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Transcript of 2010 Comprehensive Annual Financial Report
City of SuffolkVirginia
ComprehensiveAnnual Financial Reportfor the fiscal year ended June 30, 2010
iii
City of Suffolk, Virginia
Official Directory
June 30, 2010
City Council
Linda T. Johnson, Mayor Leroy Bennett, Councilman
Curtis R. Milteer, Sr., Vice Mayor Charles F. Brown, Councilman
Robert C. Barclay IV, Councilman Jeffrey L. Gardy, Councilman
Joseph H. Barlow, Councilman Charles D. Parr, Sr., Councilman
Constitutional Officers
Raleigh H. Isaacs, Sheriff Ronald H. Williams, City Treasurer
C. Phillips “Phil” Ferguson, Commonwealth’s Attorney W. Randolph Carter, Jr, Clerk of
Thomas A. Hazelwood, Commissioner of the Revenue the Circuit Court
City Administration
Selena Cuffee-Glenn, City Manager Sherry Hunt, Chief of Staff
Patrick Roberts, Deputy City Manager Sid Daughtrey, City Assessor
C. Edward Roettger, Jr., City Attorney Erika S. Dawley, City Clerk
Kevin Hughes, Economic Development Anne Seward, Budget
Gerry Jones, Capital Programs and Buildings Dale M. Walker, Finance
Captain James T. Judkins, Emergency Management Mark R. Outlaw, Fire and Rescue
Dr. Lisa McCoy, Health Ronnie Charles, Human Resources
Elliott A. Drew, Library Thomas E. Bennett, Police
Debbie George, Media and Community Relations Lakita Frazier, Parks and Recreation
D. Scott Mills, Planning and Community Development Albert S. Moor, II Public Utilities
Eric T. Nielsen, Public Works Leonard Horton, Social Services
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City of Suffolk, Virginia
Official Directory
June 30, 2010
Suffolk Public Schools – School Board
Lorraine B. Skeeter, Chairwoman Diane B. Foster, Board Member
William L. Whitley, Vice Chairman Thelma V. Hinton, Board Member
Phyllis C. Byrum, Board Member Enoch C. Copeland, Board Member
Michael J. Debranski, Ed. D., Board Member Cynthia B. Chavis, Clerk
Suffolk Public Schools – Administration
Milton R. Liverman, Ed.D., School Superintendent (retired June 30, 2010)
Deran R. Whitney, Ed.D, Interim School Superintendent – July 1, 2010 thru December 31, 2010
Michael K. Brinkley, Executive Director of Finance
Judges
Circuit Court
Westbrook J. Parker, Chief Judge
Rodham T. Delk, Jr, Judge Carl Edward Eason, Jr. Judge
General District Court
James A. Moore, Chief Judge
William R. Savage, III, Presiding Judge
Juvenile and Domestic Relations Court
Alfreda Talton-Harris, Chief Judge Robert S. Brewbaker, Jr. Judge
Dale M. WalkerDirector of FinanceCity of Suffolk, Virginia
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CITY OF SUFFOLK, VIRGINIA
Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2010
TABLE OF CONTENTS
PageINTRODUCTORY SECTION
Title Page i
Official Directory iii-iv
Table of Contents v-viii
Letter of Transmittal ix-xvi
Organizational Chart xvii
Certificate of Achievement for Excellence in Financial Reporting preface of back cover
FINANCIAL SECTION
Independent Auditors’ Report 1-2
Management’s Discussion and Analysis 3-14
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements:
Exhibit 1 Statement of Net Assets 19
Exhibit 2 Statement of Activities 20-21
Fund Financial Statements:
Exhibit 3 Balance Sheet–Governmental Funds 25
Exhibit 4 Reconciliation of the Balance Sheet of the Governmental Funds to the Statement of Net Assets 26
Exhibit 5 Statement of Revenues, Expenditures and Changes in Fund Balances–Governmental Funds 27
Exhibit 6 Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 28
Exhibit 7 Statement of Net Assets—Proprietary Funds 29
Exhibit 8 Statement of Revenues, Expenses and Changes in Net Assets—Proprietary Funds 30
Exhibit 9 Statement of Cash Flows—Proprietary Funds 31
Exhibit 10 Statement of Net Assets—Fiduciary Funds 32
Exhibit 11 Statement of Changes in Fiduciary Net Assets - OPEB Trust Fund 33
Notes to Financial Statements 35-81
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CITY OF SUFFOLK, VIRGINIA
Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2010
TABLE OF CONTENTS (CONTINUED)
Page
FINANCIAL SECTION (CONTINUED)
REQUIRED SUPPLEMENTARY INFORMATION:
Exhibit 12 Schedule of Revenues, Expenditures and Changes in Fund Balances—Budget and Actual—General Fund 85-88
Exhibit 13 Schedule of Funding Progress for the Virginia Retirement System and OPEB 89
OTHER SUPPLEMENTARY INFORMATION:
Combining and Individual Fund Statements and Schedules
Exhibit 14 Schedule of Revenues, Expenditures and Changes in Fund Balance – 93Budget and Actual – Debt Service Fund
Exhibit 15 Schedule of Current Capital Projects—Capital Projects Fund 97-98
Exhibit 16 Schedule of Current Capital Projects—Utility Fund 99-100
Exhibit 17 Combining Balance Sheet—Nonmajor Governmental Funds 102-103
Exhibit 18 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances—Nonmajor Governmental Funds 104-105
Exhibit 19 Schedule of Revenues, Expenditures and Changes in Fund Balances—Budgetand Actual—Nonmajor Governmental Funds 106-107
Exhibit 20 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets—Nonmajor Proprietary Funds 111
Exhibit 21 Combining Statement of Net Assets—Internal Service Funds 115
Exhibit 22 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets—Internal Service Funds 116
Exhibit 23 Combining Statement of Cash Flows—Internal Service Funds 117
Exhibit 24 Combining Statement of Fiduciary Net Assets—Agency Funds 121
Exhibit 25 Combining Statement of Changes in Assets and Liabilities—Agency Funds 122
Exhibit 26 Combining Balance Sheet—Governmental Funds—Discretely Presented Component Unit School Board 124
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CITY OF SUFFOLK, VIRGINIA
Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2010
TABLE OF CONTENTS (CONTINUED)
Page
FINANCIAL SECTION (CONTINUED)
OTHER SUPPLEMENTARY INFORMATION: (CONTINUED)
Combining and Individual Fund Statements and Schedules: (Continued)
Exhibit 27 Combining Statement of Revenues, Expenditures and Changes in Fund Balances—Governmental Funds—Discretely Presented Component UnitSchool Board 125-
Exhibit 28 Budgetary Reconciliation Schedule—Governmental Funds—DiscretelyPresented Component Unit School Board 126-127
Exhibit 29 Schedule of Revenues, Expenditures and Changes in Fund Balances—Governmental Funds—Budget and Actual—Discretely Presented Component 128-129Unit School Board
Exhibit 30 Statement of Net Assets—Fiduciary Funds—Discretely Presented Component 130Unit School Board
Exhibit 31 Statement of Changes in Fiduciary Net Assets - OPEB Trust Fund— 131Discretely Presented Component Unit School Board
Exhibit 32 Statement of Changes in Assets and Liabilities—Agency Funds—DiscretelyPresented Component Unit School Board 132
STATISTICAL SECTION:
Statistical Tables
Table 1 Net Assets by Component 135
Table 2 Changes in Net Assets 136-137
Table 3 Fund Balances, Governmental Funds 138-139
Table 4 Changes in Fund Balances, Governmental Funds 140-141
Table 5 Tax Revenues by Source, Governmental Funds 142-143
Table 6 Assessed and Estimated Actual Value of Taxable Property 144-145
Table 7 Property Tax Rates (Per Hundred) 147
Table 8 Principal Property Taxpayers 148
Table 9 Property Tax Levies and Collections 149
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CITY OF SUFFOLK, VIRGINIA
Comprehensive Annual Financial Report For The Fiscal Year Ended June 30, 2010
TABLE OF CONTENTS (CONTINUED)
Page
STATISTICAL SECTION: (CONTINUED)
Statistical Tables: (Continued)
Table 11 Ratios of Net General Bonded Debt Outstanding 152
Table 12 Direct Governmental Activities Debt 153
Table 13 Legal Debt Margin 154-155
Table 14 Utility Fund Bond Coverage 157
Table 15 Demographic and Economic Statistics 158
Table 16 Principal Employers 159
Table 17 Full-Time Equivalent City Government Employees by Function/Program 160-161
Table 18 Operating Indicators by Function/Program 162-163
Table 19 Capital Asset Statistics by Function/Program 164
Table 20 Property Value, Construction and Bank Deposits 165
Table 21 Principal Commercial/Industrial Water and Sewer Consumers 166
COMPLIANCE SECTION:
Report on Internal Control Over Financial Reporting and on Compliance and OtherMatters Based on an Audit of Financial Statements Performed in Accordancewith Government Auditing Standards 167-168
Report on Compliance with Requirements that Could Have a Direct and Material Effectto Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 169-170
Schedule of Expenditures of Federal Awards 171-173
Notes to Schedule of Expenditures of Federal Awards 174
Schedule of Findings and Questioned Costs 175
Summary Schedule of Prior Audit Findings 176
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CITY OF SUFFOLKP.O. BOX 1858, SUFFOLK, VIRGINIA 23439-1858 PHONE: (757) 514-4012
CITY MANAGER
December 15, 2010
The Honorable Council City of Suffolk, Virginia
Dear Council Members:
The Comprehensive Annual Financial Report (CAFR) for the period of July 1, 2009 through June 30, 2010 is hereby submitted. The code of the Commonwealth of Virginia and the City of Suffolk Charter requires an annual financial audit. Responsibility for accuracy of the presented data as well as the completeness and fairness of the CAFR presentation, including the disclosures, rests with the City. Included are the results of operations and cash flows of its proprietary funds as measured by the financial activity of its various funds. The CAFR includes all disclosures necessary to enable the reader to gain the maximum understanding of the City’s financial affairs.
Consideration is given to the adequacy of internal accounting controls when developing and implementing the City’s accounting system. The City is responsible for establishing and maintaining internal controls designed to ensure that the assets of the City are protected from loss, theft or misuse. The City also ensures that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with accounting principles generally accepted in the United States. Internal control is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that first, the cost of a control should not exceed the benefits likely to be derived and secondly, the valuation of costs and benefits requires estimates and judgments by management. We assert to the best of our knowledge this CAFR is complete and reliable in all material aspects.
According to Section 8.08 of the City Charter and Section 15.2-2511of the 1950 Code of Virginia, as amended, an annual audit by an independent auditor of the City finances is required. The City of Suffolk’s financial statements have been audited by Robinson, Farmer, Cox Associates, CPA’s. An independent audit is designed to provide reasonable assurance that financial statements are free of material misstatements and as of June 30, 2010 the CAFR reflects this position. The independent audit involved examining on a statistactical test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. As presented in the financial section, the independent auditor concluded, based on their audit, that there
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was a reasonable basis for issuing an unqualified opinion on the City of Suffolk’s financial statements for the fiscal year ended June 30, 2010. In addition, they felt the financial statements were presented fairly and in conformance with accounting principles generally accepted in the United States.
The audit included and was part of a broader federally mandated “Single Audit” designed to meet the special needs of federal grants. The standards governing single audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the City’s internal control and compliance with legal requirements, with special emphasis on those involving the administration of federal awards. The analysis by the auditors is included in the CAFR under the tab Single Audit Section.
Management, according to the Generally Accepted Accounting Principles (GAAP), is required to provide a narrative, introduction, overview, and analysis to accompany the basic financial statements with a Management’s Discussion and Analysis (MD&A). The letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A is within the financial section tab following the independent auditor’s opinion.
Profile of the Government
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 areas and one of the top ten in land area in the nation. The City is situated in the western portion of Hampton Roads, Virginia’s coastal plain area, and is bounded 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 Beach-Newport News metropolitan area with 1.6 million people. It is also known as the Hampton Roads area.
The City’s government is organized under the Council-Manager form of government. The governing body, City Council, is composed of seven members and a Mayor who develop policies for the administration of the City. The Mayor and Council are 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, directs business procedures. The City Manager also appoints and removes the directors of all departments and all employees of those departments under his/her control.
The School Board is elected by borough. Under Virginia law all operations of the School Board are completely independent of City Council and the City Administration. City Council is required to make an annual appropriation to the School Board based upon an approved budget, but has no authority to direct how such appropriation is expended.
The City of Suffolk provides a full range of municipal services authorized by statue or charter. This includes 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 services.
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The funds and entities related to the City of Suffolk included in the City’s CAFR are controlled by or dependent on the City. Determination of “controlled by or dependent on” is based on criteria developed by the Governmental Accounting Standards Board. The criteria deal with existence as an organized entity, governmental character, and substantial autonomy. Based on these criteria, the various funds of the City shown in the Table of Contents are included in this report. Since the School System is fiscally dependent on the City, the financial statements of the Suffolk City School System are included as a component unit of the City in accordance with Governmental Accounting Standards Board Statement No. 14. The Economic Development Authority has also been included as a component unit of the City due to the fiscal relationship which exists for the Northgate Commerce Park, Suffolk Industrial Park, the Hilton Garden Inn Hotel and Suffolk Conference Center, and the Health and Human Services building as well as other initiatives designed to foster economic activity in the City, in accordance with Governmental Accounting Standards Board Statement No. 14. Excluded as a component unit are the Suffolk Redevelopment and Housing Authority, the Western Tidewater Regional Jail Authority, and the Western Tidewater Water Authority which are not controlled by or dependent on the City.
The City maintains budgetary controls, the objective of which is to ensure compliance with the legal provisions embodied in the annual appropriated budget approved by City Council. Budgetary control is maintained at the expenditure level of each department using an encumbrance accounting system. Open encumbrances are reported as reservations of fund balance at June 30, 2010. A description of the procedures utilized to establish budgetary data is presented in the Notes to Required Supplementary Information of this report.
Economic Activity
The City of Suffolk has experienced a strong increase in population and is expected to go through a higher growth rate in the next 20 years than it experienced during the previous two decades, according to the Hampton Roads Planning District Commission. As seen by the chart below by 2034 the population is anticipated to double. Population grew by 58% between 1990 and 2008 and is projected to grow an additional 246% by 2034.
Suffolk is one of the fastest growing cities and is home to some of the fastest growing companies. With easy access to regional highways, international and general aviation airports, and the Port of Virginia, Suffolk has become a prime location for business development. Add in the commitment of strong city leadership and you’ll understand why more than $1 billion in new capital investment, for major new and expanding commercial projects, have taken place
Source: Hampton Roads Planning District Commission and the Virginia Employment Commission
020,00040,00060,00080,000
100,000120,000140,000160,000180,000200,000
1980 199 0 2000 2003 2008 2010 2020 2030 2034
Suffolk Population Growth and Projections
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in the community since 2000. As a result, more than 8,400 new jobs have been created. Suffolk is sending the message that we are open for business, for businesses large and small.
Suffolk’s economic viability remains strong due to its well diversified and growing industry base. Concentrated areas for growth in the City include: Warehousing and Distribution, Food Processing, Manufacturing, Hospitality, Retail, Medical Services and Modeling and Simulation. These sectors experienced growth and expansions in calendar year 2009. As a whole in 2009, new and expanding businesses invested more than $112 million in the city, announcing more than 510 new jobs.
Suffolk’s proximity to a skilled workforce and affordable land costs has been an attraction for manufacturing firms searching for new operation locations. During calendar year 2009 we saw this development continue when Cobham Composite Products expanded their operations to Suffolk. A manufacturer of composite parts for the aerospace and defense industry, Cobham leased 72,500 square-feet and will create over 200 new jobs over a five year period. Suffolk’s proximity to the Port of Virginia continues to attract companies in the distribution industry. Houff Logistics started operating from their new 28,000 square-foot facility near Northgate Commerce Park in 2009. They specialize in dry truckload freight distribution along the Mid-Atlantic Region. Northgate 10 was constructed to provide additional space for distribution companies. Northgate 10, a new dock level warehouse was completed providing over 51,000 square-feet of space for future distribution firms. Long-time Suffolk companies, Pepsi, Sysco Foods of Hampton Roads and Supreme Foods all saw expansions in calendar year 2009.
Suffolk is now home to more Modeling and Simulation companies. Northrop Grumman expanded in Suffolk, moving into a new three-story 27,400 square-foot building. The company consolidated employees from three other existing offices throughout the region, as part of this project. Suffolk's Virginia Modeling, Analysis and Simulation Center (VMASC) Accelerator welcomed two new companies to Suffolk, Alelo and Command Post Technologies.
Suffolk also experienced an expansion in the Medical sector giving citizens more variety for quality healthcare. Riverfront Family Medicine and Specialty Care, North Suffolk Family Medicine, and Children's Hospital of the King's Daughters opened practices in Suffolk in 2009. The Obici Healthcare Foundation broke ground on a new 7,000 square-foot facility. The seeds of the Foundation were planted by Amedeo Obici, founder of Planters Peanuts and Louise Obici Hospital. The foundation was established to oversee the funds Amedeo Obici left after his death for healthcare well being in Suffolk and the surrounding area. Calendar year 2009 major new and expanding businesses were as follows:
Business Highlights 2009
New Business Sector Investment
Cobham Composite Products Manufacturing $9,000,000
Northgate 10 Distribution $5,000,000
Rt. 17 Office Park Flex $4,500,000
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East Point Plaza Redevelopment $4,100,000
AAA Service Center Retail $2,500,000
Expanding Business
Hampton Roads Sanitation District Service $36,000,000
SYSCO Foods of Hampton Roads Distribution $16,000,000
Northrop Grumman Office $5,000,000
BASF Manufacturing $3,000,000
Pepsi Bottling Group Distribution $3,000,000
Capital investments and additional new jobs are an economic boom for Suffolk from January through August 2010. New capital investments from major announcements amounted to $112,067,000 plus 510 new jobs. This compiled with the following reflects over a ten year period that $1.2 billion dollars has been invested in this community generating 7,762 new jobs.
City of Suffolk – Economic Activity
Calendar Capital Investments New Year from Announcements Jobs
2001 $132,395,000 893
2002 $111,150,000 812
2003 $120,710,000 998
2004 $78,347,000 685
2005 $121,500,000 655
2006 $99,551,000 1,141
2007 $165,167,000 1,194
2008 $163,479,000 440
2009 $101,700,000 434
2010 $112,067,000 510
Total $1,206,066,000 7,762
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Suffolk’s industry sectors have had a tremendous amount of growth from new and expanding businesses. Revitalization projects have also continued to flourish in our Downtown for office, business and retail developments. Monument Construction, Stallings & Bischoff and other private developers have contributed to this growth. East Point Plaza and West Washington Lofts transformed six dilapidated structures into highly desirable retail locations in Downtown.
From small business opportunities to multi-million dollar expansions, companies have discovered Suffolk’s affordable land, convenient location, and enthusiastic city support. By managing our residential and commercial development, we continue to offer families and businesses plenty of room to live, work and play.
Long-term Financial Planning
City Council and City Management continue their visionary process in their commitment to planning for the future of the City of Suffolk. Through a series of retreats and work sessions, City Council has established priorities as the guiding principles to move the city into the twenty-first century and to develop partnerships to further the City’s objectives. Financial planning is further extended with the aid of financial advisors for bond issues and rate consultants for utility rate analysis.
In planning for the specific initiatives under these priorities, the City’s adopted ten-year Capital Improvement Plan which represents a planned schedule of the City’s needed expenditures for physical improvements over the next decade. The Capital Improvements Plan which covers the ten-year period from fiscal year 2011 through fiscal year 2020 includes water and sewer projects totaling approximately $794.9 million. Public Utilities Fund is estimated at $284.4 million, the General Fund $504.9 million and the remainder is the Storm Water Fund.
Financial policies are vital in maintaining consistency and focus. One of the financial policies continually reviewed the fund balance levels. The ratio of unassigned General Fund balance as a percentage of budgeted Governmental Funds Expenditures and capital projects fund expenditure plus budgeted plus expenditures in the School Operating and Food Service Funds indicates the ability of the City to cope with unexpected financial challenges or emergencies. The larger the Unassigned General Fund balance, the greater the City’s ability to cope with these potential financial emergencies and fluctuations in revenue cycles. The City has established a target rate of 12% at the close of each fiscal year. At June 30, 2010 the target rate exceeded the target.
Once the Unassigned General Fund balance target is achieved by the City, it is intended to be maintained for the upcoming fiscal year from prior year surpluses and budgeted additions as available before any other needs are addressed. In the event the target percentage falls below 12% due to an emergency or due to severe economic circumstances, the City will develop a plan to restore the Unassigned Fund Balance over a three year period.
Financial policies were developed for the Utility Fund which provided for a written documentation of many of the sound business practices. Categories developed include financial independence, target percentage for unrestricted cash and long term investments, debt service coverage ratios, plus asset replacement and system extension.
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In addition, a new policy for post-issuance compliance for tax forward obligations was instituted. This was for adherence to the IRS tax codes as it relates to Build America Bonds.
Awards and Recognition
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, 2009, representing the twenty-sixth 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, 2009. 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 second consecutive year for this recognition as it is valid for a one year period.
America’s 100 Best Small Cities to Live for 2010
Suffolk has been named as one of America’s 100 best Small Cities to Live for 2010 by CNN Money Magazine. The magazine compared statistics from 746 U.S. cities with a population of 50,000 to 300,000 to make its rankings. Suffolk placed 91st and was one of only four Virginia cities to make the list. It was also the first time Suffolk had been received this esteemed recognition. Some of the factors considered in the selection included job and housing markets, quality of education, crime rate and overall quality of life including leisure and cultural activities. Learning of the prestigious designation, Mayor Linda Johnson stated, “We were thrilled to learn of Suffolk’s selection by CNN Money Magazine as one of the Top 100 Small Cities in America. We are well aware of Suffolk’s unique and diverse offerings, from its historic downtown and rich farmland to its high-tech corridor and beautiful recreational offerings. It is wonderful that others are learning what we already know: whether it’s to work, live or play…It’s a good time to be in Suffolk.”
Acknowledgments
During the year, the staff of the Finance department rendered professional and knowledgeable services to the City. We are most appreciative of these efforts and take this opportunity to recognize these outstanding public servants. They maintain the accounting records of the City on a current and timely basis and deserve special consideration.
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The City Council’s oversight of the financial affairs of the City has resulted in this strong financial report and Council is commended for the policies and practices which have made it so.
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ROBINSON, FARMER, COX ASSOCIATES
A PROFESSIONAL LIMITED LIABILITY COMPANY CERTIFIED PUBLIC ACCOUNTANTS
Independent Auditors' Report
To the Honorable Members of the City Council City of Suffolk Suffolk, Virginia We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Suffolk, Virginia, as of and for the year ended June 30, 2010, which collectively comprise the City’s basic financial statements, as listed in the table of contents. These financial statements are the responsibility of the City of Suffolk, Virginia’s management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the Specifications for Audits of Counties, Cities, and Towns, issued by the Auditor of Public Accounts of the Commonwealth of Virginia; and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Suffolk, Virginia, as of June 30, 2010 and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. As reflected in the balance sheet of the governmental funds and in the notes to the financial statements, the City has early implemented GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, effective for periods beginning after June 15, 2010. In accordance with Government Auditing Standards, we have also issued our report dated November 8, 2010, on our consideration of the City of Suffolk, Virginia’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
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The Management’s Discussion and Analysis and required supplementary information as listed in the table of contents, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Suffolk, Virginia's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules, supporting schedules and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic financial statements of the City of Suffolk, Virginia. The combining and individual nonmajor fund financial statements and schedules, supporting schedules and the schedule of expenditures of federal awards as listed in the table of contents have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. Charlottesville, Virginia November 8, 2010
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MANAGEMENT’S DISCUSSION AND ANALYSIS
This section of the City of Suffolk’s (the “City”) comprehensive annual financial report presents a discussion and analysis of the City’s financial performance during the fiscal year ended June 30, 2010. Please read this in conjunction with the transmittal letter in the front of this report and the City’s basic financial statements following this section. FINANCIAL HIGHLIGHTS
At the close of the fiscal year, the assets of the City exceeded its liabilities by $363 million (total net assets – government-wide), an $2.5 million increase from fiscal year 2009.
244.5
436.5
Assets vs. Liabilities
Total assets Total liabilities
The General Fund, on a current financial resource basis, reported revenues in excess of expenditures
and other financing sources and uses by $3.0 million.
At the end of the fiscal year, the unassigned fund balance for the General Fund was $42.3 million, an increase of $4.9 million from the prior fiscal year.
Debt transactions for 2010 were as follows:
-In April 2010, the City issued $34.1 million in General Obligation Bonds. Of the $34.1 million, $30.6 million was refunding older bonds and $3.5 was new money to support the capital budget for public safety. This bond issue has an effective interest rate of 3.38%. -In September 2009, the City issued a $495,000 capital lease for the purchase of a time and attendance system. -In June 2010, the City issued $31.9 million in water and sewer bonds. Of the $31.9 million, $27.0 million was new money to support the water and sewer capital projects and $4.9 was refunding older bonds. This bond issue has a variable interest rate.
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OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise three components: 1) Government-wide financial statements, 2) Fund financial statements, and 3) Notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide financial statements The government-wide financial statements are designed to provide the readers with a broad overview of the City’s finances in a manner similar to a private-sector business. Government-wide financial reporting consists of two statements: the Statement of Net Assets and the Statement of Activities. The statement of net assets presents information on all City assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information identifying how net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, some items of revenues and expenses are reported in this statement that will result in cash flows in future fiscal periods. In the Statement of Net Assets and the Statement of Activities, the City is divided into the following categories:
Governmental activities – Most of the City’s basic services are reported here including general government, public safety, public works, education, health and welfare, parks and recreation and economic and community development.
Business-type activities – The City’s water and sewer services are reported here as well as the City’s
golf course activity and Stormwater Utilities. These services are supported by charges for services based on use.
Component Units – The City includes two separate legal entities in its report – the Suffolk School
Board and the Economic Development Authority of the City of Suffolk. While legally separate, the City is financially accountable and provides operating and capital funding to these component units.
Fund Financial Statements Fund financial statements are groupings of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate finance-related legal compliance. Traditional users of government financial statements will find the fund financial statement presentation more familiar. The focus is now on the City’s most significant funds. The fund financial statements are divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental funds – Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on current sources and uses of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.
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OVERVIEW OF THE FINANCIAL STATEMENTS: (CONTINUED) Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains several individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures and changes in fund balances for the General, Capital Projects and Debt Service funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. Proprietary Funds – The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water and sewer operations and the activities of the Stormwater Utility Fund. Internal Service funds are an accounting mechanism used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its fleet management, information technology and insurance programs. Fiduciary Funds – The fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s programs. The accounting used for fiduciary funds is similar to that of the proprietary funds. Notes to the Financial Statements – The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found following the Basic Financial Statements section of this report. Required Supplementary Information – In addition to the basic financial statements and notes, this report also presents budgetary comparison schedules, a schedule of funding progress and employer contributions and notes to the required supplementary information. Other Supplementary Information – This report also presents combining and individual fund statements and schedules.
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GOVERNMENT-WIDE FINANCIAL ANALYSIS Statement of Net Assets The following table reflects the condensed statement of net assets:
2010 2009 2010 2009 2010 2009
Current and other assets $ 113.2 $ 120.6 $ 46.6 $ 47.8 $ 159.8 $ 168.4
Capital and other non-current assets 323.3 321.1 348.4 331.0 671.7 652.1
Total assets $ 436.5 $ 441.7 $ 395.0 $ 378.8 $ 831.5 $ 820.5
Current and other liabilities $ 13.3 $ 14.5 $ 11.7 $ 7.4 $ 25.0 $ 21.9
Long-term liabilities 231.2 236.2 211.9 197.2 443.1 433.4
Total liabilities $ 244.5 $ 250.7 $ 223.6 $ 204.6 $ 468.1 $ 455.3
Net assets:
Invested in capital assets, net of
related debt $ 115.7 $ 129.6 $ 163.6 $ 171.3 $ 279.3 $ 300.9
Restricted net assets 0.4 0.4 1.5 - 1.9 0.4
Unrestricted net assets 75.9 61.0 6.3 2.9 82.2 63.9
Total net assets $ 192.0 $ 191.0 $ 171.4 $ 174.2 $ 363.4 $ 365.2
Total liabilities and net assets $ 436.5 $ 441.7 $ 395.0 $ 378.8 $ 831.5 $ 820.5
Governmental Activities Business-Type Activities Total
Statement of Net Assets
(in Millions)
As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the City of Suffolk, assets exceeded liabilities by $192 million at June 30, 2010. The largest portion of the City’s net assets, 77% and 82% in 2010 and 2009, respectively, represents its investment in capital assets (e.g., land, buildings and improvements, machinery and equipment), net of accumulated depreciation and less any related debt used to acquire or construct those assets that are still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending.
The majority of the remaining balance of net assets, 23% and 18% in 2010 and 2009, respectively, represents unrestricted net assets, which may be used to meet the City’s ongoing obligations. Unrestricted net assets increased both in governmental and business-type activities in FY 10 by $14.9 million and $4.8 million respectively.
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GOVERNMENT-WIDE FINANCIAL ANALYSIS: (CONTINUED) Statement of Activities The following table indicates the changes in net assets for governmental and business-type activities:
2010 2009 2010 2009 2010 2009Revenues:Program Revenues:
Charges for services $ 7.0 $ 6.5 $ 32.9 $ 30.0 $ 39.9 $ 36.5 Operating grants and contributions 34.3 32.3 - 0.6 34.3 32.9 Capital grants and contributions 1.9 1.6 1.5 3.8 3.4 5.4
General revenues:Real estate and property taxes 98.8 99.4 - - 98.8 99.4 Other taxes 33.0 33.0 - - 33.0 33.0 Grants and contributions, not restricted 13.9 14.4 - - 13.9 14.4 Unrestricted investment earnings 1.1 1.8 0.5 0.6 1.6 2.4 Miscellaneous 1.7 1.8 0.2 0.3 1.9 2.1
Total Revenues 191.7 190.8 35.1 35.3 226.8 226.1
Expenses:General government 9.4 8.5 - - 9.4 8.5 Judicial 7.4 7.2 - - 7.4 7.2 Public safety 42.4 36.3 - - 42.4 36.3 Public works 34.7 32.5 - - 34.7 32.5 Health and welfare 13.6 12.1 - - 13.6 12.1 Education 53.7 77.7 - - 53.7 77.7 Parks, recreation, cultural 8.3 8.3 - - 8.3 8.3 Community development 9.3 7.8 - - 9.3 7.8 Interest on long-term debt 9.2 9.9 - - 9.2 9.9 Utility - - 33.5 29.1 33.5 29.1 Golf course - - - 1.7 - 1.7 Stormwater Utility - - 3.0 2.9 3.0 2.9
Total expenses 188.0 200.3 36.5 33.7 224.5 234.0
Excess of revenues over expenses 3.7 (9.5) (1.4) - 2.3 (9.5) Transfers 2.2 (2.2) (1.0) - (1.0) Change in net assets 5.9 (9.5) (3.6) (1.0) 2.3 (10.5) Net assets - beginning of year (as restated) 186.0 199.4 175.0 173.6 361.0 373.0 Net assets - ending $ 191.9 $ 189.9 $ 171.4 $ 172.6 $ 363.3 $ 362.5
(in Millions)Changes in Net Assets
Governmental Activities Business-Type Activities Total
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GOVERNMENT-WIDE FINANCIAL ANALYSIS: (CONTINUED) Governmental Activities Real estate and personal property tax revenue, the City’s largest revenue source, totaled $98.8 million and $99.4 million in FY 2010 and 2009 respectively. The chart below indicates the growth in the General Property Taxes revenue over the past ten years. The city wide Real Property tax rate has been relatively consistent while increasing property construction has assisted the growth.
0
20
40
60
80
100
120
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10
Millions
General Property Tax Revenue
Source: Comprehensive Annual Financial Reports 2000‐2010 The City’s assessed value of real property decrease by 1% for the current fiscal year. The City is committed to ensuring the highest level of safety for its citizens and has expended $42.4 million towards public safety efforts, representing 22.6% and 18.1% of total governmental activities expenses for 2010 and 2009 respectively. Education continues to be one of the City’s highest priorities and commitments representing 28.6% and 38.8% in 2010 and 2009 respectively of total governmental activity expenses. The decrease FY10 is due to the transfer of assets to the School Board in 2009, specifically the completion of the Hillpoint Elementary school. Public Works increased $2.2 million over FY09. This is due to the continued growth of the City’s fleet and its services and services. Community Development increased $1.5 over FY09. This is due to the payments made to the Economic Development Authority under the Economic Development Investment Program. During 2010, transfers into the General Fund were $2.2 million from proprietary funds. The General fund finished strong this year with positives changes in fund balances.
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GOVERNMENT-WIDE FINANCIAL ANALYSIS: (CONTINUED)
General Property Tax67%
Local Sales and Use Tax5%
Communication & Utility Tax5%
Business & Occupational Tax4%
Motor Vehicle, Recordation & Tobacco Tax
3%
Meal & Other Local Tax5%
Unrestricted Revenues from Use of Money & Property
1%
Grants and Contributions9%
Miscellaneous1%
Revenues by Source-Governmental Activities
Business-type Activities The business-type activities are made up of Public Utilities and Stormwater Utilities. In 2010, the Golf Course was consolidated into the General Fund due to outsourcing of operations. Charges for services, including water and sewer fees, and Stormwater Utility fees represent 91.8% and 86.4% of total revenues for business-type activities for 2010 and 2009 respectively. Utility revenues increased from $24.8 million in 2009 to $29 million in 2010. Capital contributions total $1.5 million in 2010 compared to $3.8 million in 2009. These contributions represented 11.1% of total revenues for business type activities for 2010. Stormwater expenses decreased from $4.4 million in 2009 to $3 million in 2010. This is dues to a slight reduction in contractual services. Depreciation and amortization for the Utility fund was $7.8 million in 2010.
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FINANCIAL ANALYSIS OF THE CITY’S FUNDS As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $83.4 million. Approximately 46.7% of this amount is available for spending at the government’s discretion (unassigned fund balance). The remainder of fund balance is committed or restricted to indicate that is not available for new spending because it has already been committed.
General Fund. The general fund is the chief operating fund of the City. At the end of the current fiscal year, the general fund balance was $52.5 million of which $42.3 million represents unassigned fund balance of the general fund. As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balances represents 30% of the total fund expenditures, while total fund balance represents 38% of that same amount. The unassigned fund balance of the General Fund is 16.8%, which is calculated as the net of governmental funds minus the School contribution, capital projects, and transfer out. Also added to this calculation is the School operating and the School Food Service fund expenses. This percentage is a key financial policy for the city of which needs to be greater than 10%.
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Unassigned Fund Balance vs. Expenditures (%)
Unassigned Fund Balance vs. Expenditures City Policy
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FINANCIAL ANALYSIS OF THE CITY’S FUNDS: (CONTINUED)
General Fund: (Continued) The net increase to fund balance for the general fund for 2010 was $2.7 million. This increase was a result of the continued streamlining of operations throughout the organization by freezing staff positions and holding costs to a minimum. Debt service fund. The debt service fund has a fund balance of $1.0 million. Of this amount $.4 million is restricted for payment to a debt service reserve fund in a future fiscal year as required by the HUD Section 108 loan leaving $.6 million. The General Fund transfers monies to meet debt service requirements. Capital projects fund. The capital projects fund accounts for all construction projects of general public improvements, excluding capital projects related to business-type activities, which are accounted for elsewhere. At the end of the current fiscal year, the fund balance was $19.8 million, of this $13 million was committed for contracts in process, and the balance of $6.8 million was assigned for subsequent years’ projects. During FY10 the City issued general obligation bonds of $3.4 million to finance new public safety equipment and expended $20.7 million on various projects. The City’s top five construction projects consisted of the following in FY10: - $4.9 million in continued construction of the Kings Fork Safety Center. - $3.1 million in continued transportation improvement on Nanesmond Parkway/Shoulders Hill. - $1.2 million in continued transportation improvements throughout the City. - $1.0 million in continued transportation improvements on Route 17. - $0.8 million in continued transportation improvements to the Downtown Connector
At year end the City has $152 million in projects authorized and has expended and committed $114.3 million on these projects, reference details on Exhibit 15.
Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. The net assets of the proprietary funds at the end of the current fiscal year totaled $171.4 million.
Enterprise funds. The City’s enterprise funds account for its water and sewer operations and stormwater utility efforts. Unrestricted net assets of the enterprise funds were $6.2 million at the end of the current fiscal year. Internal service funds. The internal service funds are used to account for entity-wide fleet management, information technology and insurance programs. The total net assets at the end of the current fiscal year were $21.9 million. Each of the internal service funds finished strong this year with positive changes in net assets.
Trust funds. The City funded $3.3 million in other post employment benefits in the OPEB Trust Fund. The City participates in the Virginia Pooled OPEB Trust Fund. In fiscal year 2010, the City fully funded its annual contribution to the fund as calculated by the actuaries and now has $7.9 million in the OPEB Trust Fund.
