CITY OF SUFFOLK, VIRGINIA
POPULAR ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDING JUNE 30, 2018
TO THE CITIZENS OF SUFFOLK
The 2018 Popular Annual Financial Report (PAFR) is a report for our citizens. It provides you and other interested parties with an overview of the City’s financial results. This report is prepared to increase awareness throughout the community of the City’s financial operations; therefore, it is written in a userfriendly manner. The information is derived from the audited financial statements in the City’s 2018 Comprehensive Annual Financial Report (CAFR), our formal annual report. To conform with generally accepted accounting principles (GAAP), the CAFR must include the City’s component units and the presentation of individual funds in much more detail, as well as full disclosure of all material events, financial and non-financial. The 2018 CAFR was audited by Cherry Bekaert
LLP and has received an unmodified or “clean” audit opinion. Unlike the CAFR, the PAFR is not an audited document and it does not include details by fund nor does it include the other disclosures required by GAAP. The PAFR is not required to present the same level of detail as the CAFR and, therefore, does not fully conform to GAAP. This report, in a summarized version, highlights the overall financial condition and trends of the City. For more in-depth information, you may obtain a copy of the CAFR on the City’s website at www.suffolkva.us, or by contacting the Finance Department at (757) 514-7500.
IN THIS REPORT
MAYOR’S MESSAGE 2 CITY LEADERSHIP 3 ABOUT OUR CITY 4 SUFFOLK PRIORITIES:
Expanded Economic Development / Public Education 5 Growth Management and Comprehensive Planning/ Transportation; Fiscal Year 2018 Transportation Accomplishments 6 Leisure, Health, and Wellness / Public Safety 7 Civic Engagement and Responsive City Services 7 Financial Stability 8
WHERE THE MONEY COMES FROM 9 WHERE THE MONEY GOES 10 THE CITY’S NET POSITION 11 THE CITY’S ASSETS 12 THE CITY’S DEBT ADMINISTRATION 13 MORE INFORMATION 14
PAGE 1
MAYOR’S MESSAGE On behalf of the Suffolk City Council, it is my pleasure to present the 2018 Popular Annual Financial Report to our citizens. We all consider ourselves fortunate to be representatives in a City with such a rich history, a dynamic present and an unlimited future. Our goal, as with any City, is to ensure a proper stewardship of resources and funds with the overall goal of making Suffolk a better place for all of our citizens. As Mayor, it’s my duty to look to the future…to find balance. Every decision, every investment has been made with an eye to the future. Not just creating a strong economy for the present, but building the foundation we want for our children and future generations. We are a growing City, and so too are our needs, but we’ve made it a priority to keep our financial house in order. We’re on the cusp of receiving our third AAA rating; we’re a blue chip stock in the municipal marketplace; and we’ve invested wisely while demanding the very best for our City. Our commitment to our schools has never been stronger. In fact, local funding for public education has increased by more than $10 million dollars in the last six years. We recently invested more than $60 million dollars to building two new schools which opened this fall: the Colonel Fred Cherry Middle School and the Florence Bowser Elementary School. Public Safety is essential for a community’s quality of life, and it’s one of the first things people look at in judging a City. We’re committed to ensuring that our personnel have the necessary tools, equipment, and technology to keep our growing City safe. A new vision for the core City – the Suffolk Downtown Master Plan – was adopted after input from citizens, business and property owners, local leaders and City staff with a focus on key strategies for bringing new life to downtown. Improved entertainment options, support for new business growth and educational opportunities, reuse of underutilized properties, and new public spaces including Library Square on West Washington Street and a new mixed-use residential and historic reuse project on East Washington Street are all part of the plan to continue the revitalization of downtown. The official designation of a creative arts district will further contribute to the vitality and vibrancy of our downtown, making it a true destination for citizens and visitors alike.
