - 915-216,307 Due from other funds 156,229 - - - - - 156,229 Total assets 24,210,117 243,504 - - - 358,438 24,812,059 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities 1,261,688 - - - - - 1,261,688 Due to other funds - - - - - - Due to other governments 9,272 - - - - - 9,272 Total liabilities 1,270,960 - - - - - 1,270,960 Deferred inflows of resources Prepaid taxes 1,382 - - - - - 1,382 Reserve for taxes receivable 1,365,769 - - - - - 1,365,769 Total deferred inflows of resources 1,367,151 - - - - - 1,367,151 Fund balances: Restricted Stabilization by state statute 2,961,345 294 - - 6,889-2,968,528 Register of deeds - - - - - - - Sheriff - - - - - - - Emergency services - - - - - - - Tax revaluation - 243,210 - - - - 243,210 Facility improvements - - - - - - - Committed LEO SSA Pension and OPEB benefits - - - - - 358,438 358,438 Assigned Subsequent years' expenditures 1,159,957 - - - - - 1,159,957 Unassigned 17,450,704 - - - (6,889) - 17,443,815 Total fund balances 21,572,006 243,504 - - - 358,438 22,173,948 Total liabilities, deferred inflows of resources, and fund balances $ 24,210,117 $ 243,504 $ - $ - $ - $ 358,438 $ 24,812,059 Exhibit B-1 73
Vance County, North Carolina General Fund Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Fiscal Year Ended June 30, 2017 Revaluation Debt School Facility LEOSSA Totals General Reserve Service Debt Service Fees Pension June 30, Fund Fund Fund Fund Fund Fund 2017 Revenues Ad valorem taxes $ 23,935,307 $ - $ - $ - $ - $ - $ 23,935,307 Local option 8,419,426 - - - - - 8,419,426 Other taxes and licenses 59,711 - - - - - 59,711 Unrestricted intergovernmental 282,596 - - - - - 282,596 Restricted intergovernmental 10,186,462 - - - 72,715-10,259,177 Sales service 3,571,710 - - - - - 3,571,710 Investment earnings 2,210 1,430 159-74 2,791 6,664 Miscellaneous other 253,504 - - - - 253,504 Total revenues 46,710,926 1,430 159-72,789 2,791 46,788,095 Expenditures General Government 4,131,040 - - - 26,586-4,157,626 Public safety 12,608,992 - - - - - 12,608,992 Transportation 28,750 - - - - - 28,750 Environmental protection 108,136 - - - - - 108,136 Economic and community development 1,041,267 - - - - - 1,041,267 Human services 13,217,036 - - - - - 13,217,036 Cultural and recreational 1,578,743-67,180 - - - 1,645,923 Education 10,270,768 - - - - - 10,270,768 Debt Services Principal 461,361-718,000 1,224,305 - - 2,403,666 Interest and fees 34,237-74,202 379,743 - - 488,182 Total expenditures 43,480,330-859,382 1,604,048 26,586-45,970,346 Revenues over (under) expenditures 3,230,596 1,430 (859,223) (1,604,048) 46,203 2,791 817,749 Other financing sources (uses): Transfers in 1,540,681 60,625 859,223 1,604,048-4,064,577 Transfers out (3,538,955) - - - (62,581) - (3,601,536) Proceeds from lease obligations 322,500 - - - - - 322,500 Proceeds from refinancing of animal shelter 1,703,000 - - - - - 1,703,000 Payoff of interim animal shelter financing (1,703,000) (1,703,000) Sales of fixed assets 1,074 - - - - - 1,074 Total other financing sources (uses) (1,674,700) 60,625 859,223 1,604,048 (62,581) - 786,615 Revenues and other financing sources over (under) expenditures and other financing uses 1,555,896 62,055 - - (16,378) 2,791 1,604,364 Fund balances, beginning 20,016,110 181,449 - - 16,378 355,647 20,569,584 Prior period adjustment - - - - - - - Fund balances, ending $ 21,572,006 $ 243,504 $ - $ - $ - $ 358,438 $ 22,173,948 Exhibit B-2 74
Vance County, North Carolina Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund For the Fiscal Year Ended June 30, 2017 Exhibit B-3 2017 Variance Positive Budget Actual (Negative) Revenues Ad Valorem taxes Taxes $ 23,722,507 $ 23,675,061 $ (47,446) Penalties and interest 276,300 260,246 (16,054) Total 23,998,807 23,935,307 (63,500) Local option sales tax Article 39 one percent 4,163,200 4,246,247 83,047 Article 40 one - half of one percent 2,598,855 2,609,610 10,755 Article 42 one - half of one percent 2,281,126 2,266,473 (14,653) Hold Harmless (532,757) (702,904) (170,147) Total 8,510,424 8,419,426 (90,998) Other taxes and licenses Real estate transfer tax 32,750 24,849 (7,901) Motor Vehicle rental tax 32,000 32,093 93 Privilege licenses 3,000 2,769 (231) Total 67,750 59,711 (8,039) Unrestricted intergovernmental Beer and wine tax 140,000 132,852 (7,148) ABC Distribution 19,500 19,626 126 Video franchise fees 135,000 130,118 (4,882) Total 294,500 282,596 (11,904) Restricted intergovernmental Federal, State, and local grants 9,243,676 8,847,437 (396,239) H.L. Perry Library 571,633 571,633 - Vance County Housing Authority 211,973 211,973-911 fees 614,589 531,910 (82,679) ABC bottle tax 20,000 23,509 3,509 Capital Contributions - EMS consolidations - - - Total 10,661,871 10,186,462 (475,409) 75
Vance County, North Carolina Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund For the Fiscal Year Ended June 30, 2017 Exhibit B-3 2017 Variance Positive Budget Actual (Negative) Sales and services Animal Shelter 76,800 67,915 (8,885) 4H service 8,500 5,841 (2,659) DSS local fees 83,100 82,348 (752) Extension service 12,850 11,276 (1,574) City of Henderson- tax collections fees 173,265 137,896 (35,369) Elections 45,440 42,125 (3,315) Rent 26,500 26,501 1 Sale of maps and ordinance 150 2 (148) Fire incident billing reimbursement 14,000 14,120 120 Law enforcement fees 571,682 503,672 (68,010) Jail fees 156,000 183,537 27,537 Ambulance fees 1,775,000 1,823,075 48,075 Register of deeds 237,500 249,111 11,611 Inspection fees 370,000 374,191 4,191 Tax foreclosure fees 15,000 20,587 5,587 Vance County TDA fees 25,000 29,513 4,513 Total 3,590,787 3,571,710 (19,077) Investment earnings 1,000 2,210 1,210 Total 1,000 2,210 1,210 Miscellaneous: Fines 1,500 300 (1,200) Other revenues 234,231 253,204 18,973 Total 235,731 253,504 17,773 Total revenues 47,360,870 46,710,926 (649,944) Expenditures General Government: Governing body: Salaries and employee benefits - 95,771 Other operating expenditures - 148,182 Total 249,735 243,953 5,782 Administration and finance: Salaries and employee benefits 742,863 Other operating expenditures 121,266 Capital outlay - - Total 907,160 864,129 43,031 76