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Cash Goldman Sach FS Prime Obligations 0.2%
Large Cap Core Vanguard Inst'l Index
Fund 35%
Small Cap Core C.S. McKee
10%International Equity Artio Global Investors
II12%
Global REIT Ell Global Property Fund
3%
Fixed Income Vanguard Total Bond Index Fund
27%
Fixed Income Vanguard Total Bond Index Fund
32.4%
Virginia Pooled OPEB Trust FundAsset Allocation as of June 30, 2010
GENERAL FUND BUDGETARY HIGHLIGHTS The City’s annual budget, which is prepared on an operating basis, includes estimated revenues and annual appropriations. Differences between the original budget and the final amended budget resulted in a $6.2 million increase in appropriations. Listed below are explanations for significant budgetary variances between the final amended budget and actual results: Revenue from Personal Property was under the budget projections by $0.9 million. This was due to
personal property collections still trying to rebound from the economic downturn. Revenue from the Use of Money category was under the budget projections by $0.3 million. This was
due in large part to a lower returns and interest rates on investments. Categorical Aid revenues were under the budget by $0.3 million. This is due the reductions in funding
received from the State for Constitutional Officers. The Golf Course fund and its assets were transferred into the City’s General fund Budget during the
fiscal year. Economic development expenditures were under budget by $1.5 million. The majority of this figure is
made up of funds for economic development incentives that carry forward from prior years to further this development program on an as needed basis.
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CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets. The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2010, totaled $666.2 million, net of accumulated depreciation. This investment in capital assets includes land, buildings, improvements other than buildings, infrastructure, machinery and equipment and construction in progress.
2010 2009 2010 2009 2010 2009Land $ 24.5 $ 22.0 $ 3.3 $ 4.6 $ 27.8 $ 26.6 Construction in progress 42.7 27.5 61.5 94.0 104.2 121.5 Buildings 39.5 41.9 36.9 13.7 76.4 55.6 Improvements other than buildings 116.0 120.3 190.9 189.5 306.9 309.8 Machinery and equipment 20.3 20.3 50.3 29.0 70.6 49.3 Allocation of School Board assets 80.3 89.0 - - 80.3 89.0
Total $ 323.3 $ 321.0 $ 342.9 $ 330.8 $ 666.2 $ 651.8
Governmental Activities Business-type Activities Total
Capital Assets(net of depreciation)
(in Millions)
Land4%
Construction in progress
16%
Buildings11%Improvement
s other than buildings
46%
Machinery and
equipment11%
Allocation of School Board
assets12%
Capital Assets
Additional information on the City’s capital assets can be found in Note 7.
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CAPITAL ASSETS AND DEBT ADMINISTRATION: (CONTINUED) Long-term debt. At the end of the current fiscal year, the City had total outstanding debt of $421.6 million. Capital leases, claims payable, compensated absences and premiums and other credits are not included in these figures.
2010 2009 2010 2009 2010 2009Bonds Payable $ 201.7 $ 206.8 $ 211.4 $ 193.1 $ 413.1 $ 399.9
Loans and Notes Payable 8.5 9.4 - - 8.5 9.4
Total $ 210.2 $ 216.2 $ 211.4 $ 193.1 $ 421.6 $ 409.3
Governmental Activities Business-type Activities Total
Outstanding Debt
The Commonwealth of Virginia limits the amount of debt outstanding to 10% of the locality’s assessed value of real property. The City Charter further limits this calculation to 7% of the City’s assessed value of real property. The City Finance Committee has further restricted the debt ratio to 4% to reflect its conservative use of borrowed monies. The City’s outstanding debt is significantly below both limitations representing the City’s conservative debt borrowing policy. The City maintains bond ratings on general obligation debt of “Aa3”, “AA” and “AA-“ from Moody’s, S&P and Fitch respectively. Additional information on the City’s long-term debt can be found in Notes 8. ECONOMIC FACTORS The City’s economic development initiatives created over 510 new jobs and over $112 million dollars in
new capital investment in the City. For the fiscal year 2010 the City maintained its tax rate of $.91 per $100.
Suffolk was named as one of America’s 100 best small cities to live by CNN/Money Magazine. REQUESTS FOR INFORMATION This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. Questions concerning this report or requests for additional information should be directed to the City’s Department of Finance, 441 Market Street, Suffolk, Virginia, 23439.
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BASIC FINANCIAL STATEMENTS
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BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
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CITY OF SUFFOLK, VIRGINIA Exhibit 1
Statement of Net AssetsAt June 30, 2010
Primary GovernmentBusiness- Economic
Governmental Type School DevelopmentActivities Activities Totals Board Authority
ASSETS Cash and cash equivalents $ 73,465,481 $ 3,310,067 $ 76,775,548 $ 19,922,120 $ 1,382,869 Restricted cash 23,926,719 38,409,576 62,336,295 - 2,086,126 Receivables - net 6,235,249 4,859,527 11,094,776 177,549 118,659 Due from other governments 2,851,769 - 2,851,769 4,571,487 - Due from component units 568,224 - 568,224 - - Inventories 393,316 62,130 455,446 391,829 12,612,537 Prepaid items 227,447 1,425 228,872 60,000 - Deferred charges 5,535,290 5,318,989 10,854,279 - - Capital assets not depreciated 67,358,547 64,874,558 132,233,105 5,938,618 784,162 Capital assets being depreciated, net 255,955,463 278,122,047 534,077,510 61,538,166 27,996,542
Total Assets $ 436,517,505 $ 394,958,319 $ 831,475,824 $ 92,599,769 $ 44,980,895
LIABILITIES Accounts payable $ 3,948,484 $ 3,688,704 $ 7,637,188 $ 2,526,904 $ 14,724 Payables from restricted assets 1,243,087 - 1,243,087 - - Accrued liabilities - - - 465,130 - Accrued payroll - - - 12,047,313 - Accrued interest 4,642,083 3,181,733 7,823,816 - 128,004 Due to primary government - - - 328,969 239,255 Deposits and amounts held for others - 32,827 32,827 44,221 10,000 Unearned revenue 3,532,609 74,556 3,607,165 - - Long-term liabilities: Due within one year 18,104,990 4,754,028 22,859,018 217,785 691,240 Due in more than one year 213,127,805 211,888,609 425,016,414 1,697,946 19,471,091
Total Liabilities $ 244,599,058 $ 223,620,457 $ 468,219,515 $ 17,328,268 $ 20,554,314
NET ASSETSInvested in capital assets, net of related debt $ 115,706,222 $ 163,631,305 $ 279,337,527 $ 67,476,784 $ 14,993,990 Restricted for: Debt service requirements 392,169 1,525,006 1,917,175 - 2,086,126 Unrestricted assets 75,820,056 6,181,551 82,001,607 7,794,717 7,346,465
Total Net Assets $ 191,918,447 $ 171,337,862 $ 363,256,309 $ 75,271,501 $ 24,426,581
Total Liabilities and Net Assets $ 436,517,505 $ 394,958,319 $ 831,475,824 $ 92,599,769 $ 44,980,895
The accompanying notes to financial statements are an integral part of this statement.
Component Units
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CITY OF SUFFOLK, VIRGINIA
Statement of ActivitiesYear Ended June 30, 2010
Charges Operating Capitalfor Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
PRIMARY GOVERNMENT:Governmental activities: General government administration $ 9,422,635 $ 6,299 $ 122,185 $ - Judicial administration 7,393,681 736,610 1,766,209 - Public safety 42,448,178 2,931,733 2,705,501 - Public works 34,682,047 2,367,267 18,095,389 1,802,779 Health and welfare 13,569,286 25,280 9,511,711 - Education 53,624,924 - - - Parks, recreation, and cultural 8,309,722 670,162 294,402 - Community development 9,329,455 248,816 1,808,426 109,151 Interest on long-term debt 9,293,250 - - -
Total governmental activities $ 188,073,178 $ 6,986,167 $ 34,303,823 $ 1,911,930
Business-type activities: Utility $ 33,481,090 $ 29,044,958 $ - $ 1,504,233 Stormwater 3,001,245 3,861,010 - -
Total business-type activities $ 36,482,335 $ 32,905,968 $ - $ 1,504,233
Total primary government $ 224,555,513 $ 39,892,135 $ 34,303,823 $ 3,416,163
COMPONENT UNITS: School Board $ 152,194,298 $ 2,916,492 $ 97,830,203 $ -
Economic Development Authority $ 2,778,021 $ 262,004 $ 913,331 $ 45,000
Total component units $ 154,972,319 $ 3,178,496 $ 98,743,534 $ 45,000
General revenues:General property taxesLocal sales and use taxesUtility taxesCommunication taxesBusiness and occupational taxesMotor vehicle license taxesRecordation taxesTobacco taxesMeals taxesOther local taxesUnrestricted revenues from use of money and propertyGrants and contributions not restricted to specific programsMiscellaneousCity of Suffolk contribution to School Board
TransfersTotal general revenues and transfers
Change in net assetsNet assets - beginning, as restatedNet assets - ending
The accompanying notes to financial statements are an integral part of this statement.
Program Revenues
20
Exhibit 2
Business EconomicGovernmental Type School Development
Activities Activities Total Board Authority
$ (9,294,151) $ - $ (9,294,151) $ - $ - (4,890,862) - (4,890,862) - -
(36,810,944) - (36,810,944) - - (12,416,612) - (12,416,612) - - (4,032,295) - (4,032,295) - -
(53,624,924) - (53,624,924) - - (7,345,158) - (7,345,158) - - (7,163,062) - (7,163,062) - - (9,293,250) - (9,293,250) - -
$ (144,871,256) $ - $ (144,871,256) $ - $ -
$ - $ (2,931,899) $ (2,931,899) $ - $ - - 859,765 859,765 - -
$ - $ (2,072,134) $ (2,072,134) $ - $ -
$ (144,871,256) $ (2,072,134) $ (146,943,390) $ - $ -
$ - $ - $ - $ (51,447,603) $ -
$ - $ - $ - $ - $ (1,557,686)
$ - $ - $ - $ (51,447,603) $ (1,557,686)
$ 98,831,895 $ - $ 98,831,895 $ - $ - 7,355,338 - 7,355,338 - - 4,238,079 - 4,238,079 - - 3,614,856 - 3,614,856 - - 5,985,479 - 5,985,479 - - 1,711,012 - 1,711,012 - - 1,009,592 - 1,009,592 - - 1,382,361 - 1,382,361 - - 5,643,405 - 5,643,405 - - 1,976,730 - 1,976,730 - - 1,136,704 555,814 1,692,518 59,762 1,319,856
13,938,495 - 13,938,495 - - 1,674,116 231,005 1,905,121 659,771 -
- - - 52,979,674 - 2,294,321 (2,294,321) - - -
$ 150,792,383 $ (1,507,502) $ 149,284,881 $ 53,699,207 $ 1,319,856 $ 5,921,126 $ (3,579,636) $ 2,341,490 $ 2,251,604 $ (237,830)
185,997,321 174,917,498 360,914,819 73,019,897 24,664,411 $ 191,918,447 $ 171,337,862 $ 363,256,309 $ 75,271,501 $ 24,426,581
Component Units
Net (Expense) Revenue and Changes in Net Assets
Primary Government
21
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BASIC FINANCIAL STATEMENTS
Fund Financial Statements
23
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CITY OF SUFFOLK, VIRGINIA Exhibit 3
Balance Sheet - Governmental FundsAt June 30, 2010
Nonmajor TotalCapital Debt Governmental Governmental
General Projects Service Funds Funds ASSETS
Cash and cash equivalents: Unrestricted $ 46,410,332 $ 5,646,586 $ 601,360 $ 7,410,522 $ 60,068,800 Restricted 891,878 15,737,222 392,169 6,381,002 23,402,271 Receivables (Net of allowance for
uncollectibles): Taxes receivable 3,713,836 - - 76,022 3,789,858 Accounts receivable 2,362,269 9,034 - 44,470 2,415,773
Due from other governmental units 1,738,941 349,955 - 762,873 2,851,769 Due from other funds 1,851,244 - - - 1,851,244 Due from component units 568,224 - - - 568,224 Inventories 121,627 - - - 121,627 Prepaid items 10,794 - - 413 11,207
Total assets $ 57,669,145 $ 21,742,797 $ 993,529 $ 14,675,302 $ 95,080,773
LIABILITIES
Accounts payable $ 1,019,996 $ 1,320,967 $ 501 $ 1,187,775 $ 3,529,239 Payables from restricted assets 717,069 526,018 - - 1,243,087 Due to other funds - - - 763,204 763,204 Deferred revenue 2,476,649 41,234 - 29,236 2,547,119 Unearned revenue 921,389 - - 2,611,220 3,532,609
Total liabilities $ 5,135,103 $ 1,888,219 $ 501 $ 4,591,435 $ 11,615,258
FUND BALANCESNonspendable: Inventories and prepaids $ 132,421 - - - 132,421 Restricted: Debt service - - 392,169 - 392,169 Committed: General 585,475 - - - 585,475 Capital projects - 12,986,435 - - 12,986,435 Road projects - - - 4,398,679 4,398,679 Other governmental funds - - - 286,150 286,150 Assigned: General 2,986,050 - - - 2,986,050 Capital projects 6,529,103 6,868,143 - - 13,397,246 Debt service - - 600,859 - 600,859 Special revenue - - - 5,468,839 5,468,839 Unassigned: General (deficit) 42,300,994 - - (69,801) 42,231,193
Total fund balances $ 52,534,043 $ 19,854,578 $ 993,028 $ 10,083,867 $ 83,465,516 Total liabilities and fund balances $ 57,669,145 $ 21,742,797 $ 993,529 $ 14,675,302 $ 95,080,773
The accompanying notes to financial statements are an integral part of this statement.
25
CITY OF SUFFOLK, VIRGINIA Exhibit 4
Reconciliation of the Balance Sheet of the Governmental Funds
to the Statement of Net Assets
At June 30, 2010
Primary
Government
Total fund balances - governmental funds $ 83,465,516
304,339,105
2,547,119
Net financing costs 5,535,290
21,961,259
(4,602,487)
General obligation bonds $ (201,749,125)
Literary fund loans (5,250,000)
Section 108 loan (3,266,000)
Unamortized premium and other credits on bonds (6,737,894)
Compensated absences (4,324,337)
Total long-term liabilities (221,327,356)
Net assets of governmental activities $ 191,918,447
The accompanying notes to financial statements are an integral part of this statement.
Internal service funds are used by management to change the costs of certain activities such asinformation technology, fleet management, and insurance to individual funds. The assets andliabilities of the internal service funds are included in the governmental activities in thestatement of net assets.
Interest on long-term debt is not accrued in the governmental funds, but rather is recognizedas an expenditure when due.
Long-term liabilities, including bonds payable, are not due and payable in the current periodand therefore are not reported as liabilities in the governmental funds.
Amounts reported for governmental activities in the statement of net assets (Exhibit 1) aredifferent because:
Capital assets used in governmental activities are not current financial resources and thereforeare not reported in the funds.
Deferred revenue represents amounts that were not available to fund current expendituresand therefore are not reported as revenue in the governmental funds.
Other assets used in governmental activities are not financial resources and therefore notreported in the governmental funds:
26
CITY OF SUFFOLK, VIRGINIA Exhibit 5
Statement of Revenues, Expenditures and Changes in Fund Balances -Governmental Funds Year Ended June 30, 2010
Governmental FundsNonmajor Total
Capital Debt Governmental GovernmentalGeneral Projects Service Funds Funds
Revenues: Real estate and personal property taxes $ 96,903,536 $ - $ - $ 1,395,755 $ 98,299,291 Other local taxes 32,916,852 - - - 32,916,852 Permits, privilege fees and regulatory licenses 1,008,304 - - 386,538 1,394,842 Fines and forfeitures 852,307 - - - 852,307 Revenue from use of money and property 1,082,942 412 9,359 43,991 1,136,704 Charges for services 3,735,018 - - 1,004,001 4,739,019 Miscellaneous 1,248,782 88,469 - 336,865 1,674,116 Intergovernmental:
Contribution from Component Unit - School Bd. - - - - - Revenue from the Commonwealth 21,242,461 406,969 - 18,603,369 40,252,799 Revenue from the Federal Government 5,453,868 1,504,961 - 2,942,620 9,901,449
Total revenues $ 164,444,070 $ 2,000,811 $ 9,359 $ 24,713,139 $ 191,167,379
Expenditures: Current: General government administration $ 8,113,416 $ - $ - $ - $ 8,113,416 Judicial administration 6,760,145 - - 52,383 6,812,528 Public safety 36,481,173 - - 1,321,428 37,802,601 Public works 8,199,773 - - 18,584,928 26,784,701 Health and welfare 12,322,636 - - 395,887 12,718,523 Education 44,724,978 - - 776 44,725,754 Parks, recreation, and cultural 6,802,265 - - 169,922 6,972,187 Community development 7,417,037 - - 1,366,202 8,783,239 Nondepartmental 8,264,861 - - - 8,264,861 Capital outlay - 20,789,098 - - 20,789,098 Debt service: Principal - - 14,315,646 - 14,315,646 Interest and other fiscal charges - - 9,755,820 - 9,755,820 Bond issuance cost - - 339,170 - 339,170
Total expenditures $ 139,086,284 $ 20,789,098 $ 24,410,636 $ 21,891,526 $ 206,177,544
Excess (deficiency) of revenues over expenditures $ 25,357,785 $ (18,788,287) $ (24,401,277) $ 2,821,613 $ (15,010,166)
Other financing sources (uses): Issuance of refunding bonds $ - $ 19,501 $ 30,585,499 $ - $ 30,605,000 Issuance of debt - 3,550,000 - - 3,550,000 Premiums on debt - - 2,102,918 - 2,102,918 Payment to refunded bond escrow agent - - (32,350,000) - (32,350,000) Transfers in 2,244,596 4,486,751 24,376,182 115,035 31,222,564 Transfers (out) (24,863,347) - (2,153,139) (27,016,486)
Total other financing sources (uses) $ (22,618,751) $ 8,056,252 $ 24,714,599 $ (2,038,104) $ 8,113,996
Net changes in fund balances $ 2,739,034 $ (10,732,035) $ 313,322 $ 783,509 $ (6,896,170)
Fund balances at beginning of year, as restated 49,795,009 30,586,613 679,706 9,300,358 90,361,686
Fund balances at end of year $ 52,534,043 $ 19,854,578 $ 993,028 $ 10,083,867 $ 83,465,516
The accompanying notes to financial statements are an integral part of this statement.
27
CITY OF SUFFOLK, VIRGINIA Exhibit 6
Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2010
PrimaryGovernment
GovernmentalFunds
Amounts reported for governmental activities in the statement of activities are differentbecause:
Net changes in fund balances - total governmental funds $ (6,896,170)
Governmental funds report capital outlays as expenditures. However, in the statement ofactivities the cost of those assets is allocated over their estimated useful lives and reported
as depreciation expense. This is the amount by which the capital outlays exceededdepreciation in the current period. The following details support this adjustment:
Capital outlay $ 18,694,339
Dispositions of capital assets (200,360)
Depreciation expense (8,425,746)
Transfer of joint tenancy assets from Primary Government to the Component Unit (8,756,513) 1,311,720
Revenues in the statement of activities that do not provide current financial resources arenot reported as revenues in the funds. Details of this item consist of:Deferred taxes 532,604
The issuance of long-term debt (e.g. bonds, leases) provides current financial resources togovernmental funds, while the repayment of the principal of long-term debt consumes thecurrent financial resources of governmental funds. Neither transaction, however, has anyeffect on net assets. Also, governmental funds report the effect of issuance costs,premiums, discounts, and similar items the treatment of long-term debt and related items. Asummary of items supporting this adjustment is as follows:
Debt issued or incurred: General obligation bonds $ (34,155,000) Premium on general obligation debt (2,102,918) Deferred amount on refunding 2010 bonds 2,929,170 Principal repayments on debt: Principal retired on general obligation debt 43,142,646 Principal retired on literary fund loans 500,000 Principal retired on Section 108 loan 193,000 Principal retired on notes payable 240,000 10,746,898
Some expenses reported in the statement of activities do not require the use of currentfinancial resources and, therefore are not reported as expenditures in governmental funds.The following is a summary of items supporting this adjustment:
Change in accrued interest payable $ 282,418 Change in compensated absences (337,317) Change in other post employment benefits 209,817 Amortization of premiums on bonds payable 453,930 Amortization of deferred charges (273,777) 335,071
(108,997)
Change in net assets of governmental activities $ 5,921,126
The accompanying notes to financial statements are an integral part of this statement.
Internal service funds are used by management to charge the costs of certain activities such asinformation technology, fleet management, and insurance to individual funds. The netrevenue of certain internal service funds is reported with governmental activities.
28
CITY OF SUFFOLK, VIRGINIA Exhibit 7
Statement of Net Assets - Proprietary FundsAt June 30, 2010
GovernmentalActivities -
Major Fund Nonmajor InternalUtility Fund Funds Totals Service Funds
ASSETSCurrent Assets: Cash and cash equivalents $ 849,076 $ 2,460,991 $ 3,310,067 $ 13,396,681 Restricted cash 38,409,576 - 38,409,576 524,448 Receivables (net of allowance for uncollectible) 4,736,538 122,989 4,859,527 29,618 Inventories 62,130 - 62,130 271,689 Prepaid items 5 1,420 1,425 216,240
Total Current Assets $ 44,057,325 $ 2,585,400 $ 46,642,725 $ 14,438,676
Noncurrent Assets: Deferred charges $ 5,318,989 $ - $ 5,318,989 $ - Capital assets: Land $ 3,340,405 $ - $ 3,340,405 $ 298,000 Construction in progress 61,534,153 - 61,534,153 504,043 Buildings 46,353,951 - 46,353,951 1,221,050 Improvements other than buildings 243,467,482 - 243,467,482 35,157 Machinery and equipment 72,604,858 - 72,604,858 43,839,429 Less: Accumulated depreciation (84,304,244) - (84,304,244) (26,922,776) Total Capital Assets (net) $ 342,996,605 $ - $ 342,996,605 $ 18,974,903 Total Noncurrent Assets $ 348,315,594 $ - $ 348,315,594 $ 18,974,903
Total Assets $ 392,372,919 $ 2,585,400 $ 394,958,319 $ 33,413,579
LIABILITIESCurrent Liabilities: Vouchers and accounts payable $ 3,628,407 $ 60,297 $ 3,688,704 $ 419,245 Current portion of compensated absences 12,733 1,679 14,412 7,208 Unearned revenue - 74,556 74,556 - Deposits payable 32,827 - 32,827 - Accrued interest 3,181,733 - 3,181,733 39,596 Claims payable - current portion - - - 1,380,913 Due to other funds - - - 1,088,040 Current portion of bond premiums and other credits 204,410 - 204,410 - Bonds, notes payable and capital lease obligations-current 4,535,206 - 4,535,206 2,549,608 Total Current Liabilities $ 11,595,316 $ 136,532 $ 11,731,848 $ 5,484,610
Noncurrent Liabilities: Noncurrent portion of compensated absences $ 350,403 $ 60,780 $ 411,183 $ 164,779 Claims payable - net of current - - - 1,958,218 Bond premiums and other credits, net 4,654,001 - 4,654,001 - Bonds, notes payable and capital lease obligations -
net of current 206,823,425 - 206,823,425 3,844,713
Total Noncurrent Liabilities $ 211,827,829 $ 60,780 $ 211,888,609 $ 5,967,710 Total Liabilities $ 223,423,145 $ 197,312 $ 223,620,457 $ 11,452,320
NET ASSETSInvested in capital assets, net of related debt $ 163,631,305 $ - $ 163,631,305 $ 12,580,582 Restricted 1,525,006 - 1,525,006 - Unrestricted assets 3,793,463 2,388,088 6,181,551 9,380,677
Total Net Assets $ 168,949,774 $ 2,388,088 $ 171,337,862 $ 21,961,259
Total Liabilities and Net Assets $ 392,372,919 $ 2,585,400 $ 394,958,319 $ 33,413,579
The accompanying notes to financial statements are an integral part of this statement.
Business-type Activities - Enterprise Funds
29
CITY OF SUFFOLK, VIRGINIA Exhibit 8
Statement of Revenues, Expenses and Changes in Net Assets -
Proprietary Funds
Year Ended June 30, 2010
Governmental
Activities -
Major Fund Nonmajor Internal
Utility Fund Funds Totals Service Funds
Operating revenues: Charges for services $ 28,923,105 $ 3,861,010 $ 32,784,115 $ 28,395,879 Other operating revenues 121,853 - 121,853 55
Total operating revenues $ 29,044,958 $ 3,861,010 $ 32,905,968 $ 28,395,934
Operating expenses: Personnel services $ 6,815,314 $ 1,739,716 $ 8,555,030 $ 2,238,002 Self-insured claims - - - 10,672,564 Purchased services 1,239,062 110,213 1,349,275 105,384 Contractual services 1,144,363 481,409 1,625,772 1,394,428 Supplies 869,047 - 869,047 4,829,523 Utilities 944,365 - 944,365 73,236 Insurance and bonds - - - 1,626,893 OPEB - - - 3,014,322 Bulk-water purchases 3,415,399 - 3,415,399 - Depreciation and amortization 7,845,602 - 7,845,602 3,570,516 Leased property 357,005 - 357,005 496,543 Other charges 926,218 669,907 1,596,125 267,727
Total operating expenses $ 23,556,375 $ 3,001,245 $ 26,557,620 $ 28,289,138
Net income from operations $ 5,488,583 $ 859,765 $ 6,348,348 $ 106,796
Nonoperating revenues (expenses): Interest income $ 534,455 $ 21,359 $ 555,814 $ 73,158 Interest and other fiscal (expenses) (7,911,881) - (7,911,881) (281,753) Gain (loss) on disposal of capital assets - - - (149,979) Other nonoperating (expenses) (2,012,834) - (2,012,834) - Other nonoperating revenues 231,005 - 231,005 -
Total nonoperating revenues (expenses) $ (9,159,255) $ 21,359 $ (9,137,896) $ (358,574)
Net income before contributions and transfers $ (3,670,672) $ 881,124 $ (2,789,548) $ (251,778)
Capital contributions 1,504,233 - 1,504,233 2,054,538 Transfers (out) (920,363) (1,373,958) (2,294,321) (1,911,757) Changes in net assets $ (3,086,802) $ (492,834) $ (3,579,636) $ (108,997)
Net assets, beginning of year, as restated 172,036,576 2,880,922 174,917,498 22,070,256
Net assets, end of year $ 168,949,774 $ 2,388,088 $ 171,337,862 $ 21,961,259
The accompanying notes to financial statements are an integral part of this statement.
Business-type Activities - Enterprise Funds
30
CITY OF SUFFOLK, VIRGINIA Exhibit 9
Statement of Cash Flows - Proprietary FundsYear Ended June 30, 2010
GovernmentalActivities -
Major Fund Nonmajor InternalUtility Fund Funds Totals Service Funds
Cash flows from operating activities: Receipts from customers and users $ 28,490,336 $ 3,868,773 $ 32,359,109 $ 28,596,354 Payments to employees (including fringe benefits) (6,814,673) (1,722,298) (8,536,971) (2,245,558) Payments for operating activities (10,633,673) (1,231,057) (11,864,730) (20,921,340)
Net cash provided by operating activities $ 11,041,990 $ 915,418 $ 11,957,408 $ 5,429,456
Cash flows from non-capital financing activities: Transfer (out) $ (920,363) $ (1,373,958) $ (2,294,321) $ (1,911,757)
Net cash provided by (used in) non-capital financing activities $ (920,363) $ (1,373,958) $ (2,294,321) $ (1,911,757)
Cash flows from capital and related financing activities: Acquisition and construction of capital assets $ (24,517,384) $ - $ (24,517,384) $ (4,139,483) Proceeds from debt issued 32,424,906 - 32,424,906 - Capital contributions - - - 2,054,538 Principal paid on debt (8,839,786) - (8,839,786) (2,790,889) Interest paid on debt (7,344,087) - (7,344,087) (305,338) Proceeds from capital lease obligations - - - 398,785
Net cash provided by (used in) capital and related financing activities $ (8,276,351) $ - $ (8,276,351) $ (4,782,387)
Cash flows from investing activities: Interest earned $ 534,455 $ 21,359 $ 555,814 $ 73,158
Net increase (decrease) in cash and cash equivalents $ 2,379,731 $ (437,181) $ 1,942,550 $ (1,191,530)
Cash and cash equivalents at beginning of year 36,878,921 2,898,172 39,777,093 15,112,659
Cash and cash equivalents at end of year $ 39,258,652 $ 2,460,991 $ 41,719,643 $ 13,921,129
Reconciliation of operating income to net cash providedby (used in) operating activities:
Cash flows from operations: Income from operations $ 5,488,583 $ 859,765 $ 6,348,348 $ 106,796
Adjustment to reconcile net income to net cash provided by operations:
Depreciation and amortization 7,845,602 - 7,845,602 3,570,516
Changes in operating accounts: (Increase) decrease in: Accounts receivable (785,627) 35,259 (750,368) 200,420 Inventories 41,542 - 41,542 74,267 Prepaids - (1,420) (1,420) - Non-operating revenues 231,005 - 231,005 - Increase (decrease) in: Accounts payable 233,078 31,892 264,970 (53,877) Deferred revenue - (27,496) (27,496) - Claims payable - - - 1,538,889 Compensated absences 641 17,418 18,059 (7,555) Non-operating (expenses) (2,012,834) - (2,012,834) -
Net cash provided by operating activities $ 11,041,990 $ 915,418 $ 11,957,408 $ 5,429,456
The accompanying notes to financial statements are an integral part of this statement.
Business-type Activities - Enterprise Funds
31
CITY OF SUFFOLK, VIRGINIA Exhibit 10
Statement of Net Assets
Fiduciary Funds
Year Ended June 30, 2010
OPEB
Trust Agency
Fund Funds
Assets
Cash and cash equivalents $ 7,901,030 $ 28,543
Total assets $ 7,901,030 $ 28,543
Liabilities
Amounts held for others $ - $ 28,543
Total liabilities $ - $ 28,543
Net assets
Held in trust for OPEB benefits $ 7,901,030 $ -
Total net assets $ 7,901,030 $ -
Total liabilities and net assets $ 7,901,030 $ 28,543
The accompanying notes to financial statements are an integral part of this statement.
32
CITY OF SUFFOLK, VIRGINIA Exhibit 11
Statement of Changes in Fiduciary Net Assets
OPEB Trust Fund
Year Ended June 30, 2010
Additions:
Employer contributions $ 3,014,322
Gain (loss) on investments 524,471
Total additions $ 3,538,793
Deductions:
Administrative fees $ 6,320
Total deductions $ 6,320
Change in net assets $ 3,532,473
Net assets - beginning of year 4,368,557
Net assets - end of year $ 7,901,030
The accompanying notes to financial statements are an integral part of this statement.
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CITY OF SUFFOLK, VIRGINIA
Notes to Financial Statements As of June 30, 2010
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The financial statements of the City of Suffolk, Virginia have been prepared in conformity with accounting principles generally accepted in the United States of America as specified by the Governmental Accounting Standards Board (GASB) and the specifications promulgated by the Auditor of Public Accounts (APA) of the Commonwealth of Virginia. The more significant of the government's accounting policies are described below. A. Entity and Services
The City of Suffolk, Virginia (City) was formed on January 1, 1974, by the merger of the former Cities of Suffolk and Nansemond. The City of Nansemond was previously formed by the merger of the County of Nansemond and the Towns of Whaleyville and Holland. The City is a political subdivision of the Commonwealth of Virginia operating under the council-manager form of government. The elected seven-member City Council, vested with legislative powers, appoints the City Manager who is the executive and administrative head of the City’s government.
The City provides a full range of services to include the following: public safety (police and fire), education, community development (planning and zoning), water treatment and distribution, sewage collection, refuse collection, maintenance of highways, streets and infrastructure, stormwater management, recreational activities including a golf course, cultural events, social services, and library among other services.
B. Financial Reporting Entity
The City’s Basic Financial Statements include all funds, agencies, boards, commissions, authorities and other governmental organizations for which the City has financial accountability. Financial accountability includes the appointment of a voting majority of the organization’s governing body and the ability of the Primary Government to impose its will on the organization or if there is a financial benefit/burden relationship. Also, an organization that is fiscally dependent on the Primary Government should be included in its reporting entity.
These financial statements include the City of Suffolk, Virginia (the Primary Government) and its Component Units. The Component Units discussed below are included in the City’s reporting entity because of the significance of the operational or financial relationship with the City.
Blended Component Units - Blended component units, although legally separate entities are, in substance, part of the government’s operations and so data from these units are combined with data of the primary government. The City has no blended component units.
Discretely Presented Component Units - Discretely presented component units are reported separate from the primary government to emphasize that they are legally separate from the City. The following organizations have been included in the reporting entity as a discretely presented component unit: City of Suffolk Public Schools The City of Suffolk Public Schools (School Board) is responsible for elementary and secondary education within the City. The Schools are fiscally dependent upon the City because the City Council approves the annual budget of the Schools, levies the necessary taxes to finance the Schools’ operations and approves the borrowing of money.
35
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED) B. Financial Reporting Entity: (Continued)
City of Suffolk Public Schools: (Continued) The School Board has one discretely presented component unit, the Pruden Center for Industry and Technology (The Center). The Center is a vocational and technical center used by both the Suffolk City Schools and the Isle of Wight County Schools to provide classes to high school students and adults in various occupational trades. The Center is dependent upon the Suffolk School Board for a majority of its funding. The Center is shown as a discretely presented component unit as it is legally separate from the School Board. Separate audited financial statements may be obtained from the Pruden Center by contacting the Pruden Center for Industry and Technology, 4169 Pruden Blvd., Suffolk, Virginia 23434. The School Board does not issue separate financial statements. The following funds are included in the School Board: School Operating Fund – accounts for revenues and expenditures relating to the operation of the City of Suffolk Public Schools. Revenues are derived from the City’s General Fund and from state and federal funds. School Food Service Fund – accounts for revenues and expenditures relating to the operation of school cafeterias. Revenues are derived from state and federal funds and cafeteria sales. School Grants Fund – accounts for revenues and expenditures relating to grants received by the school system from federal and state governments. OPEB Trust Fund – accounts for activities of the School Board's other post-employment benefits (OPEB). This fund accumulates resources for health insurance for retired employees.
Combined School Activity Funds – accounts for additions and deductions of the various activity funds of each of the Suffolk public schools. Revenues are derived from school fundraisers, athletic and state event receipts and School Board allocations.
The Pruden Center for Industry and Technology Component Unit – Accounts for revenues and expenditures relating to operation of The Pruden Center for Industry and Technology operated jointly by Suffolk Public Schools and Isle of Wight County Public Schools. Revenues are derived primarily from local appropriations.
Economic Development Authority
The Economic Development Authority of the City of Suffolk (EDA) was established under the Industrial Development and Revenue Bond Act – Code of Virginia. A separate board appointed by the City Council governs the EDA. The EDA is authorized to acquire, own, lease and dispose of properties and to conduct related activities to promote industry and develop trade by inducing manufacturing, industrial, governmental and commercial enterprises to locate or to remain in the City. The City makes significant contributions to the EDA relating to the property the EDA develops and markets. Separate audited financial statements may be obtained from the EDA by contacting the Executive Director, City of Suffolk Economic Development Authority, 127 E. Washington Street, Suite 200, Suffolk, Virginia 23434.
36
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED) B. Financial Reporting Entity: (Continued)
Other related organizations not included in the financial statements: Western Tidewater Water Authority
The Western Tidewater Water Authority (Water Authority) was created March 18, 1998, by the City Council of the City of Suffolk, Virginia and the Board of Supervisors of the County of Isle of Wight, Virginia pursuant to the Virginia Water and Sewer Authorities Act, Chapter 51, Title 15.2, Code of Virginia.
The Water Authority was formed for the purpose of acquiring, financing, constructing, leasing, operating and maintaining facilities for the production, impoundment, treatment and transmission of potable and non-potable water. Those facilities may include, but not be limited to, sources of water supply, water intakes, reservoirs, filtration and purification plants, pumping stations, transmission lines, storage facilities and all other facilities deemed appropriate for fulfilling the purpose of the Water Authority together with all appurtenant equipment and appliances necessary or suitable therefore, and all properties, rights, easements or franchises relating thereto and deemed necessary, convenient or appropriate by the Water Authority for its operation. The City is not obligated to pay the principal or interest on notes or any other liabilities of the Authority and has no financial interest in the Authority.
Separate financial statements are available from the Western Tidewater Water Authority and can be obtained by contacting the Treasurer at P.O. Box 80, Isle of Wight, Virginia 23397.
Western Tidewater Regional Jail Authority
The Western Tidewater Regional Jail Authority (Jail Authority) was created as a political subdivision of the Commonwealth of Virginia jointly through an agreement dated November 1, 1989, among the Cities of Suffolk (59.3%) and Franklin (6.8%), and the County of Isle of Wight (33.9%) (the member jurisdictions) under the Jail Authorities Act, Code of the Commonwealth of Virginia. The Jail Authority has the responsibility to finance the acquisition, construction, equipping and maintenance of a regional jail facility to operate for the benefit of the member jurisdictions.
Notes issued by the Jail Authority are limited obligations payable solely from revenues received from the member jurisdictions. The City is not obligated to pay the principal or interest on the notes or any other liabilities of the Authority and has no financial interest in the Authority beyond its initial contribution to the Authority.
Separate financial statements are available from the Western Tidewater Regional Jail Authority and can be obtained by contacting the Superintendent at 2402 Godwin Blvd., Suffolk, Virginia 23434.
Suffolk Redevelopment and Housing Authority
The Suffolk Redevelopment and Housing Authority administers public housing and redevelopment activities in the City. It applies, receives and invests its own funds and formulates and approves its own budget.
37
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED) B. Financial Reporting Entity: (Continued)
Other related organizations not included in the financial statements: (Continued) Suffolk Redevelopment and Housing Authority: (Continued) City Council is responsible for appointing members of the Board of the Suffolk Redevelopment and Housing Authority, but the City’s accountability does not extend beyond making such appointments. Suffolk Redevelopment and Housing Authority does not have a significant operational or financial relationship with the City.
Separate financial statements are available from the Suffolk Redevelopment and Housing Authority and can be obtained by contacting the Executive Director at 530 E. Pinner Street, Suffolk, Virginia 23434.