the multitude of classes, workshops, and family-oriented events offered by Suffolk’s local, state, and nationally recognized award winning Public Library. Libraries change lives for the better, and with our Downtown Master Plan’s aforementioned planned Library Square with a new, state-of-the-art facility, we’ll continue to open up windows to the world that inspire us to explore and achieve. Our fast-growing population is driving the need for recently announced healthcare expansions which will benefit our health now and for future generations. Last fall, Suffolk Parks & Recreation joined the ranks of elite agencies across the country by earning accreditation through the Commission for Accreditation of Park and Recreation Agencies and the National Recreation and Park Association. We continue to make significant investments and have enhanced our recreational opportunities as we fully understanding their power to transform our daily lives. When it comes to economic development, Suffolk attracts a diverse mix of industries thanks to our prime Mid-Atlantic location, room for expansion and pro-business climate. Each year brings a host of new businesses who opt to establish roots in Suffolk because they are confident that it is the smartest growth strategy for them, and 2018 was no different. We’re a big City presenting big opportunities, including the 55-acre mixed-use development off of Interstate 664 called The Point at Harbour View. This site also serves as the gateway to the amazing 300-acre former Tidewater Community College site that sits on the James River, with the City of Suffolk a partner with the TCC Real Estate Foundation in this extraordinary, one-of-a-kind opportunity for development. In fact, we’ve provided funding which will protect 1.3 miles of irreplaceable shoreline for a future public space that will span the length of the entire waterfront. Here, you can reap the amenities of a big city, while at the same time retain the flavor and character of a small town. It truly is a good time to be in Suffolk! ~Mayor Linda T. Johnson
Our quality of life is also vastly impacted by our Libraries, with more and more people choosing to spend their time enjoying PAGE 2
CITY LEADERSHIP The City of Suffolk is governed by a Mayor and seven City Council members who are elected by borough. Appointed by the Council, the City employs a full-time City Manager to oversee the operations.
2017-2018 CITY COUNCIL
PATRICK ROBERTS, CITY MANAGER
The Suffolk City Council has an established vision for the City which sets the course for Suffolk over the next 20 years. Vision 2035 is as follows:
The City will achieve this by focusing on the following priorities, each of which will be highlighted within this report:
Suffolk is a vibrant and fiscally strong community leading the region in advancements in education, comprehensive transportation, public safety and diverse economic growth while continuing to preserve its rural heritage and enhancing its neighborhoods and urban centers. Throughout 430 square miles of rich land and pristine waterways, citizens and tourists treasure the beautiful trails, rivers and open spaces. Residents, visitors and merchants delight in the revitalized downtown featuring cultural, educational and recreational opportunities. Diverse shopping, businesses and entertainment venues abound. A sense of harmony and pride permeates this rare community, where crime is low; where schools are cutting edge; where people and goods move safely and efficiently throughout the City; and where citizens receive valuable services and have opportunities to be engaged. Suffolk is the desired destination of the Hampton Roads Region.
• • • • • • • •
Expanded Economic Development Public Education Leisure, Health, and Wellness Transportation Public Safety Financial Stability Growth Management and Comprehensive Planning Civic Engagement and Responsive Citizen Services
If you have questions about this report, or need additional financial information, please contact the Finance Department of the City of Suffolk by email, FinanceEmail@suffolkva.us, by phone at 757-514-7500, or by mail at Finance Department, City of Suffolk, P.O. Box 1858, Suffolk, VA 23434.
PAGE 3
ABOUT OUR CITY
The present City of Suffolk was formed January 1, 1974, from the consolidation of the City of Suffolk and the City of Nansemond (formerly Nansemond County). The City is Virginia’s largest city in land area and one of the top fifteen largest cities in land area in the nation with over 400 square miles of land mass and 30 square miles of waterways. The diverse landscape includes a mix of rural, suburban and urban development areas. The City is situated in the western portion of Hampton Roads, Virginia’s coastal plain area, and is bound by the James River to the north, the Cities of Chesapeake and Portsmouth to the east, the State of North Carolina to the south, and the Counties of Southampton and Isle of Wight to the west. The City of Suffolk is one of seven major cities that form the Norfolk-Virginia BeachNewport News metropolitan area with 1.7 million people. This region is also known as the Hampton Roads area. The City’s government is organized under the Council-
SUFFOLK’S PROFILE - FISCAL YEAR 2018 QUICK FACTS Consolidated as City of Suffolk and City of Nansemond (formerly Nansemond County)
GEOGRAPHY
Land Water
GOVERNMENT
Form of Government Chief Elected Official 8-Member City Council Full Time Equivalent City Employees
Manager form of government. The governing body, the City Council, is composed of seven members and a Mayor who collectively develop policies for the administration of the City. The Mayor is elected at large and each Council Member is elected by borough in a citywide election every other year, with terms of office being four years. The City Council appoints a City Manager to act as administrative head of the City. The City Manager serves at the pleasure of City Council and carries out the City Council’s policies and directs business procedures. The City Manager also appoints the Directors of all Departments. As a full service City, Suffolk provides a broad range of municipal services authorized by statute or charter. These services include education, public safety, highways and streets, parks and recreation, sanitation, health and social services, public improvements, planning and zoning, public utilities, storm water management and general administrative.
