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Home My WebLink About111307 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 ? & Holland 1st Quarter FY2008 General Fund ? 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 ? by $62.1 million to a Total of $2.9 billion Invested in Capital Assets Increased $99.3 million ? Revenues Totaled $1.25 billion, an Increase of ? $91.2 million Expenses Totaled $1.19 billion, an Increase of ? $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 ? -decrease of $20 million Revenues: over budget by $6.5 million ? Expenditures: less than budget by $48.2 M ? General Property Taxes: ? 58.1% of total revenue ? Increase 10.8% from prior year ? Other Local Taxes: ? 25.0% of total revenue ? Increase 1.2% from prior year ? General Fund Statement of Revenues, Expenses & Changes in Fund Balance For the Fiscal Year Ended June 30, 2007 (in millions) % of BudgetActualVarianceBudget Revenues$ 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) ? Personal Property Taxes(2.3) ? Utility Taxes.0 ? Business Licenses(.9) ? General Sales Taxes.6 ? City Tax on Deeds2.8 ? Hotel Tax.9 ? Restaurant Meal Taxes(.6) ? Cigarette .5 ? Interest and Rent8.5 ? Franchise Taxes.2 ? Automobile Licenses(.8) ? Charges for Services.3 ? Other Local Revenue.9 ? Undesignated General Fund Balance 20016.0% 12.8% % of Budgeted GF Revenue 11.1% 15012.0% ? -------- --------- 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 $59.5 504.0% 00.0% 2001200220032004200520062007 Undesignated GF Balance% of Budgeted GF Revenue Fiscal Issues Fiscal Issues Retiree Healthcare –GASB 45 ? Real Estate Assessments ? Future Capital Needs –Schools, ? Transportation, Fire Stations, etc. Economy ? Uncertainty of State Funding ? Debt Limits ? Water & Sewer Enterprise Fund Comparative Statement Water & Sewer Enterprise Fund Comparative Statement of Revenues, Expenses & Changes in Fund Net Assets of Revenues, Expenses & Changes in Fund Net Assets for the Years Ended June 30, 2007 and 2006 for the Years Ended June 30, 2007 and 2006 (in millions) (in millions) 20072006 Total Revenues$ 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 ? Laskin Road Gateway ? SandlerPAC Theater ? Various Site Acquisitions ? First Landing Fire & Rescue ? Sandbridge Beach Restoration ? Oceana Area Site Acquisition ? Convention Center ? Various Drainage and Utility Projects ? Audit Presentation City of Virginia Beach Virginia Solutions.Character. Depth. November 13, 2007 The Firm of Choice. Overview Overview of Auditors’Opinion ? Required communication of significant ? audit matters Questions ? Auditors’Opinion on the Financial Statements Unqualified Opinion ? Accounting principles generally accepted in the United ? State of America Material Transactions and balances ? Compliance with laws and regulations material to the ? financial statements Required Communications Our responsibility under generally accepted ? auditing standards: We assessed risk that the financial statements may ? contain a material misstatement, either intentional or unintentional We documented and considered internal controls to assist ? us with our audit approach, not for the purpose of providing assurance on those controls. Required Communications Our Responsibility under Government Auditing ? Standards (The Yellow Book) We reviewed and tested the City’s compliance with laws ? and regulations, noncompliance with which could have a material impact on the financial statements. We reviewed compliance with applicable laws and ? 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 ? We performed procedures in order to express an opinion ? 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 ? to detect material noncompliance with program requirements, not to express an opinion on controls. Required Communications Independence ? In accordance with AICPA Rule 101, and the ? independence standards contained in Government Auditing Standards, we were, and continue to be, independent with respect to the City of Virginia Beach. Accounting Policies ? No new significant policies adopted. ? No transactions that lacked authoritative consensus. ? Required Communications Estimates ? These statements include estimates, including: ? Allowance for doubtful accounts ? Depreciation ? Value of infrastructure assets ? Required Communications Significant Audit Adjustments ? There were no significant audit adjustments proposed ? by us that would indicate a weakness in the City’s reporting process. There were no misstatements that were not ? 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