C. Government-wide and Fund Accounting Financial Statements
The basic financial statements include both government-wide (based on the City as a whole) and fund financial statements. The focus is on either the City as a whole or major individual funds (within the fund financial statements). The government-wide financial statements categorize primary activities as either governmental or business-type. In the government-wide Statement of Net Assets, both the governmental and business-type activities columns are (a) presented on a consolidated basis by column, and (b) are reflected on a full accrual, economic resource basis, which incorporates long-term assets and receivables as well as long-term debt and obligations. Each presentation provides valuable information that can be analyzed and compared (between years and between governments) to enhance the usefulness of the information. The City generally first uses restricted assets for expenses incurred for which both restricted and unrestricted assets are available. The City may defer the use of restricted assets based on a review of the specific transaction.
The government-wide Statement of Activities is reported using the economic resources measurement focus and the accrual basis of accounting which reflects both the gross and net cost per functional category (public safety, public works, health and welfare, etc.), which are otherwise being supported by general government revenues (property, sales and use taxes, certain intergovernmental revenues, fines, permits and charges, etc.) The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, which include fees and charges paid by the recipients of goods or services offered by the programs, operating and capital grants, and contributions. The program revenues must be directly associated with the function (public safety, public works, health and welfare, etc.) or a business-type activity. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function, and 2) grants and contributions that are restricted to meeting the operation or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported as general revenues. The City does not allocate indirect expenses. The operating grants include operating-specific and discretionary (either operating or capital) grants while the capital grants column reflects capital-specific grants. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Generally the effect of interfund activity has been eliminated from the City’s government-wide financial statements for internal service funds. Exceptions to our general rule are payments-in-lieu of taxes where the amounts are equivalent to interfund services provided and other charges between the government’s proprietary funds and various other functions of government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
38
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
C. Government-wide and Fund Accounting Financial Statements: (Continued)
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989 generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private-sector guidance.
The governmental funds major fund statements in the fund financial statements are presented on a current financial resource measurement focus and modified accrual basis of accounting. This is the manner in which these funds are normally budgeted. Since the governmental fund statements are presented on a different measurement focus and basis of accounting than the government-wide statements’ governmental column, a reconciliation is presented which briefly explains the adjustments necessary to reconcile funds based on financial statements with the governmental column of the government-wide presentation.
The City’s fiduciary funds are presented in the fund financial statements by type. Since by definition these assets are being held for the benefit of a third party and cannot be used to address activities or obligations of the government, these funds are not incorporated into the government-wide statements.
The focus of the basic financial statements is on the City as a whole and the fund financial statements, including the major individual funds of the governmental and business-type categories, as well as the fiduciary funds, (by category) and the component units. Each presentation provides valuable information that can be analyzed and compared (between years and between governments) to enhance the usefulness of the information.
In the fund financial statements, financial transactions and accounts of the City are organized on the basis of funds. The operation of each fund is considered to be an independent fiscal and separate accounting entity, with a self-balancing set of accounts recording cash and/or other financial resources together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations.
The focus of governmental and proprietary fund financial statements is on major funds. Fund statements present the financial information of each major fund in a separate column. Nonmajor funds are aggregated and displayed in a single column.
The main operating fund, the general fund, is always reported as a major fund. Other individual governmental and enterprise funds are reported in separate columns as major funds based on these criteria:
a. Total assets, liabilities, revenues, or expenditures/expenses of the fund are at least 10% of the corresponding total for all funds of that category or type (that is, total governmental or total enterprise funds), and
b. Total assets, liabilities, revenues, or expenditures/expenses of the fund are at least 5% of the corresponding total for all governmental and enterprise funds combined.
In addition to funds that meet the major fund criteria, any other governmental or enterprise fund that management believes is particularly important to financial statement users may be reported as a major fund.
39
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
C. Government-wide and Fund Accounting Financial Statements: (Continued)
Governmental Funds
Governmental Funds are those through which most governmental functions typically are financed. The City presents the following major governmental funds:
General Fund - The General Fund is primary operating fund of the City which accounts for all financial resources accounted for in another fund. Revenues are derived primarily from property and other local taxes, state and federal distributions, licenses, permits, charges for services, and interest income. A significant part of the General Fund’s revenues is transferred to other funds and component units, principally to finance the operations of the City of Suffolk Public Schools.
Capital Projects Fund - The Capital Projects Fund is used to account for financial resources that are restricted, committed, or assigned to expenditures for capital outlays, except for those financed by proprietary funds or for assets held in trust for individuals, private organizations, or other governments.
Debt Service Fund - The Debt Service Fund is used to account for financial resources that are restricted, committed, or assigned to expenditure for principal and interest related costs as well as the financial resources being accumulated for future debt service. The City presents the following nonmajor governmental funds:
Special Revenue Funds The Special Revenue Funds account for proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. Suffolk Taxing District Fund – accounts for revenues and expenditures related to services provided in the Suffolk Taxing District. Most revenues are derived from a specific percentage of the annual real estate tax assessments in the Suffolk Taxing District. Downtown Business Overlay District – accounts for revenues and expenditures related to services provided in the Downtown Business Overlay District. Most revenues are derived from a specific percentage of the annual real estate tax assessments in the Downtown Business Overlay District.
Road Maintenance Fund – accounts for revenue and expenditures related to maintaining roads city wide. Revenues will be derived from the state and sale of service to other funds. Consolidated Grants Fund – accounts for revenues and expenditures involving governmental grant programs. Law Library Fund – accounts for the maintenance of a law library. Revenue is derived from court fees.
40
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
C. Government-wide and Fund Accounting Financial Statements: (Continued)
Special Revenue Funds: (Continued) Route 17 Taxing District Fund – accounts for revenues and expenditures related to services provided in the Route 17 Taxing District. Most revenues are derived from a specific percentage of the annual real estate tax assessments in the Route 17 Taxing District.
Mosquito Taxing District Fund – accounts for revenues and expenditures related to mosquito spraying services provided in the Mosquito Taxing District. Most revenues are derived from a specific percentage of the annual real estate tax assessments in the Mosquito Taxing District. Cemetery Fund – accounts for monies received from the sale of burial sites, lots and mausoleum sites, the revenue from which is to be applied to the perpetual care of the City’s cemeteries. Proprietary Funds
Proprietary Funds are used to account for activities that are similar to those often found in the private sector. All assets, liabilities, equities, revenues, expenses, and transfers relating to the primary government’s business activities are accounted for through proprietary funds. The measurement focus is on the determination of net income, financial position, and cash flows. Proprietary funds distinguish operating revenues and expenses from nonoperating revenues and expenses. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the proprietary funds are charges for services. Operating expenses include cost of sales and services, personnel, contractual services, and depreciation. The City has chosen not to implement private sector guidance issued after November 30, 1989 in reporting activities of the proprietary funds. Enterprise Funds
The Enterprise Funds account for operations that are financed in a manner similar to private business enterprises, where the intent is that costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges.
The City presents the following major enterprise fund: Utility Fund – accounts for the provision of water and sewer services to City residents. All activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operation, maintenance, billing, collections, financing and related debt service and capital assets of the water and sewage systems. The City presents the following nonmajor enterprise fund: Stormwater Utility Fund - accounts for the maintenance and improvements to the City's stormwater infrastructure.
41
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
C. Government-wide and Fund Accounting Financial Statements: (Continued)
The City presents the following other fund types: Internal Service Funds
The Internal Service Funds account for the financing of goods or services provided by one department to other departments or agencies of the City on a cost-reimbursement basis. The Internal Service Funds are included in governmental activities for government-wide reporting purposes. The excess revenue or expenses of the funds are allocated to the appropriate functional activity.
Information Technology Fund – accounts for the City's technology infrastructure and allocates costs to the various departments or agencies using the service.
Fleet Management Fund – accounts for, on a cost-reimbursement basis, the financing of vehicles and the related maintenance, repairs and fuel costs of the City and allocates operating costs to the various departments or agencies using the equipment. Risk Management Fund – accounts for the funding and payment of auto, personal liability, general liability, health insurance, and workers’ compensation claims against the City exclusive of the School Board employees. Charges to other funds are based on estimated claims for the year. Fiduciary Funds
Fiduciary Funds are used to account for assets held by the City as an agent for individuals, private organizations, and other governments. Fiduciary funds are not included in the government-wide financial statements. OPEB Trust Fund – accounts for activities of the City's other post-employment benefits (OPEB). This fund accumulates resources for health insurance for retired employees.
Agency Funds
Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of the results of operations. In addition to the Funds listed below, the Suffolk Public School Combined School Activity Funds are also agency funds. Special Welfare Fund – accounts for receipt of welfare checks and foster children support checks from the state and payments made on behalf of individuals. Commonwealth of Virginia Fund – accounts for monies collected by the City on behalf of the Commonwealth of Virginia.
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CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
D. Basis of Accounting
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using the current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet in the funds statements. Long-term assets and long-term liabilities are included in the government-wide statements. Operating statements of the governmental funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets.
The government-wide statements of net assets and statements of activities, and proprietary funds, are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation of these activities are either included on the statement of net assets or on the statement of fiduciary net assets. Proprietary fund-type operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. The fund financial statements of the Governmental Funds (for the primary government and component units) are maintained and reported on the modified accrual basis of accounting using the current financial resources measurement focus. Under this method of accounting, revenues are recognized in the period in which they become measurable and available. With respect to real and personal property tax revenue and other local taxes, the term “available” is limited to collection within forty-five days of the fiscal year-end. Levies made prior to the fiscal year-end but which are not available are deferred. Interest income is recorded as earned. Federal and State reimbursement-type grants are recorded as revenue when related eligible expenditures are incurred. Expenditures, other than accrued interest on long-term debt, are recorded when the fund liability is incurred.
E. Stewardship, Compliance and Accountability
The provisions of the Code of Virginia shall control the preparation, consideration, adoption and execution of the budget of the City. The City Charter requires the budget to be balanced with planned expenditures equal to revenue estimates. The City will prepare and annually update a long range (5 year) financial forecast model utilizing trend indicators and projections of annual operating revenues, expenditures, capital improvements and related debt service and operating costs as well as fund balance levels. The City Manager through the Budget and Finance Department will exercise appropriate fiscal management as necessary as necessary to live within the limits of the adopted budget. 1. Budgeting Information
The City utilizes the following procedures in establishing the budgetary data reflected in the basic financial statements:
− At least 60 days prior to June 30, the City Manager submits to City Council a proposed operating
budget for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and the means of financing them.
− The budget is formulated from estimates of revenues and expected expenditures from each
department. The School Board is treated as a single expenditure line item.
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CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
E. Stewardship, Compliance and Accountability: (Continued)
1. Budgeting Information: (Continued)
− The City Manager submits the proposed budget to City Council, and recommends an appropriation ordinance and an ordinance levying the tax rates for the ensuing year.
− City Council then holds public hearings on the proposed budget. Notice of such public hearing
must appear in a local newspaper not less than seven days prior to the hearing. − The budget must be approved by a majority vote of City Council and legally adopted before July
1. If City Council does not adopt the proposed budget before July 1, the budget as submitted is automatically adopted.
− Additional appropriations may be made by City Council only if there is an unencumbered fund
balance or additional funding becomes available. Supplemental budget appropriations were approved during the fiscal year ended June 30, 2010 for the following funds: General Fund, Consolidated Grants, Road Maintenance, Law Library, Capital Projects, Utility Fund, Stormwater Utility Fund, Information Technology Fund, and Fleet Management Fund.
Formal budgetary integration is employed as a management control device. Annual operating budgets are adopted by ordinance passed by City Council for the General Fund, the Debt Service Fund, the Utility Fund, Stormwater Utility Fund, the Internal Service Funds and the following Special Revenue Funds: Route 17 Tax District, Downtown Business Overlay District, Road Maintenance and Law Library. Annual operating budgets are also adopted for the School Operating, School Food Service and School Grants funds.
Budgets for proprietary fund types are prepared on the accrual basis of accounting. The General, Special Revenue and Debt Service Funds' budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America.
Beginning fund balances for budgetary basis presentation purposes are adjusted for the carry-forward or prior year encumbrances. According to City Code, unexpended and unencumbered appropriations lapse at June 30 of each year. Appropriations that are encumbered at June 30 are carried forward into the following year's appropriations to allow for liquidation of the encumbrances.
Individual grants and projects included in the Consolidated Grants Fund and Capital Projects Fund, are budgeted separate from the operating budget. These appropriations do not parallel the City's fiscal year and the accounting, encumbering and controlling of the funds are based upon the length of each individual grant or project, which may be more than one year.
44
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
E. Stewardship, Compliance and Accountability: (Continued)
2. Excess Expenditures of Appropriations
Expenditures exceeded appropriations for the year ended June 30, 2010 as follows:
Activity / Element Expenditure Appropriations Excess
Treasurer $ 1,274,131 $ 1,265,014 $ 9,117Other general government 15,909 - 15,909Juvenile and Domestic Relations Court Service Unit 813,265 705,976 107,289Lease rent of building 501,817 501,215 602
3. Fund Deficit
There were no funds with deficit balances at June 30, 2010. F. Deposits and Investments
For purposes of reporting cash flows for proprietary-type funds, cash and cash equivalents include cash on hand, money market funds, certificates of deposit and investments with maturities of three months or less. State statutes authorize the City government and the School Board to invest in obligations of the U.S. Treasury, commercial paper, corporate bonds, repurchase agreements, the Local Government Investment Pool and State Non-Arbitrage Pool. Investments for the government, as well as for its component units, are reported at fair value. No investments are valued at cost. The Local Government Investment Pool operates in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the pool shares.
Interest income on investments is allocated to the appropriate funds based upon the average monthly cash balance of each fund. Interest income is accrued as earned. Restricted Cash and Payables from Restricted Cash - Restricted cash in the various funds consists of developer bonds and various other deposits and unspent bond proceeds as disclosed in Note 3. Payables from restricted assets in the fleet management fund will be paid from these capital lease proceeds.
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CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED) G. Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “due to" or "due from" other funds” (i.e. the current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Allowances for Uncollectible Accounts
The City calculates its allowances for uncollectibles on property taxes and utility service charges using historical collection data. The receivables shown on the Statement of Net Assets are presented net of the following allowances for doubtful accounts as of June 30, 2010:
Fund
General Fund – Taxes receivable $ 2,117,066 Nonmajor Funds – Taxes receivable 41,115 Utility Fund – Accounts receivable 138,208 Nonmajor Proprietary Funds – Fees receivable 66,516
Total $ 2,362,905
Property Taxes - Property taxes are levied as of January 1 for personal property and as of July 1 for real estate, based on the assessed value of real and personal property as of the date. The City's legal right to collect property taxes attaches each year when the rates are approved and the taxes are assessed. Real estate taxes are collectible twice a year, on June 5 and December 5. Personal property taxes are due on December 5. Amounts not collected within 45 days after year-end are reflected as deferred revenue.
Real Property Personal Property
Levy date July 1 January 1Due date and collection date June 5 and December 5 December 5Lien date for delinquent taxes 3 years from due date Various
H. Inventories and Prepaid Items
Inventories of materials and supplies in the governmental and proprietary fund types are recorded at cost. The cost of inventory is recorded as an expenditure at the time individual inventory items are consumed (consumption method) on a first-in, first-out basis.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.
46
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
I. Capital Assets
Capital outlays are recorded as expenditures of the governmental funds and as assets in the government-wide financial statements to the extent the City’s capitalization threshold is met.
Property, plant, equipment and infrastructure capital outlays of the Primary Government as well as the component units are recorded as capital assets and depreciated over their estimated useful lives on a straight-line basis on both the fund’s basis and the government-wide basis. Interest expense is capitalized on proprietary fund type assets. The amount of interest expense capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion of the project against interest income earned on invested proceeds over the same period. Interest capitalized during 2010 totaled $2,287,976. The City’s capitalization policy threshold is $5,000. All capital assets are valued at historical cost or estimated historical cost if actual cost was not available. Donated assets are valued at their estimated fair market value on the date donated. Assets acquired under capital leases are capitalized at the net present value of all lease payments, and related amortization expense is included with depreciation expense.
The estimated useful lives of capital assets are as follows:
Years
Buildings 40Improvements other than buildings 15-75Machinery and equipment 3-50Infrastructure 25-50
Maintenance, repairs, and minor equipment are charged to operations when incurred. Expenditures that materially change capacities or extend useful lives are capitalized. Upon sale or retirement of land, buildings, and equipment, the cost and related accumulated depreciation, if applicable, are eliminated from the respective accounts and any resulting gain or loss is included in the results of operations. Capital assets having historical significance and being maintained by the City are not expected to decrease in value and, therefore, are not being depreciated.
J. Deferred/Unearned Revenue
Deferred revenue in the governmental fund types consists of revenues that are measurable but not available for use during the current period. Property taxes receivable at June 30 but not collected within 45 days after that date are reported as deferred revenue in the financial statements. Unearned revenues consist of amounts prepaid and not yet earned.
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CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED) K. Compensated Absences
City employees are granted vacation and sick pay in varying amounts based on years of service. Employees may accumulate, subject to certain limitations, unused vacation and sick pay earned and, upon retirement, termination, or death, may be compensated for certain amounts at specified rates. The cost of accumulated vacation and sick pay expected to be paid from future expendable resources is accounted for as a liability in the government-wide statements and proprietary fund statements. All vacation pay is accrued when incurred in the government-wide and proprietary financial statements. For governmental fund types, the amount of accumulated unpaid vacation leave which is payable from available resources is recorded as a liability of the respective fund only if they have matured, for example, as a result of employee retirement or resignation. For City proprietary funds, the cost of vacation and sick leave is recorded as a liability when earned.
L. Long-term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net assets. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
M. Fund Balance
Financial Policies
The City’s Finance Committee has been established by Council to implement and establish various financial policies. The Committee meets on a monthly basis to manage and review cash financial activities to insure compliance the established policies. Members of the Committee include those individuals stipulated by ordinance adopted by City Council. It is the City’s policy to fund current expenditures with current revenues and the City’s mission is to strive to maintain a diversified and stable revenue stream to protect the government from problematic fluctuations in any single revenue source and provide stability to ongoing services. The City’s unassigned General Fund balance will be maintained to provide the City with sufficient working capital and a margin of safety to address local and regional emergencies without borrowing. The City has elected to early implement GASB 54 for the current year for its governmental funds. Fund balances are reported according to the following categories:
Nonspendable fund balance – Includes amounts that cannot be spent because they are either not in spendable form, or, for legal or contractual reasons, must be kept intact. This classification includes inventories, prepaid amounts, assets held for sale, and long-term receivables
48
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED) M. Fund Balance: (Continued)
Restricted fund balance – Restricted funds are either externally imposed (such as debt covenants, grantor, contributors or other governments) or are imposed by law (constitutionally or enabling legislation).
Committed fund balance – The City’s Committed Funds require formal action of the City Council either by resolution or ordinance that identifies the specific circumstances under which there resources may be expended.
Assigned fund balance – Amounts that are constrained by the City’s expressed intent to use resources for specific purposes but do not meet the criteria to be classified as restricted or committed. Intent can be stipulated by the governing body, anther body (such as the Finance Committee), or by an official to whom that authority has been given. With the exception of the General Fund, this is the residual fund balance of the classification for all governmental funds with positive balances.
Unassigned fund balance – This is the residual classification of the General Fund. Only the General Fund can report a positive “unassigned fund balance”. Other governmental funds might report a negative balance in this classification. Unassigned general fund balance - The ratio of Unassigned General Fund balance as a percentage of Budgeted Governmental Funds Expenditures (net of the General Fund Contribution to Schools, transfer to other Governmental Funds, and Capital Projects Fund Expenditures) plus budgeted expenditures in the School Operating and Food Service Funds indicates the ability of the City to cope with unexpected financial problems or emergencies. The larger the Unassigned General Fund balance, the greater the City’s ability to cope with financial emergencies and fluctuations in revenue cycles. The City has established a target rate of 12% at the close of each fiscal year as computed on the upcoming budget year. Once the Unassigned General Fund Balance target is achieved by the City, it is intended to be maintained for the upcoming fiscal year from prior year surpluses and budgeted additions as available before any other needs are addressed. In the event Unassigned Fund Balance is required to be drawn below the 12% target rate due to an emergency (such as a natural disaster) or due to severe economic circumstances, the City will develop a plan to restore the Unassigned Fund Balance over the ensuing two to three years. The General Fund has the following amounts committed and assigned at June 30, 2010:
Function Commited Assigned
General government administration $ 39,359 $ - Judicial administration 47,480 119,901 Public safety 112,965 903,127 Public works 98,076 14,688 Health and welfare 242,133 207,495 Parks, recreation, and cultural 22,466 17,939 Community development 22,996 1,722,900
Total $ 585,475 $ 2,986,050
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CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
N. Net Assets
Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net of related debt, consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net assets invested in capital assets, net of related debt excludes unspent debt proceeds. Net assets are reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. The City first applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available.
O. Retirement Plan Retirement plan contributions are actuarially determined and consist of current service costs and amortization of prior service costs over a 30-year period. The City's policy is to fund pension cost as it accrues.
P. Estimates
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenditures/expenses and disclosure of contingent assets and liabilities for the reported periods. Actual results could differ from those estimates and assumptions.
Q. Component Unit-School Board Capital Asset and Debt Presentation
By law, the School Board does not have taxing authority and, therefore, it cannot incur debt through general obligation bonds to fund the acquisition, construction or improvement of its capital assets. That responsibility lies with the City who issues the debt on behalf of the School Board. However, the Code of Virginia requires the School Board to hold title to the capital assets (buildings and equipment) due to their responsibility for maintaining the assets. In the Statement of Net Assets, this scenario presents a dilemma for the City. Debt issued on behalf of the School Board is reported as a liability of the primary government, thereby reducing the net assets of the City. The corresponding capital assets are reported as assets of the Component Unit-School Board (title holder), thereby increasing its net assets.
The Virginia General Assembly amended the Code of Virginia to allow a tenancy in common with the School Board whenever the locality incurs a financial obligation which is payable over more than one fiscal year for any school property. The tenancy in common terminates when the associated debt has been paid in full. For financial reporting purposes, the legislation permits the locality to report the portion of the school property related to any outstanding financial obligation, thus eliminating a potential deficit from financing capital assets with debt.
50
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 1−SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
R. Comparative Data/reclassifications
Certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year’s presentation.
S. Credit Risk
The assessed value of real estate and personal property for the City’s ten largest taxpayers comprises 3.86% and 6.00% of the City’s real estate and personal property tax base, respectively. Concentration of credit risk with respect to receivables is limited due to the large number of citizens comprising the City’s taxpayer base.
NOTE 2−DEPOSITS AND INVESTMENTS: The City maintains a cash and investment pool for all funds except the Economic Development Authority. The cash and investments of the Economic Development Authority’s funds are held separately from other City funds and the Treasurer of the City of Suffolk is not accountable for these funds. Each fund’s portion of the pool is reported in the balance sheet as cash and cash equivalents and/or restricted assets. Deposits All cash of the City and Component Unit School Board is maintained in accounts collateralized in accordance with the Virginia Security for Public Deposits Act, Section 2.2-4400 et. seq. of the Code of Virginia or covered by federal depository insurance. The City Treasurer’s policy for deposits and investments applies to both the City and the School Board. The policy refers to relevant state statutes identifying allowable types of investments, which are deemed to be high quality. The state statutes specify the following minimum levels of credit ratings: A-1 or P-1 for commercial paper and certificates of deposit, AA or Aa for corporate notes, and AAA for asset-backed securities. The Treasurer’s policy emphasizes the use of securities of high credit quality and marketability, and follows state statute, but does not specify minimum credit ratings. Credit Risk of Debt Securities Credit risk is the risk an investor is subject to as a result of the credit quality of investments in debt securities. The City’s rated debt investments as of June 30, 2010 were rated by Standard & Poor’s and the ratings are presented below using Standard & Poor’s rating scale.
Rated Debt Investments AAA AAAm
SNAP $ - $ 56,935,436 Repurchase Agreements - Underlying:U.S. Agency Securities 18,220,638 -
Total $ 18,220,638 $ 56,935,436
Fair Quality Ratings
Locality's Rated Debt Investments' Values
51
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 2−DEPOSITS AND INVESTMENTS: (CONTINUED) Interest Rate Risk The City Treasurer's policy states that the investment portfolio shall be designed to attain a market rate of return, taking into account investment risk constraints and liquidity needs. The portfolio shall be structured so that securities mature concurrent with estimated cash needs and remain sufficiently liquid to meet anticipated operating requirements. Investments of current operating funds shall have maturities of no longer than 24 months.
Fair Less ThanInvestment Type Value 1 Year
Repurchase Agreements $ 18,220,638 $ -
Interest rate risk does not apply to the State Non-Arbritrage Pool. External Investment Pool The State Non-Arbitrage Pool (SNAP) is an open-end management investment company registered with the Securities and Exchange Commission (SEC). The fair value of the positions in the SNAP is the same as the value of the pool shares. NOTE 3−RESTRICTED CASH: The City has restricted cash as of June 30, 2010 as follows:
NonmajorGovern- Business- Internal Total
Capital Debt mental type Service PrimaryGeneral Projects Service Funds Activities Funds Government
Unspent debt proceeds $ 53,900 $ 15,211,204 $ - $ - $ 36,851,743 $ 524,448 $ 52,641,295Proffers - 526,018 - - - - 526,018Debt service - - 392,169 - 1,525,006 - 1,917,175Cemetery - - - 986,450 - - 986,450Bridge repair - - - 2,669,183 - - 2,669,183Escrow/bond/customer
deposits 812,302 - - 2,544,541 32,827 - 3,389,670Other external purposes 25,676 - - 180,828 - - 206,504
Total restricted cash $ 891,878 $ 15,737,222 $ 392,169 $ 6,381,002 $ 38,409,576 $ 524,448 $ 62,336,295
52
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 4−RECEIVABLES: Taxes receivables and accounts receivable in the proprietary funds at June 30, 2010 are as follows:
Less-Allowance for
Taxes Accounts Uncollectible ReceivablesReceivable Receivable Subtotal Accounts Net
Primary Government:General $ 5,830,902 $ - $ 5,830,902 $ (2,117,066) $ 3,713,836Nonmajor Governmental
Funds 117,137 - 117,137 (41,115) 76,022Business-type Activities - 5,064,251 5,064,251 (204,724) 4,859,527Internal Service Funds - 29,618 29,618 - 29,618
Total $ 5,948,039 $ 5,093,869 $ 11,041,908 $ (2,362,905) $ 8,679,003
Component Unit-School Board $ - $ 173,604 $ 173,604 $ - $ 173,604
NOTE 5−DUE FROM OTHER GOVERNMENTS: Due from other governments in the fund statements at June 30, 2010 are as follows:
Primary GovernmentNonmajor
Capital GovernmentalGeneral Projects Funds Total
Commonwealth of VirginiaState sales tax $ 621,718 $ - $ - $ 621,718Shared expenses 231,073 - - 231,073Social services reimbursement 460,952 - - 460,952Various grants 38,787 179,267 46,989 265,043
Total due from theCommonwealth of Virginia $ 1,352,530 $ 179,267 $ 46,989 $ 1,578,786
Federal GovernmentHUD grants $ - $ - $ 195,968 $ 195,968Social services reimbursement 386,411 - - 386,411Various grants - 170,688 519,916 690,604
Total due from theFederal government $ 386,411 $ 170,688 $ 715,884 $ 1,272,983
Total due from other governments $ 1,738,941 $ 349,955 $ 762,873 $ 2,851,769
53
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 5−DUE FROM OTHER GOVERNMENTS: (CONTINUED)
Component Unit School BoardSchool
School Food SchoolOperating Service Grants
Fund Fund Fund TotalCommonwealth of Virginia
State sales tax $ 1,043,781 $ - $ - $ 1,043,781Various grants 14,877 - 69,639 84,516
Total due from theCommonwealth of Virginia $ 1,058,658 $ - $ 69,639 $ 1,128,297
Federal GovernmentSchool food reimubursement $ - $ 237,350 $ - $ 237,350Title I - - 1,380,065 1,380,065Title VI-B - - 792,519 792,519Various grants 296,285 - 736,971 1,033,256
Total due from theFederal government $ 296,285 $ 237,350 $ 2,909,555 $ 3,443,190
Total due from other governments $ 1,354,943 $ 237,350 $ 2,979,194 $ 4,571,487
NOTE 6−INTERFUND TRANSACTIONS: Interfund Receivables and Payables Individual fund interfund receivable and payable balances at June 30, 2010 are as follows:
Due To Due From
General Fund $ 1,851,244 $ - Nonmajor Governmental Funds:
Grants Fund - 763,204 Internal Service Funds:
Fleet Management Fund - 1,088,040 Totals $ 1,851,244 $ 1,851,244
Purpose Due to General Fund $763,204 - Nonmajor Governmental Funds: Advances for receivables from other governments to be reimbursed in subsequent fiscal year. $1,088,040 - Nonmajor Enterprise Fund: Cash advances at June 30, 2010.
54
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 6−INTERFUND TRANSACTIONS: (CONTINUED) Transactions between primary government and component units Receivable and payable balances between the primary government and component units at June 30, 2010, are as follows:
Due To Due From
Primary Government $ 568,224 $ -
Component Units: School Board - 328,969
Industrial Development Authority - 239,255 Totals $ 568,224 $ 568,224
The City transferred $44,223,161 to Suffolk School Board as part of its annual operating budget appropriation for support of schools. Interfund Transfers
General Capital Debt Govern-Fund Projects Service mental Total
Transfers from:General Fund $ - $ 1,514,461 $ 23,906,655 $ 115,035 $ 25,536,151Utility 920,363 - - - 920,363Nonmajor: Governmental 670,807 340,000 1,142,331 - 2,153,138 Enterprise 373,958 1,000,000 - - 1,373,958Internal Service 279,468 1,632,290 - - 1,911,758Total $ 2,244,596 $ 4,486,751 $ 25,048,986 $ 115,035 $ 31,895,368
Transfers toNonmajor
Purpose Transfers are used to (1) move revenues from that statute or budget requires to collect them to the funds that statute or budget requires to expend them and (2) use unrestricted revenues collected in the General Fund to finance various programs accounted for in other funds is accordance with budgeting authorization.
55
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 7−CAPITAL ASSETS: The following is a summary of governmental capital asset activity for the fiscal year ended June 30, 2010:
RestatedBalance BalanceJuly 1, June 30,2009 Increases Decreases 2010
Capital assets not being depreciatedLand $ 23,407,954 $ 1,173,965 $ 45,000 $ 24,536,919Construction in progress 27,567,957 18,544,056 3,384,811 42,727,202
Total capital assets notbeing depreciated $ 50,975,911 $ 19,718,021 $ 3,429,811 $ 67,264,121
Capital assets being depreciatedBuildings $ 55,346,926 $ 96,457 $ 991,037 $ 54,452,346Improvements other than buildings 149,044,624 1,989,495 159,980 150,874,139Machinery and equipment 52,788,785 4,551,348 2,563,650 54,776,483
Total capital assets being depreciated $ 257,180,335 $ 6,637,300 $ 3,714,667 $ 260,102,968
Less accumulated depreciationBuildings $ 14,549,856 $ 1,395,493 $ 991,037 $ 14,954,312Improvements other than buildings 28,443,680 6,447,514 4,620 34,886,574Machinery and equipment 32,586,810 4,153,252 2,263,945 34,476,117
Total accumulated depreciation $ 75,580,346 $ 11,996,259 $ 3,259,602 $ 84,317,003
Total capital assets being depreciated net $ 181,599,989 $ (5,358,959) $ 455,065 $ 175,785,965
School Board Joint Tenancy Assets $ 89,020,437 $ - $ 8,756,513 $ 80,263,924
Total capital assets governmentalactivities $ 321,596,337 $ 14,359,062 $ 12,641,389 $ 323,314,010
Reconciliation of primary government net assets invested in capital assets, net of related debt:Net capital assets $ 323,314,010Long-term debt applicable to capital assets:General obligation debt $ 201,749,125 Literary fund loans 5,250,000 Section 108 loan 3,266,000 Capital lease obligations 6,394,321 Bond premiums and other credits 6,737,894 Less - debt proceeds received but not expended on capital assets (15,789,552) Net long-term debt as adjusted $ 207,607,788 (207,607,788)
Net assets invested in capital assets, less related debt $ 115,706,222
Note - Beginning balances were restated for Golf Course Fund capital assets in the amount of $3,664,263, accumulated depreciation of $1,311,258 and improvements of $1,924,282 reference Note 17.
56
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 7−CAPITAL ASSETS: (CONTINUED) The following is a summary of Utility Fund capital asset activity for the year ended June 30, 2010:
RestatedBalance BalanceJuly 1, June 30,2009 Increases Decreases 2010
Capital assets not being depreciatedLand $ 3,208,702 $ 131,703 $ - $ 3,340,405Construction in progress 94,957,734 * 21,839,068 55,262,649 61,534,153
Total capital assets notbeing depreciated $ 98,166,436 $ 21,970,771 $ 55,262,649 $ 64,874,558
Capital assets being depreciatedBuildings $ 22,112,282 $ 24,241,669 $ - $ 46,353,951Improvements other than buildings 235,261,146 8,206,336 - 243,467,482Machinery and equipment 49,137,291 23,475,567 8,000 72,604,858
Total capital assets being depreciated $ 306,510,719 $ 55,923,572 $ 8,000 $ 362,426,291
Less accumulated depreciationBuildings $ 8,543,505 $ 943,951 $ - $ 9,487,456Improvements other than buildings 47,808,323 4,710,972 - 52,519,295Machinery and equipment 20,114,814 2,190,679 8,000 22,297,493
Total accumulated depreciation $ 76,466,642 $ 7,845,602 $ 8,000 $ 84,304,244
Total capital assets being depreciated net $ 230,044,077 $ 48,077,970 $ - $ 278,122,047
Total capital assets Utility Fund $ 328,210,513 $ 70,048,741 $ 55,262,649 $ 342,996,605
Reconciliation of primary government net assets invested in capital assets, net of related debt:Net capital assets $ 342,996,605
Long-term debt applicable to capital assets see Note 8 $ 216,217,043 Less - debt proceeds received but not expended on capital assets (36,851,743) Net long-term debt as adjusted $ 179,365,300 (179,365,300)
Net assets invested in capital assets, less related debt $ 163,631,305
* Includes adjustment of $911,588 to construction in progress reference Note 17 .
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CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 7−CAPITAL ASSETS: (CONTINUED) The following is a summary of Component Unit-School Board capital asset activity for the year ended June 30, 2010:
Balance BalanceJuly 1, June 30,2009 Increases Decreases 2010
Capital assets not being depreciatedLand $ 5,938,618 $ - $ - $ 5,938,618
Capital assets being depreciatedBuildings $ 184,178,431 $ 45,284 $ - $ 184,223,715Improvements 16,396,876 44,509 - 16,441,385Machinery and equipment 32,207,150 3,337,262 844,078 34,700,334
Total capital assetsbeing depreciated $ 232,782,457 $ 3,427,055 $ 844,078 $ 235,365,434
Less accumulated depreciationBuildings $ 59,943,503 $ 4,854,586 $ - $ 64,798,089Improvements 7,401,487 621,312 - 8,022,799Machinery and equipment 19,147,594 2,428,955 834,093 20,742,456
Total accumulated depreciation $ 86,492,584 $ 7,904,853 $ 834,093 $ 93,563,344
Total capital assets being depreciated net $ 146,289,873 $ (4,477,798) $ 9,985 $ 141,802,090
City Joint Tenancy Assets $ (89,020,437) $ 8,756,513 $ - $ (80,263,924)
Total $ 63,208,054 $ 4,278,715 $ 9,985 $ 67,476,784
The following is a summary of depreciation expense charged to various functions/funds for the year ending June 30, 2010:
Governmental Activites:General Government $ 392,852 Judicial Administration 70,037 Public Safety 1,858,461 Public Works 8,686,386 Public Health 12,388 Parks, Recreation, and Culture 976,135
Total Governmental Activities $ 11,996,259 *
*
Proprietary Funds:
Utility Fund $ 7,837,602
Component Unit School Board $ 7,904,853
Includes depreciation of $3,370,705 for the Fleet Maintenance Fund and$199,811 for Information Technology Fund.
58
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 8−LONG-TERM OBLIGATIONS: The following is a summary of the changes in long-term obligation transactions of the governmental funds for the year ended June 30, 2010:
RestatedBalance BalanceJuly 1, June 30, Due Within2009 Additions Reductions 2010 One Year
Governmental Funds:General obligation debt $ 210,736,771 $ 34,155,000 $ 43,142,646 $ 201,749,125 $ 12,878,169Literary fund loans 5,750,000 - 500,000 5,250,000 500,000Notes payable 240,000 - 240,000 - - Section 108 loan 3,459,000 - 193,000 3,266,000 193,000Capital lease obligations 8,786,426 398,784 2,790,889 6,394,321 2,549,608Add bond premiums
and other credits 5,088,906 2,102,918 453,930 6,737,894 331,020Net debt $ 234,061,103 $ 36,656,702 $ 47,320,465 $ 223,397,340 $ 16,451,797
Claims payable 1,800,242 10,826,864 9,287,975 3,339,131 1,380,913OPEB 209,817 - 209,817 - - Compensated absences 4,166,564 1,137,498 807,738 4,496,324 272,280
Total $ 240,237,726 $ 48,621,064 $ 57,625,995 $ 231,232,795 $ 18,104,990
Note - Beginning balances were restated for Golf Course Fund debt in the amount of $3,974,784 anddeferred credits in the amount of $1,244, reference Note 17.