Vance County, North Carolina Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund For the Fiscal Year Ended June 30, 2017 Exhibit B-3 2017 Variance Positive Budget Actual (Negative) Elections: Salaries and employee benefits 170,441 Other operating expenditures 87,885 Capital outlay - Total 274,285 258,326 15,959 Taxes: Salaries and employee benefits 450,453 Other operating expenditures 201,249 Total 722,857 651,702 71,155 County Attorney: Contracted Services 95,886 Capital outlay - - Total 116,434 95,886 20,548 Court facilities: Salaries and employee benefits 119,298 Other operating expenditures 296,932 Capital outlay - - Total 478,304 416,230 62,074 Register of deeds: Salaries and employee benefits 202,261 Other operating expenditures 53,919 Total 262,208 256,180 6,028 Public Buildings Salaries and employee benefits 168,344 Other operating expenditures 436,101 Total 628,115 604,445 23,670 Central Services Salaries and employee benefits 9,236 Other operating expenditures 68,334 Retiree health insurance 426,705 Total 682,201 504,275 177,926 Management Information Systems Salaries and employee benefits 183,889 Other operating expenditures 45,459 Capital outlay 6,566 Total 257,449 235,914 21,535 Total General Government 4,578,748 4,131,040 447,708 77
Vance County, North Carolina Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund For the Fiscal Year Ended June 30, 2017 Exhibit B-3 2017 Variance Positive Budget Actual (Negative) Public safety: Sheriff: Salaries and employee benefits 2,964,805 Other operating expenditures 603,693 Capital outlay 136,546 Total 4,154,621 3,705,044 449,577 Jail: Salaries and employee benefits 2,079,841 Other operating expenditures 1,177,657 Total 3,366,473 3,257,498 108,975 Sheriff's interdiction program Other operating expenditures 9,022 Total 9,119 9,022 97 Fire and ambulance Salaries and employee benefits 2,681,437 Other operating expenditures 913,495 Capital outlay 192,812 Total 4,071,822 3,787,744 284,078 E911 communications Salaries and employee benefits 1,109,944 Other operating expenditures 179,767 Capital outlay 20,339 Total 1,346,098 1,310,050 36,048 Animal control: Salaries and employee benefits 251,109 Other operating expenditures 150,287 Capital outlay 23,713 Total 436,866 425,109 11,757 Rescue squad Contracted services 63,875 Capital Outlay - Total 63,875 63,875 - Medical examiner Contracted services 46,650 Total 60,000 46,650 13,350 Crime stoppers Other operating expenditures - - Total 500-500 78
Vance County, North Carolina Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund For the Fiscal Year Ended June 30, 2017 Exhibit B-3 2017 Variance Positive Budget Actual (Negative) Beaver management Other operating expenditures 4,000 Total 4,000 4,000 - Total public safety 13,513,374 12,608,992 904,382 Transportation Contribution to regional airport 28,750 (28,750) 28,750 28,750 - Environmental Protection Demolitions and removals 108,136 108,836 108,136 700 Economic and Community Development: Economic development: Salaries and employee benefits 146,079 Other operating expenditures 71,487 242,936 217,566 25,370 Soil and water conservation: Salaries and employee benefits 91,097 Other operating expenditures 6,382 98,408 97,479 929 Planning: Salaries and employee benefits 423,803 Other operating expenditures 56,709 Capital outlay 860 Total 583,551 481,372 102,179 Contributions to other agencies: Kerr Tar Regional COG membership dues 17,378 Economic Development Commission 36,000 Various other agencies 4,768 Total 65,242 58,146 7,096 Farmers Market Salaries and employee benefits 15,051 Other operating expenditures 15,401 Total 34,161 30,452 3,709 Cooperative extensions: Salaries and employee benefits 21,793 Other operating expenditures 38,016 Capital outlay 96,443 Total 184,997 156,252 28,745 79
Vance County, North Carolina Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund For the Fiscal Year Ended June 30, 2017 Exhibit B-3 2017 Variance Positive Budget Actual (Negative) Total Economic and Physical Development 1,209,295 1,041,267 168,028 Human Services: Health: Administration: Other operating expenditures 4,085 Contracted Services- GVHD 575,655 Capital outlay - Total 585,632 579,740 5,892 Mental health: Administration: Other operating expenditures 203,481 Total 274,567 203,481 71,086 Social services: Administration: Salaries and employee benefits 5,290,178 Other operating expenditures 2,480,774 Public assistance payments 427,632 Work First assistance payments 269,907 Day Care assistance payments 2,088,171 Total 11,944,009 10,556,662 1,387,347 Aging services: Administration: Salaries and employee benefits 467,907 Other operating expenditures 221,032 Total 707,995 688,939 19,056 Nutritional meals: Administration: Salaries and employee benefits 10,593 Other operating expenditures 36,493 Purchased meals 75,297 Total 139,256 122,383 16,873 Smart Start: Administration: Salaries and employee benefits 43,683 Contracted services 7,122 Operating expenditures 17,082 Total 70,407 67,887 2,520 80
Vance County, North Carolina Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund For the Fiscal Year Ended June 30, 2017 Exhibit B-3 2017 Variance Positive Budget Actual (Negative) Veterans services: Salaries and employee benefits 107,624 Other operating expenditures 7,378 Total 116,626 115,002 1,624 Vance County Housing Authority: Salaries and employee benefits 208,785 208,820 208,785 35 NYPUM Program: Contracted Services 126,139 Operating expenditures 9,944 Total 164,766 136,083 28,683 Pal-to-Pal Program: Contracted services 44,999 Operating expenditures 12,063 Total 59,094 57,062 2,032 Other Human Services Contributions: Lifeline 2,400-2,400 FVW Opportunities 12,000 12,000 - K.A.R.T.S. 156,868 156,868 - Central Children's Home 18,000 4,230 13,770 Smart Start 3,500 3,500 - Boys and Girls Club 27,000 27,000 - JCPC 21,300 13,608 7,692 Other contributions 267,500 263,806 3,694 508,568 481,012 27,556 Total Human Services 14,779,740 13,217,036 1,562,704 Cultural and recreational: Recreation: Operating expenditures- City of Henderson 541,815 445,039 96,776 Arts Council: Operating expenditures 900 900 - Libraries Salaries and employee benefits 570,604 Contribution to regional library 562,200 Total 1,132,820 1,132,804 16 Total cultural and recreational 1,675,535 1,578,743 96,792 81
