POPULAR ANNUAL FINANCIAL REPORT
CITY OF SUFFOLK, VIRGINIA FOR THE FISCAL YEAR ENDING JUNE 30, 2015
TO THE CITIZENS OF SUFFOLK IN THIS REPORT The
2015 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 user-friendly manner. The information is derived from the audited financial statements in the City’s 2015 Comprehensive Annual Financial Report (CAFR), our formal annual report.
MAYOR’S MESSAGE 2 CITY LEADERSHIP 3 SUFFOLK’S PROFILE 4 SUFFOLK PRIORITIES:
Expanded Economic Development / Public Education 5 Growth Management & Comprehensive Planning/ Transportation 6 Leisure, Health, and Wellness / Public Safety/ Civic Engagement and Responsive Citizen Services 7 Financial Stability 8
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 2015 CAFR was audited by Cherry Bekaert LLP and has received an unmodified or “clean” audit opinion.
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
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.
The Government Finance Officers Association of the United States and Canada (GFOA) has given an Award for Outstanding Achievement in Popular Annual Financial Reporting to the City of Suffolk, VA for its Popular Annual Financial Report for the fiscal year ended June 30, 2014. The Award for Outstanding Achievement in Popular Annual Financial Reporting is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government popular reports. In order to receive an Award for Outstanding Achievement in Popular Annual Financial Reporting, a government unit must publish a Popular Annual Financial Report, whose contents conform to program standards of creativity, presentation, understandability and reader appeal. We believe our current report continues to conform to the Popular Annual Financial Reporting requirements, and we are submitting it to GFOA.
This report, in a summarized version, highlights the overall financial condition and trends of the City.
FOR MORE DETAILED 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.
MAYOR’S MESSAGE Continual Improvement is the Order of the Day
Cost savings from City-driven initiatives have allowed us to make much-needed investments into our infrastructure. On behalf of the Suffolk City The new business and citizen-friendly one-stop-shop City Council, it is my pleasure Hall is convenient for both newly arriving citizens as well to present the 2015 Popular as those that have always called Suffolk home. Annual Financial Report to our citizens. Our “Progress Report It’s evident that innovation is what fuels the future of for 2015” showcases another Suffolk. And each New Year presents another twelve banner year for Suffolk as the months for this wonderful city to blaze a trail to even City continues to strive towards greater heights. The City of Suffolk, Virginia City Council excellence. We have continued Members and City Management are united in purpose our constant, focused effort to to deliver the very best service in 2016 to our citizens. steer the City of Suffolk with We hope you join us in looking forward to a 2016 where perpetual forward momentum. anything is possible in this great City! Whether it’s an emphasis on transportation, the education of our youth, new business development, or health and ~Mayor Linda T. Johnson wellness, we are increasing the pace towards our evolution from what many believed was a quaint little town into a thriving City still known for its warmth and charm. To push towards an even better City, one that performs for and meets the expectations of all, we must constantly be mindful of the past while pursuing a new vision for the future. In that progression, one of our most important achievements is keeping our financial house in order. In addition to the Triple AAA rating received last year by Standard & Poor’s, this year the Fitch Rating Agency also upgraded the City to Triple AAA status. Both agencies recognized and praised the City for its strong management, balanced budgets, and thriving economy. In fact, our sound and fiscally-responsible financial policies have enabled us to become one of only a handful of Virginia’s Triple AAA cities. Suffolk is growing. That is clear. What is also clear is that most importantly, we are growing smartly. We know that we must prepare today so that we can capably and competently address both positive and negative issues that may arise.
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 (2015: Patrick Roberts) to oversee the operations.
2014-2015 CITY COUNCIL
The Suffolk City Council recently adopted a new vision for the City which sets the course for Suffolk over the next 20 years. Vision 2035 is as follows: 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. The City will achieve this by focusing on the following Priorities, each of which will be highlighted within this report: • 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 NorfolkVirginia Beach-Newport News metropolitan area with 1.6 million people. This region is also known as the Hampton Roads area. The City’s government is organized under the Council-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 city-wide 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.