59
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 8−LONG-TERM OBLIGATIONS: (CONTINUED) The following is a summary of long-term obligations outstanding at June 30, 2010:
Issue Final Interest Authorized OutstandingDescription Date Maturity Rate and Issued June 30, 2010
Bonds Payable:Virginia Public School Authority 08/30/90 07/15/10 6.40 - 7.10 $ 3,685,000 $ 240,000 Virginia Public School Authority 07/31/91 07/15/12 4.85 - 6.60 451,546 57,755 General Obligations Bonds:
Public Improvement Series 2001 06/07/01 06/30/21 4.00 - 5.00 21,135,000 3,285,000 2001 Refunding Bonds 06/07/01 06/30/15 4.00 - 5.00 5,430,883 2,396,801 Public Improvement Series 2002 07/18/02 06/30/23 3.00 - 5.00 18,195,000 3,085,000 Public Improvement Series 2003 07/01/03 08/01/23 2.50 - 6.00 17,515,000 12,630,000 2003 Refunding Bonds 07/16/03 08/01/16 2.50 - 6.00 18,129,532 4,850,369 Public Improvement Series 2004 07/28/04 06/30/25 2.50 - 6.00 18,160,000 13,585,000 Public Improvement Series 2005 11/17/05 12/01/25 4.00 - 5.00 11,710,000 9,360,000 2005 Refunding Bonds 11/17/05 12/01/19 4.00 - 5.00 9,978,267 8,557,074 2007 Public Improvement and Refunding Bonds 04/11/07 02/01/35 4.00 - 4.50 88,081,239 77,562,126 2007B Public Improvement Bonds 12/01/07 12/01/27 4.00 - 5.00 24,475,000 22,025,000 2008 Public Improvement Bonds 10/28/08 02/01/29 4.00 - 5.00 16,600,000 9,960,000 2010A Public Improvement andRefunding Bonds 04/29/10 08/01/32 3.38 34,155,000 34,155,000
Total general obligation bonds $ 201,749,125
Literary Fund Loans:Literary Fund Loan 12/01/99 12/01/19 3.00 5,000,000 $ 2,500,000 Literary Fund Loan 04/01/01 04/01/21 3.00 5,000,000 2,750,000
Total literary fund loans $ 5,250,000
Other Notes:Section 108 Loan Payable 09/14/06 08/01/26 4.96 - 5.77 3,845,000 $ 3,266,000
60
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 8−LONG-TERM OBLIGATIONS: (CONTINUED) Summary of long-term obligations outstanding at June 30, 2010: (Continued)
OutstandingJune 30, 2010
Capital Lease Obligations:
$ 1,255,393
66,284
776,467
398,784
3,897,393
Total capital lease obligations $ 6,394,321
Add premiums and other credits $ 6,737,894
Claims payable $ 3,339,131
Compensated absences $ 4,496,324
Total governmental long-term obligations $ 231,232,795
$4,662,530 issued April 26, 2006 for the purchase of roadway maintenance equipment toinclude 20 dump trucks, 9 mowing tractors, 1 rubber tire loader,1 asphalt patch truck,backhoes, 18 pickups, a ditch master and miscellaneous other equipment; payable in quarterlyinstallments of $258,070 through July 2011; interest at 3.69%
$245,968 issued September 13, 2006 for the purchase of 2 freightliner trash trucks; payable inquarterly installments of $258,070 through September 2011; interest at 4.11%
$2,083,504 issued February 28, 2007 for the purchase of a various roadway maintenaceequipment; payable in quarterly installments of $115,371 through February, 2012; interest at3.97%
$495,043 issued September 24, 2010 for the purchase of a time and attendance system;payable in monthly installments of $13,751 through November 2012
$5,412,300 issued November 10, 2008 for the purchase of 28 public safety vehicles; payable inquarterly installments of $299,170 through November 2013; interest at 3.90%
61
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 8−LONG-TERM OBLIGATIONS: (CONTINUED) Amortization Requirements for Governmental Funds The following is a summary of long-term obligation amortization requirements for governmental funds at June 30, 2010:
Year General Section 108 Capital LeaseEnding
June 30, Principal Interest Principal Interest Principal Interest Principal Interest
2011 $ 12,878,169 $ 8,497,772 $ 500,000 $ 157,500 $ 193,000 $ 170,065 $ 2,714,620 $ 195,5082012 13,827,876 8,302,867 500,000 142,500 193,000 160,406 1,875,618 103,9252013 13,964,858 7,748,472 500,000 127,500 193,000 150,707 1,214,381 51,0582014 14,212,945 7,104,538 500,000 112,500 193,000 140,979 589,702 8,6392015 13,212,952 6,495,059 500,000 97,500 193,000 131,214 - - 2016 13,409,433 5,888,295 500,000 82,500 193,000 121,410 - - 2017 12,975,428 5,298,267 500,000 67,500 193,000 111,567 - - 2018 13,117,475 4,632,084 500,000 52,500 193,000 101,521 - - 2019 11,057,488 4,009,410 500,000 37,500 193,000 91,215 - - 2020 10,662,501 3,512,725 500,000 22,500 193,000 80,764 - - 2021 9,860,000 3,083,021 250,000 7,500 193,000 70,187 - - 2022 8,895,000 2,664,593 - - 193,000 59,495 - - 2023 9,075,000 2,241,698 - - 193,000 48,697 - - 2024 8,300,000 1,858,500 - - 193,000 37,812 - - 2025 7,550,000 1,522,043 - - 193,000 26,849 - - 2026 6,775,000 1,212,774 - - 193,000 15,809 - - 2027 6,370,000 923,688 - - 178,000 5,135 - - 2028 6,545,000 633,825 - - - - - - 2029 2,155,000 368,944 - - - - - - 2030 1,355,000 295,875 - - - - - - 2031 1,110,000 242,950 - - - - - - 2032 1,150,000 193,838 - - - - - - 2033 1,215,000 142,350 - - - - - - 2034 1,015,000 93,375 - - - - - - 2035 1,060,000 47,700 - - - - - -
Total $ 201,749,125 $ 77,014,663 $ 5,250,000 $ 907,500 $ 3,266,000 $ 1,523,832 $ 6,394,321 $ 359,130
ObligationsLiterary Fund LoansObligation Bonds Loan Payable
The Internal Services Fund capital lease obligations are collateralized by equipment with a book value of $6,918,522 for 2010, which is net of accumulated depreciation of $5,825,900 for 2010 at June 30, 2010.
62
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 8−LONG-TERM OBLIGATIONS: (CONTINUED) Other General Fund revenues are used to pay all long-term general obligation debt, capital leases, and compensated absences. The General Fund has a contingent liability for repayment of the general obligation bonds outstanding in the Enterprise Fund, from which repayment is anticipated, should the Enterprise Fund be unable to do so. Debt service requirements for general obligation bonds and other long-term obligations are met by the General Fund. The City retains the liability for the portion of general obligation bonds issued to fund capital projects of the School Board. General obligation bonds are direct obligations and pledge the full faith and credit of the City. The following is a summary of the changes in long-term obligation transactions of the proprietary funds for the year ended June 30, 2010:
Balance Balance AmountJuly 1, June 30, Due Within2009 Additions Reductions 2010 One Year
Utility Fund:Bonds payable $ 188,253,417 $ 31,945,000 $ 8,839,786 $ 211,358,631 $ 4,535,206
Add bond premiumsother credits 4,558,920 479,906 180,415 4,858,411 204,410
Net bonds payable $ 192,812,337 $ 32,424,906 $ 9,020,201 $ 216,217,042 $ 4,739,616Compensated absences 362,493 99,445 98,804 363,134 12,733
Total Utility Fund $ 193,174,830 $ 32,524,351 $ 9,119,005 $ 216,580,176 $ 4,752,349
Stormwater Utility Fund:Compensated absences $ 45,042 $ 38,485 $ 21,068 $ 62,459 $ 1,679
Total Proprietary Funds $ 193,219,872 $ 32,562,836 $ 9,140,073 $ 216,642,635 $ 4,754,028
63
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 8−LONG-TERM OBLIGATIONS: (CONTINUED) The following is a summary of proprietary funds long-term obligations outstanding at June 30, 2010:
Issue Final Interest Authorized OutstandingDescription Date Maturity Rate % and Issued June 30, 2010
Public Utility Fund:Bonds payable:General Obligation and Revenue Bonds: Water and Sewer Revenue Bonds Series 2000 03/29/00 04/01/30 4.20 - 5.90 $ 14,435,000 $ 345,0002001 Refunding Bonds 06/07/01 06/30/15 4.00 - 5.00 1,344,117 593,200Water and Sewer Bonds Series 2001 12/14/01 04/01/31 3.85 - 5.10 18,340,000 - 2003 Refunding Bonds 07/16/03 08/01/16 2.50 - 6.00 3,250,469 869,631
Water and Sewer Revenue Bonds Series 2003 12/04/03 10/01/33 2.10 - 5.10 11,725,000 10,450,0002003C VRA Refunding Bonds 08/07/03 10/01/16 2.00 - 5.00 3,295,000 1,810,000Water and Sewer Revenue Bonds Series 2004B 11/17/04 10/01/26 2.00 - 6.00 11,695,000 10,230,000Water and Sewer Revenue Bonds Series 2005B 12/07/05 10/01/35 4.77 - 5.10 14,050,000 $ 13,045,0002005 Refunding Bonds 11/17/05 12/01/19 4.00 - 5.00 26,733 22,9262006B VRA Refunding Bonds 08/09/06 04/01/30 4.10 - 4.87 12,750,000 12,235,000Water and Sewer Revenue Bonds Series 2006C 11/29/06 10/01/36 4.26 - 4.91 36,460,000 35,215,0002007 Public Improvement and Refunding Bond 04/11/07 02/01/35 4.00 - 4.50 163,761 97,8742007 Series Water and Sewer Revenue Bond - VRA 12/13/07 10/01/37 3.40 - 5.10 39,795,000 39,075,0002008 Series Water and Sewer Revenue Bond - VRA 12/10/08 10/01/38 2.29 - 5.54 45,300,000 45,300,0002009 Series Water and Sewer Revenue Bond - VRA 06/17/09 10/01/25 1.13 - 4.86 10,200,000 10,125,0002009 Series (Taxable-Build America Bonds) 11/10/09 02/01/40 3.87 27,000,000 27,000,0002010 VRA Refunding Bonds (VPFP) 06/16/10 04/01/31 4.52 4,945,000 4,945,000
Total long-term debt $ 211,358,631
Bond premiums and other credits 4,858,411
Net bonds payable $ 216,217,042
Compensated absenses 363,134
Total Public Utility Fund $ 216,580,176
Stormwater Utility Fund:
Compensated absences $ 62,459
Total Proprietary Funds $ 216,642,635
64
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 8−LONG-TERM OBLIGATIONS: (CONTINUED) Other: (Continued) The following is a summary of long-term obligation amortization requirements for proprietary funds at June 30, 2010:
Major FundYear Ending Utility Fund
June 30, Principal Interest
2011 $ 4,535,206 $ 10,601,209 2012 4,691,504 10,093,642 2013 5,485,142 9,899,199 2014 5,717,055 9,688,681 2015 5,742,048 9,462,990 2016 5,925,567 9,212,376 2017 6,039,572 8,947,174 2018 5,972,525 8,682,160 2019 6,222,513 8,402,789 2020 6,512,499 8,108,945 2021 6,785,000 7,799,560 2022 7,115,000 7,469,664 2023 7,430,000 7,120,921 2024 7,770,000 6,753,329 2025 8,140,000 6,363,307 2026 8,515,000 5,945,606 2027 8,915,000 5,504,538 2028 8,485,000 5,062,804 2029 8,880,000 4,619,577 2030 9,310,000 4,154,092 2031 8,815,000 3,665,617 2032 8,110,000 3,225,248 2033 8,510,000 2,792,747 2034 8,935,000 2,338,952 2035 8,610,000 1,882,134 2036 9,040,000 1,422,490 2037 8,600,000 961,709 2038 6,645,000 559,498 2039 4,370,000 262,245 2040 1,535,000 95,170
Totals $ 211,358,631 $ 171,098,373
The City also leases various equipment and facilities through operating leases which are subject to appropriation annually. Rent expense for governmental and business-type activities was $2,095,859 and $1,073,490, respectively.
65
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 8−LONG-TERM OBLIGATIONS: (CONTINUED) School Board Long-Term Liabilities Following is a summary of changes in noncurrent liabilities of the School Board and its component unit for the year ended June 30, 2010:
Balance Balance CurrentJuly 1, 2009 Additions Reductions June 30, 2010 Portion
Compensated absences:School Board $ 2,052,220 $ 435,086 $ 571,575 $ 1,915,731 $ 217,785
General Obligation Debt Limit The Commonwealth of Virginia imposes a legal limit of 10% of the assessed valuation of taxable real property on the amount of general obligation borrowing which may be outstanding by the City. The City of Suffolk has independently set a lower debt limit of 4% of the assessed valuation. As of June 30, 2010 the City's aggregated general obligation indebtedness is approximately $422 million less that the City's limit and $695 million less that the Commonwealth's limit as summarized in statistical table number 13. The City was in compliance with all significant financial covenants contained in the various bond indentures at June 30, 2010. The City does not have overlapping debt at June 30, 2010. In prior years, the City defeased certain general obligation and other bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City’s financial statements. At June 30, 2010, $18,140,000 of bonds outstanding are considered defeased. On June 16, 2010 the City issued $4,945,000 in VRA Water and Sewer Bonds in the Virginia Pooled Financing Program to advance refund $5,205,000 Water and Sewer Bonds Series 2001 on October 1, 2026 through April 1, 2031. This refunding reduced debt service payments by $667,664. A premium was received in the amount of $479,906 and issuance costs totaled $109,499 reflecting a net loss on refunding of $110,407. On April 27, 2010 the City issued $34,155,000 Series 2010 New Money ($3,450,000) and Refunding Bonds ($30,705,000) with an effective interest rate of 3.3%. The refunded bonds are summarized as follows:
Refund 1999 Public Improvement Bonds $ 1,080,000 Refund 2000 Public Improvement Bonds 945,000 Refund 2001 GO Refunding Bonds 2,170,000 Refund 2002 Public Improvement Bonds 12,420,000 Refund 1994 Public Improvement and Refunding Bonds 955,000 Refund 2007 Public Improvement and Refunding Bonds 6,380,000 Refund 2002 Public Improvement Bonds 5,810,000
Total $ 29,760,000
66
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 8−LONG-TERM OBLIGATIONS: (CONTINUED) General Obligation Debt Limit: (Continued) The 2010 bonds will be repaid in various installments beginning August 1, 2011 to August 1, 2033. As a result the above bonds are considered to be defeased in substance and the liability for those bonds has been removed from these financial statements. The City received premiums in the total amount of $2,102,918 as part of this bond issue. The re-acquision price exceeded the carrying amount of the old debt by $1,130,179. These advance refundings were undertaken to reduce the total debt service payments over the next 20 years by $1,237,249 and resulted in an economic gain (difference between the present value of the old and new debt service payments ) of $982,272. Arbitrage Rebate Management has calculated its estimated arbitrage rebate liability relating to the City's various bond issues in accordance with Internal Revenue Service regulations. Internal Revenue Service regulations require the City to remit the rebate to the United States Treasury once every five years. At June 30, 2010, the City did not have an estimated rebate liability. Bonds Authorized and Unissued Bonded debt authorized by City Council in previous years but unissued as of June 30, 2010, totals $57,380,739. NOTE 9−DEFINED BENEFIT PENSION PLAN: A. Plan Description Name of Plan: Virginia Retirement System (VRS) Identification of Plan: Agent and Cost-Sharing Multiple-Employer Defined Benefit Pension Plan Administering Entity: Virginia Retirement System (System)
All full-time, salaried permanent employees of participating employers must participate in the VRS. Benefits vest after five years of service. Employees are eligible for an unreduced retirement benefit at age 65 with 5 years of service (age 60 for participating law enforcement officers, firefighters, and sheriffs) or at age 50 with at least 30 years of service if elected by the employer (age 50 with at least 25 years for participating local law enforcement officers, firefighters, and sheriffs) payable monthly for life in an amount equal to 1.7 percent of their average final compensation (AFC) for each year of credited service (1.85% to sheriffs and if the employer elects, to other employees in hazardous duty positions receiving enhanced benefits). Benefits are actuarially reduced for retirees who retire prior to becoming eligible for full retirement benefits. In addition, retirees qualify for annual cost-of-living adjustment (COLA) beginning in their second year of retirement. The COLA is limited to 5% per year. AFC is defined as the highest consecutive 36 months of reported compensation. Participating local law enforcement officers, firefighters, and sheriffs may receive a monthly benefit supplement if they retire prior to age 65. The VRS also provides death and disability benefits. Title 51.1 of the Code of Virginia (1950), as amended, assigns the authority to establish and amend benefit provisions to the General Assembly of Virginia.
67
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 9−DEFINED BENEFIT PENSION PLAN: (CONTINUED) A. Plan Description: (Continued)
The System issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information for VRS. A copy of that report may be downloaded from their website at http://www.varetire.org/Pdf/publications/2009-Annual-Report.pdf or obtained by writing to the System's Chief Financial Officer at P.O. Box 2500, Richmond, VA 23218-2500.
B. Funding Policy
Plan members are required by Title 51.1 of the Code of Virginia (1950), as amended, to contribute 5% of their annual salary to the VRS. This 5% member contribution may be assumed by the employer. In addition, the City and School Board are required to contribute the remaining amounts necessary to fund participation in the VRS using the actuarial basis specified by the Code of Virginia and approved by the VRS Board of Trustees. The City's and School's non-professional employees contribution rates for the fiscal year ended 2010 were 9.22% and 7.08% of annual covered payroll, respectively. The School Board’s contributions for professional employees were $8,229,751, $10,175,482, and $6,170,650 to the teacher cost-sharing pool for the fiscal years ended June 30, 2010, 2009 and 2008, respectively and these contributions represented 8.81%, 8.81% and 8.30%, respectively, of current covered payroll.
C. Annual Pension Cost For fiscal year 2010, the City’s annual pension cost of $4,817,023 was equal to the City’s required and actual contributions.
For fiscal year 2010, the City School Board’s annual pension cost for the Board’s non-professional employees was $871,508 which was equal to the Board’s required and actual contributions.
Annual Percentage NetFiscal Year Pension of APC Pension
Ending Cost (APC) (1) Contributed Obligation
City:June 30, 2010 $ 4,817,023 100% $ - June 30, 2009 4,730,739 100% - June 30, 2008 4,404,885 100% -
School Board:Non-professional:
June 30, 2010 $ 871,508 100% $ - June 30, 2009 837,098 100% - June 30, 2008 821,274 100% -
(1) Employer portion only
Trend information for the City and School Board
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CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 9−DEFINED BENEFIT PENSION PLAN: (CONTINUED)
C. Annual Pension Cost: (Continued)
The required contribution was determined as part of the June 30, 2009 actuarial valuation using the entry age actuarial cost method. The actuarial assumptions at June 30, 2009 included (a) 7.50% investment rate of return (net of administrative expenses), (b) projected salary increases ranging from 3.75% to 5.60% per year for general government employees and 3.50% to 4.75% for employees eligible for enhanced benefits available to law enforcement officers, firefighters, and sheriffs, and (c) a cost of living adjustment of 2.50% per year. Both the investment rate of return and the projected salary increases include an inflation component of 2.50%. The actuarial value of the City’s and the City School Board’s assets is equal to the modified market value of assets. This method uses techniques that smooth the effects of short-term volatility in the market value of assets over a five-year period. The City’s, School Board's unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at June 30, 2007 was 20 years.
D. Funded Status and Funding Progress As of June 30, 2009, the most recent actuarial valuation date, the City’s plan was 81.20% funded. The actuarial accrued liability for benefits was $181,382,891, and the actuarial value of assets was $147,279,719, resulting in an unfunded actuarial accrued liability (UAAL) of $34,103,172. The covered payroll (annual payroll of active employees covered by the plan) was $52,462,203 and ratio of the UAAL to the covered payroll was 65.1%. As of June 30, 2009 the most recent actuarial valuation date, the City School Board’s plan was 91.20% funded. The actuarial accrued liability for benefits was $17,857,433, and the actuarial value of assets was $16,285,337, resulting in an unfunded actuarial accrued liability (UAAL) of $1,572,096. The covered payroll (annual payroll of active employees covered by the plan) was $7,212,065 and ratio of UAAL to the covered payroll was 21.80%. The schedule of funding progress, presented as Required Supplementary Information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.
NOTE 10−DEFERRED/UNEARNED REVENUE:
The balance in deferred revenue on the fund statements and unearned revenues on the government-wide statements at year-end is comprised of the following elements:
Deferred UnearnedRevenue Revenue
Unearned developer deposits and other amounts (General) $ - $ 921,389 Unearned developer deposits (Nonmajor Governmental) - 2,544,541 Unearned grant receipts (Governmental) 41,234 66,679 Taxes receivable, net (Governmental) 2,476,649 - Taxes receivable, net (Nonmajor Governmental) 29,236 Unearned revenue, (Nonmajor Proprietary) - 74,556
Total $ 2,547,119 $ 3,607,165
69
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 11−CONTINGENT LIABILITIES AND COMMITMENTS: Litigation At year end there are two lawsuits against the School Board involving negligence in connection with mold contamination of a school building which collectively total $9M. The suits allege the School Board had untrained school personnel performing mold sample collection and remediation by application of bleach and other biocides which caused undue harm to two individuals. These cases were filed in state court but have been removed to federal court and the court has not ruled at this time. These lawsuits are not covered by any policy of insurance and it is not known whether or not damages, if any, will be awarded. Other claims and lawsuits are pending against the City and School Board. In the opinion of the City and School Board attorneys, resolution of these cases will not involve a significant liability to the City or the School Board. Federally Assisted Grant Programs The City participates in a number of federally assisted grant programs. Although the City has been audited in accordance with the provisions of OMB Circular A-133, these programs remain subject to financial and compliance audits by the grantors or their representatives. Such audits could lead to requests for reimbursements to the grantor agency for expenditures disallowed under terms of the grant. Based on prior experience, City management believes such disallowances, if any, will not be significant. Construction Commitments The City has authorized expenditures for capital additions and construction of various governmental and utility capital projects. At June 30, 2010, projects expected to be completed at various dates through 2010 had a total unexpended balance of $12,986,435 (governmental) and $11,857,580 (utility). Contingency The City currently has been notified by a taxpayer that is may be requesting the manufacturing exemption for the Business Professional Occupancy License taxes for the years 2007 to 2009 which total $1,066,513. At the date of this report this evaluation is on-going.
70
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 11−CONTINGENT LIABILITIES AND COMMITMENTS: (CONTINUED) Self-Insurance The City is self-insured for a portion of its health insurance risks up to $125,000 per occurrence. An external insurance policy provides coverage over the specified amount up to $1,000,000 per individual for life. Claims payable reported in the Risk Management Fund at June 30, 2010 consists of all current self-insured claims payable amounting to $3,339,131. The current portion is $1,380,913 and $1,491,141 for 2010 and 2009, respectively. Claims payable for health insurance are based on current enrollment and benefits and historical experience. Claims payable for workman’s compensation and other contingent liabilities are based on insurance coverage and specific claims which have been presented. Following is a summary of changes in claims payable for the fiscal years ended June 30, 2010 and 2009:
CurrentClaims Year Claims
Payable Claims and PayableJuly 1, Changes in Claims June 30,2009 Estimates Payments 2010
Workman's Compensation and other $ 1,038,741 $ 2,315,147 $ (907,089) $ 2,446,799 Health Insurance 761,501 8,511,717 (8,380,886) 892,332
Totals $ 1,800,242 $ 10,826,864 $ (9,287,975) $ 3,339,131
CurrentClaims Year Claims
Payable Claims and PayableJuly 1, Changes in Claims June 30,2008 Estimates Payments 2009
Workman's Compensation and other $ 1,164,369 $ 802,921 $ (928,549) $ 1,038,741 Health Insurance 860,603 6,626,906 (6,726,008) 761,501
Totals $ 2,024,972 $ 7,429,827 $ (7,654,557) $ 1,800,242
Third-party administrators acting on behalf of the City pay all self-insured claims. There have been no claims settled that exceeded insurance coverage in any of the past three years.
71
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 11−CONTINGENT LIABILITIES AND COMMITMENTS: (CONTINUED) Worker’s Compensation Self-Insurance Coverage – School Board The School Board maintains a self-insurance plan for workers’ compensation benefits. Charges are made to the School Operating, Grants and Food Service Funds as approved by City Council in the annual operating budgets. Any excess charges are reflected as a reserved fund balance for workers’ compensation claims in the School Operating Fund. Claims are paid by a third-party administrator acting on behalf of the School Board under terms of a contractual agreement. Administrative fees are included within the provisions of that agreement. The plan pays all claims up to $600,000 and $500,000 for each covered accident, for the years ended June 30, 2010 and 2009, respectively. Any claims exceeding $600,000 for each covered accident are paid by specific stop-loss insurance provided by a third-party insurance company. As of June 30, 2010, the workers’ compensation benefit obligation consisted of $309,178 in reported unpaid claims and estimated incurred but not reported claims. Changes in the balance of claims liabilities during the years ended June 30, 2010 and 2009, are as follows:
Current YearClaims Claims and Claims
Payable Changes in Claims PayableJuly 1, 2009 Estimates Payments June 30, 2010
Workers' compensation $ 465,510 $ 300,479 $ (456,811) $ 309,178
Current YearClaims Claims and Claims
Payable Changes in Claims PayableJuly 1, 2008 Estimates Payments June 30, 2009
Workers' compensation $ 338,917 $ 784,399 $ (657,806) $ 465,510
At June 30, 2010, School Operating Fund cash of $627,484 was held for purposes of funding the School’s future claims liabilities. As a result, $627,484 of the School Operating Fund balance is reserved for payment of future claims liabilities. Health Insurance Self-insurance Coverage – School Board Claims are paid by a third-party administrator acting on behalf of the School Board under terms of a contractual agreement. The plan pays all claims up to $125,000 for each participant. Any claims exceeding $125,000 for each participant are paid by specific stop-loss insurance provided by a third-party insurance company. As of June 30, 2010, School Operating Fund cash of $380,122 was held for purposes of funding the School’s future claims liabilities. As a result, $380,122 of the School Operating Fund balance is reserved for payment of future claims liabilities.
72
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 12−LANDFILL POST CLOSURE CARE COSTS: State and Federal laws and regulations require that the City of Suffolk perform certain maintenance and monitoring functions subsequent to closure of the City’s landfill site. The City ceased accepting solid waste at the landfill in 1984 and completed initial closure measures in 1995. The City’s ten-year post closure period began in 1995 and has been extended. The estimated post closure cost is $581,200. This cost estimate includes site maintenance, water quality testing, and applicable methane gas monitoring measures, leachate collection and disposal. The total current cost of landfill closure and post closure care is an estimate and subject to changes resulting from inflation, deflation, technology, or changes in applicable laws or regulations. The City has expended $326,041 through fiscal year 2010. It is estimated that the remaining $255,159 will be recognized as post closure care expenses between June 30, 2010, and the date post closure care requirements expire. NOTE 13−SURETY BONDS: Surety Bonds of the City of Suffolk are as follows:
Ronald H. Williams, Treasurer Constitutional Officer's Self-Insurance Plan $ 1,000,000 Commonwealth of Virginia Faithful
Performance of Duty Bond Plan 500,000
Thomas A. Hazelwood, Constitutional Officer's Self-Insurance Plan 1,000,000 Commissioner of the Revenue Commonwealth of Virginia Faithful
Performance of Duty Bond Plan 3,000
Raleigh H. Isaacs, Sheriff Constitutional Officer's Self-Insurance Plan 1,000,000 Commonwealth of Virginia Faithful
Performance of Duty Bond Plan 30,000
W. Randolph Carter, Jr., Constitutional Officer's Self-Insurance Plan 1,000,000 Clerk of Circuit Court Commonwealth of Virginia Faithful
Performance of Duty Bond Plan 485,000
C. Phillips Ferguson, Constitutional Officer's Self-Insurance Plan 1,000,000 Commonwealth's Attorney
NOTE 14−SUBSEQUENT EVENTS: There are no subsequent events at June 30, 2010.
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CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 15−TRUST FOR OTHER POST-EMPLOYMENT BENEFITS: The City of Suffolk has established a irrevocable trust pursuant to Section 15.2-1544 of the Code of Virginia, as amended for the purpose of accumulated and investing assets to fund Other Post-Employment Benefits (OPEB) and to participate in the Virginia Pooled OPEB Trust Fund and has established a Local Finance Board to become a Participating Employer in the Trust Fund. The Trust Fund provides administrative, custodial and investment services to the Participating Employers in the Trust Fund. For the fiscal year ending June 30, 2010 the City contributed $3,014,322 and the School Board contributed $1,411,000 to the Trust Fund. Expenses allocated to the Trust Fund during the fiscal year ended June 30, 2010 totaled $6,320 for the City and $3,825 for the School Board. The Trust Fund issues a separate report, which can be obtained by requesting a copy from the plan administrator, Virginia Municipal League (“VML”) at P.O. Box 12164, Richmond, Virginia 23241. NOTE 16−OTHER POST-EMPLOYMENT BENEFITS PROGRAM: City: A. Plan Description
The City Post-Retirement Medical Plan (CPRMP) is a single-employer defined benefit healthcare plan which offers health insurance for retired employees. Retired employees, who were enrolled in the City group health insurance plan for the 24 month prior to retirement date, who were employed by City with at least 20 years of service and who retire under the VRS plan are eligible to elect post-retirement coverage in the CPRMP. Retirees pay 100 % of spousal premiums. Coverage ceases when retirees reach the age of 65. Surviving spouses are not allowed access to the plan. The plan is administered by the City and the City has no separate financial report.
B. Funding Policy
The City establishes employer contribution rates for plan participants as part of the budgetary process each year. The City determines how the plan will be funded each year whether it will partially fund or fully fund the plan. For participating retirees the City pays $195 per month towards the monthly premium and the retiree contributes remaining funds towards the monthly premium.
C. Annual OPEB Cost and Net OPEB Obligation
In accordance with GASB Statement No. 45, an actuarial study was performed calculating the postemployment healthcare costs as of June 30, 2010. The actuarial valuation estimated the Unfunded Actuarial Accrued Liability (“UAAL”) at $19,264,318 and an Annual Required Contribution (“ARC”) of $3,014,322. The annual cost of other post employment benefits (OPEB) under GASB 45 is the Annual Required Contribution (ARC). The City paid $661,766 towards the estimated pay as you go cost for OPEB benefits in fiscal year 2010, and in addition contributed $3,014,322 to a Trust Fund to fully fund the ARC. The City elected to pre-fund OPEB liabilities. The City is contributing the annual required contribution of the employer (ARC) an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The thirty year amortization period is open.
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CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 16−OTHER POST-EMPLOYMENT BENEFITS PROGRAM: C. Annual OPEB Cost and Net OPEB Obligation: (Continued)
For 2010, the City’s cash payment of $3,372,436 was more than the annual pension costs. The City’s annual OPEB cost, the contributions made, and the decrease in net OPEB obligation as well as the net OPEB obligation for 2010 are as follows:
Annual required contribution $ 3,014,322 Interest on net OPEB obligation (24,913) Adjustment to annual required contribution 28,126 Annual OPEB cost (expense) $ 3,017,535 Contributions made (3,372,436) Increase (decrease) in net OPEB obligation $ (354,901) Net OPEB obligation - beginning of year (332,175) Net OPEB obligation - end of year $ (687,076)
Information reflecting annual pension cost, amounts contributed as well as the percentage contributed for the past three fiscal years is as follows:
PercentageAnnual of Annual Net
Fiscal OPEB OPEB Cost OPEBYear Ended Cost Contributed Obligation
June 30, 2010 $ 3,017,535 111.88% $ (687,076) June 30, 2009 2,321,226 123.33% (332,175) June 30, 2008 2,323,275 93% 211,866
Funded Status and Funding Progress The schedule of funding progress, presented as Required Supplementary Information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revisions as actual results are compared with past expectations and new estimates are made about the future. As of July 1, 2010 the most recent actuarial valuation date, the City’s plan was 29.54% funded. The actuarial accrued liability for benefits was $27,341,308, and the actuarial value of assets was $8,076,990, resulting in an unfunded actuarial accrued liability UAAL of $19,264,318. The covered payroll (annual payroll of active employees covered by the plan) was $58,766,577, and the ratio of UAAL to the covered payroll was 32.78%.
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CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 16−OTHER POST-EMPLOYMENT BENEFITS PROGRAM: (CONTINUED) City: (Continued) C. Annual OPEB Cost and Net OPEB Obligation: (Continued)
Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. Cost Method The projected unit credit (PUC) cost method was used for this valuation. The objective of this method is to fund each participant’s benefits under the plan as they would accrue. Under this method the total value of the benefit to which each participant is expected to become entitled is broken down into units, each associated with a year of past or future credited service.
D. Summary of Actuarial Assumptions
Interest Assumptions
Funding
Assumptions
Interest rate assumed 7.50%
Payroll growth *
* Since none of the benefits are salary related, there is no salary increase assumption.
The UAAL is being amortized as a level percentage of projected payroll on an open basis. Health care cost trends, which is the trend rates of increased claims representing the rate of increase of employer claims payments. Medical annual rate increases for pre-medicare members are as follows:
Fiscal Fiscal
Year Ended Percentage Year Ended Percentage
2010 9.50% 2015 7.00%
2011 9.00% 2016 6.50%
2012 8.50% 2017 6.00%
2013 8.00% 2018 5.50%
2014 7.50% 2019 5.00%
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CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 16−OTHER POST-EMPLOYMENT BENEFITS PROGRAM: (CONTINUED) City: (Continued) D. Summary of Actuarial Assumptions: (Continued)
Interest Assumptions Annual Per Capita Costs for fiscal year ended June 30, 2010 are as follows:
Retirees eligible for medicare are enrolled in medicare supplemental plan F with a drug card. The City provides $19,522 per month towards the premium ($2,343 per year)
Age Amount Age Amount
50 $ 7,495 64 $ 10,590
55 8,479 65 2,343
62 10,079
Aging Assumption
Medical
Annual
Age Increase
55 2.50%
60 2.50%
64 0.5%
Retiree Contribution increase assumption:
Retiree medical contributions are assumed to increase at the same rate as incurred claims. Assume constant costs sharing between employer and employees.
School Board: A. Plan Description
The School Board Post-Retirement Medical Plan is a single-employer defined benefit healthcare plan which offers health insurance for retired employees. Retired employees, who were enrolled in Suffolk Public Schools group health insurance plan for the 24 month prior to retirement date, who were employed by Suffolk Public Schools with at least 10 years of service and who retire under the VRS plan are eligible to elect post-retirement coverage in the plan. Retirees pay 100 % of spousal premiums. Coverage ceases when retirees reach the age of 65. Surviving spouses are not allowed access to the plan. The plan is administered by the School Board and has no separate financial report.
77
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 16−OTHER POST-EMPLOYMENT BENEFITS PROGRAM: (CONTINUED) School Board: (Continued) A. Plan Description: (Continued)
The School Board participates in the Virginia Pooled OPEB Trust Fund (“Trust Fund”), an irrevocable trust established for the purpose of accumulating assets to fund postemployment benefits other than pensions. The Trust Fund issues a separate report, which can be obtained by requesting a copy from the plan administrator, Virginia Municipal League (“VML”) at P.O. Box 12164, Richmond, Virginia 23241.
B. Funding Policy
The School Board establishes benefit levels, employee contributions and employer contribution rates for plan participants as part of the budgetary process each year. The School Board determines how the plan will be funded each year whether it will partially fund the plan or fully fund the plan. For participating retirees the School Board pays $203 per month towards the monthly premium and the retiree contributes remaining funds towards the monthly premium.
C. Annual OPEB Cost and Net OPEB Obligation
In accordance with GASB Statement No. 45, an actuarial study was performed calculating the postemployment healthcare costs as of June 30, 2010. The actuarial valuation estimated the Unfunded Actuarial Accrued Liability (“UAAL”) at $12,806,424 and an Annual Required Contribution (“ARC”) of $2,214,000. The annual cost of other post employment benefits (OPEB) under GASB 45 is called the annual required contribution or ARC. The School Board paid $945,000 towards the estimated pay as you go cost for OPEB benefits in fiscal year 2010, and in addition contributed $1,269,000 to a Trust Fund to fully fund the ARC. The School Board elected to pre-fund OPEB liabilities. The School Board is required to contribute the annual required contribution of the employer (ARC) an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The thirty year amortization period is open.
Annual OPEB Cost
For 2010, the School Board’s expected cash payment of $2,214,000 is equal to the ARC. The School Board’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2010 are as follows:
Annual required contribution $ 2,214,000 Interest on net OPEB obligation - Adjustment to annual required contribution - Annual OPEB cost (expense) $ 2,214,000 Contributions made (2,214,000) Increase (decrease) in net OPEB obligation $ - Net OPEB obligation - beginning of year - Net OPEB obligation - end of year $ -
78
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 16−OTHER POST-EMPLOYMENT BENEFITS PROGRAM: (CONTINUED) School Board: (Continued) C. Annual OPEB Cost and Net OPEB Obligation: (Continued)
Information reflecting annual pension cost, amounts contributed as well as the percentage contributed for the past three fiscal years is as follows:
PercentageAnnual of Annual Net
Fiscal OPEB OPEB Cost OPEBYear Ended Cost Contributed Obligation
June 30, 2010 $ 2,214,000 100.00% $ - June 30, 2009 2,214,000 100.00% - June 30, 2008 2,213,791 100.00% -
Funded Status and Funding Progress The schedule of funding progress, presented as Required Supplementary Information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revisions as actual results are compared with past expectations and new estimates are made about the future. As of June 30, 2010 the School Board’s plan was 25.21% funded. The actuarial accrued liability for benefits was $17,122,042, and the actuarial value of assets was $4,315,618, resulting in an unfunded actuarial accrued liability UAAL of $12,806,424. The covered payroll (annual payroll of active employees covered by the plan) was $59,353,222, and the ratio of UAAL to the covered payroll was 21.58%. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
79
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 16−OTHER POST-EMPLOYMENT BENEFITS PROGRAM: (CONTINUED) School Board: (Continued) C. Annual OPEB Cost and Net OPEB Obligation: (Continued)
Cost Method The projected unit credit (PUC) cost method was used for this valuation. The objective of this method is to fund each participant’s benefits under the plan as they would accrue. Under this method the total value of the benefit to which each participant is expected to become entitled is broken down into units, each associated with a year of past or future credited service. Interest Assumptions
FundingAssumptions
Discount rate 7.50%Payroll growth *
* Since none of the benefits are salary related, there is no salary increase assumption.