Vance County, North Carolina Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund For the Fiscal Year Ended June 30, 2017 Exhibit B-3 2017 Variance Positive Budget Actual (Negative) Education: Public schools- current 8,232,440 8,232,440 - Public schools- capital outlay 978,500 978,068 432 Community colleges- current 1,041,540 1,041,540 - Community colleges-capital outlay 18,720 18,720 - Total Education 10,271,200 10,270,768 432 Debt service: Debt principal 491,030 461,361 29,669 Interest and fees 26,828 34,237 (7,409) Total debt service 517,858 495,598 22,260 Total expenditures 46,683,336 43,480,330 3,203,006 Revenue over (under) expenditures 677,534 3,230,596 2,553,062 Other Financing Sources (Uses): Operating transfers from (to) other funds: Transfers to other funds (3,815,298) (3,538,955) 276,343 Transfers from other funds 1,598,029 1,540,681 (57,348) Total operating transfers (2,217,269) (1,998,274) 218,995 Proceeds from lease obligation 322,500 322,500 - Proceeds from refinancing of animal shelter - 1,703,000 1,703,000 Payoff of interim animal shelter financing - (1,703,000) (1,703,000) Sale of Library - - - Sale of fixed assets 35,000 1,074 (33,926) Contingency (68,664) - 68,664 Appropriated fund balance 1,250,899 - (1,250,899) Total other financing sources (uses) (677,534) (1,674,700) (997,166) Net change in fund balance $ - 1,555,896 $ 1,555,896 Fund balance, beginning 20,016,110 Fund balance, ending $ 21,572,006 82
Vance County, North Carolina Revaluation Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2017 Exhibit B-3a Variance Positive Budget Actual (Negative) Revenues Investment earnings $ 450 $ 1,430 $ 980 Total revenues 450 1,430 980 Expenditures General Government Tax revaluation 241,088-241,088 Total Expenditures 241,088-241,088 Revenue over (under) expenditures (240,638) 1,430 242,068 Other Financing Sources (Uses) Transfer from General Fund 60,625 60,625 - Fund Balance Appropriated 180,013 - (180,013) Total other financing sources 240,638 60,625 (180,013) Revenues and appropriated fund balance over (under) expenditures $ - 62,055 $ 62,055 Fund balance, beginning 181,449 Fund balance, ending $ 243,504 83
Vance County, North Carolina Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2017 Exhibit B-3b Variance Positive Budget Actual (Negative) Revenues Investment earnings $ 100 $ 159 $ 59 Total revenues 100 159 59 Expenditures Economic and community development Contribution to City of Henderson - - - Cultural and recreational Contribution to City of Henderson 67,180 67,180 - Debt Service Principal retirement 718,000 718,000 Interest and fees 74,203 74,202 1 Total Expenditures 859,383 859,382 1 Revenue over (under) expenditures (859,283) (859,223) 60 Other Financing Sources (Uses) Transfer from General Fund 859,283 859,223 (60) Total other financing sources 859,283 859,223 (60) Revenue and other financing sources over (under) expenditures $ - - $ - Fund balance, beginning - Fund balance, ending $ - 84
Vance County, North Carolina School Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2017 Exhibit B-3c Variance Positive Budget Actual (Negative) Revenues Investment earnings $ $ - $ - Total revenues - - - Expenditures Debt Service Principal retirement 1,224,307 1,224,305 2 Interest and fees 379,744 379,743 1 Total Expenditures 1,604,051 1,604,048 3 Revenue over (under) expenditures (1,604,051) (1,604,048) 3 Other Financing Sources (Uses) Transfer from General Fund 1,604,051 1,604,048 (3) Total other financing sources 1,604,051 1,604,048 (3) Revenues and appropriated fund balance over (under) expenditures $ - - $ - Fund balance, beginning - Fund balance, ending $ - 85
Vance County, North Carolina Facility Fee Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2017 Exhibit B-3d Variance Positive Budget Actual (Negative) Revenues Restricted intergovernmental $ 78,000 $ 72,715 $ (5,285) Investment earnings 75 74 (1) Total revenues 78,075 72,789 (5,286) Expenditures General Government Courthouse facility fees 28,085 26,586 1,499 Total Expenditures 28,085 26,586 1,499 Revenue over (under) expenditures 49,990 46,203 (3,787) Other Financing Sources (Uses) Transfer to General Fund (62,581) (62,581) - Fund Balance Appropriated 12,591 - (12,591) Total other financing sources (49,990) (62,581) (12,591) Revenue and other financing sources over (under) expenditures $ - (16,378) $ (16,378) Fund balance, beginning 16,378 Fund balance, ending $ - 86
Vance County, North Carolina Law Enforcement Officers Special Separation Allowance Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2017 Exhibit B-3e Variance Positive Budget Actual (Negative) Revenues Investment earnings $ 500 2,791 $ 2,291 Total revenues 500 2,791 2,291 Expenditures Public Safety LEO Separation allowance benefit 133,299-133,299 Fringe benefits retirees 241,456-241,456 Total Expenditures 374,755-374,755 Revenue over (under) expenditures (374,255) 2,791 377,046 Other Financing Sources (Uses) Transfer from General Fund - Fund Balance Appropriated 374,255 - (374,255) Total other financing sources 374,255 - (374,255) Revenue and other financing sources over (under) expenditures $ - 2,791 $ 2,791 Fund balance, beginning 355,647 Prior period adjustment Fund balance, ending $ 358,438 87