DEMOGRAPHICS*
Population Unemployment Rate Median Household Income* Median Home Cost
92,533 3.1% $65,435 $260,000
January 1, 1974
400 square miles 30 square miles
Council-Manager Mayor 4-Year Terms 1342
*Sources: Weldon Cooper Center for Public Service, Virginia Employment Commission, Bureau of Economic Analysis, U.S. Census Bureau. PAGE 4
SUFFOLK PRIORITIES EXPANDED ECONOMIC DEVELOPMENT Suffolk is the fastest growing City in Hampton Roads and is well positioned for continued growth and prosperity. With a diversified and skilled workforce, proximity to the Port of Virginia, available land for development, efficient transportation access, high quality of life, a regard for its historic past and a dynamic vision for the future, Suffolk continues to attract new business and investment, create jobs, and provide an invigorating economic climate for expansion. Noted nationally for job creation and as one of the most livable cities, Suffolk continues to capitalize on its assets in a top-ranked business-friendly state.
NEW AND EXPANDING BUSINESS HIGHLIGHTS JANUARY 1 – DECEMBER 31, 2018 NEW BUSINESS
SECTOR
INVESTMENT
Harbour View North Retail $ 6,400,000 Atarfil Advanced Manufacturing $ 5,100,000 ALDI Retail $ 5,000,000 CVS Pharmacy Retail $ 4,000,000
EXPANDING BUSINESS SECTOR INVESTMENT Sentara BelleHarbour Lakeview Medical Center at Harbour View Ace Hardware Hardee’s Nansemond Pre-Cast Concrete
THE ECONOMY OF SUFFOLK IS CONTINUING TO GROW AS EVIDENCED BY THE FOLLOWING TRENDS: •
Unemployment is 3.1%, down from 4.1% in the previous year.
•
Median Home sales price is $260,000, same as last year.
•
Median Household Income is $65,435.
Medical Medical Warehousing & Distribution Retail Advanced Manufacturing
$34,000,000 $14,000,000 $ 9,000,000 $ 2,500,000 $ 2,200,000
Median Household Income (MHI) has grown in the City by 63% from 2000 to 2018. The City of Suffolk now has the third highest MHI in the region, which is also higher than both the state and national MHI. New and existing businesses invested $114 million in creating or expanding business in Suffolk in 2018.
9TH BEST COMMUNITY ON BEST PLACES TO LIVE TOP 25 LIST OF “WHERE THE JOBS ARE” – CNN MONEY MAGAZINE – 2012 ECONOMIC DEVELOPMENT EFFORTS BROUGHT 712 NEW JOBS TO SUFFOLK IN 2018.
PUBLIC EDUCATION The City Council and City Management place a high priority on education in the City. Over the next ten years, approximately $282 million has been appropriated or planned for in the Capital Improvements Plan for renovations and new schools, as well as to provide for HVAC improvements and a new operations facility. PAGE 5
SUFFOLK PRIORITIES GROWTH MANAGEMENT AND COMPREHENSIVE PLANNING This population trend is projected to continue over the foreseeable future. By 2045, we expect to see an increase in population by 43%.