The UAAL is being amortized as a level percentage of projected payroll on an open basis. Health care cost trends, which is the trend rates of increased claims representing the rate of increase of employer claims payments. Medical annual rate increases for pre-medicare members are as follows:
Fiscal FiscalYear Ended Percentage Year Ended Percentage
2010 8.29% 2015 7.32%2011 8.09% 2016 7.13%2012 7.89% 2017 6.96%2013 7.69% 2018 6.79%2014 7.50% 2019 6.59%
Annual Per Capita Costs for fiscal year ended June 30, 2010 are as follows:
Age Amount Age Amount
50 $ 6,719 64 $ 9,494 55 7,602 65 n/a62
80
CITY OF SUFFOLK, VIRGINIA Notes to Financial Statements As of June 30, 2010 (Continued)
NOTE 16−OTHER POST-EMPLOYMENT BENEFITS PROGRAM: (CONTINUED) School Board: (Continued) C. Annual OPEB Cost and Net OPEB Obligation: (Continued)
Aging Assumption
MedicalAge Annual Increase
55 2.50%60 2.50%65 2.50%
Retiree Contribution increase assumption:
Retiree medical contributions are assumed to increase at the same rate as incurred claims. Assume constant costs sharing between employer and employees.
NOTE 17−NET ASSET ADJUSTMENTS Net Assets were adjusted as of July 1, 2009 as follows:
General Governmental ProprietaryFund Activities Funds
Net assets, as previously reported $ 51,210,069 $ 190,972,718 $ 174,244,827
Adjustment for reclassification of the Golf Course Fund from Proprietary Fund to General Fund (1,415,060) (1,415,060) 1,415,060 Golf Course capital assets - 3,664,263 (3,664,263) Golf Course deferred charges - 64,160 (64,160) Golf Course bonds payable - (3,974,784) 3,974,784 Golf Course interest payable - (77,192) 77,192 Golf Course deferred credits - (1,244) 1,244
Adjustment for accumulated depreciation amounts (1,311,258) -
Adjustment for improvements other than buildings (1,924,282) - Adjustment for construction in progress - - (1,978,774) Adjustment for Capacity Payment to Western
Tidewater Water Authority - - 911,588
Net assets, as restated $ 49,795,009 $ 185,997,321 $ 174,917,498
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REQUIRED SUPPLEMENTARY INFORMATION
Note to Required Supplementary Information: Presented budgets were prepared in accordance with accounting principles generally accepted in the United States of America.
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CITY OF SUFFOLK, VIRGINIA Exhibit 12
Page 1 of 4Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual - General FundYear Ended June 30, 2010
VarianceFrom Final
BudgetOriginal Final Positive
Fund, Function, Activity, Element Budget Budget Actual (Negative)
Revenues: General property taxes: Real estate $ 78,987,614 $ 78,987,614 $ 79,323,059 $ 335,445 Personal property 13,460,230 13,460,230 12,555,164 (905,066) Public service corporations 1,962,000 1,962,000 2,239,936 277,936 Mobile homes - - 68,095 68,095 Machinery and tools - - 1,573,541 1,573,541 Penalties 1,000,000 1,000,000 838,088 (161,912) Interest - - 305,653 305,653
Total general property taxes $ 95,409,844 $ 95,409,844 $ 96,903,536 $ 1,493,692
Other local taxes: Sales and use $ 7,154,000 $ 7,154,000 $ 7,355,338 $ 201,338 Utility tax 4,176,000 4,176,000 4,238,079 62,079 Communication taxes 3,800,000 3,800,000 3,614,856 (185,144) Business and occupational licenses 5,800,000 5,800,000 5,985,479 185,479 Motor vehicle license 1,650,000 1,650,000 1,711,012 61,012 Bank stock 290,000 290,000 641,735 351,735 Recordation 967,500 967,500 1,009,592 42,092 Tobacco 1,400,000 1,400,000 1,382,361 (17,639) Lodging 736,920 736,920 957,654 220,734 Meals 5,600,000 5,600,000 5,643,405 43,405 Public facility taxes 78,000 78,000 - (78,000) Admission 399,000 399,000 377,341 (21,659)
Total other local taxes $ 32,051,420 $ 32,051,420 $ 32,916,852 $ 865,432
Permits, fees and licenses: Animal license $ 36,000 $ 36,000 $ 34,914 $ (1,086) Permits and other licenses 827,210 827,210 973,390 146,180
Total permits, fees, and licenses $ 863,210 $ 863,210 $ 1,008,304 $ 145,094
Fines and forfeitures $ 816,000 $ 816,000 $ 852,307 $ 36,307
Revenue from use of money and property: Revenue from use of money $ 590,000 $ 590,000 $ 281,872 $ (308,128) Revenue from use of property 358,090 358,090 801,070 442,980
Total use of money and property $ 948,090 $ 948,090 $ 1,082,942 $ 134,852
Charges for services: Excess fees - Circuit Court Clerk $ 356,387 $ 356,387 $ 214,674 $ (141,713) Police and traffic control 32,500 32,500 29,323 (3,177) Charges for other protection 70,000 70,000 64,997 (5,003) Charges for parks and recreation 479,325 479,325 656,900 177,575 Charges for library 10,000 10,000 13,262 3,262 Charges for planning and community development 43,000 43,000 30,729 (12,271) Charges for other services 2,082,000 1,532,000 2,024,637 492,637 Airport sales 839,000 839,000 700,496 (138,504)
Total charges for services $ 3,912,212 $ 3,362,212 $ 3,735,018 $ 372,806
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CITY OF SUFFOLK, VIRGINIA Exhibit 12Page 2 of 4
Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual - General FundYear Ended June 30, 2010
VarianceFrom Final
BudgetOriginal Final Positive
Fund, Function, Activity, Element Budget Budget Actual (Negative)
Revenues: (Continued) Miscellaneous revenue: Miscellaneous $ 836,000 $ 841,000 $ 1,248,782 $ 407,782
Total revenue from local sources $ 134,836,776 $ 134,291,776 $ 137,747,741 $ 3,455,965
Revenue from the Commonwealth: Noncategorical aid: Tax on Deeds $ 582,000 $ 582,000 $ 683,930 $ 101,930 Railroad rolling stock tax 100,000 100,000 1,277 (98,723) House Bill 599 Funds 3,163,582 3,163,582 2,899,462 (264,120) PPTRA 10,169,729 10,169,729 10,169,730 1 Mobile home titling tax 65,000 65,000 41,251 (23,749) Vehicle rental tax 179,000 179,000 142,845 (36,155)
Total noncategorical aid $ 14,259,311 $ 14,259,311 $ 13,938,495 $ (320,816)
Categorical aid: Commonwealth's Attorney $ 973,000 $ 973,000 $ 872,159 $ (100,841) Commissioner of Revenue 187,000 187,000 166,101 (20,899) Treasurer 252,000 252,000 219,408 (32,592) Sheriff 942,000 942,000 759,028 (182,972) Circuit Court Clerk 473,000 603,308 551,871 (51,437) Registrar 62,000 62,000 54,120 (7,880)
Total categorical aid $ 2,889,000 $ 3,019,308 $ 2,622,687 $ (396,621)
Other categorical aid: Public assistance and welfare administration $ 3,825,933 $ 3,825,933 $ 3,854,518 $ 28,585 Budget reduction to C/VA - - (327,444) (327,444) Other categorical aid 697,034 1,025,817 1,154,205 128,388 Total other categorical aid $ 4,522,967 $ 4,851,750 $ 4,681,279 $ (170,471) Total categorical aid $ 7,411,967 $ 7,871,058 $ 7,303,966 $ (567,092) Total revenue from the Commonwealth $ 21,671,278 $ 22,130,369 $ 21,242,461 $ (887,908)
Revenue from the Federal Government: Categorical aid: Public assistance and welfare administration $ 5,274,656 $ 5,274,656 $ 5,125,088 $ (149,568) Emergency Services 11,000 11,000 11,032 32 Parks, recreation and cultural 35,642 35,642 25,494 (10,148) Property seizure - - 32,874 32,874 Other federal grants 210,289 177,170 259,380 82,210 Total revenue from the federal government $ 5,531,587 $ 5,498,468 $ 5,453,868 $ (44,600)
Total revenues $ 162,039,641 $ 161,920,613 $ 164,444,070 $ 2,523,457
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CITY OF SUFFOLK, VIRGINIA Exhibit 12Page 3 of 4
Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual - General FundYear Ended June 30, 2010
VarianceFrom Final
BudgetOriginal Final Positive
Fund, Function, Activity, Element Budget Budget Actual (Negative)
Expenditures: General government administration: Legislative: City Council $ 324,143 $ 338,109 $ 320,293 $ 17,816 General and financial administration: City Manager 793,755 822,159 822,156 3 Budget and strategic planning 416,130 407,387 394,304 13,083 City Attorney 885,120 901,843 875,216 26,627 Human resources 982,096 1,095,539 870,883 224,656 Commissioner of the Revenue 845,304 849,963 834,535 15,428 City Assessor 1,025,296 1,252,238 1,041,487 210,751 City Treasurer 1,243,996 1,265,014 1,274,131 (9,117) Finance 1,032,688 1,117,249 1,112,775 4,474 Purchasing 337,847 272,616 272,311 305 Other general government - - 15,909 (15,909) Board of elections: Registrar 284,485 310,830 279,416 31,414 Total general government administration $ 8,170,860 $ 8,632,947 $ 8,113,416 $ 519,531
Judicial administration: Courts: Circuit Court $ 156,196 $ 156,196 $ 155,232 $ 964 District Court 79,049 79,049 48,889 30,160 Magistrate 19,654 19,654 17,099 2,555 Juvenile and Domestic Relations Court 22,519 22,519 20,968 1,551 Juvenile and Domestic Relations Court Service Unit 872,435 705,976 813,265 (107,289) Circuit Court Clerk 1,078,787 1,288,808 1,239,440 49,368 Sheriff 1,894,564 1,878,060 1,863,206 14,854 Commonwealth's Attorney 2,603,429 2,720,741 2,602,047 118,694 Total judicial administration $ 6,726,633 $ 6,871,003 $ 6,760,145 $ 110,858
Public safety: Police $ 14,604,215 $ 15,596,952 $ 15,119,641 $ 477,311 Communications 1,476,746 1,511,428 1,412,878 98,550 Fire 16,561,510 17,504,894 16,684,318 820,576 Western Tidewater Regional Jail 306,042 713,021 713,021 - Animal shelter and management 551,517 558,473 528,205 30,268 Neighborhood development services 2,014,249 2,072,142 2,008,583 63,559 Emergency services 17,483 17,912 14,527 3,385 Total public safety $ 35,531,762 $ 37,974,822 $ 36,481,173 $ 1,493,649
Public works: Administration $ 3,558,885 $ 3,738,033 $ 3,386,464 $ 351,569 Refuse collection 3,771,566 3,932,135 3,477,094 455,041 Maintenance building and grounds 443,596 446,692 435,836 10,856 Aviation facilities 1,009,777 1,033,280 900,379 132,901 Total public works $ 8,783,824 $ 9,150,140 $ 8,199,773 $ 950,367
Health and welfare: Social services $ 13,394,984 $ 13,762,247 $ 12,322,636 $ 1,439,611 Total health and welfare $ 13,394,984 $ 13,762,247 $ 12,322,636 $ 1,439,611
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CITY OF SUFFOLK, VIRGINIA Exhibit 12Page 4 of 4
Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual - General FundYear Ended June 30, 2010
VarianceFrom Final
BudgetOriginal Final Positive
Fund, Function, Activity, Element Budget Budget Actual (Negative)
Expenditures: (Continued) Education: Contribution to Component Unit School Board $ 44,552,130 $ 44,552,130 $ 44,223,161 $ 328,969 Lease rent of building 501,215 501,215 501,817 (602) Total education $ 45,053,345 $ 45,053,345 $ 44,724,978 $ 328,367
Parks, recreation and cultural: Parks and recreation $ 4,378,950 $ 4,449,485 $ 4,233,387 $ 216,098 Golf course - - 380,787 (380,787) Public libraries 2,125,279 2,223,985 2,188,091 35,894 Total parks, recreation and cultural $ 6,504,229 $ 6,673,470 $ 6,802,265 $ (128,795)
Community development: Planning $ 1,221,004 $ 1,132,890 $ 1,077,846 $ 55,044 Geographic information system 555,237 618,593 604,463 14,130 Economic development 1,041,155 3,411,274 1,912,545 1,498,729 Communications 501,080 510,757 488,946 21,811 Tourism 440,103 469,670 450,449 19,221 Local and regional organizations 2,864,935 2,823,400 2,822,153 1,247 Cooperative extension services 78,008 68,008 60,635 7,373 Total community development $ 6,701,522 $ 9,034,592 $ 7,417,037 $ 1,617,555
Nondepartmental: Fringe benefits and insurance $ 8,578,914 $ 8,534,210 $ 8,264,861 $ 269,349 Total nondepartmental $ 8,578,914 $ 8,534,210 $ 8,264,861 $ 269,349
Total expenditures $ 139,446,073 $ 145,686,776 $ 139,086,284 $ 6,600,492
Excess (deficiency) of revenues over expenditures $ 22,593,568 $ 16,233,837 $ 25,357,785 $ 9,123,948
Other financing sources (uses): Transfers in $ 2,235,289 $ 2,235,289 $ 2,244,596 $ 9,307 Transfers (out) (24,828,857) (24,863,347) (24,863,347) - Total other financing (uses) $ (22,593,568) $ (22,628,058) $ (22,618,751) $ 9,307
Net changes in fund balance $ - $ (6,394,221) $ 2,739,034 $ 9,133,255
Fund balance at beginning of year, as restated - 6,394,221 49,795,009 43,400,788
Fund balance at end of year $ - $ - $ 52,534,043 $ 52,534,043
88
CITY OF SUFFOLK, VIRGINIA Exhibit 13
Schedule of Funding Progress for the Virginia Retirement System and Other Post Employment BenefitsLast Three Fiscal Years
Actuarial Actuarial Unfunded UAALValue of Accrued (Excess Funded) Funded Annual as % of
Valuation Assets Liability Actuarial Ratio Covered PayrollDate (AVA) (AAL) Accrued Liability (2) / (3) Payroll (4) / (6)(1) (2) (3) (4) (5) (6) (7)
City:
6/30/2009 $ 147,279,719 $ 181,382,891 $ 34,103,172 81.20% $ 52,462,203 65.01%6/30/2008 142,580,456 168,516,668 25,936,212 84.61% 50,262,100 51.60%6/30/2007 127,487,501 151,283,005 23,795,504 84.27% 47,940,645 49.64%
Discretely Presented Component Unit School Board - Non-Professional:
6/30/2009 $ 16,285,337 $ 17,857,433 $ 1,572,096 91.20% $ 7,212,065 21.80%6/30/2008 15,498,806 16,575,497 1,076,691 93.50% 6,776,948 15.89%6/30/2007 13,749,278 15,354,981 1,605,703 89.54% 6,831,960 23.50%
Actuarial Actuarial UnfundedValue of Accrued (Excess Funded) Annual UAAL
Valuation Assets Liability Actuarial Funded Covered as % ofDate (AVA) (AAL) Accrued Liability Ratio Payroll Payroll(1) (2) (3) (4) (5) (6) (7)
City:
FY 10 July 1, 2010 $ 8,076,990 $ 27,341,308 $ 19,264,318 29.54% $ 58,766,577 32.78%FY 09 July 1, 2007 4,368,558 24,529,651 20,161,093 17.81% 57,292,676 35.19%FY 08 July 1, 2007 2,398,246 24,529,651 22,131,405 9.78% 55,476,526 39.89%
* **
School Board:
FY 10 July 1, 2010 $ 4,315,618 $ 17,122,042 $ 12,806,424 25.21% $ 59,353,222 21.58%FY 09 July 1, 2007 2,756,021 14,499,271 11,743,250 19.01% 59,163,327 19.85%FY 08 July 1, 2007 1,445,000 14,499,271 13,054,271 9.97% 55,305,573 23.60%
* *** These amounts reflect contributions to the OPEB trust fund by the City and School Board
** Amounts provided by the City and School Board
Virginia Retirement System
Other Post Employment Benefits
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OTHER SUPPLEMENTARY INFORMATION
Debt Service Fund
The Debt Service Fund is used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs.
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CITY OF SUFFOLK, VIRGINIA Exhibit 14
Schedule of Revenues, Expenditures and Changes in Fund Balance -- Budget and Actual -Debt Service FundYear Ended June 30, 2010
VarianceFrom Final
BudgetOriginal Final PositiveBudget Budget Actual (Negative)
Revenues: Revenue from use of money and property: Revenue from use of money $ - $ - $ 9,359 $ 9,359
Total revenues $ - $ - $ 9,359 $ 9,359
Expenditures: Debt service: Principal $ 14,315,647 $ 14,315,647 $ 14,315,646 $ 1 Interest and other fiscal charges 9,855,542 9,855,542 9,755,820 99,722 Bond issuance costs - - 339,170 (339,170)
Total expenditures $ 24,171,189 $ 24,171,189 $ 24,410,636 $ (239,447)
Excess (deficiency) of revenues over expenditures $ (24,171,189) $ (24,171,189) $ (24,401,277) $ (230,088)
Other financing sources (uses): Transfers in $ 24,171,189 $ 24,171,189 $ 24,376,182 $ 204,993 Issuance of refunding bonds - - 30,585,499 30,585,499 Premiums on debt - - 2,102,918 2,102,918 Payment to refunded bond escrow agent - - (32,350,000) (32,350,000)
Total other financing sources (uses) $ 24,171,189 $ 24,171,189 $ 24,714,599 $ 543,410
Net changes in fund balance $ - $ - $ 313,322 $ 313,322
Fund balance at beginning of the year - - 679,706 679,706
Fund balance at end of the year $ - $ - $ 993,028 $ 993,028
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OTHER SUPPLEMENTARY INFORMATION
Capital Projects Fund
The Capital Projects Fund is used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary fund types).
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CITY OF SUFFOLK, VIRGINIA Exhibit 15Page 1 of 2
Capital Projects FundSchedule of Current Capital ProjectsYear Ended June 30, 2010
Constructionin Progress at
Project Name Authorization Expenditures Committed June 30, 2010(1) (2) (3) (1)
Airport Development $ 787,932 $ 300,000 $ - $ - Airport Drainage Study 1,801,200 1,137,504 231,438 924,465 Airport Maintenance Storage Building 120,000 - - - Airport Security Improvements 367,192 196,844 22,622 219,466 Airport Water/Sewer Lines 276,914 276,914 - 276,914 Ambulance Purchase 878,339 717,582 158,339 211,150 Animal Shelter Kennel Floor 525,000 121,028 2,348 93,107 ARRA Citywide Repaving Project 1,991,235 798 - 798 Barnes Rd. - Widening and Paving 539,518 539,518 - - Benton Road Improvements 1,255,224 986,004 - 986,004 Boston Community Street 250,000 60,386 13,456 60,386 Boston Community Improvement 200,000 - - - Burbage Grant Sidewalk Project 36,224 36,224 - - Chuckatuck Village Plan 681,385 332,872 18,828 107,258 Citywide Emergency Home Repair 8,822 5,000 - 5,000 Commerce Street Parking Lot 55,200 13,966 - 13,966 Downtown Connector Road Improvements 3,896,220 2,429,896 1,386,804 1,698,896 Driver Fire Station Additions 390,000 74,227 18,200 74,227 Driver Village Plan 297,058 125,138 127,767 - East Suffolk Administration Center Stabilization 615,281 560,781 78,822 26,487 East Suffolk Community Center Playground 50,000 50,000 - - East Suffolk Complex 9,109,478 6,925,104 2,194,146 168,300 East Washington St Plan 404,492 391,913 4,492 391,913 East Washington Street/Hall Place Neighborhood 969,331 945,895 - 16,564 East Washington Streetscape 11,890,972 9,547,450 1,451,217 5,968,394 Eclipse/Crittenden Plan 915,788 3,548 84,527 3,548 Emergency Signal - Holland/O'Kelly 170,000 166,876 - 166,876 Energy Efficiency ARRA Funding 741,100 473,321 146,761 461 EPA Phase II Stormwater 258,917 18,277 71,380 18,277 Fairground Revitalization Plan 1,000,000 528,437 130,072 528,437 Finney Avenue Extension 2,002,240 1,985,935 - 4,924 Fire Engine 1,544,137 1,553,876 - - Geographic Information System 4,025,172 3,950,566 61,903 3,534,466 Great Dismal Swamp Interpretive Center 30,000 - - - Greenways, Blueways, & Trails 1,419,886 553,343 5,200 549,778 Hampton Roads Technology Park 25,001 - - - Hangar Taxiway Construction/Site Preparation 1,085,221 1,083,992 - - HVAC Equipment Upgrade - Various Schools 133,700 41,236 - - Hazardous Materials Management 370,079 299,671 - - Health & Human Services Building 14,691 41,200 - - Hillpoint Elementary School 20,045,268 20,045,194 - - Holland and Kenyon Rd Inter Improve 1,250,000 828 - 828 Holland Athletic Fields 160,000 152,100 7,900 - Holland Village Plan 474,458 458,103 3,560 49,695 Hollywood 2nd Street Egress 146,686 28,433 66,500 28,433 Hollywood 2nd Street Egress & Pierce Park 113,314 29,349 - 29,349 HSIP Proactive Safety Project 424,607 - - - Huntersville Community Plan 145,055 144,774 - 133,573 Huntersville Improvements 100,000 67,564 12,815 67,564 James River Water Shed/Sandler Pond 36,250 25,654 - 25,654 Kensington Blvd Sidewalk 80,000 - 37,800 - Kidzone 41,334 15,413 - 5,428 Kings Fork Safety Center 7,628,791 6,739,568 939,744 6,547,212 Kings Fork Safety Center Engine 500,000 489,561 - 24,031
Cumulative Totals
97
CITY OF SUFFOLK, VIRGINIA Exhibit 15Page 2 of 2
Capital Projects FundSchedule of Current Capital ProjectsYear Ended June 30, 2010 (Continued)
Constructionin Progress at
Project Name Authorization Expenditures Committed June 30, 2010(1) (2) (3) (1)
Kings Highway Bridge Construction $ 1,000,000 $ - $ - $ - Land Easement Acquisition Runway 4/22 571,591 385,493 30,915 209,340 Main Street Pedestrian Improvement 612,238 27,525 5,081 122,401 Main Street to Commerce Street Connection 517,508 508,302 17,507 508,302 Maintenance Facility Building 2,124,098 1,021,866 52,993 126,764 Mullican Drive Rural Addition Roadway 153,377 84,031 386 78,169 Municipal Blvd. Safety Improvements 31,561 31,561 - - Municipal Building Stabilization Master 170,000 319 - 319 Municipal Center Renovation 626,154 597,620 2,385 - Municipal Channel Upgrade 1,017,438 445,364 35,833 134,273 Nansemond Parkway Civic League 50,000 - - - Nansemond Parkway Recreation Facility 53,000 - - - Nansemond Parkway/Shoulders Hill Road 17,791,926 3,910,055 599,657 3,135,526 Nansemond River High School Sewer Pump Station 250,000 157,196 10,185 167,381 Neighborhood Plans (Olde Towne) 215,505 210,884 2,850 42,194 New Whaleyville/Holland Elementary 1,502,701 60,000 - 60,000 North Main Street Fifth Lane Project 4,609 - - - Northgate Industrial Park 435,138 486,139 - 10,138 Obici House Stabilization 364,020 214,581 - 214,581 Old Courthouse Renovation/Jail Demolition 1,414,818 1,049,194 271,390 1,573,863 Old East Washington Street Improvements 267,151 243,162 23,989 23,271 Old Human Resource Bldg. Renovation 400,000 412,325 - 412,325 Orlando Community Improvement 120,000 - - - Parks Capital Maintenance 2,758,754 2,616,439 17,802 1,133,470 Pedestrian Crossing Godwin & Kensin 60,000 3,550 19,637 3,550 Phoenix Bank 1,432,287 485,137 58,009 410,382 Pierce Park 79,824 79,824 - - Pierce Park II Street Improvements 180,000 130,326 32,716 130,326 Police Administration Building 9,337,058 5,912,948 3,412,030 618,093 Program Administration 90,004 82,256 - 82,256 Property Acquisition - Obici Hospital 2,001,779 1,554,077 - 1,329,510 Public Buildings Capital Maintenance 3,095,530 2,827,246 241,021 2,140,147 Raleigh Avenue 124,170 102,543 - 102,543 Recreation Buildings Capital Maintenance 1,007,008 955,079 14,129 107,623 Riddick's Folly Structural Repair 183,000 157,041 3,000 157,041 Road Maintenance Off- Holland Rd. 160,000 159,222 - 92,167 Road Maintenance Off- Salt Storage Facility 495,000 491,308 - 491,308 Rt. 17 Improvements (Special Taxing District) 1,211,167 1,058,150 591,756 1,034,367 Runway 4-22 Safety Area Expansion 6,242,674 516,814 - 245,452 Saratoga 200,000 197,267 2,769 197,267 Saratoga Phase II Neighborhood Rehabilitation 865,511 820,162 - 292,214 Spring Street Park Acquisition - 20,000 - - Storm Drainage Improvements 1,296,085 1,286,906 - - Street Landscape 351,156 353,466 - 26,351 Suffolk Industrial Park 2,832,863 2,846,087 - - Transportation Improvements-Rt. 17 (Townpoint Rd.) 5,026,243 3,539,579 214,031 3,539,579 VA Dept of Aviation Fuel Upgrade 34,136 34,135 - - Va Dept of Aviation Maint Storage Bldg 38,001 32,885 3,277 - Village Plans 300,083 88,442 21,561 88,442 Wellons Street Parking Lot 80,000 73,081 - 73,081 Whaleyville Fire Station Emergency Signal 150,000 8,519 - 8,519 Whaleyville Village Plan 473,799 366,677 24,886 166,904
Totals $ 152,077,676 $ 101,316,641 $ 12,986,435 $ 42,251,265
Cumulative Totals
98
CITY OF SUFFOLK, VIRIGINIA Exhibit 16
Page 1 of 2
Utility Fund
Schedule of Current Capital Projects
Year Ended June 30, 2010
Construction
in Progress
at June 30,
Project Name Authorization Expenditures Committed 2010
(1) (2) (3) (1)
Rt 58 Water Tank & Pump Station $ 4,884,102 $ 3,833,500 $ 1,198,380 $ 2,395,742 Water Facilities Manual 97,500 86,577 10,812 114,263 Crittenden Well Trans Main Pipeline 4,400,308 4,400,308 - 4,414,327 Water Storage Tank 162,100 108,898 53,201 117,610 Dam Rehabilitation 1,063,208 947,763 13,945 1,059,359 Pembroke Water Main Replacement 113,316 113,316 - - Mullican Dr Water Main Ext 232,443 102,269 132,346 132,349 Norfolk Bulk Water 2,942,200 1,856,025 - 1,997,881 Pepsi Water Main Ext 34,387 34,387 - - Water System Emergency Response Plan 220,169 220,169 - - Water Layer GIS 1,084,447 768,965 266,507 1,017,096 Benton Road Water 271,081 271,081 - - Holland Emergency Wells 1,821,672 1,765,420 16,652 1,911,454 Operations & Maintenance Facility 200,000 194,263 - 308,588 Holland Consent Wells 1,873,984 1,136,225 737,759 1,676,258 Nansemond Gardens/Wilroy Acres Water 967,229 942,731 23,293 79,630 Water Treatment Plant Phase II 53,246,220 51,809,784 1,218,776 4,517,426 RT 460 Tank & Pipeline 46,300 19,911 26,390 23,357 Misc Development Project Easements (Water) 24,783 24,783 - - Finney Avenue Project 136,582 154,299 - - Fairgrounds Portsmouth Main Relocation 1,108,431 612,461 517,904 629,700 Fairgrounds Water Upgrades 689,943 504,068 149,065 541,577 Water Treatment Plant Phase III 1,762,900 1,193,540 569,360 1,351,700 Meadow Country Road Water Extension 579,919 624,779 - - Water Source Development 2,579,568 - - 125,323 Water Distribution & Transmission System Expansion 10,832,456 - - 100,020 Water Distribution System Upgrades 11,821,139 - - 121,790 Operations & Maintenance Facility FY01 7,947,800 1,308,349 - 1,358,654 Everets Road Water Main Replacement 56,000 30,800 25,200 37,382 Western Branch Raw Water Main 113,500 78,248 35,253 88,141 Sleepy Hole Golf Course Water Main 135,474 16,247 119,227 33,940 RT 460 Water Transmission Main Extension 46,300 - - 6,047 Lonestar Lakes Entrance 10,475 - - 1,368 Water Meter Location GPS 150,000 - - 19,590 Bennett's Creek Office Park Water 16,493 - - 2,154 Water Meter Upgrades 291,565 291,425 - - Fire Hydrant Upgrades 125,775 125,775 - - Water Valve Replacement 2,919 2,919 - - Lead Service Line Replacement 1,075 1,075 - - Maple Hills/Forest Glen Water 705,380 671,169 29,160 675,197 Crittenden/Eclipse Water 1,551,252 1,464,143 - 1,607,862 Whaleyville Water Source 833,988 821,128 12,860 821,128 Community Well Sites Abandonment 3,074,877 3,074,877 - - Whaleyville Water Distribution System 4,917,875 4,818,118 79,737 5,319,424 Sewer Pumping Station Access Driveway 446,960 433,868 15,272 445,699 Fairgrounds Sewer Upgrades 332,817 282,832 32,089 296,595 Sewage PS Upgrades (10, 11, 12, 13, 43) 146,225 146,225 - -
Cumulative Totals
99
CITY OF SUFFOLK, VIRIGINIA Exhibit 16
Page 2 of 2
Utility Fund
Schedule of Current Capital Projects
Year Ended June 30, 2010
Construction
in Progress
at June 30,
Project Name Authorization Expenditures Committed 2010
(1) (2) (3) (1)
Sanitary Sewer Evaluation Study $ 26,105,552 $ 19,934,911 $ 5,117,815 $ 17,175,630 Force Main Upgrades 427,834 427,834 - - Sanitary Sewer Facilities Manual 215,090 197,613 17,377 193,555 Operations Center (Sewer) 350,000 - - - South Main St Sewer Rehab 36,958 32,523 4,435 - Elephant's Fork Pump Station & FM Upgrades 470,865 301,933 121,651 333,620 Emergency Generators 212,731 212,731 - 212,731 Sewer Infrastructure Annual Services Contract 168,566 107,725 60,841 119,026 Miscellaneous Pump Station Upgrades 1,268,669 1,094,627 73,981 548,544 Sleepy Hole Golf Course Wastewater 167,660 104,384 63,276 124,602 City Works 451,025 280,848 160,603 313,787 Pearl Street Rehab 68,816 44,597 24,219 - PS 124 - Nansemond Pkwy 5,916 5,916 - 5,916 Fire Station 10 - PS & FM 78,050 78,050 - - Benton Road Sewer 1,373,480 1,373,480 - - Pump Station # 63 Upgrades 177,839 58,316 103,948 79,357 Mullican Dr Sewer Extension 177,037 176,487 8,769 199,368 Pump Station # 106 Rehabilitation 121,070 38,845 82,225 53,287 Pump Station # 30 Replacement 135,083 28,999 106,084 45,391 Misc Development Project Easements (Sewer) 25,806 18,806 - - PS # 64 and Sewer System Replacement 153,713 11,966 141,747 31,088 Prentis House Sewer Relocation 1,775 - - 232 Bennett's Creek Office Park Sewer 120,764 - - 5,778 Neighborhood Sewer Projects 10,260,921 - - 1,742 Sewer System Upgrades 7,868,805 - - 99,660 Non-Residential Sewer Extension 6,407,470 - - 834,706 Cedar Point Sanitary Sewer 4,641,763 4,816,784 - - Maple Hills/Forest Glenn Sewer 2,167,952 2,134,042 - 2,247,456 Constant's Wharf Wastewater Pump Station 1,464,403 1,229,711 240,800 264,614 Nansemond Gardens/Wilroy Acres Sewer 14,758 14,758 - - Sewer Pump Station #14 Upgrades 285,379 285,379 - 550 Eastover Sanitary Sewer Extension 30,606 15,528 15,078 22,644 Crittenden/Eclipse Sewer 3,395,731 3,040,975 23,148 3,124,133 Lake Speight Neighborhood Sewer Extension 156,919 59,682 35,138 111,818 Respass Beach/Holly Acres Sewer 1,606,594 1,606,594 - 45,657 Holland Sewage Treatment Study 159,518 159,518 - - Constance Rd Sanitary Sewer Rehab 996,516 903,896 12,767 851,933 Water & Sewer Facility Generator Connect 518,387 489,065 9,225 558,790 Master Sanitary Sewer Plan Update 1,070,943 965,352 105,591 399,400 Turlington Park Sewer Extension 275,267 180,112 45,676 180,509
Totals $ 197,739,367 $ 125,724,709 $ 11,857,580 $ 61,536,163
(1) Included in cumulative expenditure totals
(2) Inception of project through 6/30/10
(3) Open POs at 6/30/10
Cumulative Totals
100
OTHER SUPPLEMENTARY INFORMATION
Nonmajor Governmental Funds
101
CITY OF SUFFOLK, VIRGINIA
Combining Balance Sheet -
Nonmajor Governmental Funds
At June 30, 2010
Downtown
Suffolk Business
Taxing Overlay Road Consolidated
District District Maintenance Grants
Assets
Cash and cash equivalents $ 317,126 $ 54,180 $ 4,846,738 $ 204,013
Restricted cash - - 5,213,724 180,828
Receivables (Net of allowances for uncollectibles):
Taxes receivable - 11,530 - -
Accounts receivable - - 40,512 331
Prepaid items - - 413 -
Due from other governments - - - 762,873
Total assets $ 317,126 $ 65,710 $ 10,101,387 $ 1,148,045
Liabilities
Vouchers and Accounts payable $ - $ - $ 1,081,828 $ 102,571
Due to other funds - - - 763,204
Unearned revenue - - 2,544,541 66,679
Deferred revenue - 5,784 - -
Total liabilities $ - $ 5,784 $ 3,626,369 $ 932,454
Fund Balances
Fund balances:
Committed:
Bridge repair $ - $ - $ 2,669,183 $ -
Other road projects - - 1,729,496 -
Grants - - - 285,392
Rt. 17 taxing district - - - -
Assigned:
Special revenue 317,126 59,926 2,076,339 -
Unassigned:
Unreserved (deficit) - - - (69,801)
Total fund balances $ 317,126 $ 59,926 $ 6,475,018 $ 215,591
Total liabilities and fund balances $ 317,126 $ 65,710 $ 10,101,387 $ 1,148,045
Special Revenue Funds
102
Exhibit 17