SUFFOLK’S PROFILE - FISCAL YEAR 2015 QUICK FACTS Consolidated as City of Suffolk and City of Nansemond (formerly Nansemond County)
January 1, 1974
GEOGRAPHY Land Water `
400 square miles 30 square miles
GOVERNMENT Form of Government Council-Manager Chief Elected Official Mayor 8-Member City Council 4-Year Terms Full Time Equivalent City Employees 1321
DEMOGRAPHICS* Population Unemployment Rate Per Capita Income** Median Household Income** Median Home Cost
89,586 5.2% $45,390 $66,822 $251,000
*Sources: Weldon Cooper Center for Public Service, Virginia Employment Commission, Bureau of Economic Analysis, U.S. Census Bureau. **Most recent data available for Per Capita Income and Median Household Income is Calendar Year 2014.
SUFFOLK PRIORITIES EXPANDED ECONOMIC DEVELOPMENT Suffolk is one of the fastest growing Cities 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, and was a top pick for business development in 2014.
MEDIAN HOUSEHOLD INCOME (MHI) HAS GROWN IN THE CITY BY 63% FROM 2000 TO 2014. 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 HAVE INVESTED $116 MILLION IN CREATING OR EXPANDING BUSINESS IN SUFFOLK.
NEW AND EXPANDING BUSINESS HIGHLIGHTS JANUARY 1 – DECEMBER 31, 2014 NEW BUSINESS SECTOR INVESTMENT Friant & Associates Advanced Manufacturing $17,400,000 Hampton Inn Hospitality $8,000,000 First Team Subaru Retail $7,000,000 Riverfront Shoppes Retail $6,000,000 Harbour View Health Building Office & Administrative $5,750,000 Madison Building Office & Administrative $4,600,000
EXPANDING BUSINESS SECTOR INVESTMENT Unilever Lipton Food & Beverage Processing $29,500,000 Sentara Medical $6,900,000 BASF Advanced Manufacturing $4,500,000 Walgreens Retail $4,500,000 J. M. Smucker Company Food & Beverage Processing $4,000,000 Massimo Zanetti Beverage USA Food & Beverage Processing $4,000,000 Bennetts Creek Veterinary Clinic Medical $2,015,000
9TH BEST COMMUNITY ON BEST PLACES TO LIVE TOP 25 LIST OF “WHERE THE JOBS ARE” – CNN MONEY MAGAZINE – 2012
TWO ADDITIONAL SUFFOLK PUBLIC SCHOOLS ACHIEVED FULL ACCREDITATION FROM THE VIRGINIA BOARD OF EDUCATION. SCHOOL ENROLLMENT HAS INCREASED BY 7% OVER THE LAST 10 YEARS.
Suffolk Public Schools Every Child a Star...Together We Help Them Shine! Vision: The vision of Suffolk Public Schools is that all students will become life-long learners equipped with the skills, knowledge and attitudes to succeed as productive citizens in a local, national and global society.
SUFFOLK MIDDLE SCHOOLS SAW AN INCREASE IN STUDENTS PASSING THE STATE’S STANDARDS OF LEARNING (SOL) TEST FROM 76% TO 80% AND HIGH SCHOOLS SAW AN EVEN BIGGER JUMP, FROM 59% TO 77%!
THE ECONOMY OF SUFFOLK IS CONTINUING TO GROW AS EVIDENCED BY THE FOLLOWING TRENDS: • Unemployment is 5.2%, down from 6.0% in the previous year. • Median Home sales price is $251,000, up from $247,800 last year. • Median Household Income is $66,822, up from 66,085 last year.
THE CITY COUNCIL AND CITY MANAGEMENT PLACE A HIGH PRIORITY ON EDUCATION IN THE CITY; OVER THE NEXT FIVE YEARS, APPROXIMATELY $53 MILLION HAS BEEN APPROPRIATED OR PLANNED FOR IN THE CAPITAL IMPROVEMENTS PLAN TO BUILD A NEW ELEMENTARY AND A NEW MIDDLE SCHOOL.
GROWTH MANAGEMENT & COMPREHENSIVE PLANNING
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 2015 Accomplishments
• Increased transit ridership by 11.3% in calendar year 2014. • Instituted pilot transit routes for Northern Suffolk and for connector service between Downtown, Chesapeake and North Suffolk. The latter service also provides a critical connection to transit service for the Hampton Roads region. • Recognized as One of the Top 100 Best Fleets - Government Fleet Magazine - 2012
Growth Management and Comprehensive Planning
By 2040, we expect to see an increase in population by 48%.
