111307 CAFRCity of Virginia Beach
City of Virginia Beach
Comprehensive Annual
Financial Report
2006-07
Prepared in Accordance with
GASB Statement 34
Core Strategy
“Act as Stewards of Community and
Organizational Resources”
Audited Financial Statements -2007
–Entity Wide Statements
–General Fund
–Water & Sewer Fund
–Storm Water Fund
–Schools
–Capital Improvement Program
–Debt
External Auditor Report –Cherry, Bekaert
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& Holland
1st Quarter FY2008 General Fund
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Did the City’s Entity-Wide Financial
Did the City’s Entity-Wide Financial
Condition Improve during
Condition Improve during
Fiscal Year Ended June 30, 2007
Fiscal Year Ended June 30, 2007
YES!
Net Assets of the Primary Government Increased
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by $62.1 million to a Total of $2.9 billion
Invested in Capital Assets Increased $99.3 million
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Revenues Totaled $1.25 billion, an Increase of
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$91.2 million
Expenses Totaled $1.19 billion, an Increase of
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$134.3 million
Entity-Wide
Entity-Wide
Statement of Net Assets –Primary Government
Statement of Net Assets –Primary Government
June 30, 2007
June 30, 2007
(in millions)
(in millions)
GovernmentalBusinessTotal
Assets$3,308.9$937.4$4,246.3
Liabilities1,140.6159.81,300.4
Net
Assets $2,168.3$777.6$2,945.9
Entity-Wide
Entity-Wide
Primary Government
Primary Government
Infrastructure and Other Capital Assets
Infrastructure and Other Capital Assets
at June 30, 2007 –Net of Accumulated Depreciation
at June 30, 2007 –Net of Accumulated Depreciation
(in millions)
(in millions)
Net
BalanceAdditions/Balance
June 30, 2006DeletionsJune 30, 2007
Land and Improvements$ 744.4$ 30.0$ 774.4
Buildings479.8188.9668.7
Site Improvements115.418.3133.7
Machinery and Equipment44.5(6.4)38.1
Infrastructure852.8(17.0)835.8
Utility System563.86.0569.8
Construction in Progress609.0(113.8)495.2
Total Infrastructure & Capital Assets$ 3,409.7$ 106.0$ 3,515.7
Infrastructure = Roadways, Bridges, Landfill, Hurricane Protection
Entity-Wide
Statement of Activities –Primary Government
Statement of Activities –Primary Government
June 30, 2007
June 30, 2007
(in millions)
(in millions)
Program Net
ExpensesRevenuesExpenses
Governmental Activities$ 1,081.8$ 262.7$ (819.1)
Business Activities106.8116.69.8
Total Primary Govt$ 1,188.6$ 379.3$ (809.3)
General Revenues:
Taxes781.6
Other89.8
Net Increase62.1
Net Assets -Beginning2,883.8
Net Assets -Ending$2,945.9
General Fund Highlights
General Fund Highlights
June 30, 2007
June 30, 2007
Undesignated Fund Balance: $103.4 million
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-decrease of $20 million
Revenues: over budget by $6.5 million
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Expenditures: less than budget by $48.2 M
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General Property Taxes:
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58.1% of total revenue
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Increase 10.8% from prior year
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Other Local Taxes:
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25.0% of total revenue
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Increase 1.2% from prior year
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General Fund Statement of Revenues, Expenses &
Changes in Fund Balance
For the Fiscal Year Ended June 30, 2007
(in millions)
% of
BudgetActualVarianceBudget
Revenues$ 973.2$979.7$ 6.51.0
Expenses1,024.7976.548.24.7
Excess Revenues Over/(Under) Expenses(51.5)3.2$ 54.7
Fund Balance –July 1173.1173.1