Total
Route 17 Mosquito Non-Major
Law Taxing Taxing Governmental
Library District District Cemetery Funds
$ 187,236 $ 992,719 $ 808,510 $ - $ 7,410,522
- - - 986,450 6,381,002
- 64,492 - - 76,022
3,627 - - - 44,470
- - - - 413
- - - - 762,873
$ 190,863 $ 1,057,211 $ 808,510 $ 986,450 $ 14,675,302
$ 3,376 $ - $ - $ - $ 1,187,775
- - - - 763,204
- - - - 2,611,220
- 23,452 - - 29,236
$ 3,376 $ 23,452 $ - $ - $ 4,591,435
$ - $ - $ - $ - $ 2,669,183
- - - - 1,729,496
- - - - 285,392
- 758 - - 758
187,487 1,033,001 808,510 986,450 5,468,839
- - - - (69,801)
$ 187,487 $ 1,033,759 $ 808,510 $ 986,450 $ 10,083,867
$ 190,863 $ 1,057,211 $ 808,510 $ 986,450 $ 14,675,302
103
CITY OF SUFFOLK, VIRGINIA
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
Year Ended June 30, 2010
Downtown
Suffolk Business
Taxing Overlay Road Consolidated
District District Maintenance Grants
Revenues:
Real estate taxes $ 329 $ 199,026 $ - $ -
Permits, privilege fees and regulatory licenses - - 386,538 -
Revenue from use of money and property 1,476 638 25,452 -
Charges for services - - 901,864 38,503
Miscellaneous - - 241,304 95,526
Intergovernmental:
Revenue from the Commonwealth - - 18,053,108 550,261
Revenue from the Federal Government - - - 2,942,620
Total revenues $ 1,805 $ 199,664 $ 19,608,266 $ 3,626,910
Expenditures
Current:
Judicial administration $ - $ - $ - $ 7,364
Public safety - - - 1,063,366
Public works - 180,245 18,123,433 281,250
Health and welfare - - - 395,887
Education - - - 776
Parks, recreation, and cultural - - - 169,922
Community development - - - 1,366,202
Total expenditures $ - $ 180,245 $ 18,123,433 $ 3,284,767
Excess (deficiency) of revenues over
expenditures $ 1,805 $ 19,419 $ 1,484,833 $ 342,143
Other financing sources (uses):
Transfers in $ - $ - $ - $ 115,035
Transfers (out) - - (1,001,500) (372,667)
Total other financing sources (uses) $ - $ - $ (1,001,500) $ (257,632)
Net changes in fund balances $ 1,805 $ 19,419 $ 483,333 $ 84,511
Fund balances at beginning of year 315,321 40,507 5,991,685 131,080
Fund balances at end of year $ 317,126 $ 59,926 $ 6,475,018 $ 215,591
Special Revenue Funds
104
Exhibit 18
Total
Route 17 Mosquito Nonmajor
Law Taxing Taxing Governmental
Library District District Cemetery Funds
$ - $ 1,194,533 $ 1,867 $ - $ 1,395,755
- - - - 386,538
853 2,493 3,772 9,307 43,991
45,234 - - 18,400 1,004,001
35 - - - 336,865
- - - - 18,603,369
- - - - 2,942,620
$ 46,122 $ 1,197,026 $ 5,639 $ 27,707 $ 24,713,139
$ 45,019 $ - $ - $ - $ 52,383
- 258,062 - - 1,321,428
- - - - 18,584,928
- - - - 395,887
- - - - 776
- - - - 169,922
- - - - 1,366,202
$ 45,019 $ 258,062 $ - $ - $ 21,891,526
$ 1,103 $ 938,964 $ 5,639 $ 27,707 $ 2,821,613
$ - $ - $ - $ - $ 115,035
- (769,665) - (9,307) (2,153,139)
$ - $ (769,665) $ - $ (9,307) $ (2,038,104)
$ 1,103 $ 169,299 $ 5,639 $ 18,400 $ 783,509
186,384 864,460 802,871 968,050 9,300,358
$ 187,487 $ 1,033,759 $ 808,510 $ 986,450 $ 10,083,867
105
CITY OF SUFFOLK, VIRGINIA
Schedule of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds - Budget and Actual
Year Ended June 30, 2010
Variance Variance
From From
Final Final
Budget Budget
Original Final Positive Original Final Positive
Budget Budget Actual (Negative) Budget Budget Actual (Negative)
Revenues:
Real estate taxes $ - $ - $ - $ - $ 195,000 $ 195,000 $ 199,026 $ 4,026
Permits, privilege fees and regulatory
licenses - - - - - - - -
Fines and forfeitures - - - - - - - -
Revenue from use of money
and property - - 853 853 - - 638 638
Charges for services 57,000 57,000 45,234 (11,766) - - - -
Miscellaneous 1,000 1,000 35 (965) - - - -
Intergovernmental: - - - - -
Revenue from the Commonwealth - - - - - - - -
Revenue from the Federal Government - - - - - - - -
Total revenues $ 58,000 $ 58,000 $ 46,122 $ (11,878) $ 195,000 $ 195,000 $ 199,664 $ 4,664
Expenditures Current: Judicial administration $ 79,873 $ 80,876 $ 45,019 $ 35,857 $ - $ - $ - $ - Public safety - - - - - - - - Public works - - - - 195,000 195,000 180,245 14,755 Health and welfare - - - - - - - - Parks, recreation, and cultural - - - - - - - - Community development - - - - - - - -
Total expenditures $ 79,873 $ 80,876 $ 45,019 $ 35,857 $ 195,000 $ 195,000 $ 180,245 $ 14,755
Excess (deficiency) of revenues over expenditures $ (21,873) $ (22,876) $ 1,103 $ 23,979 $ - $ - $ 19,419 $ 19,419
Other financing sources (uses): Transfers in $ 21,873 $ 22,876 $ - $ (22,876) $ - $ - $ - $ - Transfers (out) - - - - - - - -
Total other financing sources (uses) $ 21,873 $ 22,876 $ - $ (22,876) $ - $ - $ - $ -
Net changes in fund balances $ - $ - $ 1,103 $ 1,103 $ - $ - $ 19,419 $ 19,419
Fund balances at beginning of year - - 186,384 186,384 - - 40,507 40,507
Fund balances at end of year $ - $ - $ 187,487 $ 187,487 $ - $ - $ 59,926 $ 59,926
Special Revenue Funds
Downtown Business Overlay DistrictLaw Library
106
Exhibit 19
Variance Variance
From From
Final Final
Budget Budget
Original Final Positive Original Final Positive
Budget Budget Actual (Negative) Budget Budget Actual (Negative)
$ - $ - $ - $ - $ 1,535,000 $ 1,535,000 $ 1,194,533 $ (340,467)
126,250 126,250 386,538 260,288 - - - -
- - - - - - - -
- - 25,452 25,452 - - 2,493 2,493
900,000 900,000 901,864 1,864 - - -
15,000 772,208 241,304 (530,904) - - - -
- - - - -
18,103,680 20,330,680 18,053,108 (2,277,572) - - - -
- - - - - - - -
$ 19,144,930 $ 22,129,138 $ 19,608,266 $ (2,520,872) $ 1,535,000 $ 1,535,000 $ 1,197,026 $ (337,974)
$ - $ - $ - $ - $ - $ - $ - $ - - - - - - 258,820 258,062 758
18,143,430 21,127,638 18,123,433 3,004,205 - - - - - - - - - - - - - - - - - - - - - - - - - - -
$ 18,143,430 $ 21,127,638 $ 18,123,433 $ 3,004,205 $ - $ 258,820 $ 258,062 $ 758
$ 1,001,500 $ 1,001,500 $ 1,484,833 $ 483,333 $ 1,535,000 $ 1,276,180 $ 938,964 $ (337,216)
$ - $ - $ - $ - $ - $ 188,820 $ - $ (188,820) (340,000) (340,000) (1,001,500) (1,001,500) (1,535,000) (1,465,000) (769,665) 695,335
$ (340,000) $ (340,000) $ (1,001,500) $ (1,001,500) $ (1,535,000) $ (1,276,180) $ (769,665) $ 506,515
$ 661,500 $ 661,500 $ 483,333 $ (518,167) $ - $ - $ 169,299 $ 169,299
(661,500) (661,500) 5,991,685 6,653,185 - - 864,460 864,460
$ - $ - $ 6,475,018 $ 6,135,018 $ - $ - $ 1,033,759 $ 1,033,759
Route 17 Taxing DistrictRoad Maintenance
107
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OTHER SUPPLEMENTARY INFORMATION
Nonmajor Proprietary Funds
109
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CITY OF SUFFOLK, VIRGINIA Exhibit 20
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets -
Nonmajor Proprietary Funds
Year Ended June 30, 2010
Golf
Course Stormwater
Fund Fund Totals
Operating revenues:
Charges for services $ - $ 3,861,010 $ 3,861,010
Total operating revenues $ - $ 3,861,010 $ 3,861,010
Operating expenses:
Personnel services $ - $ 1,739,716 $ 1,739,716
Purchased services - 110,213 110,213
Contractual services - 481,409 481,409
Supplies - - -
Depreciation and amortization - - -
Leased property - - -
Other charges - 669,907 669,907
Total operating expenses $ - $ 3,001,245 $ 3,001,245
Net income from operations $ - $ 859,765 $ 859,765
Nonoperating revenues:
Interest income $ - $ 21,359 $ 21,359
Total nonoperating revenues $ - $ 21,359 $ 21,359
Net income before contributions and transfers $ - $ 881,124 $ 881,124
Transfers (out) - (1,373,958) (1,373,958)
Change in net assets $ - $ (492,834) $ (492,834)
Net assets, beginning of year, as restated - 2,880,922 2,880,922
Net assets, end of year $ - $ 2,388,088 $ 2,388,088
Business-type Activities - Enterprise Funds
111
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OTHER SUPPLEMENTARY INFORMATION
Internal Service Funds
113
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CITY OF SUFFOLK, VIRGINIA Exhibit 21
Combining Statement of Net Assets - Internal Service Funds
At June 30, 2010
Information Fleet RiskTechnology Management Management
Fund Fund Fund TotalsASSETSCurrent Assets:
Cash and cash equivalents $ 1,239,947 $ 2,376,292 $ 9,780,442 $ 13,396,681 Restricted cash - 524,448 - 524,448
Receivables (net of allowance for uncollectibles): Accounts receivable - 5,660 23,958 29,618
Inventories - 271,689 - 271,689 Prepaids - - 216,240 216,240
Total Current Assets $ 1,239,947 $ 3,178,089 $ 10,020,640 $ 14,438,676
Capital assets: Land $ - $ 298,000 $ - $ 298,000 Buildings and improvements - 1,221,050 - 1,221,050 Improvements other than buildings - 35,157 - 35,157 Machinery and equipment 2,707,259 41,132,170 - 43,839,429 Construction in progress 504,043 - - 504,043 Less: Accumulated depreciation (2,120,341) (24,802,435) - (26,922,776)
Total Capital Assets (net) $ 1,090,961 $ 17,883,942 $ - $ 18,974,903
Total Assets $ 2,330,908 $ 21,062,031 $ 10,020,640 $ 33,413,579
LIABILITIESCurrent Liabilities:
Accounts payable $ 24,063 $ 220,831 $ 174,351 $ 419,245 Claims payable - current portion - - 1,380,913 1,380,913 Accrued interest - 39,596 - 39,596
Due to other funds - 1,088,040 - 1,088,040 Current portion of compensated absences 3,184 2,837 1,187 7,208 Current portion of capital leases - 2,549,608 - 2,549,608
Total Current Liabilities $ 27,247 $ 3,900,912 $ 1,556,451 $ 5,484,610
Noncurrent Liabilities:Noncurrent portion of compensated absences $ 79,772 $ 79,124 $ 5,883 $ 164,779 Claims payable - net of current - - 1,958,218 1,958,218 Noncurrent portion of capital leases 398,785 3,445,928 - 3,844,713
Total Noncurrent liabilities $ 478,557 $ 3,525,052 $ 1,964,101 $ 5,967,710
Total Liabilities $ 505,804 $ 7,425,964 $ 3,520,552 $ 11,452,320
NET ASSETSInvested in capital assets, net of related debt $ 692,176 $ 11,888,406 $ - $ 12,580,582 Unrestricted assets (deficit) 1,132,928 1,747,661 6,500,088 9,380,677
Total Net Assets $ 1,825,104 $ 13,636,067 $ 6,500,088 $ 21,961,259
Total Liabilities and Net Assets $ 2,330,908 $ 21,062,031 $ 10,020,640 $ 33,413,579
115
CITY OF SUFFOLK, VIRGINIA Exhibit 22
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets -
Internal Service Funds
Year Ended June 30, 2010
Information Fleet Risk
Technology Management Management
Fund Fund Fund Totals
Operating revenues:
Charges for services $ 2,692,806 $ 10,642,898 $ 15,060,175 $ 28,395,879
Other operating revenues 55 - - 55
Total operating revenues $ 2,692,861 $ 10,642,898 $ 15,060,175 $ 28,395,934
Operating expenses:
Personnel services $ 946,243 $ 1,153,121 $ 138,638 $ 2,238,002
Insurance claims and expenses - - 10,672,564 10,672,564
Purchased services 29,909 19,144 56,331 105,384
Contractual services 579,151 805,706 9,571 1,394,428
Supplies 104,133 4,718,791 6,599 4,829,523
Utilities 34,001 37,577 1,658 73,236
Insurance and bonds - - 1,626,893 1,626,893
OPEB - - 3,014,322 3,014,322
Depreciation 199,811 3,370,705 - 3,570,516
Building and equipment rental 16,937 479,606 - 496,543
Other charges 248,559 3,857 15,311 267,727
Total operating expenses $ 2,158,744 $ 10,588,507 $ 15,541,887 $ 28,289,138
Net income (loss) from operations $ 534,117 $ 54,391 $ (481,712) $ 106,796
Nonoperating revenues (expenses):
Interest income $ 4,526 $ 24,813 $ 43,819 $ 73,158
Interest expense - (281,753) - (281,753)
Gain (loss) on disposal of capital assets - (149,979) - (149,979)
Total nonoperating revenues (expenses) $ 4,526 $ (406,919) $ 43,819 $ (358,574)
Net income (loss) before contributions and transfers $ 538,643 $ (352,528) $ (437,893) $ (251,778)
Capital contributions - 2,054,538 - 2,054,538
Transfers (out) (87,980) (147,366) (1,676,411) (1,911,757)
Changes in net assets $ 450,663 $ 1,554,644 $ (2,114,304) $ (108,997)
Net assets, beginning of year 1,374,441 12,081,423 8,614,392 22,070,256
Net assets, end of year $ 1,825,104 $ 13,636,067 $ 6,500,088 $ 21,961,259
116
CITY OF SUFFOLK, VIRGINIA Exhibit 23
Combining Statement of Cash Flows - Internal Service Funds
Year Ended June 30, 2010
Information Fleet RiskTechnology Management Management
Fund Fund Fund Totals
Cash flows from operating activities: Receipts from customers and users $ 2,692,861 $ 10,784,167 $ 15,119,326 $ 28,596,354 Payments to employees (including fringe benefits) (956,231) (1,150,186) (139,141) (2,245,558) Payments for operating activities (1,088,208) (6,030,166) (13,802,966) (20,921,340)
Net cash provided by operating activities $ 648,422 $ 3,603,815 $ 1,177,219 $ 5,429,456
Cash flows from non-capital financing activities: Transfers (out) $ (87,980) $ (147,366) $ (1,676,411) $ (1,911,757)
Net cash provided by (used in) non-capital financing activities $ (87,980) $ (147,366) $ (1,676,411) $ (1,911,757)
Cash flows from capital and related financing activities: Acquisition of capital assets $ (616,065) $ (3,523,418) $ - $ (4,139,483) Principal paid on capital lease obligations - (2,790,889) - (2,790,889) Capital contributions - 2,054,538 - 2,054,538 Issuance of long-term debt 398,785 - - 398,785 Interest paid on debt - (305,338) - (305,338)
Net cash (used in) capital and related financing activities $ (217,280) $ (4,565,107) $ - $ (4,782,387)
Cash flows from investing activities: Interest earned $ 4,526 $ 24,813 $ 43,819 $ 73,158
Net increase (decrease) in cash and cash equivalents $ 347,688 $ (1,083,845) $ (455,373) $ (1,191,530)
Cash and cash equivalents at beginning of year 892,259 3,984,585 10,235,815 15,112,659
Cash and cash equivalents at end of year $ 1,239,947 $ 2,900,740 $ 9,780,442 $ 13,921,129
Reconciliation of operating income to net cash provided by (used in) operating activities:Cash flows from operations: Income (loss) from operations $ 534,117 $ 54,391 $ (481,712) $ 106,796
Adjustment to reconcile net income (loss) to net cash provided by operations:
Depreciation and amortization 199,811 3,370,705 - 3,570,516
Changes in operating accounts: (Increase) decrease in: Accounts receivable and due from other governments - 141,269 59,151 200,420 Inventories 47,315 26,952 - 74,267 Increase (decrease) in: Accounts payable (122,833) 7,562 61,394 (53,877) Compensated absences (9,988) 2,936 (503) (7,555) Claims payable - - 1,538,889 1,538,889
Net cash provided by operating activities $ 648,422 $ 3,603,815 $ 1,177,219 $ 5,429,456
117
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OTHER SUPPLEMENTARY INFORMATION
Agency Funds
119
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CITY OF SUFFOLK, VIRGINIA Exhibit 24
Combining Statement of Fiduciary Net Assets -
Agency Funds
At June 30, 2010
Special Commonwealth
Welfare of Virginia
Fund Fund Totals
Assets
Cash and cash equivalents $ 26,010 $ 2,533 $ 28,543
Total assets $ 26,010 $ 2,533 $ 28,543
Liabilities
Amounts held for others $ 26,010 $ 2,533 $ 28,543
Total liabilities $ 26,010 $ 2,533 $ 28,543
121
CITY OF SUFFOLK, VIRGINIA Exhibit 25
Combining Statement of Changes in Assets and Liabilities
Agency Funds
Year Ended June 30, 2010
Balance Balance
Beginning End of
of Year Additions Deletions Year
Special Welfare Fund:
Assets:
Cash and cash equivalents $ 26,458 $ 77,908 $ 78,356 $ 26,010
Liabilities:
Amounts held for others $ 26,458 $ 77,908 $ 78,356 $ 26,010
Commonwealth of Virginia Fund:
Assets:
Cash and cash equivalents $ 3,368 $ 142,366 $ 143,201 $ 2,533
Liabilities:
Amounts held for others $ 3,368 $ 142,366 $ 143,201 $ 2,533
Totals -- All agency funds
Assets:
Cash and cash equivalents $ 29,826 $ 220,274 $ 221,557 $ 28,543
Total assets $ 29,826 $ 220,274 $ 221,557 $ 28,543
Liabilities:
Amounts held for others $ 29,826 $ 220,274 $ 221,557 $ 28,543
Total liabilities $ 29,826 $ 220,274 $ 221,557 $ 28,543
122
OTHER SUPPLEMENTARY INFORMATION
Discretely Presented Component Unit School Board
123
CITY OF SUFFOLK, VIRGINIA Exhibit 26
Combining Balance Sheet - Governmental Funds - Discretely Presented Component Unit School Board
At June 30, 2010
Component
Unit
School Subtotal The Pruden
School Food School Excluding Center for Total
Operating Service Grants Component Industry & School
Fund Fund Fund Unit Technology Board ASSETS Cash and investments: Unrestricted $ 17,695,182 $ 2,072,886 $ - $ 19,768,068 $ 154,052 $ 19,922,120 Receivables (net of allowance for
uncollectibles): Accounts receivable 128,375 45,229 - 173,604 3,945 177,549 Due from other funds 1,513,649 - - 1,513,649 - 1,513,649 Due from other governments 1,354,943 237,350 2,979,194 4,571,487 - 4,571,487 Inventories 129,770 262,059 - 391,829 - 391,829 Prepaids 60,000 - - 60,000 - 60,000
Total assets $ 20,881,919 $ 2,617,524 $ 2,979,194 $ 26,478,637 $ 157,997 $ 26,636,634
LIABILITIESAccounts payable $ 2,165,343 $ 174,573 $ 183,043 $ 2,522,959 $ - $ 2,522,959 Accrued liabilities 311,078 - - 311,078 154,052 465,130 Accrued payroll 10,852,005 235,224 960,084 12,047,313 - 12,047,313 Amounts held for others 44,221 - - 44,221 - 44,221 Due to primary government 328,969 - - 328,969 - 328,969 Due to other governments - - - - 3,945 3,945 Due to other funds - - 1,513,649 1,513,649 - 1,513,649
Total liabilities $ 13,701,616 $ 409,797 $ 2,656,776 $ 16,768,189 $ 157,997 $ 16,926,186
FUND BALANCESNonspendable: Inventories and prepaids $ 189,770 262,059 - 451,829 - 451,829 Restricted: Grant Compliance - - 322,418 322,418 - 322,418 Committed:
Workers compensation claims 627,484 - - 627,484 - 627,484 Health insurance claims 380,122 - - 380,122 - 380,122
Assigned:Special revenue 5,982,927 1,945,668 - 7,928,595 - 7,928,595
Total fund balances $ 7,180,303 $ 2,207,727 $ 322,418 $ 9,710,448 $ - $ 9,710,448
Total liabilities and fund balances $ 20,881,919 $ 2,617,524 $ 2,979,194 $ 26,478,637 $ 157,997 $ 26,636,634
Reconciliation of Fund Balances to Net Assets
Fund balances $ 9,710,448
Capital assets used in governmental activities are not current financial resources and therefore not
67,476,784
Long-term liabilities are not due and payable in the current period and therefore are not reported
(1,915,731)
Total net assets $ 75,271,501
in the funds
reported in the governmental funds
124
CITY OF SUFFOLK, VIRGINIA Exhibit 27
Combining Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds - Discretely Presented Component Unit School Board
Year Ended June 30, 2010
Component
Unit
School Subtotal The Pruden
School Food School Excluding Center for TotalOperating Service Grants Component Industry & School
Fund Fund Fund Unit Technology Board
Revenues:Revenue from use of money and property $ 59,034 $ 728 $ - $ 59,762 $ - $ 59,762Charges for services 181,551 2,614,143 - 2,795,694 120,798 2,916,492Miscellaneous 627,592 32,179 - 659,771 - 659,771Intergovernmental:
City contribution to School Board 44,223,161 - - 44,223,161 - 44,223,161 Revenue from the Commonwealth 75,462,073 115,950 588,542 76,166,565 26,000 76,192,565 Revenue from the Federal Government 4,285,640 3,702,614 11,205,056 19,193,310 - 19,193,310 School Board contribution to Pruden Center - - - - 1,643,648 1,643,648 Isle of Wight contribution to Pruden Center - - - - 800,680 800,680
Total revenues $ 124,839,051 $ 6,465,614 $ 11,793,598 $ 143,098,263 $ 2,591,126 $ 145,689,389
Expenditures:Current:
Education $ 127,198,937 $ 6,139,451 $ 11,913,490 $ 145,251,878 $ 2,591,126 $ 147,843,004
Total expenditures $ 127,198,937 $ 6,139,451 $ 11,913,490 $ 145,251,878 $ 2,591,126 $ 147,843,004
Excess (deficiency) of revenues over expenditures $ (2,359,886) $ 326,163 $ (119,892) $ (2,153,615) $ - $ (2,153,615)
Other financing sources (uses): Transfers in $ - $ - $ 127,737 $ 127,737 $ - $ 127,737 Transfers (out) (127,737) - - (127,737) - (127,737)
Total other financing sources (uses) $ (127,737) $ - $ 127,737 $ - $ - $ -
Net changes in fund balances $ (2,487,623) $ 326,163 $ 7,845 $ (2,153,615) $ - $ (2,153,615)
Fund balances at beginning of year 9,667,926 1,881,564 314,573 11,864,063 - 11,864,063
Fund balances at end of year $ 7,180,303 $ 2,207,727 $ 322,418 $ 9,710,448 $ - $ 9,710,448
Reconciliation of Changes in Fund Balances to Changes in Net Assets:
Net changes in fund balances $ (2,153,615)
Change in capital assets 4,268,730
Changes in compensated absences 136,489
Changes in net assets $ 2,251,604
125
CITY OF SUFFOLK, VIRGINIA
Budgetary Reconciliation Schedule
Governmental Funds - Discretely Presented Component Unit School Board
Year Ended June 30, 2010
Total Total Exhibit 29 Encumbrances Exhibit 27
Total revenues $ 124,839,051 $ - $ 124,839,051 Total other financing sources - - -
Total revenues and other financing sources $ 124,839,051 $ - $ 124,839,051
Total expenditures $ 133,241,864 $ (6,042,927) $ 127,198,937Total other financing (uses) 127,737 - 127,737
Total expenditures and other financing (uses) $ 133,369,601 $ (6,042,927) $ 127,326,674
Net changes in fund balances $ (8,530,550) $ 6,042,927 $ (2,487,623)
School Operating Fund
126
Exhibit 28
Total Total Total Total Exhibit 29 Encumbrances Exhibit 27 Exhibit 29 Encumbrances Exhibit 27
$ 6,465,614 $ - $ 6,465,614 $ 11,793,598 $ - $ 11,793,598 - - - 127,737 - 127,737
$ 6,465,614 $ - $ 6,465,614 $ 11,921,335 $ - $ 11,921,335
$ 6,140,224 $ (773) $ 6,139,451 $ 11,981,725 $ (68,235) $ 11,913,490- - - - - -
$ 6,140,224 $ (773) $ 6,139,451 $ 11,981,725 $ (68,235) $ 11,913,490
$ 325,390 $ 773 $ 326,163 $ (60,390) $ 68,235 $ 7,845
School Food Service Fund School Grants Fund
127
CITY OF SUFFOLK, VIRGINIA
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Governmental Funds - Discretely Presented Component Unit School Board
Year Ended June 30, 2010
School Operating Fund
Variance
From Final
Actual Budget
Original Final Budgetary Positive
Budget Budget Basis (Negative)
Revenues:
Revenue from use of money and property $ 80,000 $ 80,000 $ 59,034 $ (20,966)
Charges for services 100,000 100,000 181,551 81,551
Miscellaneous 760,000 760,000 627,592 (132,408)
Intergovernmental:
Contribution from the City of Suffolk 44,552,130 44,552,130 44,223,161 (328,969)
Revenue from the Commonwealth 80,262,870 77,183,796 75,462,073 (1,721,723)
Revenue from the Federal Government 1,052,000 4,131,074 4,285,640 154,566
Total revenues $ 126,807,000 $ 126,807,000 $ 124,839,051 $ (1,967,949)
Expenditures:
Education $ 126,622,000 $ 135,133,335 $ 133,241,864 $ 1,891,471
Food services - - - -
Grant expenditures - - - -
Total education $ 126,622,000 $ 135,133,335 $ 133,241,864 $ 1,891,471
Total expenditures $ 126,622,000 $ 135,133,335 $ 133,241,864 $ 1,891,471
Excess (deficiency) of revenues over expenditures $ 185,000 $ (8,326,335) $ (8,402,813) $ (76,478)
Other financing sources (uses):
Transfers in $ - $ - $ - $ -
Transfers (out) (185,000) (130,400) (127,737) 2,663
Total other financing sources (uses) $ (185,000) $ (130,400) $ (127,737) $ 2,663
Net changes in fund balances $ - $ (8,456,735) $ (8,530,550) $ (73,815)
128
Exhibit 29
School Food Service Fund School Grants Fund
Variance Variance
From Final From Final
Actual Budget Actual Budget
Original Final Budgetary Positive Original Final Budgetary Positive
Budget Budget Basis (Negative) Budget Budget Basis (Negative)
$ 5,000 $ 5,000 $ 728 $ (4,272) $ - $ - $ - $ -
2,707,000 2,707,000 2,614,143 (92,857) - - - -
30,000 30,000 32,179 2,179 - - - -
- - - - - - - -
107,000 107,000 115,950 8,950 648,273 648,273 588,542 (59,731)
3,483,000 3,483,000 3,702,614 219,614 15,899,990 15,899,990 11,205,056 (4,694,934)
$ 6,332,000 $ 6,332,000 $ 6,465,614 $ 133,614 $ 16,548,263 $ 16,548,263 $ 11,793,598 $ (4,754,665)
$ - $ - $ - $ - $ - $ - $ - $ -
6,732,000 6,732,000 6,140,224 591,776 - - - -
- - - - 16,676,000 16,676,000 11,981,725 4,694,275
$ 6,732,000 $ 6,732,000 $ 6,140,224 $ 591,776 $ 16,676,000 $ 16,676,000 $ 11,981,725 $ 4,694,275
$ 6,732,000 $ 6,732,000 $ 6,140,224 $ 591,776 $ 16,676,000 $ 16,676,000 $ 11,981,725 $ 4,694,275
$ (400,000) $ (400,000) $ 325,390 $ 725,390 $ (127,737) $ (127,737) $ (188,127) $ (60,390)
$ - $ - $ - $ - $ 127,737 $ 127,737 $ 127,737 $ -
- - - - - - - -
$ - $ - $ - $ - $ 127,737 $ 127,737 $ 127,737 $ -
$ (400,000) $ (400,000) $ 325,390 $ 725,390 $ - $ - $ (60,390) $ (60,390)
129
CITY OF SUFFOLK, VIRGINIA Exhibit 30
Statement of Net Assets
Fiduciary Funds - Discretely Presented Component Unit School Board
At June 30, 2010
School
OPEB Trust Activity
Fund Funds
Assets
Cash and cash equivalents $ 4,206,690 $ 1,120,379
Total assets $ 4,206,690 $ 1,120,379
Liabilities
Amounts held for others $ - $ 1,120,379
Total liabilities $ - $ 1,120,379
Net assets
Held in trust for OPEB benefits $ 4,206,690 $ -
Total net assets $ 4,206,690 $ -
Total liabilities and net assets $ 4,206,690 $ 1,120,379
130
CITY OF SUFFOLK, VIRGINIA Exhibit 31
Statement of Changes in Fiduciary Net Assets
OPEB Trust Fund - Discretely Presented Component Unit School Board
At June 30, 2010
School
Board
Additions:
Employer Contributions $ 1,411,000
Gain (loss) on investments 300,090
Total additions $ 1,711,090
Deductions:
Administrative fees $ 3,825
Total liabilities $ 3,825
Change in net assets $ 1,707,265
Net assets - beginning of year 2,499,425
Net assets - end of year $ 4,206,690
131
CITY OF SUFFOLK, VIRGINIA Exhibit 32
Statement of Changes in Assets and Liabilities - Agency Funds
Discretely Presented Component Unit School Board
Year Ended June 30, 2010
Balance Balance
Beginning End of
of Year Additions Deletions Year
School Activity Funds:
Cash $ 946,625 $ 2,628,523 $ 2,454,769 $ 1,120,379
Liabilities:
Amounts held for students $ 946,625 $ 2,628,523 $ 2,454,769 $ 1,120,379
132
STATISTICAL SECTION This part of the City of Suffolk's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information says about the City's overall financial health.
Contents Table Number Financial Trends
These tables contain trend information to help the reader understand howthe City's financial performance and well-being have changed over time.
1 to 5
Revenue Capacity
These tables contain information to help the reader assess the factorsaffecting the City's ability to generate its property taxes.
6 to 10
Debt Capacity
These tables contain information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue debt in the future.
11 to 15
Demographic and Economic Information
These tables offer demographic and economic indicators to help the readerunderstand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments.
16 to 17 Operating Information
These tables contain information about the City's operations and resources tohelp the reader understand how the City's financial information relates to theservices the City provides and the activities it performs.
18 to 22 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented GASB Statement 34 in fiscal year 2002; schedules presenting government-wide information include information beginning in that year.
133
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CITY OF SUFFOLK, VIRGINIA Table 1
NET ASSETS BY COMPONENT
LAST NINE FISCAL YEARS
2002 2003 2004 2005 2006 2007 2008 2009 2010
Governmental Activities
Invested in capital assets,
net of related debt $ 14,455,117 $ 17,854,254 $ 41,339,232 $ 22,018,105 $ 50,694,555 $ 128,097,710 $ 140,789,631 $ 129,638,603 $ 115,706,222
Restricted:
Capital Projects 11,273,870 8,845,303 12,565,077 2,862,010 5,222,554 - - - -
Debt Service (245,575) (1,679,443) - - - 392,169 392,169 392,169 392,169
Other Purposes 1,189,783 1,439,773 2,250,498 944,650 3,703,280 - 959,304 - -
Special Programs 524,725 - - - - - - - -
Unrestricted 28,290,778 29,082,266 9,733,131 22,631,799 12,468,387 44,337,037 57,234,531 60,941,946 75,820,056
Total Governmental
Activities Net Assets $ 55,488,698 $ 55,542,153 $ 65,887,938 $ 48,456,564 $ 72,088,776 $ 172,826,916 $ 199,375,635 $ 190,972,718 $ 191,918,447
Business-Type Activities
Invested in capital assets,
net of related debt $ 27,866,304 $ 38,652,097 $ 56,290,404 $ 69,299,223 $ 170,862,396 $ 173,084,623 $ 172,165,375 $ 171,309,403 $ 163,631,305
Restricted:
Capital Projects 21,854,006 17,214,206 1,689,149 - - - - - -
Debt Service - - - - - - - - 1,525,006
Other Purposes - - 634,206 - 39,426 - - - -
Unrestricted 6,869,399 7,032,281 7,773,220 1,776,739 3,058,548 445,172 1,489,816 2,935,424 6,181,551
Total Business-Type
Activities Net Assets $ 56,589,709 $ 62,898,584 $ 66,386,979 $ 71,075,962 $ 173,960,370 $ 173,529,795 $ 173,655,191 $ 174,244,827 $ 171,337,862
Primary Government
Invested in capital assets,
net of related debt $ 42,321,421 $ 56,506,351 $ 97,629,636 $ 91,317,328 $ 221,556,951 $ 301,182,333 $ 312,955,006 $ 300,948,006 $ 279,337,527
Restricted:
Capital Projects 33,127,876 26,059,509 14,254,226 2,862,010 5,222,554 - - - -
Debt Service (245,575) (1,679,443) - - - 392,169 392,169 392,169 1,917,175
Other Purposes 1,189,783 1,439,773 2,884,704 944,650 3,742,706 - 959,304 - -
Special Programs 524,725 - - - - - - - -
Unrestricted 35,160,177 36,114,547 17,506,351 24,408,538 15,526,935 44,782,209 58,724,347 63,877,370 82,001,607
Total Primary Government
Net Assets $ 112,078,407 $ 118,440,737 $ 132,274,917 $ 119,532,526 $ 246,049,146 $ 346,356,711 $ 373,030,826 $ 365,217,545 $ 363,256,309
(1) (2) (3)
Information prior to 2002 is not available due to implementation of GASB Statement No. 34 in 2002.
(1) This includes a $3,274,701 restatement in the Governmental Activities Net Assets.
(2) This includes a $105,473,045 restatement in the Business-Type Activities Net Assets.
(3) This includes a $12,376,267 restatement in the Governmental Activities Net Assets and $446,251 restatement in the Business-TypeActivities Net Assets.