The City Council has adopted the 2015 Suffolk has many unique City of Suffolk Comprehensive Plan neighborhoods, beautiful natural entitled Suffolk 2035: A Vision for the landscapes and small-town charm. The Future. City faces the challenge of maintaining these and other valued assets while Suffolk features many development experiencing sustained growth. This types and character types, from dense, desire to accommodate growth while walkable urban neighborhoods, to preserving Suffolk’s special features riverside communities and rural has prompted the City to address villages. The plan emphasizes service provisions, connectivity, enhancing existing character and environmental protection, and the promoting quality new development. quality of life and traditions as the City continues to grow and develop. Through the proficient management of residential and commercial 334 New Residential Building Permits development, the City continues to were issued in calendar year 2014. offer families and businesses plenty of Significant capacity of 5,471 approved, room to live, work and play. but yet un-built, residential units have potential to absorb approximately 13 Over the past 14 years, the population years of forecasted residential demand. in Suffolk has grown by 40.7%. This population trend is projected to Upcoming Capital Project: Public continue over the foreseeable future. Works Operational and Maintenance Facility.
SUFFOLK PRIORITIES The City of Suffolk, Virginia continues to be ranked as among the best places in the United States to live, work, play and more. Here are a few of the City’s fiscal year 2015 accomplishments: LEISURE, HEALTH & WELLNESS • Suffolk was ranked 19th on the list of Best Cities for Young Families in Virginia for 2015 by NerdWallet, a personal finance site for consumers. Among factors considered were home affordability, prosperity and growth, quality of education, and family friendliness. Suffolk had the 2nd highest ranking in the top 20 when it comes to family income growth from the period of 1999-2013 with a growth rate of 65.95 percent. • NerdWallet also named Suffolk the 15th Best City for Veterans in the Nation for 2015 as a result of its strong economic indicators and robust veteran community. • Conceptualized, coordinated and produced the First Annual Suffolk Mystery Authors Festival. • Hosted the First Hampton Roads LogistiXGames in Suffolk. Completed and Upcoming Capital Projects: • Whaleyville Community Center • Sleepy Hole Park Renovation • Trail Enhancements • Bennett’s Creek Recreation Center
One of America’s Best Small Cities to Live - CNN Money Magazine 2010 PUBLIC SAFETY • Implemented a new Police Body Camera Program. • Revitalized Child Safety Seat Program for our citizens Completed and Upcoming Capital Projects: • Fire Station 1 Renovations • Aerial Ladder Truck
CIVIC ENGAGEMENT & RESPONSIVE CITY SERVICES • The Suffolk Public Library was awarded the Innovative Outreach Award and the Outstanding Website Award by the Virginia Public Library Directors Association (VPLDA). The Innovative Outreach Award was given specifically for the work Suffolk Public Library is doing with their Pop-Up Library. The Pop-Up Library allows Suffolk Public Library to expand access to services by setting up temporary locations throughout the community, increase awareness of what the library has to offer and reach out to citizens who may not typically use the traditional library locations. • Implemented Libraries Transforming Communities initiative by hosting Community Conversations in different areas of the city with a diverse audience. • Coordinated the 2014 National Night Out celebration and was awarded the top national honor for our population category marking the third time the City of Suffolk has been first in the nation (2008, 2009, and 2014) and the ninth (9th) straight year the City of Suffolk has placed in the top five in the Nation for National Night Out. • Received a 2015 Silver Award of Distinction from The Academy of Interactive and Visual Arts for the City’s Popular Annual Financial Report (PAFR) for fiscal year 2014. This was the first year that the City had prepared the PAFR. • 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 fiscal year ended June 30, 2014.
SUFFOLK PRIORITIES 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%. The City has exceeded this target by 3.3% for FY2015.
Other Fiscal Year 2015 Accomplishments
• For the second year in a row, the City of Suffolk has achieved a rating of AAA on the City’s General Obligation (GO) Bonds. Fitch Ratings is now the second agency to have bestowed this coveted designation upon the City, and they’ve upgraded the rating on $252.5 million in City GO Bonds to AAA from AA+. Fitch also assigned the AAA rating to approximately $42.58 million GO and Refunding Bonds Series 2015. This rating increase follows the City’s very first AAA rating upgrade, which was made by Standard & Poor’s Rating Service in 2014. • Achieved a current 3-year combined real estate and personal property tax collection rate of 99.85%. • The Real Estate tax rate of $1.03 per $100 of assessed value is the 2nd lowest in the region.