Fund Balance –June 30$ 121.6$176.3
Less: Reservations
Loans & Encumbrances$12.9
Future Programs19.9
City CIP 2007-200825.4
School Revenue Sharing14.7
Total Reservations
$72.9
Undesignated Fund Balance$103.4
Fund Balance as a percent of Budgeted FY2008 Revenues is 10.1%
GENERAL FUND
GENERAL FUND
Local Revenues Exceed Budget by $8.3 million
Local Revenues Exceed Budget by $8.3 million
FY 2007
FY 2007
Millions
Real Estate $(1.8)
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Personal Property Taxes(2.3)
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Utility Taxes.0
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Business Licenses(.9)
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General Sales Taxes.6
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City Tax on Deeds2.8
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Hotel Tax.9
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Restaurant Meal Taxes(.6)
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Cigarette .5
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Interest and Rent8.5
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Franchise Taxes.2
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Automobile Licenses(.8)
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Charges for Services.3
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Other Local Revenue.9
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Undesignated General Fund Balance
20016.0%
12.8%
% of Budgeted GF Revenue
11.1%
15012.0%
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--------
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9.5%
Dollars (Millions)
9.3%
9.0%
10.1%
8.8%
$123.4 $103.4
1008.0%
------
$96.6
$96.2
$73.0
$63.1
$62.3
$59.5
504.0%
00.0%
2001200220032004200520062007
Undesignated GF Balance% of Budgeted GF Revenue
Fiscal Issues
Fiscal Issues
Retiree Healthcare –GASB 45
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Real Estate Assessments
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Future Capital Needs –Schools,
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Transportation, Fire Stations, etc.
Economy
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Uncertainty of State Funding
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Debt Limits
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Water & Sewer Enterprise Fund Comparative Statement
Water & Sewer Enterprise Fund Comparative Statement
of Revenues, Expenses & Changes in Fund Net Assets
of Revenues, Expenses & Changes in Fund Net Assets
for the Years Ended June 30, 2007 and 2006
for the Years Ended June 30, 2007 and 2006
(in millions)
(in millions)
20072006
Total Revenues$ 99.5$ 93.2
Total Expenses(91.4)(90.4)
Capital Contributions1.15.9
Increase in Net Assets9.28.7
Total Net Assets –July 1551.6542.9
Total Net Assets –June 30$ 560.8$ 551.6
Storm Water Enterprise Fund Comparative Statement
Storm Water Enterprise Fund Comparative Statement
of Revenues, Expenses & Changes in Fund Net Assets
of Revenues, Expenses & Changes in Fund Net Assets
for the Years Ended June 30, 2007 and 2006
for the Years Ended June 30, 2007 and 2006
(in millions)
(in millions)
20072006
Total Revenues$ 20.3$ 17.9
Total Expenses(14.7)(15.5)
Increase in Net Assets5.62.7
Total Net Assets –July 1204.9202.5
Total Net Assets –June 30$ 210.5$ 204.9
School Operating Fund-Statement of Revenues, Expenses &
Encumbrances
For the Fiscal Year Ended June 30, 2007
(in millions)
REVENUES
BudgetActualVariance
City$319.7$303.9$(15.8)*
Local2.73.60.9
From Commonwealth348.2349.61.4
From Federal Government14.818.33.5
Total Revenues$685.4$675.4$(10.0)
EXPENDITURES AND
ENCUMBRANCES$695.1$685.1$(10.0)
*Total Reservation in the General Fund of $14.7 million after reduction for
revenue sharing formula.