Suffolk features many development types and character types, from dense, walkable urban neighborhoods, to riverside communities and rural villages. The plan emphasizes enhancing existing character and promoting quality new development. Suffolk continues to see population growth with an 12% increase since 2010. Over the past 18 years, the population in Suffolk has grown by 45%.
The Suffolk Department of Parks and Recreation coordinated the presentation of the Suffolk Bicycle and Pedestrian Plan draft to Planning and City Council as Comprehensive Plan amendment. Suffolk features many unique neighborhoods, beautiful natural landscapes, and small-town charm. The City faces the challenge of maintaining these and other valued assets while experiencing sustained growth. This desire to accommodate growth while preserving Suffolk’s special features has prompted the City to address service provisions, connectivity, environmental protection, and the quality of life and traditions as the City continues to grow and develop.
TRANSPORTATION The residential growth and change in Suffolk require the City to be proactive in planning for its future to insure efficient and effective delivery of services and a high quality of life for its citizens. The transportation network plays a key role in accommodating growth within Suffolk and providing connections throughout the region. The 2015 Comprehensive Plan addresses areas of limited connectivity within the City, as well as issues such as congestion, heavy freight traffic, emergency preparedness, and promoting mobility and alternate forms of transportation.
FISCAL YEAR 2018 TRANSPORTATION ACCOMPLISHMENTS •
Increased transit ridership by 11% over the last two years.
•
Completed the redesign and construction of the Liberty Street, Fairgrounds Park Lot, adding much needed parking to that area.
•
Developed and implemented the East Washington Street Signal Coordination Plan.
•
Installed four new transit shelter locations. PAGE 6
SUFFOLK PRIORITIES LEISURE, HEALTH, AND WELLNESS
CIVIC ENGAGEMENT AND RESPONSIVE CITY SERVICES
•
•
The Suffolk Public Library launched new WiFi2Go program to provide wireless internet access to people with needs throughout the community.
•
Implemented mobile voter photo identification outreach program.
•
Suffolk’s 2018 National Night Out celebration resulted in our City receiving our fifth First Place in the nation award (for areas between 50,000 and 100,000 population) from the National Association of Town Watch (NATW). National Night Out is an annual communitybuilding campaign that promotes police-community partnerships and neighborhood camaraderie to make our neighborhoods safer, more caring places to live. National Night Out enhances the relationship between neighbors and public safety personnel while bringing back a true sense of community.
Suffolk was selected for the list of one of the Best Cities for Young Families in Virginia by NerdWallet, a personal finance site for consumers. Among factors considered were home affordability, prosperity and growth, quality of education, and family friendliness.
•
Suffolk’s Department Parks and Recreation joins the ranks of elite park and recreation agencies across the country by earning accreditation through the Commission for Accreditation of Park and Recreation Agencies (CAPRA) and the National Recreation and Park Association (NRPA).
•
Suffolk received the Stairway to Success Award – Good Level, recognizing the City’s excellence in its commitment to Early Childhood Education at the Virginia Municipal League (VML) Annual Banquet.
•
Provided immunization services to 436 citizens and family planning services to 524 citizens.
COMPLETED CAPITAL PROJECTS:
•
Nansemond Parkway Road Widening
•
Godwin Courts Building Improvements
•
Opening of two new schools - Florence Bowser Elementary School and Colonel Fred Cherry Middle School
PUBLIC SAFETY •
Completed first Fire & Rescue Academy. Conducted fire and life safety presentations for residents of the Suffolk Redevelopment and Housing Authority. Conducted Youth Fire and Life Safety Camps.
•
Trained 20 new Animal Care volunteers for a total of 93 trained volunteers engaged in a variety of activities including adoption events, animal foster care, and staff assistance at the Animal Shelter.
•
Obtained Commission on Accreditation for Law Enforcement (CALEA) for Emergency Communications.
CITIZEN REPORTING •
•
Received the Award for Outstanding Achievement in Popular Annual Financial Reporting from the Government Finance Officers Association of the United States and Canada (GFOA). The Association of Government Accountants (AGA) awarded a Certificate of Excellence in Citizen-Centric Reporting to the City of Suffolk, Virginia for its report to our citizens for the FY 2017 Citizen-Centric Report.