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, Virginia for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2014, representing the thirty-first 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, Virginia for its annual budget for the fiscal year beginning July 1, 2014. 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 seventh consecutive year for this recognition as it is valid for a one year period.
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.
WHERE THE MONEY COMES FROM When assessing the financial results of the City, it is important that we focus on the Cityâ€™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. 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) FYE 06/30/15
General Fund Revenue By Source (In Millions)
FY Ending FY Ending 06/30/2014 Revenue by Source: FY Ending FY Ending 06/30/2015 06/30/2014$ 06/30/2015 Revenue by Source: Real Estate and Personal Property Taxes 108.3 $ 110.6 Real Estate andTaxes Personal Property Taxes $ 108.3 $ 110.6 Other Local 36.1 39.7 Other Local Taxes 36.1 39.7 Permits,Fees Fees Regulatory 1.0 1.1 Permits, andand Regulatory LicensesLicenses 1.0 1.1 Fines and forfeitures 0.9 1.0 Fines and forfeitures 0.9 1.0 Revenue from Use of Money and Property 0.6 0.6 Revenue from Use of Money and Property 0.6 0.6 Charges for Services 3.5 3.6 Charges for Services 3.5 3.6 Miscellaneous 1.2 1.3 Miscellaneous 1.2 1.3 State Revenue 20.0 19.8 Federal Revenue 5.0 5.0 State Revenue 20.0 19.8 Total Revenues $ 176.6 $ 182.7 Federal Revenue 5.0 5.0 Total Revenues $ 176.6 $ 182.7 General Fund Revenue By Source (In Millions)
THE CITY OF SUFFOLK HAS A VARIETY OF SOURCES OF REVENUES TO FUND OPERATIONS. THE LARGEST GENERAL FUND REVENUE SOURCES ARE REAL ESTATE AND PERSONAL PROPERTY TAXES, FOLLOWED BY OTHER LOCAL TAXES AND STATE REVENUE. General Property Tax Revenue 120
100 Permits, Fees and Fines and forfeitures, Regulatory Licenses, $1.0 - 0.5% $1.1 - 0.6% Other Local Taxes, Revenue from Use of $39.7 - 21.7% Permits, Fees and Money and Property,
80 60 40
Regulatory Licenses, $1.1 - 0.6% Other Local Taxes, $39.7 - 21.7%
Charges for Services, $3.6 - 2.0% Miscellaneous, $1.3 - 0.7%
Source: Comprehensive Annual Financial Reports 2006 - 2015
The chart above indicates the growth in the General Property Taxes revenue over the past ten years. The increase in the real estate and personal property taxes is due to both increased assessed value and growth and development within the City.
Fines forfeitures, $0.6and - 0.3% $1.0 - 0.5%
State Revenue, $19.8 - 10.8% Real Estate and Personal Property Taxes, $110.6 - 60.5%
Charges for Serv $3.6 - 2.0%
Federal Revenue, $5.0 - 2.7% Miscellaneous,
Real Estate and IN TOTAL, 2015 REVENUE INCREASED Personal Property BYTaxes, $6.1 MILLION WHEN COMPARED $110.6 - 60.5% TO 2014.
THE FY15 REAL ESTATE TAX RATE OF $1.03 PER $100 OF ASSESSED VALUE IS THE 2ND LOWEST IN THE REGION. IN FY16 THE CITY RAISED THE TAX RATE TO $1.07 PER $100 OF ASSESSED VALUE TO PROVIDE ADDITIONAL FUNDING TO THE SCHOOLS. THE RATE STILL REMAINS ONE OF THE LOWEST IN THE REGION.