135
CITY OF SUFFOLK, VIRGINIA Table 2Page 1 of 2
CHANGES IN NET ASSETS
2002 2003 2004 2005 2006 2007 2008 2009 2010ExpensesGovernmental Activities: General Government $ 5,952,937 $ 5,617,639 $ 8,019,005 $ 1,900,766 $ 6,916,053 $ 8,379,163 $ 9,575,332 $ 8,493,992 $ 9,422,635 Judicial 4,771,088 4,457,170 4,428,005 4,936,491 5,535,063 6,807,141 7,157,778 7,159,993 7,393,681 Public Safety 22,521,545 21,195,772 24,623,891 26,646,128 33,410,471 33,914,535 36,275,476 36,372,402 42,448,954 Public Works 7,950,702 7,665,951 13,763,814 4,657,083 5,275,996 28,828,221 29,772,711 32,530,396 34,682,047 Health and Welfare 14,043,726 12,527,607 13,014,409 13,810,781 13,252,584 10,843,875 12,718,036 12,187,513 13,569,286 Education 26,882,975 32,979,130 26,253,784 56,260,122 38,779,835 51,958,540 42,109,639 77,678,641 53,624,148 Parks, Recreation and Cultural 4,515,517 4,130,338 4,043,316 15,364,543 8,707,837 8,783,502 8,524,477 8,301,660 8,309,722 Community Development 4,193,781 9,677,963 6,556,252 10,058,214 11,807,444 27,229,557 6,296,351 7,742,440 9,329,455 Other Public Services 2,868,171 2,375,419 3,662,585 2,949,560 3,669,173 - - - - Interest on Long-Term Debt 6,510,669 6,549,846 7,359,854 7,266,452 7,099,604 6,989,398 11,090,479 9,896,678 9,293,250 Bond Costs 94,231 27,383 13,390 27,970 22,272 - - - - Non-Departmental 3,201,419 4,292,818 7,587,424 5,481,997 - - - - - Total Governmental Activities Expenses $ 103,506,761 $ 111,497,036 $ 119,325,729 $ 149,360,107 $ 134,476,332 $ 183,733,932 $ 163,520,279 $ 200,363,715 $ 188,073,178
Business-Type Activities: Utilities $ 12,672,901 $ 13,045,332 $ 15,593,938 $ 17,773,204 $ 23,296,106 $ 30,173,237 $ 29,147,386 $ 29,133,054 $ 33,481,090 Golf course 17,317 1,181,521 1,148,610 1,834,057 1,934,301 1,979,380 1,780,625 1,689,229 - Stormwater management - - - - - 1,911,122 2,591,374 2,924,270 3,001,245Total Business-Type Activities Expenses $ 12,690,218 $ 14,226,853 $ 16,742,548 $ 19,607,261 $ 25,230,407 $ 34,063,739 $ 33,519,385 $ 33,746,553 $ 36,482,335
Total Primary Government Expenses $ 116,196,979 $ 125,723,889 $ 136,068,277 $ 168,967,368 $ 159,706,739 $ 217,797,671 $ 197,039,664 $ 234,110,268 $ 224,555,513
Program RevenuesGovernmental activities: Charges for Services: General Government and Administration $ 103,970 $ 931,888 $ 2,114,804 $ 2,243,348 $ 2,507,468 $ - $ - $ - $ 6,299 Judicial Administration 566,751 1,475,505 493,282 588,401 687,317 939,300 788,324 753,969 736,610 Public Safety 1,380,455 994,414 184,587 198,638 249,612 1,313,880 2,361,369 2,587,982 2,931,733 Public Works 769,700 - 1,380,740 1,386,084 1,254,981 1,746,854 1,531,857 2,195,198 2,367,267 Health and Welfare - - - - - 15,015 15,201 7,388 25,280 Parks, Recreation and Cultural 430,920 457,370 288,075 316,658 325,748 335,642 476,376 628,393 670,162 Community Development 59,509 25,102 11,357 33,296 27,930 948,983 1,215,821 302,134 248,816 Other Public Service 547,591 499,626 575,318 602,404 812,681 - - - - Total Charges for Services $ 3,858,896 $ 4,383,905 $ 5,048,163 $ 5,368,829 $ 5,865,737 $ 5,299,674 $ 6,388,948 $ 6,475,064 $ 6,986,167
Operating Grants and Contributions: General Government and Administration $ 383,924 $ 370,679 $ 1,195,139 $ 443,125 $ 294,285 $ 473,712 $ 531,013 $ 170,905 $ 122,185 Judicial Administration 2,477,980 2,463,581 2,131,555 2,267,307 2,141,741 1,802,021 1,846,680 1,829,318 1,766,209 Public Safety 889,563 475,511 1,971,088 745,611 1,159,591 2,325,968 2,293,795 2,136,678 2,705,501 Public Works 706,517 754,217 6,357,646 292,492 676,331 16,350,686 17,088,074 18,491,121 18,095,389 Health and Welfare 10,513,767 10,960,814 11,295,734 11,788,079 10,199,959 8,172,786 8,398,910 8,848,554 9,511,711 Education 150,897 83,991 131,645 - - - - - - Parks, Recreation and Cultural 513,362 268,232 305,659 369,363 749,244 285,761 297,489 305,120 294,402 Community Development 163,529 572,857 780,466 996,938 550,749 756,429 302,122 575,172 1,808,426 Other Public Services 98,691 41,039 11,494 72,711 28,630 - - - - Total Operating Grants and Contributions $ 15,898,230 $ 15,990,921 $ 24,180,426 $ 16,975,626 $ 15,800,530 $ 30,167,363 $ 30,758,083 $ 32,356,868 $ 34,303,823
Capital Grants and Contributions: Public Safety $ - $ - $ - $ - $ - $ - $ - $ 70,500 $ - Public Works 1,538,340 926,906 1,151,499 1,763,201 1,979,527 105,190,141 138,253 587,602 1,802,779 Health and Welfare - 78,000 - - - 8,383 - - - Education 1,538,360 1,030,585 1,035,898 1,290,471 1,394,061 - - - - Parks, Recreation and Cultural 28,687 - 41,378 27,652 227,199 2,043 - - - Community Development 1,068,879 - 26,935 86,672 628,900 1,127,019 1,088,018 966,594 109,151 Other Public Services - - - 170,280 - - - - - Nondepartmental - - 1,172,283 18,701 - - - - - Total Capital Grants and Contributions $ 4,174,266 $ 2,035,491 $ 3,427,993 $ 3,356,977 $ 4,229,687 $ 106,327,586 $ 1,226,271 $ 1,624,696 $ 1,911,930
Total Governmental Activities Program Revenues$ 23,931,392 $ 22,410,317 $ 32,656,582 $ 25,701,432 $ 25,895,954 $ 141,794,623 $ 38,373,302 $ 40,456,628 $ 43,201,920
LAST NINE FISCAL YEARS
136
CITY OF SUFFOLK, VIRGINIA Table 2Page 2 of 2
CHANGES IN NET ASSETS
2002 2003 2004 2005 2006 2007 2008 2009 2010Program Revenues: (Continued)Business-Type Activities: Charges for Services: Utility $ 18,359,157 $ 16,616,219 $ 16,920,731 $ 19,566,580 $ 20,419,822 $ 22,096,514 $ 23,803,453 $ 24,813,989 $ 29,044,958 Non-major - 686,307 438,735 1,430,093 1,510,288 4,412,172 5,220,655 5,152,294 3,861,010 Total Charges for Services $ 18,359,157 $ 17,302,526 $ 17,359,466 $ 20,996,673 $ 21,930,110 $ 26,508,686 $ 29,024,108 $ 29,966,283 $ 32,905,968
Operating Grants and Contributions: Utility $ - $ - $ 400,724 $ 240,093 $ 11,163 $ 814,500 $ 864,141 $ 542,287 $ - Total Operating Grants and Contributions $ - $ - $ 400,724 $ 240,093 $ 11,163 $ 814,500 $ 864,141 $ 542,287 $ -
Capital Grants and Contributions: Utility $ - $ 3,935,770 $ 2,233,515 $ 3,284,662 $ 383,412 $ 6,043,266 $ 2,658,020 $ 3,785,842 $ 1,504,233 Total Capital Grants and Contributions $ - $ 3,935,770 $ 2,233,515 $ 3,284,662 $ 383,412 $ 6,043,266 $ 2,658,020 $ 3,785,842 $ 1,504,233
Total Business-Type Activities Program Revenues$ 18,359,157 $ 21,238,296 $ 19,993,705 $ 24,521,428 $ 22,324,685 $ 33,366,452 $ 32,546,269 $ 34,294,412 $ 34,410,201
Total Primary Government Program Revenues $ 42,290,549 $ 43,648,613 $ 52,650,287 $ 50,222,860 $ 48,220,639 $ 175,161,075 $ 70,919,571 $ 74,751,040 $ 77,612,121
Net (Expense)/RevenueGovernmental Activities $ (79,575,369) $ (89,086,719) $ (86,669,147) $ (123,658,675) $ (108,580,378) $ (41,939,309) $ (125,146,977) $ (159,907,087) $ (144,871,256)Business-Type Activities 5,668,939 7,011,443 3,251,157 4,914,167 (2,905,722) (697,287) (973,116) 547,859 (2,072,134)
Total Primary Government Net Expense $ (73,906,430) $ (82,075,276) $ (83,417,990) $ (118,744,508) $ (111,486,100) $ (42,636,596) $ (126,120,093) $ (159,359,228) $ (146,943,390)
General Revenues and Other Changes in Net AssetsGovernmental Activities: Taxes $ 75,735,139 $ 82,192,711 $ 91,734,955 $ 102,418,853 $ 106,905,524 $ 120,034,998 $ 131,543,030 $ 132,560,748 $ 131,748,747 Grants and Contributions Not Restricted to Specific Programs 2,947,490 2,954,054 3,041,024 3,239,271 14,174,921 14,535,729 14,427,389 14,405,688 13,938,495 Revenue from use of money and property 1,686,545 2,476,306 2,100,281 2,060,740 2,445,754 3,871,010 3,794,438 1,845,378 1,136,704 Gain on Disposal of Capital Assets - - (30,742) - 180,500 - - - - Transfers/Miscellaneous 1,104,708 1,517,103 169,414 1,783,138 2,659,201 4,235,712 1,930,839 2,692,356 3,968,437Total Governmental Activities $ 81,473,882 $ 89,140,174 $ 97,014,932 $ 109,502,002 $ 126,365,900 $ 142,677,449 $ 151,695,696 $ 151,504,170 $ 150,792,383
Business-Type Activities: Reimbursements from Other Agencies $ 518,131 $ 113,312 $ - $ 23,000 $ - $ - $ - $ - $ - Grants and Contributions Not Restricted to Specific Programs 84,706 - - - - - - - - Investment Earnings 235,370 129,655 197,469 237,146 476,611 1,042,633 1,633,718 640,041 555,814 Gain on Disposal of Capital Assets - 28,464 - - - - - - - Transfers/Miscellaneous (41,608) (973,999) 39,758 (485,330) (158,526) (329,670) (535,206) (598,264) (2,063,316)Total Business-Type Activities $ 796,599 $ (702,568) $ 237,227 $ (225,184) $ 318,085 $ 712,963 $ 1,098,512 $ 41,777 $ (1,507,502)
Total Primary Government $ 82,270,481 $ 88,437,606 $ 97,252,159 $ 109,276,818 $ 126,683,985 $ 143,390,412 $ 152,794,208 $ 151,545,947 $ 149,284,881
Change in Net AssetsGovernmental Activities $ 1,898,513 $ 53,455 $ 10,345,785 $ (14,156,673) $ 17,785,522 $ 100,738,140 $ 26,548,719 $ (8,402,917) $ 5,921,126Business-Type Activities 6,465,538 6,308,875 3,488,384 4,688,983 (2,587,637) 15,676 125,396 589,636 (3,579,636)
Total Primary Government $ 8,364,051 $ 6,362,330 $ 13,834,169 $ (9,467,690) $ 15,197,885 $ 100,753,816 $ 26,674,115 $ (7,813,281) $ 2,341,490
(1)
Information prior to 2002 is not available due to implementation of GASB Statement No. 34 in 2002.
(1) In Fiscal Year 2007 the City adjusted grouping categories based on new fund additions, changes in operational structure
and GFOA comments.
LAST EIGHT FISCAL YEARS
137
CITY OF SUFFOLK, VIRGINIA
FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
2001 2002 2003 2004 2005
General Fund
Reserved $ 4,078,996 $ 3,740,533 $ 2,872,994 $ 2,656,053 $ 3,235,758
Unreserved 32,399,193 32,785,732 34,169,781 28,902,323 25,079,595
Non-Spendable - - - - -
Committed - - - - -
Assigned
General - - - - -
Capital Projects - - - - -
Unassigned - - - - -
Total General Fund $ 36,478,189 $ 36,526,265 $ 37,042,775 $ 31,558,376 $ 28,315,353
All Other Governmental Funds
Reserved $ 4,467,017 $ 8,189,533 $ 1,948,525 $ 4,117,671 $ 4,768,672
Unreserved, reported in:
Capital Projects Funds 19,519,255 3,564,030 7,378,260 8,082,082 8,307,664
Debt Service Funds - (245,575) (1,679,443) (2,360,804) (1,572,163)
Permanent - - - - -
Special Revenue Funds 927,608 2,137,286 1,850,914 2,224,696 2,272,683
Restricted - - - - -
Committed, reported in:
Capital Projects Funds - - - - -
Nonmajor Governmental Funds - - - - -
Other Governmental Funds - - - - -
Assigned, reported in:
Capital Projects Funds - - - - -
Special Revenue Funds - - - - -
Debt Service Funds - - - - -
Unassigned - - - - -
Total all other Governmental Funds $ 24,913,880 $ 13,645,274 $ 9,498,256 $ 12,063,645 $ 13,776,856
Component Unit (School Board)
Reserved $ 4,236,109 $ 4,477,136 $ 6,353,892 $ 8,191,095 $ 6,611,928
Unreserved 601,041 798,427 773,035 220,970 844,356
Nonspendable - - - - -
Restricted - - - - -
Committed - - - - -
Assigned - - - - -
$ 4,837,150 $ 5,275,563 $ 7,126,927 $ 8,412,065 $ 7,456,284
(1)
With the implementation of GASB Statement No. 34 in Fiscal Year 2002, the fund balance of the nonexpendable trust fund was reclassified to that of a special revenue fund.
(1) This includes a $937,447 restatement in the General Fund.
(2) This includes a $4,703,180 restatement in the Capital Projects Fund.
With the implementation of GASB Statement No. 54 in Fiscal Year 2010, the fund balance terminology
was changed.
138
Table 3
2006 2007 2008 2009 2010
$ 2,008,158 $ 594,170 $ 810,492 $ 670,027 $ -
28,146,402 33,217,808 47,279,178 50,540,042 -
- - - - 132,421
- - - - 585,475
- - - - 2,986,050
- - - - 6,529,103
- - - - 42,300,994
$ 30,154,560 $ 33,811,978 $ 48,089,670 $ 51,210,069 $ 52,534,043
$ 5,890,801 $ 2,419,652 $ 8,189,612 $ 12,318,937 $ -
(7,242,148) 28,003,480 21,339,005 19,353,128 -
(757,116) 734,340 861,708 679,706 -
977,277 1,026,077 959,304 - -
(174,585) 4,171,904 6,635,295 8,214,906 -
- - - - 392,169
- - - - 12,986,435
- - - - 4,398,679
- - - - 286,150
- - - - 6,868,143
- - - - 5,468,839
- - - - 600,859
- - - - (69,801)
$ (1,305,771) $ 36,355,453 $ 37,984,924 $ 40,566,677 $ 30,931,473
$ 5,378,752 $ 8,174,301 $ 8,065,992 $ 10,459,827 $ -
1,011,181 783,382 1,370,368 1,404,236 -
- - - - 451,829
- - - - 322,418
- - - - 1,007,606
- - - - 7,928,595
$ 6,389,933 $ 8,957,683 $ 9,436,360 $ 11,864,063 $ 9,710,448
(2)
139
CITY OF SUFFOLK, VIRGINIA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDSLAST TEN FISCAL YEARS
2001 2002 2003 2004Revenues
General Property Taxes (1) $ 47,924,487 $ 53,892,139 $ 57,961,870 $ 66,231,547 Other Local Taxes 18,567,350 21,843,000 23,503,407 25,361,853 Licenses, Permits and Fees 1,236,861 1,405,319 1,452,509 1,459,690 Fines and Forfeitures 414,419 349,377 553,375 655,114 Use of Money and Property 4,681,210 2,420,813 3,185,964 2,164,113 Intergovernmental 76,770,071 79,370,828 113,176,486 127,923,434 Charges for Services 1,438,789 1,784,194 2,076,100 2,781,664 Sale of Commodities and Property 1,472,687 1,580,723 1,888,096 2,011,073 Miscellaneous 865,580 2,062,003 640,633 908,522
Total Revenues $ 153,371,454 $ 164,708,396 $ 204,438,440 $ 229,497,010
ExpendituresGeneral Government $ 4,583,998 $ 5,089,739 $ 5,481,723 $ 5,903,203 Judicial 3,670,902 4,147,075 4,420,572 4,402,709 Public Safety 16,443,143 19,529,292 20,911,023 23,876,250 Public Works 6,412,480 6,418,212 6,839,111 7,008,118 Health and Welfare 12,168,833 12,257,769 12,495,701 13,001,895 Education 78,070,900 84,091,273 92,760,306 131,062,322 Parks, Recreation and Cultural 2,943,721 3,750,968 3,885,476 3,810,234 Community Development 2,362,377 3,666,922 3,643,667 6,506,643 Other Public Services 1,452,488 2,439,054 2,380,779 2,725,172 Non-Departmental 5,798,002 2,796,469 3,755,336 10,749,106 Capital Outlay 27,567,545 18,144,092 25,488,540 24,763,361 Debt Service Other 191,961 94,231 133,327 150,408 Interest 5,878,200 6,365,540 6,650,152 7,208,931 Principal 11,299,424 7,819,576 8,598,182 10,081,717
Total Expenditures $ 178,843,974 $ 176,610,212 $ 197,443,895 $ 251,250,069
Excess of Revenues Over (Under) Expenditures $ (25,472,520) $ (11,901,816) $ 6,994,545 $ (21,753,059)
Other Financing Sources (Uses)Proceeds of Refunding Bonds $ 5,402,123 $ - $ - $ 19,770,997 Proceeds of Bonds Issued 26,203,584 - 18,124,270 18,183,028 Premiums on Debt - - - - Transfers to Component Units - (25,184,762) (27,434,956) - Transfers In 32,212,726 33,920,389 5,980,095 12,522,466 Payment to Refunded Bonds Escrow Agent (5,402,123) - - (19,770,997) Proceeds from Sale of Asset - - - 1,722,690 Transfers Out (31,344,201) (8,521,719) (5,443,097) (12,308,996)
Total Other Financing Sources (Uses) $ 27,072,109 $ 213,908 $ (8,773,688) $ 20,119,188
Net Change in Fund Balance $ 1,599,589 $ (11,687,908) $ (1,779,143) $ (1,633,871)
Debt Service as a percentage of 11.36% 8.95% 8.87% 7.63% non-capital expenditures
Includes General, Capital Projects, Special Revenue, Debt Service, School Operating, School Food Service and the School Grants Fund. School Funds
are reported in the component unit section of the financial statements, but are included here since they are a part of the general goverment function.
With the implementation of GASB Statement No. 34 in Fiscal Year 2002, the fund balance of the nonexpendable trust fund was reclassified to that
of a special revenue fund.
In Fiscal Year 2007 the City adjusted grouping categories based on new fund additions, changes in operational structure and GFOA comments.
(1) Includes $12,202,627 from the first semi-annual real estate tax collection.
(2) Education includes the City's payments to the School Board, as listed below, which were reported as transfers in prior years.
2004 – $30,386,932 2005 – $34,230,484 2006 – $38,779,835 2007 – $41,553,626
(3) Includes $2,437,088 of funding for the IDA's Secondary Debt Service Reserve Fund to support the $18.3 million Economic Development Revenue Bondsrelating to the Hilton Garden Inn and Suffolk Conference Center.
Note C:
Note A:
Note B:
140
Table 4
2005 2006 2007 2008 2009 2010
$ 74,827,500 $ 76,472,589 $ 88,450,925 $ 98,037,522 $ 99,044,697 $ 98,299,291 27,514,690 30,512,149 31,261,557 33,104,223 33,090,604 32,916,852 1,581,725 1,811,848 1,532,729 1,375,508 1,182,302 1,394,842
661,623 695,620 552,063 475,350 521,771 852,307 2,139,060 2,542,192 3,966,250 3,794,438 1,845,378 1,136,704
134,887,182 155,028,233 (8) 180,010,723 47,805,781 49,182,612 50,154,248 2,957,076 3,166,463 5,811,425 4,538,081 4,770,991 4,739,019 2,174,387 2,371,587 - - - -
896,602 2,678,000 (7) 4,315,695 1,368,871 1,784,155 1,674,116
$ 247,639,845 $ 275,278,681 $ 315,901,367 $ 190,499,774 $ 191,422,510 $ 191,167,379
$ 6,433,652 $ 6,648,753 $ 8,177,101 $ 8,172,799 $ 8,075,932 $ 8,113,416 4,915,653 5,183,428 6,602,250 6,770,319 6,815,601 6,812,528
26,239,576 30,227,291 31,896,254 33,563,830 34,676,356 37,802,601 8,767,265 11,172,271 (8) 22,157,962 24,379,984 26,204,343 26,784,701
13,786,005 12,581,669 10,493,819 11,040,820 11,597,910 12,718,523 (2) 148,483,536 (2) 161,903,529 (2) 171,941,517 45,999,422 48,472,908 44,725,754
4,299,784 4,839,971 6,042,500 5,984,292 6,680,503 6,972,187 (3) 4,485,621 4,541,559 (5) 26,784,795 6,192,145 8,032,334 8,783,239
2,949,560 3,561,018 - - - - (4) 4,995,690 5,530,537 7,012,669 7,622,634 8,753,753 8,264,861
29,674,725 38,086,252 18,741,520 28,574,620 20,582,782 20,789,098
131,124 209,398 1,005,084 190,205 288,914 339,170 6,829,437 7,385,176 6,689,872 8,531,876 9,645,646 9,755,820 9,949,599 12,991,845 15,044,611 13,361,741 13,667,737 14,315,646
$ 271,941,227 $ 304,862,697 $ 332,589,954 $ 200,384,687 $ 203,494,719 $ 206,177,544
$ (24,301,382) $ (29,584,016) $ (16,688,587) $ (9,884,913) $ (12,072,209) $ (15,010,165)
$ - $ 9,978,267 $ 28,440,000 $ - $ - $ 30,605,000 21,160,000 14,406,949 63,486,239 24,475,000 16,600,000 3,550,000
168,989 918,255 3,131,272 501,623 - 2,102,918 - - - - -
7,910,293 6,114,990 6,699,896 27,223,057 30,481,200 31,222,564 - (10,365,390) (29,703,423) - - (32,350,000) - - - - - -
(7,423,493) (5,778,826) (6) (9,204,842) (26,407,603) (29,306,840) (27,016,486)
$ 21,815,789 $ 15,274,245 $ 62,849,142 $ 25,792,077 $ 17,774,360 $ 8,113,996
$ (2,485,593) $ (14,309,771) $ 46,160,555 $ 15,907,164 $ 5,702,151 $ (6,896,169)
6.93% 7.64% 6.93% 12.74% 12.75% 12.98%
Nondepartmental includes expenditures for Hurricane Isabel.
Includes $18,451,749 contribution to the IDA from the refunding of the Economic Development Revenue Bonds relating to the Hilton Garden Inn and Suffolk Conference Center.
Includes approximately $3,000,000 in transfers to the internal service funds to eliminate fund deficits and establish a reserve for future claims inthe Risk Management Fund.
Includes $1,500,000 from the first installment payment on the sale of the Obici property
Includes revenues and expenditures for the Road Maintenance fund which had a full year of maintenance for fiscal year 2007
(6)
(7)
(4)
(8)
(5)
141
CITY OF SUFFOLK, VIRGINIA
TAX REVENUES BY SOURCE, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
2001 2002 2003 2004 2005
General Property Tax $ 47,924,487 $ 53,892,139 $ 57,961,870 $ 66,231,547 $ 74,827,500
Other Local Taxes:
Sales and Use 4,321,930 5,033,151 5,293,294 5,787,336 6,393,278
Utility Tax 5,225,478 6,619,362 7,062,298 6,439,771 6,160,225
Communication Taxes - - - - -
Business and Occupational License 2,990,623 3,460,903 3,618,973 3,901,699 4,528,220
Franchise 311,472 197,742 481,015 216,994 233,565
Motor Vehicle License 1,119,357 1,196,784 1,248,266 1,330,191 1,350,308
Bank Stock 242,790 204,459 166,264 242,789 283,547
Recordation 384,620 507,616 644,418 855,860 2,001,254
Tobacco 934,559 898,407 971,777 1,693,781 1,538,959
Lodging 173,076 201,284 224,742 227,152 302,463
Meals 2,075,966 2,530,282 2,704,256 3,291,137 3,323,238
Admission 127,041 293,405 351,413 386,899 369,995
Emergency Phone Services 660,438 699,605 736,691 988,243 1,029,638
Public Facility Tax Rebate - - - - -
Total $ 66,491,837 $ 75,735,139 $ 81,465,277 $ 91,593,399 $ 102,342,190
(1) Effective January 1, 2007 the Commonwealth of Virginia moved to a Communication Tax collected by the State and remitted to the locality
versus the local taxes previously charged by the jurisdiction.
142
Table 5
Change
2006 2007 2008 2009 2010 2001-2010
$ 76,472,589 $ 88,450,925 $ 98,037,522 $ 99,044,697 $ 98,299,291 105%
7,043,982 7,177,386 7,579,882 7,323,289 7,355,338 70%
6,420,430 5,348,947 4,190,304 4,279,814 4,238,079 -19%
- 1,723,627 3,682,126 3,733,667 3,614,856 (1) 0%
5,177,235 5,674,968 5,806,810 6,261,676 5,985,479 100%
251,447 138,635 - - - -100%
1,359,928 1,532,277 1,650,732 1,713,998 1,711,012 53%
362,571 350,564 288,973 306,405 641,735 164%
2,632,855 2,122,575 1,563,745 1,186,018 1,009,592 162%
1,403,764 1,378,724 1,415,123 1,408,348 1,382,361 48%
235,137 226,867 832,049 778,559 957,654 453%
3,886,919 4,306,494 5,632,980 5,683,139 5,643,405 172%
356,211 382,592 354,950 376,024 377,341 0%
1,033,810 502,503 - - - (1) -100%
347,860 395,398 106,549 39,667 - 0%
$ 106,984,738 $ 119,712,482 $ 131,141,745 $ 132,135,301 $ 131,216,143
143
CITY OF SUFFOLK, VIRGINIA
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Estimated Estimated
Citizens Public Actual City Citizens Public Actual
Property (1) Service (2) Total Value Wide Property (3) Service (2) Total Value
$ 2,973,951,700 $ 15,638,034 $ 2,989,589,734 $ 3,178,132,234 1.03 $ 450,578,178 $ 146,698,674 $ 597,276,852 $ 613,576,705
3,197,461,000 17,455,240 3,214,916,240 3,402,129,340 1.08 487,554,205 172,908,792 660,462,997 679,675,085
3,532,824,000 17,669,080 3,550,493,080 3,750,119,580 1.08 529,426,302 167,961,412 697,387,714 715,774,193
4,044,414,400 18,332,444 4,062,746,844 4,280,219,144 1.08 608,825,985 166,161,886 774,987,871 793,450,303
4,700,248,600 16,416,461 4,716,665,061 4,983,988,261 1.08 624,278,865 153,824,486 778,103,351 795,194,961
5,767,166,200 18,411,941 5,785,578,141 6,215,420,841 1.06 699,151,891 175,007,613 874,159,504 893,604,794
7,615,318,305 16,841,670 7,632,159,975 8,207,595,470 0.94 760,041,770 154,722,996 914,764,766 931,956,210
8,471,944,000 20,753,336 8,492,697,336 9,466,652,720 0.94 766,350,990 207,604,394 973,955,384 650,872,800
9,095,186,800 23,662,692 9,118,849,492 9,723,630,800 0.91 804,367,320 217,629,411 1,021,996,731 609,262,900
9,055,790,400 26,606,668 9,082,397,068 9,705,046,100 0.91 721,104,740 245,272,079 966,376,819 630,103,100
(1) Real property is assessed at 100% of estimated actual value except land use property which approximates 30%. Source: City Assessor's Office
(2) Determined by the State Corporation Commission of Virginia.
(3) Vehicles are assessed at 100% of average loan value: recreation vehicles are assessed at 100% of lowest NADA value; and machinery and tools are assessed at 20% of original cost for the first five years and 10% thereafter. Source: City Commissioner of the Revenue's Office.
2009
2010
Assessed Value
Real Property
Assessed Value
Personal Property
2008
Year
Fiscal
2002
2003
2004
2005
2007
2006
2001
144
Table 6
Ratio of Total
Assessed to
Estimated Total
Personal Assessed Actual Estimated
Property (3) Value Value Actual Value
4.25 $ 3,586,866,586 $ 3,791,708,939 94.60%
4.25 3,875,379,237 4,081,804,425 94.94%
4.25 4,247,880,794 4,465,893,773 95.12%
4.25 4,837,734,715 5,073,669,447 95.35%
4.25 5,494,768,412 5,779,183,222 95.08%
4.25 6,659,737,645 7,109,025,635 93.68%
4.25 8,546,924,741 9,139,551,680 93.52%
4.25 9,466,652,720 10,117,525,520 93.57%
4.25 9,723,630,800 10,332,893,700 94.10%
4.25 9,055,790,400 9,685,893,500 93.49%
Total
145
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CITY OF SUFFOLK, VIRGINIA Table 7
DIRECT PROPERTY TAX RATES (PER HUNDRED) (1)
LAST TEN FISCAL YEARS
Downtown
Suffolk Route 17 Mosquito Business Machinery Minimum
Fiscal Taxing City Taxing Control Overlay Personal and Total Direct
Year District Wide District District District Property (3) Tools (4) Rate (5)
2001 $ 1.19 $ 1.03 $ 0.26 $ 0.035 $ - $ 4.25 $ 3.15 $ 5.28
2002 1.24 1.08 0.26 0.035 - 4.25 3.15 5.33
2003 1.24 1.08 0.26 0.035 - 4.25 3.15 5.33
2004 1.24 1.08 0.26 0.035 - 4.25 3.15 5.33
2005 1.24 1.08 0.26 0.035 - 4.25 3.15 5.33
2006 1.22 1.06 0.26 0.035 - 4.25 3.15 5.31
2007 0.98 0.94 0.26 0.035 0.125 4.25 3.15 5.19
2008 - 0.94 0.26 - 0.125 4.25 3.15 5.19
2009 - 0.91 0.26 - 0.125 4.25 3.15 5.16
2010 - 0.91 0.26 - 0.125 4.25 3.15 5.16
(1) The City is not a component of any overlapping governments; therefore, it does not share any overlapping tax rates nor debt.
(2) Real property is assessed at 100% of estimated actual value, except land use property which approximates 30%.
(3) Vehicles are assessed at 100% of average loan value.
(4) Assessed at 20% of original cost during the first five years of life; 10% thereafter.
(5) The district tax rates include the City-wide rate. Additionally, districts overlap some properties, resulting in those properties being
taxed at the City rate plus the additional rate for each applicable district. Therefore, only the City-wide rate is used with the personal
property rate to calculate the Minimum Total Direct Rate.
(6) In Fiscal Year 2008, the Suffolk Taxing District and Mosquito Control District supplemental taxes were not assessed because the
City instituted a city-wide mosquito control program and incorporated the fees associated with those services into the storm water
utility fee.
Real Property (2)
147
CITY OF SUFFOLK, VIRGINIA Table 8
PRINCIPAL PROPERTY TAX PAYERSCURRENT YEAR AND NINE YEARS AGO
Real Property
Percentage Percentageof Total City of Total City
Taxable Taxable Taxable TaxableAssessed Assessed Assessed Assessed
Type of Business Value Value (1) Value Value (1)
116 Lakeview Parkway LLC Joint Military Training Facility $ 67,963,300 0.75% $ 34,456,900 1.16%LMC Properties Joint Military Training Facility 43,666,300 0.48% - - CVN Distribution Distribution Warehouse 43,843,300 0.48% 29,554,600 0.99%Target Corporation Distribution Warehouse 39,245,000 0.43% - - Sysco Food Services of Hampton Roads Food Services 30,377,400 0.34% 24,296,000 0.82%Lakeview Development Group LLC Joint Military Training Facility 22,969,900 0.25% - - Planters/Kraft Foods Peanut Products 25,685,400 0.28% 17,628,200 0.59%Bon Secours Hampton Rds Health Sys Health Systems 21,969,300 0.24% 11,578,900 0.39%The Pergola Group Apartment Complex 26,818,900 0.30% 725,400 0.02%Lake Prince Center, Inc. Retirement Community 26,714,100 0.29% 187,000 0.01%Harborview Partners Real Estate Developers - - 22,487,600 0.76%Ciba Specialty Chemical Chemical Plant - - - - City of Norfolk Municipal Water System - - 22,901,200 0.84%Sustainable Forest Wood Products - - 18,120,500 0.61%City of Portsmouth Municipal Water System - - 12,612,900 0.42%City of Norfolk Municipal Water System - - 23,306,900 0.78%Walmart Retail Merchandise - - 10,251,000 0.34%Dominion Land Inc. Real Estate Developers - - 11,425,400 0.38%
$ 349,252,900 3.86% $ 205,075,600 6.96%
(1) Total assessed valuation of real estate for fiscal year 2009-2010 - $9,055,790,400
Personal Property
Percentage Percentageof Total City of Total City
Taxable Taxable Taxable TaxableAssessed Assessed Assessed Assessed
Type of Business Value Value (2) Value Value (2)
Ciba Specialty Chemicals Chemical Plant $ 9,432,130 0.98% $ 7,830,900 1.74%Sara Lee International Beverage Company 8,794,980 0.91% 5,844,040 1.30%QVC of Suffolk Inc Distribution Warehouse 6,373,480 0.66% - - Unilever Bestfoods/Lipton Tea Beverage Company 7,991,250 0.83% - - Lockheed Martin Corporation Technology Company 5,021,290 0.52% - - Planters/Kraft Foods Peanut Products 6,525,940 0.68% 5,811,110 1.29%Target Corporation Distribution Warehouse 3,640,010 0.38% - - Massimo Zanetti Beverage USA Beverage Company 4,457,350 0.46% - - Sysco Food Services of Hampton Roads Food Services 3,231,410 0.33% - - Charter Communications Cable Products 2,535,190 0.26% 896,790 0.20%Penn Engineering & Manufacturing Self Clenching Fasteners - - 1,922,240 0.43%Thomas J. Lipton Co. Beverage Company - - 4,870,540 1.08%CVN Distribution Co Distribution Warehouse - - 2,989,230 0.66%Sonoco Products Company Fuel Services - - 1,078,260 0.24%Lakeview Medical Center, Inc. Medical Products - - 1,005,200 0.22%Vixtex Packaging, Inc. Packaging Warehouse - - 1,495,720 0.33%
$ 58,003,030 6.00% $ 33,744,030 8.14%
(2) Total assessed valuation of personal property for fiscal year 2009-2010 - $966,376,819
2000-2001 - $450,578,178 Does not include Public Service CorporationsSource: City of Suffolk, Commissioner of Revenue's office
2000-2001 -$2,973,951,700 does not include public service corporations
Taxpayer
Taxpayer
2010 2001
2010 2001
Source: City of Suffolk Assessor's Office
148
CITY OF SUFFOLK, VIRGINIA Table 9
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
As
Percent of As
Current Percent Outstanding As Percent At End As Percent Percent of
Total Tax Tax of Levy Delinquent of Current of Fiscal of Current Applicable
Levy (1) Collections Collected Amount Taxes Amount (2) Levy Year (2) Levy Levies
$ 47,995,899 $ 46,948,148 97.82% $ 1,025,905 4696.08% $ 47,974,053 99.95% $ 21,846 0.05% 1.32%
53,553,363 52,796,334 98.59% 727,714 2482.39% 53,524,048 99.95% 29,315 0.05% 1.20%
58,175,390 57,393,884 98.66% 646,620 2058.64% 58,040,504 99.77% 31,410 0.05% 1.18%
66,303,851 65,447,182 98.71% 710,189 484.84% 66,157,371 99.78% 146,480 0.22% 1.08%
74,108,747 73,148,580 98.70% 747,395 351.27% 73,895,975 99.71% 212,772 0.29% 1.02%
87,028,625 85,921,671 98.73% 918,601 487.70% 86,840,272 99.78% 188,353 0.22% 0.91%
98,604,779 97,146,638 98.52% 1,096,719 303.45% 98,243,357 99.63% 361,422 0.37% 0.90%
107,353,414 105,361,772 98.14% 1,369,006 122.45% 106,730,778 99.42% 1,118,001 1.04% 0.97%
112,502,640 110,007,171 97.78% 1,886,960 121.44% 111,894,131 99.46% 1,553,816 1.38% 1.14%
109,732,744 107,359,137 97.84% - 0.00% 107,359,137 97.84% 2,373,607 2.16%
Note A: Delinquent real property taxes not collected within three years, a lien is recorded on the property of the collection thereof. Collecitons in
subsequent years represent delinquent accounts collected during the course of that fiscal year for all prior fiscal years.
(1) Beginning in the year ended June 30, 2000, the total tax levy includes the Commonwealth's reimbursement.
(2) Adjusted for collections through August 15. Data furnished by City Treasurer
Outstanding Delinquent TaxesDelinquent Total
2001
Tax Collections
Fiscal
Year
2010
2009
2002
2006
2008
2007
2005
2003
2004
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Property Tax Levies and Collections
Total Tax Levy Current Tax Collections
149
CITY OF SUFFOLK, VIRGINIA
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Internal
General Bond Section 108 Service Fund
Fiscal Obligation VPSA Literary Anticipation Loan Notes Capital
Year Bonds Bonds Fund Loan Notes Payable Payable Leases
2001 $ 118,492,672 $ 2,372,276 $ 9,750,000 $ - $ - $ 1,415,000 $ 2,285,189
2002 111,374,910 2,170,462 9,250,000 - - 1,415,000 1,951,375
2003 121,679,066 1,963,124 8,750,000 - - 1,415,000 1,738,928
2004 130,576,861 1,745,204 8,250,000 - - - 2,686,055
2005 139,505,817 1,526,650 7,750,000 - - 3,000,000 3,168,162
2006 140,962,269 1,297,419 7,250,000 - - 4,196,949 8,370,710
2007 188,919,526 1,062,465 6,750,000 - 3,845,000 1,588,475 8,767,219
2008 202,079,985 816,739 6,250,000 - 3,652,000 480,000 6,354,783
2009 210,171,583 565,188 5,750,000 - 3,459,000 240,000 8,786,426
2010 201,451,369 297,756 5,250,000 - 3,266,000 - 6,394,321
Note A: Personal Income and population data is shown on the Demographic and Economic Statistics, Table 16
*Data not available
**
Governmental Activities
150
Table 10
General Total Percentage
Revenue Obligation Notes Primary of Personal Per
Bonds** Bonds Payable Government Income Capita
$ 27,395,000 $ 10,590,470 $ 13,684 $ 172,314,291 9.74% 2,675
45,270,000 9,542,706 2,200,000 183,174,453 9.82% 2,711
44,460,000 12,267,021 2,200,000 194,473,139 9.67% 2,774
55,345,000 11,658,139 3,334,000 213,595,259 9.78% 2,938
54,600,000 11,354,183 - 220,904,812 * 2,926
67,410,000 10,362,731 - 239,850,078 * 3,111
103,200,000 9,385,474 - 323,518,159 * 4,068
141,385,000 8,615,016 - 369,633,523 * 4,491
184,380,000 3,873,417 - 417,225,614 * 5,094
207,965,000 3,393,631 - 428,018,077 * 5,156
Business-Type Activities
151
CITY OF SUFFOLK, VIRGINIA Table 11
RATIOS OF NET GENERAL BONDED DEBT OUTSTANDINGLAST TEN FISCAL YEARS
Percentage ofSection Debt Net General
General Literary 108 Service Net Debt toObligation VPSA Fund Notes Loan Monies General Estimated Per
Bonds Bonds Loan Payable Payable Total Available Debt Actual Value Capita
$ 118,492,672 $ 2,372,276 $ 9,750,000 $ 1,415,000 $ - $ 132,029,948 $ 2,017,096 $ 130,012,852 3.62% $ 2,018111,374,910 2,170,462 9,250,000 1,415,000 - 124,210,372 6,680 124,203,692 3.20% 1,838121,679,066 1,963,124 8,750,000 1,415,000 - 133,807,190 - 133,807,190 3.15% 1,909130,576,861 1,745,204 8,250,000 - - 140,572,065 - 140,572,065 2.91% 1,934139,505,817 1,526,650 7,750,000 3,000,000 - 151,782,467 - 151,782,467 2.76% 2,010140,962,269 1,297,419 7,250,000 4,196,949 - 153,706,637 - 153,706,637 2.16% 1,994188,919,526 1,062,465 6,750,000 1,588,475 3,845,000 202,165,466 734,340 201,431,126 2.20% 2,613202,079,985 816,739 6,250,000 480,000 3,652,000 213,278,724 861,708 212,417,016 2.10% 2,581206,196,799 565,188 5,750,000 240,000 3,459,000 216,210,987 679,706 215,531,281 2.09% 2,631201,451,369 297,756 5,250,000 - 3,266,000 210,265,125 1,665,833 208,599,292 2.15% 2,513
Note A: Population data is shown on the Demographic and Economic Statistics, Table 16Estimated Actual Value is shown on the Assessed Value and Estimated Actual Value Statistics, Table 6
Note B: Estimated Actual Value used includes all taxable property (real estate, personal property and public service corporation property).
Note C: Includes bonds and notes payable only - no capital lease obligations of the internal service funds.