ONE OF AMERICA’S BEST SMALL CITIES TO LIVE - CNN MONEY MAGAZINE 2010 PAGE 7
SUFFOLK PRIORITIES
THE CITY IS COMMITTED TO BEING RESPONSIBLE STEWARDS OF OUR TAXPAYER DOLLARS AND WILL CONTINUE TO ADDRESS THE STRATEGIC NEEDS AND PRIORITIES OF THE CITY THROUGH THE IMPLEMENTATION OF COST REDUCTION STRATEGIES.
FINANCIAL STABILITY
Financial policies are vital in maintaining consistency and focus. A good measure of the City’s ability to cope with unexpected financial challenges or emergencies is the ratio of unassigned General Fund balance as a percentage of the budgeted governmental funds expenditures. The target for this ratio is 12%. As of June 30, 2018 the fund balance ratio exceeded the target.
OTHER ACCOMPLISHMENTS • •
Received an unmodified audit opinion for the FY 2018 audit. Achieved a current 3-year combined real estate and personal property tax collection rate of 99.5%.
•
Facilitated the sale of surplus items resulting in over $700,000 in proceeds.
• Reaffirmed bond rating upgrade on the City’s general obligation bonds to AAA by Fitch Ratings..
FINANCIAL REPORTING AWARDS
Comprehensive Annual Financial Report •
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Suffolk for its comprehensive annual financial report for the fiscal year ended June 30, 2017, representing the thirty-fourth consecutive year that the City has received this award. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized comprehensive annual financial report whose contents conform to program standards. Such reports must satisfy both accounting principles generally accepted in the United States of America and applicable legal requirements.
Annual Budget •
The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to the City of Suffolk for its annual budget for the fiscal year beginning July 1, 2018. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications device. This is the tenth consecutive year for this recognition as it is valid for a one year period.
PAGE 8
WHERE THE MONEY COMES FROM When assessing the financial results of the City, it is important that we focus on the City’s General Fund. This page and the next report General Fund financial data only. The General Fund is the general operating fund of the City and supports the regular day-to-day operations of the City. It is used to account for all revenues and expenditures of the City except those required to be accounted for in another fund such as Capital Projects, Grants and Debt Service Funds, and Utility, Refuse, and Stormwater Activities.
IN TOTAL, 2018 REVENUE INCREASED BY ALMOST $5.3 MILLION WHEN COMPARED TO 2017. Like all governments, the City must raise funds to pay for the services that it provides to its citizens and businesses. These sources of funds, referred to as revenue, are raised through grants, charges and taxes.
GENERAL FUND REVENUE BY SOURCE (IN MILLIONS) EXCLUDING TRANSFERS General Fund Revenue By Source (In Millions) Revenue by Source: Real Estate and Personal Property Taxes Other Local Taxes Permits, Fees and Regulatory Licenses Fines and forfeitures Revenue from Use of Money and Property Charges for Services Miscellaneous State Revenue Federal Revenue Total Revenues
FY Ending 06/30/2017 $ 121.7 43.2 1.3 0.7 1.2 3.4 1.7 21.3 5.5 $ 200.0
FY Ending 06/30/2018 $ 125.2 45.7 1.5 0.9 2.0 3.3 1.5 20.3 4.9 $ 205.3
Permits, Fees and Regulatory Licenses $1.5 - 0.7%
Other Local Taxes $45.7 - 22.3%
Fines and Forfeitures $0.9 - 0.4% Revenue from Use of Money and Property $2.0 - 1.0% Charges for Services $3.3 - 1.6%
61.0% 22.3% 0.7% 0.4% 1.0% 1.6% 0.7% 9.9% 2.4% 100.0%
Miscellaneous $1.5 - 0.7% State Revenue $20.3 - 9.9%
Federal Revenue $4.9 - 2.4%
Real Estate and Personal Property Taxes $125.2 - 61.0%
** Do not include Transfers In THE CITY OF SUFFOLK HAS A VARIETY OF SOURCES OF REVENUES TO FUND OPERATIONS. LARGEST GENERAL REVENUE The chart following indicates the growth in the GeneralTHE Property Taxes revenue over the past ten FUND years. The increase in the real estate and pe Page 28 of CAFR
SOURCES ARE REAL ESTATE AND PERSONAL PROPERTY TAXES, FOLLOWED BY OTHER LOCAL TAXES AND STATE REVENUE.
property taxes is due to increase in assessed value of the personal property. (Please bring the next chart up on this page underneath here.)