Revenue fro Money and $0.6 - 0
$1.3 - 0.7%
State Revenue, $19.8 - 10.8%
Federal Reve $5.0 - 2.7
General Fund Expenditures by Function (In Millions) FY Ending FY Ending 06/30/2014 06/30/2015 Expenditures by Function: General Government Administration $ 14.0 $ 14.8 Judicial Administration 7.3 7.6 Public Safety 48.0 49.0 Public Works 1.3 0.9 Health and Welfare 12.9 12.8 Once the City collects taxes and other revenues, the monies must be spent efficiently to provide services Education 49.1 51.1 to the citizens and businesses of the City. As this Parks, section further detail,7.8the City Recreationwill and Cultural 9.0 provides a variety of Community Development 7.6 8.6 services to its residents and businesses. Nondepartmental 0.5 1.8 Total Expenditures $ 148.5 $ 155.6
WHERE THE MONEY GOES
GENERAL FUND EXPENDITURE BY FUNCTION (IN MILLIONS) FYE 06/30/15 General Fund Expenditures by Function (In Millions) FY Ending FY Ending 06/30/2014 06/30/2015 Expenditures by Function: General Government Administration $ 14.0 $ 14.8 Judicial Administration 7.3 7.6 Public Safety 48.0 49.0 Public Works 1.3 0.9 Health and Welfare 12.9 12.8 Education 49.1 51.1 Parks, Recreation and Cultural 7.8 9.0 Community Development 7.6 8.6 Nondepartmental 0.5 1.8 Total Expenditures $ 148.5 $ 155.6
EDUCATION IS A TOP PRIORITY FOR THE CITY AS EVIDENCED BY THE FACT THAT IT IS THE LARGEST BUDGETED GENERAL FUND EXPENDITURE IN FY15 AND INCREASED BY $2 MILLION OVER FY14 EXPENDITURES.
The City is committed to ensuring the highest level of safety for its citizens and has expended $49 million towards Public Safety efforts in FY15, which represents an increase of $1 million over FY14 expenditures. Other increases are attributable to new Parks and Recreation programs and a growth in Economic Development incentive payments for new and expanding businesses and education.
Annually, the City Manager submits a Budget for City Councilâ€™s adoption. The proposed budget must not include expenditures that exceed estimated opening balances 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 Cityâ€™s ability to deliver services more efficiently and effectively.
The City’s combined net position (which is the City’s “bottom line”) increased by $9.7 million in fiscal year 2015, of which approximately 1.4% represents resources that are subject to external restrictions or enabling legislation.
THE CITY HAS A SOLID FINANCIAL POSITION WITH 12.8% OF NET POSITION, The Statement of Net Position presents information OR $65.8 MILLION, AS UNRESTRICTED. THE on all City The assets and deferred outflows of resources, Statement of Net Position presents information on all City assets and deferred outflows of UNRESTRICTED PORTION OF NET POSITION IS and liabilities and deferred inflows of resources, resources, and liabilities and deferred inflows with of resources, with the difference reported as net AVAILABLE TO ALLOW THE CITY TO PROVIDE the difference reported asisnet position. This data is position. This data inclusive of all the activities of the City but does not include City SERVICES TO CITIZENS. inclusive ofcomponent all the activities the City but does not the units. Netof position is one way to measure City’s financial health, or financial include City component units. Net position is one position. way to measure the City’s financial health, or financial position. Net Position
NET POSITION (IN MILLIONS)
(In Millions) Governmental Activities Business-type Activities 2015 2014* 2015 2014* Current and other assets $ 160.2 $ 152.9 $ 49.3 $ 60.5 Capital and other non-current assets 525.2 503.2 466.9 441.4 Total assets 685.4 656.1 516.2 501.9 Deferred Outflows of Resources
Total 2015 2014* 209.5 $ 213.4 992.1 944.6 1,201.6 1,158.0
45.6 274.1 319.7
52.2 257.1 309.3
31.5 342.7 374.2
18.3 332.2 350.5
77.1 616.8 693.9
70.5 589.3 659.8
Deferred Inflows of Resources
Net position: * Net investment in capital assets Restricted Unrestricted Net position
312.4 5.0 44.9 362.3
290.3 9.6 46.6 346.5
125.5 2.2 20.9 148.6
145.1 2.1 7.5 154.7
437.9 7.2 65.8 510.9
435.4 11.7 54.1 501.2
Current and other liabilities Long-term liabilities Total liabilities
* Net position for 2014 restated due to implementation of GASB No.'s 68 and 71
Net investment in Capital Assets (land, buildings, infrastructure, improvements, machinery and equipment, less accumulated and related debt usedmillion, to acquire those assets) of $437.9 million The City has a solid depreciation financial position with 12.8% outstanding of net position, or $65.8 as unrestricted. The unrestricted comprises ofisthe net position. nottoavailable portion of net85.7% position available to allow theThese City to assets provide are services citizens. for future spending because they are assets used 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 $437.9 million comprises 85.7% of the net position. These assets are not available for future spending because they are assets used to provide services THE CITY’S to citizens. COMBINED NET
POSITION (WHICH IS THE CITY’S “BOTTOM LINE”) INCREASED BY $9.7 MILLION IN FISCAL YEAR 14 2015, OF WHICH APPROXIMATELY 1.4% REPRESENTS RESOURCES THAT ARE SUBJECT TO EXTERNAL RESTRICTIONS OR ENABLING LEGISLATION.