Exhibit B-4 Vance County, North Carolina Capital Projects Fund - School Capital Project Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2017 Variance Project Prior Current Total Positive Authorization Years Year To Date (Negative) Revenues Restricted intergovernmental Lottery proceeds $ 931,154 $ 1,280,935 $ 470,822 $ 1,751,757 $ 820,603 Vance County Schools contribution 99,026 - - - 99,026 Investment earnings - 18,304 71 18,375 18,375 Total revenues 1,030,180 1,299,239 470,893 1,770,132 938,004 Expenditures Education New Clarke Elementary School 14,016,545 13,789,232-13,789,232 227,313 Multi-purpose rooms, HVAC 3,952,945 3,651,049-3,651,049 301,896 Public School Facility Improvement 2,982,495 2,546,399 274,316 2,820,715 161,780 NVHS Science Labs 545,850 507,520-507,520 38,330 Total 21,497,835 20,494,200 274,316 20,768,516 729,319 Total Expenditures 21,497,835 20,494,200 274,316 20,768,516 729,319 Revenue over (under) expenditures (20,467,655) (19,194,961) 196,577 (18,998,384) 1,667,323 Other Financing Sources (Uses) Installment purchase obligations 18,924,320 18,924,320-18,924,320 - Operating transfers in 1,543,335 206,418 224,017 430,435 (1,112,900) Total other financing sources 20,467,655 19,130,738 224,017 19,354,755 (1,112,900) Revenue and other financing sources over (under) expenditures $ - $ (64,223) 420,594 $ 356,371 $ 554,423 Fund balance, beginning (64,223) Fund balance, ending $ 356,371 Amounts reported for revenues, expenditures, and changes in fund balance are different from budget/actual statement due to consolidation of the School Capital Reserve Fund: Investment earnings $ 3,159 Reimbursement - QSCB interest 125,508 Lottery proceeds 394,955 Transfers in 1,998,027 Transfers out (2,860,244) Fund balance, beginning, School Capital Reserve Fund 1,726,397 Fund balance, ending, consolidated School Capital Projects $ 1,744,173 88
Exhibit B-4a Vance County, North Carolina Capital Projects Fund - School Capital Reserve Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2017 Variance Positive Budget Actual (Negative) Revenues Restricted intergovernmental QSCB interest reimbursement $ 133,166 $ 125,508 $ (7,658) Lottery proceeds 394,955 394,955 - Other reimbursement - Investment earnings 3,200 3,159 (41) Total revenues 531,321 523,622 (7,699) Expenditures Education Capital Outlay - - Total - - - Total Expenditures - - - Revenue over (under) expenditures 531,321 523,622 (7,699) Other Financing Sources (Uses) Operating transfers in 2,003,532 1,998,027 (5,505) Operating transfers out (2,860,248) (2,860,244) 4 Fund balance appropriated 325,395 - (325,395) Total other financing sources (531,321) (862,217) (330,896) Revenue and other financing sources over (under) expenditures $ - (338,595) $ (338,595) Fund balance, beginning 1,726,397 Fund balance, ending $ 1,387,802 89
NON-MAJOR GOVERNMENTAL FUNDS Non-Major Governmental Funds are Special Revenue Funds and Capital Projects Funds
Exhibit C-1 Vance County, North Carolina Non-Major Governmental Funds Combining Balance Sheet June 30, 2017 Special Capital Totals Revenue Project June 30, Funds Funds 2017 ASSETS Cash and cash equivalents $ 1,209,009 $ 173,323 $ 1,382,332 Restricted cash - 1,240,854 1,240,854 Receivables: Property tax 43,595-43,595 Accounts receivable 175,900-175,900 Due from other governments 16,642 27,306 43,948 Notes receivable 16,500-16,500 Total assets 1,461,646 1,441,483 2,903,129 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities 10,565 21,390 31,955 Due to other funds 156,229-156,229 Due to other governments - - - Total liabilities 166,794 21,390 188,184 DEFERRED INFLOWS OF RESOURCES Taxes Receivable 43,595-43,595 Notes Receivable 16,500-16,500 Total deferred inflows of resources 60,095-60,095 Fund balances: Restricted: Stabilization by state statute 209,042 27,306 236,348 Public safety - 157,067 157,067 Emergency services 457,396-457,396 Tax revaluation - - - School capital - 1,235,720 1,235,720 Community development - - Unassigned 568,319-568,319 Total fund balances 1,234,757 1,420,093 2,654,850 Total liabilities, deferred inflows of resources and fund balances $ 1,461,646 $ 1,441,483 $ 2,903,129 90
Exhibit C-2 Vance County, North Carolina Non-Major Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Fiscal Year Ended June 30, 2017 Special Capital Totals Revenue Project June 30, Funds Funds 2017 Revenues Ad valorem taxes $ 776,542 $ - $ 776,542 Restricted intergovernmental 1,056,240-1,056,240 Investment earnings 2,124 844 2,968 Total revenues 1,834,906 844 1,835,750 Expenditures Current: Public safety 960,034 1,426,985 2,387,019 Economic and physical development 39,021-39,021 Education - 52,548 52,548 Debt Services Principal 141,475-141,475 Interest and fees 3,796-3,796 Total expenditures 1,144,326 1,479,533 2,623,859 Excess (deficiency) of revenues over expenditures 690,580 (1,478,689) (788,109) Other financing sources: Transfers in (155,424) 200,000 44,576 Transfers (out) (229,748) (229,748) Issuance of General Obligation Bonds - - - Issuance of Refunding Bonds - - - Payment to Refunded Bonds Escrow - - - Premium on Bonds - - - Installment Financing - 1,298,000 1,298,000 Bond issuance cost - - - Total other financing sources (uses) (155,424) 1,268,252 1,112,828 Net change in fund balance 535,156 (210,437) 324,719 Fund balances, beginning 699,601 1,630,530 2,330,131 Prior Period Adjustment - - - Fund balances, ending $ 1,234,757 $ 1,420,093 $ 2,654,850 91
Vance County, North Carolina Non-Major Special Revenue Funds Combining Balance Sheet For the Fiscal Year Ended June 30, 2017 Emergency CDBG Telephone Fire Economic Community Neighborhood Scattered Totals System District Development Development Development Sites June 30, Fund Fund Fund Fund Fund Fund 2017 ASSETS Cash and cash equivalents 21,686 442,657 744,666 $ - $ - $ - $ 1,209,009 Restricted Cash - - - - - - - Receivables: Property Tax - 43,595 - - - - 43,595 Accounts receivable 38,352-137,548 - - - 175,900 Due from other governments 16,642 - - - - - 16,642 Sales tax refund- State of NC - - - - - - - Notes Receivable - - 16,500 - - - 16,500 Total assets 76,680 486,252 898,714 - - - 1,461,646 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities 6,882 65 - - 3,618-10,565 Due to other funds - - - - 156,229-156,229 Due to other governments - - - - - - - Total liabilities 6,882 65 - - 159,847-166,794 Deferred inflows of resources Taxes receivable - 43,595 - - - - 43,595 Notes receivable - - 16,500 - - - 16,500 Total deferred inflows of resources - 43,595 16,500 - - - 60,095 Fund balances: Restricted Stabilization by state statute 54,994-154,048 - - - 209,042 Public safety - - - - - - - Emergency services 14,804 442,592 - - - - 457,396 Tax revaluation - - - - - - - School capital - - - - - - - Community Development - - - - - - - Unassigned - - 728,166 - (159,847) - 568,319 Total fund balances 69,798 442,592 882,214 - (159,847) - 1,234,757 Total liabilities, deferred inflows of resources, and fund balances $ 76,680 $ 486,252 $ 898,714 $ - $ - $ - $ 1,461,646 Exhibit C-3 92