General Fund Expenditures by Function (In Millions)
Page 16 and page 43 (Transfers to) of the CAFR ** Do not include Transfers Out for Debt and Other Page 28 of CAFR
General Property Tax Revenue 140 120 100 80 60 40 20
FY 18
FY 17
FY 16
FY 15
FY 14
FY 13
FY 12
0
FY 11
9.5% 4.8% 34.7% 0.5% 7.7% 32.9% 6.3% 3.4% 0.1% 100.0%
FY 10
FY Ending 06/30/2018 $ 16.3 8.2 59.7 0.9 13.3 56.5 10.9 5.9 0.2 $ 171.9
FY 09
FY Ending 06/30/2017 $ 15.6 8.0 56.4 0.9 13.3 54.9 10.4 9.1 0.3 $ 168.9
Millions
Expenditures by Function: General Government Administration Judicial Administration Public Safety Public Works Health and Welfare Education Parks, Recreation and Cultural Community Development Nondepartmental Total Expenditures
Source: Comprehensive Annual Financial Reports 2009 - 2018
The chart above indicates the growth in the General Property Tax revenue over the past ten years. The increase in the real estate and personal property taxes is due to the increase in the overall assessed value of both personal property and real estate.
PAGE 9 The Real Estate tax rate of $1.11 per $100 of assessed
WHERE THE MONEY GOES
Revenue from Use of Money and Property Charges for Services Miscel l aneous State Revenue Federal Revenue Total Revenues
$
1.2 3.4 1.7 21.3 5.5 200.0 $
2.0 3.3 1.5 20.3 4.9 205.3
1.0 1.6 0.7 9.9 2.4 100.0
Once the City collects taxes and other revenues, the monies must be spent efficiently to provide services to the citizens and Do not include Transfers In businesses of the City. As this section will further detail,** the City provides a variety of services to its residents and businesses. Page 28 of CAFR
GENERAL FUND EXPENDITURE BY FUNCTION (IN MILLIONS) General Fund Expenditures by Function (In Millions) EXCLUDING TRANSFERS
The City is committed to ensuring the highest level of safety for its citizens and has expended $59.7million towards public safety efforts in FY18, which represents an increase of $3.2 million over FY17 expenditures.
EDUCATION IS A TOP PRIORITY FOR THE CITY AS EVIDENCED BY THE FACT THAT IT IS THE LARGEST BUDGETED GENERAL FUND EXPENDITURE IN FY18 AND INCREASED BY $1.6 MILLION OVER FY17 EXPENDITURES.
Expenditures by Function: General Government Administration Judicial Administration Public Safety Public Works Health and Welfare Education Parks, Recreation and Cultural Community Development Nondepartmental Total Expenditures
FY Ending FY Ending 06/30/2017 06/30/2018 $ 15.6 $ 16.3 8.0 8.2 56.4 59.7 0.9 0.9 13.3 13.3 54.9 56.5 10.4 10.9 9.1 5.9 0.3 0.2 $ 168.9 $ 171.9
Page 16 and page 43 (Transfers to) of the CAFR ** Do not include Transfers Out for Debt and Other Public Safety, $59.7 - 34.7% Page 28 of CAFR Judicial Administration, $8.2- 4.8%
Public Works, $0.9 - 0.5%
General Government Administration, $16.3 - 9.5%
Health and Welfare, $13.3 - 7.7%
Nondepartmental, $0.2 - 0.1%
THE REAL ESTATE TAX RATE OF $1.11 PER $100 OF ASSESSED VALUE (AS OF 7/1/18) IS THE 3RD LOWEST IN THE REGION.