The City’s capital assets for its governmental and business-type activities as of June 30, 2015, totaled $992.1 million, net of accumulated depreciation. This investment in capital assets includesASSETS land, buildings, improvements other than buildings, ACTIVITIES AS THE CITY’S FOR ITSgovernmental GOVERNMENTAL AND BUSINESS-TYPE TheCAPITAL City’s capital assets for its and business-type machinery and equipment and construction in OF JUNE activities 30,infrastructure, 2015,asTOTALED $992.1 MILLION, NET OF ACCUMULATED DEPRECIATION. THIS of June 30, 2015, totaled $992.1 million, net of INVESTMENT IN CAPITAL ASSETS INCLUDES LAND, BUILDINGS, IMPROVEMENTS OTHER progress. accumulated depreciation. This investment in capital assets
THAN BUILDINGS, INFRASTRUCTURE, MACHINERY AND EQUIPMENT AND CONSTRUCTION IN includes land, buildings, improvements other than buildings, PROGRESS. Assets infrastructure, machineryCapital and equipment and construction in CAPITALprogress. ASSETS Capital Assets
(net of depreciation) Capital Assets (in Millions)
Capital AssetsActivities Governmental (net of depreciation) 2015 2014 (in Millions)
Land $ 22.9 $ Construction in progress 28.8 Governmental Activities Buildings 96.7 2015 2014 Land $ 22.9 $ 295.622.9 Infrastructure Construction in progress Improvements other than buildings 28.8 34.593.9 Buildings 96.7 47.6 Machinery and equipment 45.4 Infrastructure 295.6 286.5 Intangiblesother than buildings 1.319.2 Improvements 34.5 Machinery and equipment Intangibles Total
45.4 1.3 $
MachineryCapital and Assets
Machinery and equipment equipment 10% 10%
2015 2014 22.9 $ 5.6 $ 5.6 93.9 71.7 99.2 Business-type Activities Total 47.6 77.9 2015 2014 2015 58.3 $ 286.55.6 $ 5.6 28.5 $- $ 71.7 99.2 100.5 19.2 252.0 225.9 77.9 58.3 174.6 31.359.7 52.3 295.6 1.2 252.0 225.9 286.5 52.3
466.9 $ 441.3 $
105.1 1.3 441.3
2014 28.5 193.1 105.9 286.5 245.1 83.6 $ 1.2
2015 28.5 $ 100.5 174.6 295.6 286.5 105.1 1.3
2014 28.5 193.1 105.9 286.5 245.1 83.6 1.2
Land Construction 308.8 in
Land Construction 308.8 in progress 3% progress 3% 10% 10% Buildings 18%
Improvements Improvements other than other than buildings buildings 29%
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: • NEW ELEMENTARY SCHOOL • NEW MIDDLE SCHOOL • FIRE STATION 1 RENOVATIONS • PUBLIC WORKS OPERATIONS AND MAINTENANCE FACILITY • BENNETT’S CREEK RECREATION CENTER
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: • • • • •
New Elementary School New Middle School Fire 15Station 1 Renovations Public Works Operations and Maintenance Facility 15 Bennett’s Creek Recreation Center
DEBT ADMINISTRATION LONG-TERM DEBT: AT THE END OF THE CURRENT FISCAL YEAR, THE CITY HAD TOTAL OUTSTANDING DEBT OF $569.6 MILLION.
OUTSTANDING DEBT (IN MILLIONS) Bonds payable
Outstanding Debt (in millions) Governmental Activities 2015 2014 $ 231.0 $ 220.0
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 $883.0 MILLION FOR 2015. THE CITY CHARTER FURTHER LIMITS THIS GENERAL OBLIGATION LIMIT TO 7% OF THE CITY’S ASSESSED VALUE OF REAL
Business-type Activities 2015 2014 323.4 $ 309.6 1.4
PROPERTY OR $618.1 MILLION. OF THE DEBT SHOWN ABOVE, ONLY $449.5 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.
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 GFAO website: www.gfoa.org.
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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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