Outstanding Debt By Purpose
June 30, 2007
Agriculture
Reserve
General
Program
Government
$24,541,566
$671,291,668
2.19%
59.90%
Storm Water
$11,397,237
1.02%
Water and Sewer
$132,273,924
11.80%
Schools
$281,222,374
25.09%
Total Debt Outstanding $1,120,726,769
Summary of Current Debt
Affordability Indicators
Ratio Established
DescriptionGuidelinesFY 07
Annual Debt Service to General
Government ExpendituresNo greater than 10.0%7.5%
Overall Net Debt to Estimated Full
ValueNo greater than 3.5%2.1%
Overall Net Debt Per CapitaNo greater than $2,400$2,197
Overall Net Debt Per Capita to Per
Capita Personal IncomeNo greater than 6.5%5.7%
Capital Improvement Program
Capital Improvement Program
Expenditures (in millions)
Expenditures (in millions)
Fiscal Year 2007
Fiscal Year 2007
General Government Projects$185.3
School Projects74.8
Water and Sewer Projects23.0
Stormwater Projects5.6
Total Capital Project Expenditures$287.7
Capital Improvement Program
Capital Improvement Program
Expenditures
Expenditures
Fiscal Year 2007
Fiscal Year 2007
(continued)
(continued)
Key Projects
Street Resurfacing
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Laskin Road Gateway
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SandlerPAC Theater
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Various Site Acquisitions
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First Landing Fire & Rescue
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Sandbridge Beach Restoration
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Oceana Area Site Acquisition
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Convention Center
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Various Drainage and Utility Projects
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Audit Presentation
City of Virginia Beach
Virginia
Solutions.Character.
Depth.
November 13, 2007
The Firm of Choice.
Overview
Overview of Auditors’Opinion
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Required communication of significant
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audit matters
Questions
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Auditors’Opinion on the Financial
Statements
Unqualified Opinion
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Accounting principles generally accepted in the United
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State of America
Material Transactions and balances
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Compliance with laws and regulations material to the
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financial statements
Required Communications
Our responsibility under generally accepted
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auditing standards:
We assessed risk that the financial statements may
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contain a material misstatement, either intentional or
unintentional
We documented and considered internal controls to assist
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us with our audit approach, not for the purpose of
providing assurance on those controls.
Required Communications
Our Responsibility under Government Auditing
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Standards (The Yellow Book)
We reviewed and tested the City’s compliance with laws
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and regulations, noncompliance with which could have a
material impact on the financial statements.
We reviewed compliance with applicable laws and
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regulations identified in the Specifications for Audit of
Counties, Cities and Townsissued by the Auditor of
Public Accounts of the Commonwealth of Virginia
Required Communications
Our Responsibility under OMB A-133
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We performed procedures in order to express an opinion
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on the City’s compliance with requirements applicable to
major Federal programs. Our opinion was unqualified.
We performed tests of controls to assess the City’s ability
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to detect material noncompliance with program
requirements, not to express an opinion on controls.
Required Communications
Independence
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In accordance with AICPA Rule 101, and the
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independence standards contained in Government
Auditing Standards, we were, and continue to be,
independent with respect to the City of Virginia Beach.
Accounting Policies
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No new significant policies adopted.
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No transactions that lacked authoritative consensus.
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Required Communications
Estimates
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These statements include estimates, including:
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Allowance for doubtful accounts
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Depreciation
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Value of infrastructure assets
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Required Communications
Significant Audit Adjustments
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There were no significant audit adjustments proposed
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by us that would indicate a weakness in the City’s
reporting process.
There were no misstatements that were not
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corrected.
1st Quarter FY2008 General Fund
GENERAL FUND FY 2008
Actual Revenues at October 2007
Compared to Historic Trend
100.00%
100%
Percent of Total Revenues
73.90%
80%
59.57%
55.97%
49.73%
60%
45.93%
42.47%
40%
25.20%
14.73%
9.60%
20%
5.00%
2.75%
13.90%
0%
9.70%
JulAugSepOctNovDecJanFebMarAprMayJun
Month
Percent of Total RevenuesActual Revenues
GENERAL FUND FY 2008
Actual Expenditures at October 2007
Compared to Historic Trend
100.00%
92.46%
100%
84.75%
75.00%
80%
68.07%
60.78%
50.76%
Expenditures
60%
Percent of
44.06%
37.88%
Total
40%
21.67%
14.77%
33.7%
20%
6.56%
20.8%
0%
JulAugSepOctNovDecJanFebMarAprMayJun
Month
Percent of Total ExpendituresActual Expenditures