Community Development, $5.9 -3.4% Parks, Recreation and Cultural, $10.9 - 6.3%
Education, $56.5 - 32.9%
Annually, the City Manager submits a Budget for City Council’s adoption. The proposed budget must not include expenditures that exceed anticipated revenues and anticipated income. The budget process is approached with a focus on maintaining core services critical to residents, while simultaneously identifying sustainable savings that strengthen the City’s ability to deliver services more efficiently and effectively.
PAGE 10
9.5 4.8 34.7 0.5 7.7 32.9 6.3 3.4 0.1 100.0
NET POSITION (Tables and Charts - MDA Net Position)
The Statement of Net Position presents information on all City assets and deferred outflows of resources and liabilities and deferred inflows of resources with the difference reported as net position. This data is inclusive of all the activities of the City CITY OF SUFFOLK, VIRGINIA but does not include City component units. Net position is one way to measure the City’s financial health, or financial position. NET POSITION BY COMPONENT LAST TEN FISCAL YEARS
NET POSITION (IN MILLIONS) Current and other assets Capital and other non-current assets Total assets Deferred Outflows of Resources
Net Position Governmental Activities 2018 2017* $ 186.9 $ 187.2 575.2 540.5 762.1 727.7
Business-type Activities 2018 2017* $ 93.1 $ 84.3 463.4 456.9 556.5 541.2
2018 $ 280.0 1,038.6 1,318.6
Total
2017* $ 271.5 997.4 1,268.9
15.9
21.6
19.3
18.5
35.2
40.1
41.1 317.4 358.5
59.1 308.0 367.1
20.6 399.0 419.6
13.7 396.1 409.8
61.7 716.4 778.1
72.8 704.1 776.9
Deferred Inflows of Resources
14.9
9.8
1.6
1.0
16.5
10.8
Net position: Net investment in capital assets Restricted Unrestricted Net position
336.0 2.1 66.5 $ 404.6
318.7 8.9 44.8 $ 372.4
108.5 2.5 43.6 $ 154.6
108.8 2.9 37.2 $ 148.9
444.5 4.6 110.1 $ 559.2
427.5 11.8 82.0 $ 521.3
Current and other liabilities Long-term liabilities Total liabilities
*2017 has been restated to reflect the implementation of GASB75 related to OPEB.
The City has a solid financial position with 19.7% of net position, or $110.1 million, as unrestricted. The unrestricted portion of net position is available to allow the City to provide services to citizens. Net investment in capital assets (land, buildings, infrastructure, improvements, machinery and equipment, less accumulated depreciation and related outstanding debt used to acquire those assets) of $444.5 million comprises 79.5% of the net position. These assets are not available for future spending because they are assets used to provide services to citizens.
THE CITY’S COMBINED NET POSITION (WHICH IS THE CITY’S “BOTTOM LINE”) INCREASED BY $37.9 MILLION IN FISCAL YEAR 2018, OF WHICH APPROXIMATELY 0.8% REPRESENTS RESOURCES THAT ARE SUBJECT TO EXTERNAL RESTRICTIONS OR ENABLING LEGISLATION. PAGE 11
CAPITAL ASSETS THE CITY’S CAPITAL ASSETS FOR ITS GOVERNMENTAL AND BUSINESS-TYPE ACTIVITIES AS OF JUNE 30, 2018, TOTALED $1,038.6 MILLION, N:\Finance\Audit FY2018\CAFR\Tables and Charts CAFR.xlsx NET OF ACCUMULATED DEPRECIATION. THIS FY2018 INVESTMENT IN CAPITAL ASSETS INCLUDES LAND, BUILDINGS, IMPROVEMENTS OTHER THAN (MDA Capital Assets Tab) BUILDINGS, INFRASTRUCTURE, MACHINERY AND EQUIPMENT AND CONSTRUCTION IN PROGRESS. Capital Assets (net of depreciation) (in Millions)
CAPITAL ASSETS (NET OF DEPRECIATION IN MILLIONS) Governmental Activities
Land Construction in progress Building s Infrastructure Improvements other than buildings Machinery and equipment Intangibles Total
2018 23.5 112.2 94.2 265.6 34.3 43.9 1.5 575.2