Vance County, North Carolina Non-Major Special Revenue Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Fiscal Year Ended June 30, 2017 Emergency CDBG Telephone Fire Economic Community Neighborhood Scattered Totals System District Development Development Stabilization Sites June 30, Fund Funds Fund Fund Fund Fund 2017 Revenues Ad valorem taxes $ - $ 776,542 $ - $ - $ - $ - $ 776,542 Restricted intergovernmental 648,883-186,866-220,491-1,056,240 Investment earnings 2,124 - - - - - 2,124 Other Total 651,007 776,542 186,866-220,491-1,834,906 Expenditures Public safety 493,984 466,050 - - - - 960,034 Economic and community development - 25,380-13,641-39,021 Education - - - - Debt Services Principal 141,475 - - 141,475 Interest and fees 3,796 - - - - - 3,796 Total 639,255 466,050 25,380-13,641-1,144,326 Excess (deficiency) of revenues over expenditures 11,752 310,492 161,486-206,850-690,580 Other financing sources (uses): Transfers in - - 100,000 - - - 100,000 Transfers out (53,229) (202,195) - - - - (255,424) Total other financing sources (uses) (53,229) (202,195) 100,000 - - - (155,424) Net change in fund balance (41,477) 108,297 261,486-206,850-535,156 Fund balances, beginning 111,275 334,295 620,728 - (366,697) - 699,601 Prior period adjustment - - - - - - - Fund balances, ending $ 69,798 $ 442,592 $ 882,214 $ - $ (159,847) $ - $ 1,234,757 Exhibit C-4 93
Exhibit C-5 Vance County, North Carolina Non-major Governmental Funds: Capital Project Funds Combining Balance Sheet For the Fiscal Year Ended June 30, 2017 General General Capital Capital Totals Projects Reserve June 30, Fund Fund 2017 ASSETS Cash and cash equivalents $ 16,256 $ 157,067 $ 173,323 Restricted Cash 1,240,854-1,240,854 Receivables: Property Tax - - - Accounts receivable - - - Due from other governments 27,306-27,306 Notes Receivable - - - Total assets 1,284,416 157,067 1,441,483 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable and accrued liabilities 21,390-21,390 Due to other funds - - - Due to other governments - - - Total liabilities 21,390-21,390 Deferred inflows of resources Taxes receivable - - - Notes receivable - - - Total deferred inflows of resources - - - Fund balances: Restricted Stabilization by state statute 27,306-27,306 Public safety - 157,067 157,067 Emergency services - - - Tax revaluation - - - School capital 1,235,720-1,235,720 Community Development - - - Unassigned - - - Total fund balances 1,263,026 157,067 1,420,093 Total liabilities, deferred inflows of resources, and fund balances $ 1,284,416 $ 157,067 $ 1,441,483 94
Exhibit C-6 Vance County, North Carolina Non-major Governmental Funds: Capital Project Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances For the Fiscal Year Ended June 30, 2017 General General Capital Capital Totals Project Reserve June 30, Fund Fund 2017 Revenues Ad valorem taxes $ - $ - $ - Restricted intergovernmental - - - Investment earnings 72 772 844 Other - - Total 72 772 844 Expenditures Public safety 1,426,985-1,426,985 Economic and community development - - - Education 52,548-52,548 Debt Services Principal - - Interest and fees - - - Total 1,479,533-1,479,533 Excess (deficiency) of revenues over expenditures (1,479,461) 772 (1,478,689) Other financing sources (uses): Installment financing 1,298,000-1,298,000 Transfers in - 200,000 200,000 Transfers out 37,928 (267,676) (229,748) Total other financing sources (uses) 1,335,928 (67,676) 1,268,252 Net change in fund balance (143,533) (66,904) (210,437) Fund balances, beginning 1,406,559 223,971 1,630,530 Prior period adjustment - - - Fund balances, ending $ 1,263,026 $ 157,067 $ 1,420,093 95
Vance County, North Carolina Emergency Telephone System Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2017 Exhibit C-7 2017 Variance Positive Budget Actual (Negative) Revenues Restricted intergovernmental $ 657,683 $ 648,883 $ (8,800) Investment earnings 1,200 2,124 924 Total 658,883 651,007 (7,876) Expenditures Public safety E-911 Fund Operating expenditures 421,365 348,506 72,859 Capital outlay 189,408 145,478 43,930 Debt Services Principal retirement 132,055 141,475 (9,420) Interest expense 2,926 3,796 (870) Total expenditures 745,754 639,255 106,499 Revenue over (under) expenditures (86,871) 11,752 98,623 Other Financing Sources (Uses) Transfer to general fund - (53,229) (53,229) Fund Balance Appropriated 86,871 - (86,871) Total other financing sources (uses) 86,871 (53,229) (140,100) Revenues and other financing sources over (under) expenditures $ - (41,477) $ (41,477) Fund balance, beginning 111,275 Fund balance, ending $ 69,798 96
Vance County, North Carolina Fire District Fund Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2017 Exhibit C-8 2017 Variance Positive Budget Actual (Negative) Revenues Ad valorem tax $ 745,351 $ 776,542 $ 31,191 Total Revenues 745,351 776,542 31,191 Expenditures Economic & community development Public Safety Contracted Services 745,351 466,050 279,301 Total Expenditures 745,351 466,050 279,301 Revenue over (under) expenditures - 310,492 310,492 Other financing sources (uses): Transfer to general fund - (202,195) 202,195 Fund Balance Appropriated - - - Total Other Financing Sources (Uses) - (202,195) 202,195 Revenues and other financing sources over (under) expenditures $ - 108,297 $ 512,687 Fund balance, beginning 334,295 Fund balance, ending $ 442,592 97
Vance County, North Carolina Economic Development Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2017 Exhibit C-9 2017 Variance Positive Budget Actual (Negative) Revenues Restricted Intergovernmental Lease income $ 182,873 $ 183,266 $ 393 Town of Middleburg Loan 3,600 3,600 - Total revenues 186,473 186,866 393 Expenditures Economic and physical development Special projects- economic incentives 622,901 25,380 597,521 Total expenditures 622,901 25,380 597,521 Revenue over (under) expenditures (436,428) 161,486 597,914 Other Financing Sources (Uses) Fund Balance Appropriated 336,428 - (336,428) Transfer from general fund 100,000 100,000 - Total other financing sources (uses) 436,428 100,000 (336,428) Revenue and other sources over (under) expenditures $ - 261,486 $ 261,486 Fund balance, beginning 620,728 Fund balance, ending $ 882,214 98