$
$
Business-type Activities
2017 23.0 70.1 96.8 271.2 34.9 46.2 1.6
$
543.8
$
2018 5.6 25.6 77.5 275.4 67.2 12.1
$
463.4
$
308.8 Capital Assets
Machinery and equipment 10%
PITCHKETTLE ROAD IMPROVEMENTS NEW CENTRAL LIBRARY NEW COLLEGE DRIVE FIRE STATION NANSEMOND PARKWAY/WILROY ROAD FLYOVER
Land 3%
457.4
Machinery and equipment 10%
Intangibles 1.4%
$
$
2018 29.1 137.8 171.7 265.6 309.7 111.1 13.6
$
1,038.6
$
2017 28.6 104.4 172.7 271.2 306.1 103.2 15.0 1,001.2
Construction in progress 10% Buildings 17%
Capital Assets
ASSETS ARE INCREASING DUE TO THE CITY’S COMMITMENT TO MAINTAINING AND ADDING TO THE INFRASTRUCTURE OF THE CITY THROUGH THE CAPITAL IMPROVEMENT PLAN. SOME OF THE IMPROVEMENTS CONTAINED IN THE CITY’S ADOPTED TEN YEAR CAPITAL IMPROVEMENT PLAN ARE AS FOLLOWS: • • • •
Intangibles 1.4%
Total
2017 5.6 34.3 75.9 271.2 57.0 13.4
Land 3%
Construction in progress 10% Buildings 17%
Improvements other than buildings 31%
Infrastructure 27%
PAGE 12
0.028018 0.132679 0.165319 0.255729 0.29819 0.106971 0.013095
DEBT ADMINISTRATION LONG-TERM DEBT: AT THE END OF THE CURRENT FISCAL YEAR, THE CITY HAD TOTAL OUTSTANDING DEBT OF $696.5 MILLION, INCLUDING GENERAL N:\Finance\Audit FY2018\CAFR\Tables and Charts FY2018 CAFR.xlsx GOVERNMENT, SCHOOL CONSTRUCTION AND UTILITY FUND DEBT. (MDA LT Debt Tab)
OUTSTANDING DEBT (IN MILLIONS)
Bonds payable Bond Premiums
Outstanding Debt (in millions)
Governmental Activities 2018 2017 262.4 $ 252.6 23.7 23.5
$
Business-type Activities 2018 2017 375.8 $ 365.0 28.6 28.7
Total $
2018 638.2 52.3
$
2017 617.6 52.2
Capital leases
3.5
6.2
0.8
1.0
4.3
7.2
Loans and notes payable
1.7
1.9
-
-
1.7
1.9
Total
291.3
$
284.2
$
405.2
$
394.7
$
696.5
$
678.9
The Commonwealth of Virginia limits the amount of general obligation debt outstanding to 10% of the locality’s assessed value of real property, which is $958.1 million for 2018. The City Charter further limits this general obligation limit to 7% of the City’s assessed value of real property or $670.7 million. Of the debt shown above, only $442.7 million is general obligation debt that is applicable to the legal debt limits. The City has met both of the legal debt limits. Achieving these limits represents the City’s conservative debt borrowing policy.
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MORE INFORMATION
The Government Finance Officers Association (GFOA) has been promoting the preparation of high quality popular annual financial reports since 1991. More than 140 governments participate in the program each year. The Popular Annual Financial Reporting Awards Program is specifically designed to encourage state and local governments to prepare and issue a high quality popular annual financial report. Popular annual financial reports can play an important role in making financial information accessible to ordinary citizens and other interested parties who may be challenged by more detailed traditional financial reports. Additional details can be found at the GFOA website: www.gfoa.org.
WE WANT TO HEAR FROM YOU Do you like this report? What other information would you like to see contained in this report? Please let us know by contacting the Finance Department at FinanceEmail@suffolkva.us, or 757-514-7500. Please see the City’s website at www.suffolkva.us, for additional information, including the City’s Comprehensive Annual Financial Report and the City Profile and Statistical Digest.
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CITY OF SUFFOLK
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