Vance County, North Carolina Community Development Fund Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2017 Variance Project Prior Current Totals to Positive Authorization Year Year Date (Negative) Revenues Restricted intergovernmental revenues Community Development Block Grant Scatter Sites $ 360,000 $ 333,245 $ - $ 333,245 $ (26,755) Urgent Repairs 40,000 39,990-39,990 (10) Total Revenues 400,000 373,235-373,235 (26,765) 2017 Expenditures Economic & community development Scattered Sites 360,000 343,015-343,015 16,985 Urgent Repairs 40,000 39,604-39,604 396 Total Expenditures 400,000 382,619-382,619 17,381 Revenue over (under) expenditures - (9,384) - (9,384) (9,384) Other financial sources (uses): Transfer from general fund - 9,384-9,384 9,384 Revenues and other financing sources over (under) expenditures $ - $ - $ - $ - Fund balance, beginning - Fund balance, ending $ - Exhibit C-10 99
Vance County, North Carolina Neighborhood Stabilization Fund Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2017 Exhibit C-11 Variance Project Prior Current Totals to Positive Authorization Years Year Date (Negative) Revenues Restricted intergovernmental Federal grants Neighborhood Stabilization grant $ 2,100,000 $ 1,150,487 $ 220,491 $ 1,370,978 $ (729,022) Total Revenues 2,100,000 1,150,487 220,491 1,370,978 (729,022) 2017 Expenditures Economic & community development Administration 100,000 166,983 1,522 168,505 (68,505) Construction and redevelopment 1,067,000 1,114,290 12,119 1,126,409 (59,409) Purchase and rehabilitation 933,000 235,911-235,911 697,089 Total Expenditures 2,100,000 1,517,184 13,641 1,530,825 569,175 Revenue over (under) expenditures $ - $ (366,697) 206,850 $ (159,847) $ (159,847) Fund balance, beginning (366,697) Fund balance, ending $ (159,847) 100
Vance County, North Carolina Community Development Fund- Scattered Sites Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual For the Fiscal Year Ended June 30, 2017 Variance Project Prior Current Totals to Positive Authorization Year Year Date (Negative) Revenues Restricted intergovernmental revenues Community Development Block Grant Scatter Sites 360,000 397,191 397,191 37,191 Urgent Repairs 40,000 - - - (40,000) Total Revenues 400,000 397,191-397,191 (2,809) 2017 Expenditures Economic & community development 2011 Catalyst 11-C-2375 Administration 33,770 30,274-30,274 3,496 Planning 6,230 - - - 6,230 Rehabilitation 320,000 366,917-366,917 (46,917) Urgent Repairs 40,000 - - - 40,000 Total Expenditures 400,000 397,191-397,191 2,809 Revenue over (under) expenditures $ - $ - - $ - $ - Fund balance, beginning - Fund balance, ending $ - Exhibit C-12 101
CAPITAL PROJECTS FUND Capital Projects Funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds.
Vance County, North Carolina Capital Projects Fund General Capital Projects Fund Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) For the Fiscal Year Ended June 30, 2017 Exhibit C-13 Variance Project Prior Current Total Positive Authorization Years Year To Date (Negative) Revenues Restricted intergovernmental- Grants and donations Farmers Market $ 577,448 $ 610,514 $ - $ 610,514 $ 33,066 Grants- VGCC Granville County 311,209 - - (311,209) Investment earnings - 1,948 72 2,020 2,020 Total revenues 888,657 612,462 72 612,534 (276,123) Expenditures Economic & community development Famers market Administration 3,000 - - - 3,000 Contracted Services 71,417 7,119-7,119 64,298 Construction 29,754 644,381-644,381 (614,627) Contingency 523,277 - - - 523,277 Jail repairs Legal and fiscal- Debt issuance cost - - 52,085 52,085 (52,085) Contracted Services - - 26,526 26,526 (26,526) Construction - 60,836 335,945 396,781 (396,781) Contingency - - - - - Animal shelter Legal and fiscal- Debt issuance cost 45,000 9,007 30,294 39,301 5,699 Contracted Services 137,250 78,250 9,680 87,930 49,320 Construction 1,474,842 642,404 909,547 1,551,951 (77,109) Contingency 62,908-62,908 62,908 - Vance Granville Community College Administration 47,862 70,629-70,629 (22,767) Contracted Services 42,180 31,635 2,932 34,567 7,613 Contingency 60,158 - - - 60,158 Construction 1,143,009 511,971 49,616 561,587 581,422 Debt Service Debt issuance costs - 2,809-2,809 (2,809) Total expenditures 3,640,657 2,059,041 1,479,533 3,538,574 102,083 Revenue over (under) expenditures (2,752,000) (1,446,579) (1,479,461) (2,926,040) (174,040) Other Financing Sources (Uses) Installment financing proceeds 2,685,000 2,721,000 1,298,000 4,019,000 1,334,000 Installment purchase obligations issued - 40,138-40,138 40,138 Operating transfers in 67,000 92,000 37,928 129,928 62,928 Operating transfers out Total other financing sources 2,752,000 2,853,138 1,335,928 4,189,066 1,437,066 Revenue and other sources over (under) expenditures $ - $ 1,406,559 (143,533) $ 1,263,026 $ 1,263,026 Fund balance, beginning 1,406,559 Fund balance, ending $ 1,263,026 102
Vance County, North Carolina Capital Projects Fund General Capital Reserve Fund Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) For the Fiscal Year Ended June 30, 2017 Exhibit C-14 Variance Positive Budget Actual (Negative) Revenues Investment earnings $ 300 $ 772 $ 472 Total revenues 300 772 472 Expenditures Public Safety Operating Expenses 200,300 0 200,300 Total expenditures 200,300-200,300 Revenue over (under) expenditures (200,000) 772 200,772 Other Financing Sources (Uses) Operating transfers in 200,000 200,000 - Operating transfers out (257,676) (267,676) 10,000 Fund balance appropriated 257,676-257,676 Total other financing sources 200,000 (67,676) 267,676 Revenue and other sources over (under) expenditures $ - (66,904) $ (66,904) Fund balance, beginning 223,971 Fund balance, ending $ 157,067 103
ENTERPRISE FUNDS Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs of providing goods and services to the general public on a continuing basis be financed or recovered primarily through user charges; or where the governing body has decided that periodic determination of net income is appropriate for accountability purposes.
Exhibit D-1 Vance County, North Carolina Solid Waste Fund Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) For the Fiscal Year Ended June 30, 2017 2017 Variance Positive Budget Actual (Negative) Operating Revenues Charges for services Household fees $ 2,112,500 $ 2,013,131 $ (99,369) Warren County manned site 40,000 41,483 1,483 Other operating revenues 9,000 9,659 659 Total Operating Revenues 2,161,500 2,064,273 (97,227) Nonoperating Revenues (Expenditures) Federal, state and local grants 90,279 78,565 (11,714) Intergovernmental taxes and fees 98,800 106,683 7,883 Total Nonoperating revenues 189,079 185,248 (3,831) Total Revenues 2,350,579 2,249,521 (101,058) Operating Expenditures Landfill operations Salaries and employee benefits 71,187 67,836 3,351 Bad debt expense - - - Operating expenditures 2,020,153 1,903,303 116,850 Contracted services 285,000 190,358 94,642 Capital outlay 93,656 93,222 434 Total Operating Expenditures 2,469,996 2,254,719 215,277 Total Revenues over Expenditures (119,417) (5,198) 114,219 Other Financing Sources (uses): Transfers in 325 325 - Fund Balance Appropriated 119,092 - (119,092) Total Other Financing Sources 119,417 325 (119,092) Revenues and other sources over (under) expenditures $ - (4,873) $ (4,873) Reconciliation from budgetary basis (modified accrual) to full accrual basis Capital outlay 93,222 Depreciation (7,391) Increase in deferred outflows of resources - pensions 9,625 Increase in other postemployment benefits (2,379) Increase in compensated absences (75) Increase in net pension liability (11,305) Decrease in deferred inflows of resource pensions 1,194 Decrease in accrued landfill closure costs 66,341 Total reconciling items 149,232 Change in net position $ 144,359 104
Exhibit D-2 Vance County, North Carolina Water District Fund Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) For the Fiscal Year Ended June 30, 2017 2017 Variance Positive Budget Actual (Negative) Operating Revenues Charges for services Water sales and connection fees $ 674,720 $ 724,799 $ 50,079 Debt setoff Revenue 104,481 104,581 100 Other operating Revenues 16,040 17,291 1,251 Total Operating Revenues 795,241 846,671 51,430 Nonoperating Revenues (Expenditures) Investment earnings 1,200 1,267 67 Total Nonoperating revenues 1,200 1,267 67 Total Revenues 796,441 847,938 51,497 Operating Expenditures Water Operations Purchased water 196,080 126,551 69,529 Bad debt expense 5,000-5,000 Operating expenditures 265,861 232,709 33,152 Contracted services 251,520 215,746 35,774 Total 718,461 575,006 143,455 Debt service Debt Principal 227,654 218,750 8,904 Interest and other charges 351,535 351,535 - Total Debt service 579,189 570,285 8,904 Total Operating expenditures 1,297,650 1,145,291 152,359 Revenues over expenditures (501,209) (297,353) 203,856 Other financing sources (uses): Transfers in 501,209 350,006 (151,203) Fund Balance Appropriated - - - Total Other financing sources 501,209 350,006 (151,203) Revenues and other sources over (under) expenditures $ - 52,653 $ 52,653 Reconciliation from budgetary basis (modified accrual) to full accrual basis Debt principal 218,750 Amortization (43,750) Depreciation Increase in accrued interest (368,394) (931) Water District Capital Project Fund Federal and state grants - Interest earnings from project - Transfers 10,000 Total reconciling items (184,325) Change in net position $ (131,672) 105
Exhibit D-2a Vance County, North Carolina Water District Capital Project Fund Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) For the Fiscal Year Ended June 30, 2017 Actual Variance Project Prior Current Total Positive Authorization Years Year To Date (Negative) Revenues Restricted intergovernmental $ 2,597,642 $ 3,942,204 $ - $ 3,942,204 $ 1,344,562 Investment Earnings - 32,275-32,275 32,275 Total Revenues 2,597,642 3,974,479-3,974,479 1,376,837 Expenditures Legal and Professional Fees 1,405,618 2,340,709-2,340,709 (935,091) Interest expense 234,985 153,103-153,103 81,882 Construction and acquisition 12,483,143 12,241,964 10,000 12,251,964 231,179 Contingency 813,330 - - - 813,330 Debt Service - 43,750-43,750 (43,750) Total Expenditures 14,937,076 14,779,526 10,000 14,789,526 147,550 Other Financing Sources (Uses) Installment purchases obligations 11,760,000 11,760,000-11,760,000 - Operating transfer in 579,434-10,000 10,000 (569,434) Total Other Financing Sources 12,339,434 11,760,000 10,000 11,770,000 (569,434) Revenues and other sources over (under) expenditures $ - $ 954,953 $ - $ 954,953 $ 954,953 106
AGENCY FUNDS Agency funds are used to account for assets held by the county as an agent for individuals, private organizations, other governments, and/or other funds.
Vance County, North Carolina Agency Funds Combining Statement of Fiduciary Assets and Liabilities June 30, 2017 Assets Motor Social Vance County Fines and Resister Totals Vehicles Services Jail Inmate Forfeitures of Deeds June 30, Trust Fund Trust Fund Trust Fund Fund Fund 2017 Cash and cash equivalents $ - $ 45,925 $ 175,925 $ - $ - $ 221,850 Total assets $ - $ 45,925 $ 175,925 $ - $ - $ 221,850 Liabilities and Fund Balances Liabilities: Accounts payable $ - $ 45,925 175,925 $ - $ - $ 221,850 Intergovernmental payable - - - - - - Total liabilities $ - $ 45,925 $ 175,925 $ - $ - $ 221,850 Exhibit E-1 107
Vance County, North Carolina Agency Funds Combining Statement of Changes in Assets and Liabilities For the Fiscal Year Ended June 30, 2017 Exhibit E-2 Balance Balance July 1, June 30, 2016 Additions Deductions 2017 City Ad Valorem and Motor Vehicles Tax Fund Assets: Cash and cash equivalents $ - $ 6,657,404 $ 6,657,404 $ - Liabilities Intergovernmental payable $ - $ 6,657,404 $ 6,657,404 $ - Social Services Trust Fund Assets: Cash and cash equivalents $ 58,630 $ 92,010 $ 104,715 $ 45,925 Liabilities: Accounts payable $ 58,630 $ 92,010 $ 104,715 $ 45,925 Vance County Jail Inmate Trust Fund Assets: Cash and cash equivalents $ 155,494 $ 129,053 $ 108,622 $ 175,925 Liabilities: Accounts payable $ 155,494 $ 129,053 $ 108,622 $ 175,925 Fines and Forfeitures Fund Assets: Cash and cash equivalents $ - $ 199,977 $ 199,977 $ - Liabilities: Intergovernmental payable $ - $ 199,977 $ 199,977 $ - Register of Deeds Trust Fund Assets: Cash and cash equivalents $ - $ 4,557 $ 4,557 $ - Liabilities: Intergovernmental payable $ - $ 4,557 $ 4,557 $ - Totals - All Agency Funds Assets: Cash and cash equivalents $ 214,124 $ 7,083,001 $ 7,075,275 $ 221,850 Total assets $ 214,124 $ 7,083,001 $ 7,075,275 $ 221,850 Liabilities: Accounts payable $ 214,124 $ 221,063 $ 213,337 $ 221,850 Intergovernmental payable - 6,861,938 6,861,938 - Total liabilities $ 214,124 $ 7,083,001 $ 7,075,275 $ 221,850 108
OTHER SCHEDULES This section includes additional information on property taxes.
Exhibit F-1 Vance County, North Carolina General Fund Schedule of Ad Valorem Taxes Receivable June 30, 2017 Uncollected Uncollected Balance Collections Balance Fiscal Year June 30, 2016 Additions And Credits Adjustments June 30, 2017 2016-2017 $ - $ 24,397,052 $ 23,578,627 $ - $ 818,425 2015-2016 830,605-442,386-388,219 2014-2015 235,668-131,592-104,076 2013-2014 150,181-60,682-89,499 2012-2013 158,629-92,857-65,772 2011-2012 76,300-16,588-59,712 2010-2011 50,109-8,563-41,546 2009-2010 47,022-5,312-41,710 2008-2009 44,911-5,393-39,518 2007-2008 45,789-4,163-41,626 2006-2007 46,308-4,612 (41,696) - $ 1,685,522 $ 24,397,052 $ 24,350,775 $ (41,696) 1,690,103 Less: allowance for uncollectible accounts: General Fund 324,335 Ad valorem taxes receivable - net: General Fund $ 1,365,768 Reconcilement with revenues: Ad valorem taxes - General Fund $ 23,935,307 Reconciling items: Interest collected (260,246) Adjustment 717,410 Total reconciling items 457,164 Total collections and credits $ 24,392,471 109
Exhibit F-2 Total Levy Property excluding County - wide Registered Registered Property Amount Motor Motor Valuation Rate of Levy Vehicles Vehicles Original levy: Property taxed at current years rate $ 2,716,897,865 0.890 $ 24,180,391 $ 20,656,933 $ 3,523,458 Penalties 50,524 50,524 - Total 2,716,897,865 24,230,915 20,707,457 3,523,458 Discoveries: Current year taxes 12,792,360 0.890 113,852 113,852 - Prior years taxes 208,059 208,059 - Total 12,792,360 321,911 321,911 - Abatements/Releases: Current year (13,279,888) 0.890 (118,191) (118,191) - Prior Year (37,583) (37,583) - Total (13,279,888) (155,774) (155,774) - Total Property Valuation $ 2,716,410,337 Vance County, North Carolina Analysis of Current Tax Levy County - wide Levy For the Fiscal Year Ended June 30, 2017 Net levy 24,397,052 20,873,594 3,523,458 Uncollected taxes at June 30, 2016 (County Only) 818,425 818,425 - Current year's taxes collected (includes penalty) $ 23,578,627 $ 20,055,169 $ 3,523,458 Current levy collection percentage 96.65% 96.08% 100.00% 110
Exhibit F-2a Vance County, North Carolina Analysis of Current Tax Levy County - wide Levy For the Fiscal Year Ended June 30, 2017 Secondary Market Disclosures: Assessed Valuation: Assessment Ratio 1 100% Real Property $ 1,923,945,885 Personal Property 704,901,375 Public Service Companies 2 87,563,077 Total Assessed Valuation $ 2,716,410,337 Tax Rate per $100 0.89 Levy (includes discoveries, releases and abatements) 3 $ 24,176,052 In addition to the County-wide rate, the following table lists the levies by the County on behalf of fire protection districts for the fiscal year ended June 30: $ 691,303 1 Percentage of appraised value has been established by statute. 2 Valuation of railroads, telephone companies and other utilities as determined by the North Carolina Property Tax Commission. 3 The levy includes interest and penalties. 111
Exhibit F-2b Vance County, North Carolina Ten Largest Taxpayers For the Fiscal Year Ended June 30, 2017 2016 Percentage of Assessed Total Assessed Taxpayer Type of Business Valuation Valuation DLP Maria Parham Medical Private Hospital $ 58,564,838 2.16% Duke Energy Progress Utility 50,437,275 1.86% I AMS Company Manufacturing 49,967,612 1.84% Ardagh Glass Inc. Manufacturing 41,413,525 1.52% Wal-Mart Stores East LP Retail 26,478,258 0.97% DLP Maria Parham Medical Center Private Hospital 20,693,217 0.76% Variety Wholesalers Retail 20,036,769 0.74% W&W Properties and Rentals LLC Property Management 17,070,584 0.63% Pacific Coast Feather Co. Manufacturing 14,100,030 0.52% Wal-Mart Real Estate Business Trust Retail 13,021,914 0.48% Total $ 311,784,022 11.48% 112
Exhibit F-3 Vance County, North Carolina Schedule of Cash and Investment Balances For the Fiscal Year Ended June 30, 2017 Carrying Cost Market Value Value Value Cash On Hand $ 950 $ 950.00 $ 950.00 In Time Deposit 1,010,376 1,010,376 1,010,376 In Demand Deposit 23,639,338 23,639,338 23,639,338 24,650,664 24,650,664 24,650,664 Other Investments North Carolina Capital Management Trust 2,332,598 2,332,598 2,332,598 Total Cash and Investments $ 26,983,262 $ 26,983,262 $ 26,983,262 Distribution by Funds Carrying Value General Fund General Fund $ 20,039,232 Revaluation Fund 243,210 Debt Service Fund 1 LEOSSA and OPEB Pension Fund 358,438 Facility Fees Fund (6,889) $ 20,633,992 Special Revenue Funds Emergency Telephone System Fund 21,686 Fire District Fund 442,657 Economic Development Fund 588,437 1,052,780 Capital Project Fund School Capital Outlay Fund 490,995 School Capital Reserve Fund 1,387,802 General Capital Projects Fund 1,094,388 General Capital Reserve Fund 157,067 3,130,252 Enterprise Funds Solid Waste Fund 571,829 Water Fund 1,372,560 1,944,389 Fiduciary Funds Agency Funds Vance County Jail Inmates Trust Funds 175,925 Register of Deeds Trust Fund - Social Services Fund 45,925 221,850 Total Cash and Investments $ 26,983,263.00 113
COMPLIANCE SECTION The Compliance Section contains the audited Schedule of Expenditures of Federal and State Awards (grants).
Thompson, Price, Scott, Adams & Co, P.A. P.O Box 398 1626 S. Madison Street Whiteville, NC 28472 Telephone (910) 642-2109 Fax (910) 642-5958 Alan W. Thompson, CPA R. Bryon Scott, CPA Gregory S. Adams, CPA Report On Internal Control Over Financial Reporting And On Compliance and Other Matters Based On An Audit Of Financial Statements Performed In Accordance With Government Auditing Standards To the Board of County Commissioners Vance County Henderson, North Carolina Independent Auditors' Report We have audited, in accordance with the 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, the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Vance County, North Carolina, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprises Vance County's basic financial statements, and have issued our report thereon dated January 25, 2018. Our report includes a reference to other auditors who audited the financial statements of the Vance County ABC Board and Vance County Tourism Development Authority, as described in our report on Vance County's financial statements. The financial statements of Vance County ABC Board and Vance County Tourism Development Authority were not audited in accordance with Governmental Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Vance County's internal control over financial reporting (internal control) to determine the audit procedure that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Vance County's internal control. Accordingly, we do not express an opinion on the effectiveness of the County's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of the internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Members American Institute of CPAs - N.C. Association of CPAs - AICPA Division of Firms 114