20012002
General Bonded Debt Outstanding
YearFiscal
2010
20032004200520062007
20092008
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
3.62%
3.20%
3.15%
2.91%
2.76%
2.16%
2.20%
2.10%
2.09%
2.15%
Percentage of Net General Debt to Estimated Actual Value
152
CITY OF SUFFOLK, VIRGINIA Table 12
DIRECT GOVERNMENTAL ACTIVITIES DEBT
Outstanding
Balance
FY 2010
1990 VPSA Bond $ 240,000
1991 VPSA Bond 57,755
1999 Literary Fund Loan 2,500,000
2001 Literary Fund Loan 2,750,000
2001 General Obligation Bond 3,285,000
2001 Refunding Bond 2,396,801
2002 General Obligation Bond 3,085,000
2003 General Obligation Bond 12,630,000
2003 Refunding Bond 4,850,369
2004 General Obligation Bond 13,585,000
2005 General Obligation Bond 9,360,000
2005 Refunding Bond 8,557,074
2007 Refunding and new funds 77,562,126
Section 108 Loan Payable 3,266,000
2007 General Obligation Bond 22,025,000
2008 General Obligation Bond 9,960,000
2010 Refunding and new funds 34,155,000
Subtotal General Government Activities $ 210,265,125
Public Safety Vehicles Lease $ 3,897,393
Refuse Trucks Capital Lease 1,255,393
Refuse Trucks Capital Lease 66,284
Roadway Maintenance Capital Lease 776,467
Time and Attendence System 398,784
Subtotal General Govermental Activities Internal Svc Funds $ 6,394,321
Total Direct Governmental Activities Debt $ 216,659,446
Debt Issue
153
CITY OF SUFFOLK, VIRGINIA
LEGAL DEBT MARGIN
LAST TEN FISCAL YEARS
Legal Debt Margin Calculation for Fiscal Year 2010
Commonwealth's
City's Legal Legal Debt
Debt Margin Margin
Assessed value (as of July 1, 2009) - taxable real
property, including public service corporations $ 9,082,397,068 $ 9,082,397,068
Legal debt limits:
7% of assessed value (authorized limit imposed by City Charter) 635,767,795
10% of assessed value(authorized by the Commonwealth for all cities) 908,239,707
Deduct amount of debt applicable to debt limit:
Gross general debt (includes bonds and note payable) 213,658,756 213,658,756
Totals $ 422,109,039 $ 694,580,951
City's Legal Debt Margin
2001 2002 2003 2004
Debt Limit $ 209,271,281 $ 225,044,137 $ 248,534,516 $ 284,392,279
Total Net Debt applicable to Limit 142,634,102 135,953,078 151,476,712 155,564,204
Legal Debt Margin $ 66,637,179 $ 89,091,059 $ 97,057,804 $ 128,828,075
Total Net Debt Applicable to Limit
as a percentage of debt limit 68.16% 60.41% 60.95% 54.70%
Commonwealth's Legal Debt Margin
2001 2002 2003 2004
Debt Limit $ 298,958,973 $ 321,491,624 $ 355,049,308 $ 406,274,684
Total Net Debt applicable to Limit 142,634,102 135,953,078 151,476,712 155,564,204
Legal Debt Margin $ 156,324,871 $ 185,538,546 $ 203,572,596 $ 250,710,480
Total Net Debt Applicable to Limit
as a percentage of debt limit 47.71% 42.29% 42.66% 38.29%
Note A: During a refunding in Fiscal Year 2004 it was determined that the 1993 VRA Bonds were general obligation bonds purchased by the VRA
and should be included in this calcuation. Prior fiscal years have been restated in order to accommodate this determination.
154
Table 13
2005 2006 2007 2008 2009 2010
$ 330,166,554 $ 404,990,470 $ 534,251,198 $ 594,488,418 $ 638,319,464 $ 635,767,795
163,136,650 164,069,368 211,550,939 221,893,739 224,059,188 213,658,756
$ 167,029,904 $ 240,921,102 $ 322,700,259 $ 372,594,679 $ 414,260,276 $ 422,109,039
49.41% 40.51% 39.60% 37.33% 35.10% 33.61%
2005 2006 2007 2008 2009 2010
$ 471,666,506 $ 578,557,814 $ 763,215,997 $ 849,269,734 $ 911,884,949 $ 908,239,707
163,136,650 164,069,368 211,550,939 221,893,739 224,059,188 213,658,756
$ 308,529,856 $ 414,488,446 $ 551,665,058 $ 627,375,995 $ 687,825,761 $ 694,580,951
34.59% 28.36% 27.72% 26.13% 24.57% 23.52%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Legal Debt Margin
City's Legal Debt Margin
Commonwealth's Legal Debt Margin
155
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CITY OF SUFFOLK, VIRGINIA Table 14
UTILITY FUND BOND COVERAGELAST TEN FISCAL YEARS
Net Revenue
Direct Available
Gross Operating For Debt
Revenue (2) Expenses (1) Service Principal Interest Total Coverage
$ 15,803,804 $ 9,906,753 $ 5,897,051 $ 1,332,052 $ 1,336,877 $ 2,668,929 2.21
19,197,558 9,084,449 10,113,109 1,526,448 1,155,637 2,682,085 3.77
20,755,301 9,226,636 11,528,665 3,550,685 2,352,608 5,903,293 1.95
19,338,363 10,421,464 8,916,899 3,458,541 1,643,242 5,101,783 1.75
23,096,899 12,559,188 10,537,711 4,717,955 2,436,878 7,154,833 1.47
21,275,903 13,840,075 7,435,828 1,789,209 4,109,964 5,899,173 1.26
29,991,524 14,859,732 15,131,792 2,498,818 5,389,293 7,888,111 1.92
28,893,476 14,820,616 14,072,860 2,290,458 4,217,220 6,507,678 2.16
29,758,790 16,601,440 13,157,350 2,961,599 5,772,191 8,733,790 1.51
29,579,413 15,710,773 13,868,640 3,559,790 6,723,321 10,283,111 1.35
(1) Exclusive of depreciation, amortization, interest expense, debt issuance costs and loss on disposal of capital assets.
(2) Includes operating revenues, miscellaneous revenues and interest income in the Utility Fund.
Includes only Public Utility revenue debt that falls under the debt covenant requirements of the master indenture.
The chart below is the Virginia Revenue Authority (VRA) coverage based on the debt that falls under the covenant of the master
indenture. VRA Bonds represent 74% of the total debt service.
Financial Above VRA Above
Policy or Below VRA Policy or Below
Coverage Goal Policy Coverage Goals Policy
2.21 NA NA 2.50 1.15 1.35
3.77 NA NA 4.17 1.15 3.02
1.95 NA NA 2.04 1.15 0.89
1.75 NA NA 1.81 1.15 0.66
1.47 NA NA 1.62 1.15 0.47
1.26 NA NA 1.47 1.15 0.32
1.92 NA NA 2.16 1.15 1.01
2.16 NA NA 2.38 1.15 1.23
1.51 1.30 0.21 1.61 1.15 0.46
1.35 1.30 0.05 1.40 1.15 0.25
2004
Fiscal
Year
2001
2002
2003
2010
2005
2006
2007
2008
2009
VRA
2003
2004
2005
Total Utility Bonds
2009
2001
2002
2008
2007
2010
Debt Service RequirementsFiscal
Year
2006
157
CITY OF SUFFOLK, VIRGINIA Table 15
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Personal Income (2) Per Capita Average Daily
Population (1) In Thousands Income (2)* Membership (3) City of Suffolk State of Virginia United States
64,415 1,768,615 26,630 11,608 3.1% 3.2% 4.8%
67,568 1,865,282 26,924 12,003 4.3% 4.2% 5.8%
70,100 2,005,863 27,536 12,476 4.3% 4.0% 6.0%
72,700 2,164,876 28,592 12,966 4.1% 3.7% 5.5%
75,500 2,339,067 30,033 13,297 3.9% 3.5% 5.1%
77,100 2,574,717 32,126 13,452 3.4% 3.0% 4.6%
79,524 2,737,833 33,751 13,490 3.2% 3.0% 4.6%
82,302 2,908,023 36,157 13,513 4.2% 4.0% 5.8%
81,907 not available not available 13,568 7.3% 7.3% 9.7%
83,006 not available not available 13,801 7.5% 6.5% 9.2%
Sources:
(1) 2000 - U.. Census Bureau: 2001-2009 - City of Suffolk Planning Department
(2) Bureau of Economic Analysis based on calendar year
(3) City of Suffolk Public Schools based on March 31st collection data for State of Virginia
(4) Virginia Employment Commission - Area Unemployment Statistics
Unemployment Rate
2008
2007
Fiscal
Year
2001
2002
2010
2003
2004
2005
2006
2009
0
2
4
6
8
10
12
1 2 3 4 5 6 7 8 9 10 11
City of Suffolk
State of Virginia
United States
Comparative Unemployment Rates2001‐2010
2001 2002 2003 2004 2005 2006 2007 2008 200 9 2010
Fiscal Year
158
CITY OF SUFFOLK, VIRGINIA Table 16
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
Percentage of Total City
Employer Type of Business Employees Employment
U.S. Joint Forces Command/Joint Warfighting Center Computer Modeling and Simulation (Civilian) 2,220 5.26%Sentara/Obici Memorial Hospital Health Care 1,200 2.84%QVC Distribution Home Shopping Distribution 900 2.13%Wal-Mart Stores Retail 840 1.99%BASF Chemical Manufacturer 400 0.95%Sysco Food Services of Hampton Roads Food Service Distribution 350 0.83%Unilever Bestfoods/Lipton Tea Beverage Manufacture and Distribution 350 0.83%Planters/Kraft Foods Peanut Products 340 0.81%Target Corporation Warehouse Distribution 300 0.71%Towne Bank Retail Banking 281 0.67%Bon Secours Health System Health Care 269 0.64%Lakeview Medical Center Health Care 232 0.55%Massimo Zanetti Beverage USA Beverage Company 227 0.54%Birdsong Peanuts Peanut Products 150 0.36%Amadas Industries Agricultural Equipment Manufacturer 100 0.24%Sara Lee International Beverage Company 85 0.20%
8,244 19.53%
Total number of employees city-wide (daytime population) for fiscal year 38,422
Percentage of Total City
Employer Type of Business Employees Employment
U.S. Joint Forces Command/Joint Warfighting Center Computer Modeling and Simulation (Civilian) - - Sentara/Obici Memorial Hospital Health Care 800 2.89% QVC Distribution Home Shopping Distribution 725 2.62%Wal-Mart Stores Retail 500 1.81%Hampton Roads BASF Chemical Manufacturer 275 0.99%Unilever Bestfoods/Lipton Tea Beverage Manufacture and Distribution 250 0.90%Planters/Kraft Foods Peanut Products 275 0.99%Lakeview Medical Center Health Care 190 0.69%Amadas Industries Agricultural Equipment Manufacturer 100 0.36%Birdsong Peanuts Peanut Products 175 0.63%Sara Lee International Beverage Company 250 0.90%
3,540 12.80%
Total number of employees city-wide (daytime population) for fiscal year 30,171
The Suffolk Public Schools (1,780 employees) and the City of Suffolk (1,202 employees) have not been included to give
a clearer reflection of community activity.
Source: Economic Development Department and Virginia Employement Commission
2001
2010
159
CITY OF SUFFOLK, VIRGINIA Table 17
Page 1 of 2
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAMLAST EIGHT FISCAL YEARS
2003 2004 2005 2006 2007 2008 2009 2010
General Fund:
General Government:
City Council 8 8 9 9 9 9 10 10
City Manager 2 2 2 2 5 5 6 6
Asst City Manager Operations 2 2 2 2 1 - - -
Asst City Manager Development 4 4 4 4 4 2 - -
Management Services 8 9 7 7 6 6 - -
Budget and Strategic Planning - - - - - - 4 4
City Attorney 6 7 7 7 9 9 9 8
Human Resources 6 6 7 7 8 8 8 8
Commissioner of Revenue 10 10 10 11 12 12 12 11
City Assessor 13 13 13 13 13 13 14 15
Treasurer 13 13 13 13 16 16 15 15
Finance - Administration and Accounting 9 9 11 12 11 11 10 12
Finance - Purchasing 3 3 4 4 5 5 4 4
Registrar 2 2 2 2 2 2 2 2
Total 86 88 91 93 101 98 94 95
Judicial:
Circuit Court 2 2 2 2 2 2 2 2
Circuit Court - Clerk's Office 13 13 13 13 14 14 13 14
Sheriff 21 21 21 22 25 25 25 24
Commonwealth Attorney 17 17 17 18 22 29 29 28
Total 53 53 53 55 63 70 69 68
Public Safety:
Police
Administration and Officers 167 175 186 196 206 206 194 204
Emergency Communications 22 22 22 22 26 26 26 22
Animal Shelter and Management 9 9 9 9 9 9 8 7
Fire
Fire and Rescue 174 183 187 190 197 197 216 213
Fire Prevention 3 3 3 3 3 3 5 -
Neighborhood Development 25 27 27 27 27 27 26 24
Total 400 419 434 447 468 468 475 470
Public Works:
Public Works
Administration 7 7 7 7 7 6 5 3
Traffic Engineering and Maintenance (1) 24 27 30 34 - - - -
Engineering (2) 8 9 11 12 - - - -
Refuse Collection (3) 11 12 12 14 46 46 40 41
Maintenance Building and Grounds 22 22 25 25 27 27 15 4
Mosquito Control 1 2 2 2 2 - - -
Capital Program Management 2 3 3 3 3 3 6 20
Aviation Facilities 3 3 3 3 3 3 3 3
Total 78 85 93 100 88 85 69 71
Function/Program
160
CITY OF SUFFOLK, VIRGINIA Table 17
Page 2 of 2
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAMLAST SEVEN FISCAL YEARS
2003 2004 2005 2006 2007 2008 2009 2010
General Fund:Health and Welfare:
Social Services 103 101 102 101 102 102 101 100Comprehensive Services Act 1 1 1 1 1 1 1 1 Total 104 102 103 102 103 103 102 101
Parks, Recreation and Cultural:Parks and Recreation Administration 5 8 5 5 4 4 4 4 Support Services - - 5 5 4 4 4 4 Parks, Gateway and Facility Maintenance 17 17 18 20 22 22 20 19 Recreation 13 11 9 9 12 12 14 16Library 15 17 17 23 35 34 31 31 Total 50 53 54 62 77 76 73 74
Community Development:Planning 14 15 16 16 18 16 14 12Geographic Information Systems - - - - - 3 5 5Economic Development 6 7 7 7 7 8 5 4Tourism 2 2 3 3 3 3 3 3Communications - - 4 5 5 5 5 5 Total 22 24 30 31 33 35 32 29
Total General Fund 793 824 858 890 933 935 914 908
Special Revenue Fund:Transit 5 5 5 5 5 5 - - Road Maintenance (1) Road Maintenance - - - - 93 94 86 91 Traffic Engineering - - - - 20 23 22 23 Total Special Revenue Fund 5 5 5 5 118 122 108 114
Enterprise Fund:Public Utilities Administration 4 4 6 6 6 8 6 9 Customer Service 7 7 17 17 18 18 18 18 Line Maintenance 29 29 26 26 26 26 24 27 Maintenance 19 17 17 20 20 20 19 20 Water Production 19 23 24 28 28 29 28 29 Engineering 11 11 11 12 16 18 15 17Stormwater Utility Stormwater Utility (2) - - - - 28 28 26 27 Mosquito Control (2) - - - - - 7 6 7 Total Enterprise Fund 89 91 101 109 142 154 142 154
Internal Service Funds:Fleet Management 17 18 19 19 25 26 23 21Information Technology 10 10 11 12 12 13 13 12Risk Management - - 2 2 2 2 2 1 Total Risk Management 27 28 32 33 39 41 38 34
Total 914 948 996 1,037 1,232 1,252 1,202 1,210
(4) (4)
1. Road maintenance fund was increased in 2007 due to VA Dept. of Transportation turning over the highwaysystem within the City to Suffolk.
2. New program adopted by City Council in 2007 and staffing realignment.3. Change in methodology of calculating full time employees in this department.4. 2009 and 2010 actual data furnished by Human Resources. 2003-2008 provided by Budget Office.
Function/Program
161
CITY OF SUFFOLK, VIRGINIA
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Function/Program 2001 2002 2003 2004
General Government:
Building permits issued 1,980 1,296 1,974 1,975
Value of permits issued (millions) $ 182.0 $ 184.9 $ 228.8 $ 195.4
Number of registered voters 39,268 41,253 41,966 44,341
Taxable retail sales (millions) 419.9 453.3 488.8 539.3
Taxable retail sales per capita 6,518 6,710 6,973 7,418
Parks, Recreation and Cultural:
Library volumes in collection (,000) 160.0 160.2 157.8 160.1
Circulation (,000) - - - -
Enterprise Fund:
Public Utilities
Customers - Water 19,171 20,351 20,566 19,885
Customers - Sewer
Average daily consumption (mgd) 4.56 5.43 5.38 5.21
Treatment Capacity daily (mgd) 7.45 7.45 7.45 7.45
Pump Stations 86 90 98 104
Sources: Various City Departments
** Data is not availabe as this is shown on a calendar year basis
162
Table 18
2005 2006 2007 2008 2009 2010
1,776 1,886 1,416 1,294 488 949
$ 268.5 $ 288.5 $ 272.8 $ 179.4 $ 134.0 $ 108.2
45,922 47,569 48,170 50,843 55,578 55,008
530.7 599.4 645.2 652.8 not available not available
7,029 8,153 8,114 7,931 not available not available
175.0 175.7 218.1 222.7 228.4 221.4
- - - - 401
21,515 22,533 23,435 24,370 24,576 24,663
19,795 20,319 20,708 20,911
5.55 6.49 6.70 7.68 6.89 6.79
7.45 11.20 11.20 11.20 11.20 17.45
112 113 125 129 131 134
163
CITY OF SUFFOLK, VIRGINIA Table 19
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAMLAST TEN FISCAL YEARS
Function/Program 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Public Safety:
Police Stations 5 5 4 4 4 4 4 4 4 5
Fire Stations 7 7 7 8 8 8 8 8 8 8
Public Works: (1)
State maintained road miles 1,302 1,302 1,302 1,308 1,308 1,308 17 18 18 18
City maintained road miles 74 74 76 76 76 76 1,420 1,500 1,531 1,581
Streetlights 5,423 5,768 5,968 6,467 6,710 6,940 6,980 7,000 7,139 7,648
Bridges 3 3 3 3 3 3 144 144 154 154
Traffic Signals 23 23 23 23 23 23 86 89 91 91
Education:
Elementary Schools 12 12 12 12 12 12 13 13 14 14
Middle Schools 3 4 4 4 4 4 4 4 4 4
High Schools 2 2 2 2 3 3 3 3 3 3
Alternative Schools 1 1 1 1 1 1 1 1 1 1
Number of Teachers, Principals,
and Assistants 1,180 1,212 1,246 1,295 1,347 1,380 1,393 1,405 1,448 1,425
Average Daily Membership 11,608 12,003 12,476 12,966 13,297 13,452 13,490 13,512 13,568 13,801
Capacity of Schools 11,450 11,450 11,450 11,450 13,250 13,250 14,050 14,050 14,632 14,577
Enterprise Fund:
Public Utilities
Miles of Water Main 247 254 256 261 271 400 415 420 420 422
Miles of Sanitary Sewers 177 182 184 188 198 293 308 309 313 315
Miles of Storm Sewers 6 6 6 6 6 6 142 495 505 505
Parks, Recreation and Cultural:
Parks and Recreation
Number of major parks and
recreation facilties (2) 36 38 41 41 41 41 41 41 40 40
Acreage of major parks and
recreation facilties 1,334 1,405 1,821 1,825 1,825 1,825 1,825 1,827 1,827 1,827
Library
Number of libraries 1 1 1 1 1 1 1 1 1 1
Number of branch libraries 3 3 3 3 3 3 3 2 2 2
Number of bookmobiles 1 1 1 1 1 1 1 1 1 1
Sources: Various City Departments
1. 2008 Virginia Department of Transportation turned over the highway system within the City to the City of Suffolk, except for
Interstate I-664 and Route 164
2. 2009 sold the American Leagion Building
164
CITY OF SUFFOLK, VIRGINIA Table 20
PROPERTY VALUE, CONSTRUCTION AND BANK DEPOSITS
LAST TEN FISCAL YEARS
Bank
Fiscal Number Number Deposits (2)
Year of Permits Value of Permits Value (in thousands) Residential Commercial Agricultural Nontaxable Total
2001 169 $ 65,079,091 1,811 $ 116,922,016 416,000 $ 2,209,050,400 $ 586,899,400 $ 366,544,400 $ 571,385,800 $ 3,733,880,000
2002 212 63,388,257 2,024 133,069,941 427,000 2,391,608,700 631,472,700 361,592,700 631,546,300 4,016,220,400
2003 175 108,959,711 1,799 119,230,994 450,000 2,626,448,600 723,716,810 382,285,100 688,124,300 4,420,574,810
2004 184 57,183,116 1,791 138,229,794 481,000 3,086,553,300 792,445,200 382,888,200 714,195,300 4,976,082,000
2005 191 86,239,759 1,585 182,767,959 504,000 3,633,548,700 876,319,900 457,703,200 751,744,400 5,719,316,200
2006 196 59,858,597 1,690 228,671,215 598,000 4,537,277,500 1,013,362,100 646,369,300 809,532,500 7,006,541,400
2007 218 140,285,316 1,198 132,475,248 642,000 6,060,448,500 1,362,319,600 767,985,700 914,701,000 9,105,454,800
2008 193 73,914,062 1,101 105,455,002 * 6,850,010,900 1,444,643,500 845,756,000 978,058,800 10,118,469,200
2009 151 79,953,808 337 54,363,185 * 7,114,848,900 1,779,310,900 829,471,000 1,000,191,500 10,723,822,300
2010 168 40,876,496 781 67,393,951 * 7,021,145,800 1,655,756,200 378,888,400 1,021,152,900 10,076,943,300
(1) City Zoning Administration and Enforcement
(2) Federal Home Loan Bank of Atlanta and Federal Deposit Insurance Corporation
(3) City Assessor's Office, estimated actual value
* N/A
Construction (1) Construction (1) Real Property Value (3)
Commercial Residential
0 50 100 150 200 250 300
1
2 Single Family
Multi‐Family
2010 New Residential Construction
Permits Issued
$43,667,311
$14,666,785
165
CITY OF SUFFOLK, VIRGINIA Table 21
PRINCIPAL COMMERCIAL/INDUSTRIAL WATER AND SEWER CONSUMERS
YEAR ENDED JUNE 30, 2010
Annual
Consumption % of Total
in Gallons Annual
Water Consumers Type of Business (Hundred Cubic Feet) Consumption*
Western Tidewater Water Authority Regional Water Supply 158,229 6.01%
Sara Lee Coffee & Tea Beverage Company 89,392 3.40%
BASF Corporaton Chemical Plant 58,555 2.22%
Western Tidewater Regional Jail Jail-Regional Facility 40,780 1.55%
Sentara/Obici Hospital Hospital 35,865 1.36%
Suffolk Public Schools School System 35,311 1.34%
Unilever Bestfoods Beverage Company 22,754 0.86%
Planters Peanut Co. Peanut Products 21,905 0.83%
Wanchese Fish Company Seafood Processing 19,341 0.73%
Harbour Breeze Apartments Real Property Management 15,985 0.61%
498,117 18.92%
*Total annual consumption for fiscal year 2009-2010 was 2,632,512
Annual
Consumption % of Total
in Gallons Annual
Sewer Consumers Type of Business (Hundred Cubic Feet) Consumption**
Sara Lee Coffee and Tea Beverage Company 68,171 3.19%
BASF Corporation Chemical Plant 58,555 2.74%
Western Tidewater Regional Jail Jail-Regional Facility 40,780 1.91%
Sentara/Obici Hospital Hospital 35,865 1.68%
Suffolk Public School Education 35,311 1.65%
Unileaver Best Foods Beverage Company 22,754 1.06%
Wanchese Fish Company Seafood Processing 19,341 0.90%
Harbour Breeze Apartments Real Property Management 15,985 0.75%
30 West Pershing LLC Real Property Management 13,019 0.61%
Estates of Scottfield Real Property Management 10,193 0.48%
251,803 11.77%
**Total annual consumption for fiscal year 2009-2010 was 2,139,958
166
ROBINSON, FARMER, COX ASSOCIATES
A PROFESSIONAL LIMITED LIABILITY COMPANY CERTIFIED PUBLIC ACCOUNTANTS
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards To the Honorable Members of the City Council City of Suffolk Suffolk, Virginia We have audited the financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Suffolk, Virginia as of and for the year ended June 30, 2010, which collectively comprise the City of Suffolk, Virginia’s basic financial statements and have issued our report thereon dated November 8, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the Specifications for Audits of Counties, Cities, and Towns, issued by the Auditor of Public Accounts of the Commonwealth of Virginia. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City of Suffolk, Virginia's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Suffolk, Virginia's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the County’s financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.
167
Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Suffolk, Virginia's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the City Council, management, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Charlottesville, Virginia November 8, 2010
168
ROBINSON, FARMER, COX ASSOCIATES
CERTIFIED PUBLIC ACCOUNTANTS A PROFESSIONAL LIMITED LIABILITY COMPANY
Report on Compliance with Requirements that Could Have a Direct and Material Effect on Each Major Program and on Internal Control
Over Compliance in Accordance with OMB Circular A-133 To the Honorable Members of the City Council City of Suffolk Suffolk, Virginia Compliance We have audited the City of Suffolk, Virginia’s compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2010. The City of Suffolk, Virginia's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the City of Suffolk, Virginia's management. Our responsibility is to express an opinion on the City of Suffolk, Virginia's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City of Suffolk, Virginia's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of City of Suffolk, Virginia's compliance with those requirements. In our opinion, the City of Suffolk, Virginia complied, in all material respects, with the requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2010. Internal Control Over Compliance The management of the City of Suffolk, Virginia is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City of Suffolk, Virginia's internal control over compliance with the requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance.
169
Internal Control Over Compliance: (Continued) A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify deficiencies in internal control over compliance that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of the City Council, management, and others within the entity, federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Charlottesville, Virginia November 8, 2010
170
CITY OF SUFFOLK, VIRGINIA Page 1 of 3
Schedule of Expenditures of Federal Awards - Primary Government and Discretely Presented Component UnitYear Ended June 30, 2010
Federal Pass-ThroughFederal Grantor/State Pass - Through Grantor/ CFDA Agency FederalProgram Title Number Identifying Number Expenditures
PRIMARY GOVERNMENT:
DEPARTMENT OF AGRICULTURE: Direct payments: Summer Food Service Program for Children 10.559 N/A $ 85,744 Pass through payments: Department of Social Services: State Administrative Matching Grants - Supplemental Nutrition Assistance Program 10.561 0010110 1,265,697 ARRA State Administrative Matching Grants - Supplemental Nutrition Assistance Program 10.561 0010110 22,370
Total Department of Agriculture $ 1,373,811
DEPARTMENT OF LABOR: Direct payments: WIA Pilots, Demonstrations, and Research Projects 17.261 17901-60580 $ 158,664
Pass through payments: Operation Incorporated of Hampton Roads: Workforce Investment Act - Youth Activities 17.259 N/A 232,525 ARRA Workforce Investment Act - Youth Activities 17.259 N/A 4,698
Total Department of Labor $ 395,887
DEPARTMENT OF TRANSPORTATION: Direct payments: Airport Improvement Program 20.106 AIP 3-51-0050 922,489 Highway Planning and Construction 20.205 N/A $ 284,817
Total Department of Transportation $ 1,207,306
DEPARTMENT OF ENERGY: Direct payments: ARRA Energy Efficiency and Conservation Block Grant Program 81.128 N/A $ 473,321
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: Direct payments: Home Investment Partnerships Program 14.239 N/A $ 343,476
Pass through payments: Department of Housing and Community Development: Community Development Block Grants/Entitlement Grants 14.218 476,277 ARRA Community Development Block Grants/Entitlement Grants 14.253 N/A 79,406 Community Development Block Grants - Neighborhood Stabilization Program 14.228 53505-49380 352,077 ARRA Homelessness Prevention and Rapid Re-Housing Program 14.257 45805-49050 294,882
Total Department of Housing and Urban Development $ 1,546,118
DEPARTMENT OF HEALTH AND HUMAN SERVICES: Pass - through payments: Department of Social Services: Promoting Safe and Stable Families 93.556 0950110 $ 52,330 Temporary Assistance for Needy Families 93.558 0400111 1,036,549 Refugee and Entrant Assistance-State Administered Programs 93.566 0500111 3,410 Low-Income Home Energy Assistance 93.568 0600411 50,830
171
CITY OF SUFFOLK, VIRGINIA Page 2 of 3
Schedule of Expenditures of Federal Awards - Primary Government and Discretely Presented Component UnitYear Ended June 30, 2010 (Continued)
Federal Pass-ThroughFederal Grantor/State Pass - Through Grantor/ CFDA Agency FederalProgram Title Number Identifying Number Expenditures
PRIMARY GOVERNMENT: (Continued)DEPARTMENT OF HEALTH AND HUMAN SERVICES: (Continued) Pass - through payments: (Continued) Department of Social Services: (Continued) Child Care and Development Block Grant 93.575 0770110 $ 322,287 Child Care Mandatory and Matching Funds of the Child Care and Development Fund 93.596 0760111 277,920 ARRA Child Care and Development Block Grant 93.713 0770110 123,700 Chafee Education and Training Vouchers Program 93.599 9160110 2,959 Adoption Incentive Payments 93.603 1130108 1,042 Child Welfare Services 93.645 0900110 3,319 Foster Care-Title IV-E 93.658 1100111 562,584 Foster Care-Title IV-E - ARRA 93.658 1100111 25,671 Adoption Assistance 93.659 1120111 123,882 Adoption Assistance - ARRA 93.659 1120111 11,154 Social Services Block Grant 93.667 1000111 437,044 Chafee Foster Care Independence Program 93.674 9150110 14,558 Children's Health Insurance Program 93.767 0540111 56,441 Medical Assistance Program 93.778 1200111 731,342
Total Department of Health and Human Services $ 3,837,022
DEPARTMENT OF INTERIOR: Pass - through payments: Department of Historic Resources: Dismal Swamp 15.000 N/A $ 25,494 Historic Preservation Fund Grants-In-Aid 15.904 50205-66022 10,000 Save America's Treasures 15.929 B-06-SP-VA-1052 75,524
Total Department of Interior $ 111,018
DEPARTMENT OF JUSTICE: Direct payments: Bulletproof Vest Partnership Program 16.607 N/A $ 7,068 Pass through payments: Department of Criminal Justice Services: Crime Victim Assistance 16.575 39001-46000 164,420 Edward Byrne Memorial Formula Grant Program 16.579 39001-61011 40,456 State Criminal Alien Assistance Program 16.606 N/A 5,932 Gang Resistance Education and Training 16.737 2008-JV-FX-0038 51,251 Edward Byrne Memorial Justice Assistance Grant Program 16.738 39001-41000 69,175 Public Safety Partnership and Community Policing Grants 16.710 2008-CK-WX-0837 35,046 Violence Against Women Formula Grants 16.588 39001-46500 45,887 ARRA Edward Byrne Memorial Justice Assistance Grant Program 16.803 2009-SU-B9-0033 49,076 ARRA Edward Byrne Memorial Competitive Grant Program 16.808 2009-SB-B9-1925 87,214
Total Department of Justice $ 555,525
DEPARTMENT OF HOMELAND SECURITY: Pass through payments: Department of Criminal Justice: Hazard Mitigation Grant 97.039 77501-52749 $ 11,032 ARRA Port Security Grant Program 97.056 77501-52858 309,716 Department of Emergency Services: State Homeland Security Program 97.073 77501-52708 57,150 Buffer Zone Protection Program 97.078 77501-52766 23,545
Total Department of Homeland Security $ 401,443
Total Primary Government $ 9,901,451
172
CITY OF SUFFOLK, VIRGINIA Page 3 of 3
Schedule of Expenditures of Federal Awards - Primary Government and Discretely Presented Component UnitYear Ended June 30, 2010 (Continued)
Federal Pass-ThroughFederal Grantor/State Pass - Through Grantor/ CFDA Agency FederalProgram Title Number Identifying Number Expenditures
COMPONENT UNIT-SCHOOL BOARD:
DEPARTMENT OF AGRICULTURE: Pass through payments: Department of Agriculture and Consumer Services: Food Distribution 10.555 N/A $ 258,065 Department of Education: National School Breakfast Program 10.553 17901-40591 881,771 National School Lunch Program 10.555 17901-40623 2,466,698 Summer Food Service Program for Children - Commodities 10.559 N/A 2,347 Summer Food Service Program for Children 10.559 N/A 39,228 ARRA Child Nutrition Discretionary Grants Limited Availability 10.579 17901-40592 20,989 Fresh Fruit and Vegetable Program 10.582 17901-40599 54,504
Total Department of Agriculture $ 3,723,602
DEPARTMENT OF HEALTH AND HUMAN SERVICES: Direct payments: Medical Assistance Program 93.778 N/A $ 69,358
DEPARTMENT OF DEFENSE: Direct payments: JROTC Instruction 12.000 N/A $ 159,533
DEPARTMENT OF EDUCATION: Direct payments: Impact Aid 84.041 N/A $ 493,808 Pass through payments: Department of Education: Adult Education - Basic Grants to States 84.002 17901-42801 114,529 Title I Grants to Local Educational Agencies 84.010 17901-42901 2,904,105 ARRA Title I Grants to Local Educational Agencies 84.389 17901-42913 947,639 Special Education Grants to States 84.027 17901-43071 2,898,470 ARRA Special Education Grants to States 84.391 17901-61245 1,133,416 Vocational Education: Career and Technical Education - Basic grants to states 84.048 17901-61095 366,339 Special Projects: Special Education - Preschool Grants 84.173 17901-62521 51,161 ARRA Special Education - Preschool Grants 84.392 17901-61247 6,596 Safe and Drug-Free Schools and Communities-State Grants 84.186 17901-60511 43,256 21st Century Community Learning Centers 84.287 17901-60565 12,233 Education Technology State Grants 84.318 17901-61600 39,982 ARRA Education Technology State Grants 84.386 17901-60897 60,520 Reading First State Grants 84.357 17901-60655 33,248 Improving Teacher Quality State Grants 84.367 17901-61480 609,818 School Improvement Grants 84.377 17901-43040 93,844 ARRA Education for Homeless Children and Youth 84.387 17901-18102 34,588 ARRA State Fiscal Stabilization Funds, Education State Grants 84.394 17901-62532 5,397,263
Total Department of Education $ 15,240,815
Total Component Unit School Board $ 19,193,308
Total Expenditures of Federal Awards $ 29,094,759
See accompanying notes to schedule of expenditures of federal awards.
173
CITY OF SUFFOLK, VIRGINIA
Notes to Schedule of Expenditures of Federal AwardsFor The Year Ended June 30, 2010
Note 1 - General
Note 2 - Basis of Accounting
Note 3 - Subrecipients
Amount
CFDA Provided to
Program Name Number Subrecipients
HOME Investment Partnership Program 14.239 $ 275,378
Community Development Block Grant 14.228 90,017
Note 4 - Food Donation
Note 5 - Relationship to Financial Statements
Intergovernmental federal revenues per the basic financial statements:
Primary government:
Governmental funds - exhibit 5 $ 9,901,449
School Board - exhibit 27 19,193,310
Total federal expenditures per the Schedule of Expenditures
of Federal Awards $ 29,094,759
Of the federal expenditures presented in the schedule, the City of Suffolk, Virginia provided federal awards to subrecipients asfollows:
Nonmonetary assistance is reported in the schedule at the fair market value of the commodities received and disbursed. At June30, 2010, the City of Suffolk, Virginia had food commodities totaling $258,065 in inventory.
Federal expenditures, revenues and capital contributions are reported in the City's basic financial statements as follows:
The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of the City ofSuffolk, Virginia under programs of the federal government for the year ended June 30, 2010 . The information in this Schedule ispresented in accordance with the reporting requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations . Because the Schedule presents only a selected portion of operations of the City of Suffolk, Virginia, it is notintended to and does not present the financial position, changes in net assets, or cash flows of the City of Suffolk, Virginia. �
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized followingthe cost principles contained in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments , whereincertain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers arepresented where available.
174
CITY OF SUFFOLK, VIRGINIA
Schedule of Findings and Questioned Costs
Year Ended June 30, 2010
Section I - Summary of Auditor's Results
Financial Statements
Type of auditor's report issued: Unqualified
Internal control over financial reporting:Material weakness(es) identified? No
Significant deficiency(ies) identified None reported
Noncompliance material to financial statements noted? No
Federal Awards
Internal control over major programs:Material weakness(es) identified? No
Significant deficiency(ies) identified None reported
Type of auditor's report issued on compliance for major programs: Unqualified
Any audit findings disclosed that are required to bereported in accordance with Circular A-133, Section .510 (a)? No
Identification of major programs:
Name of Federal Program or Cluster
Child Nutrition ClusterSNAP Cluster
Airport Improvement Grant
Title I ClusterSpecial Education Cluster (IDEA)State Fiscal Stabilization Funds (SFSF) ARRA, Education State GrantsChild Care & Development Block Grant ClusterFoster Care - Title IV-E
Dollar threshold used to distinguish between Type A and Type B programs: $872,843
Auditee qualified as low-risk auditee? Yes
Section II - Financial Statement Findings
There are no financial statement findings to report.
Section III - Federal Award Findings and Questioned Costs
There are no federal award findings and questioned costs to report.
84.39493.575 / 93.596 / 93.71393.658
CFDA #
10.56110.553 / 10.555 / 10.559
20.10684.010 / 84.38984.027 / 84.173 / 84.391 / 84.392
175
CITY OF SUFFOLK, VIRGINIA
Summary Schedule of Prior Audit Findings
Year Ended June 30, 2010
None reportable
176
Certificate of Achievement for Excellence
in Financial Reporting
Presented to
City of Suffolk Virginia
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2009
A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers
Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual fmancial
reports (CAFRs) achieve the highest standards in government accounting
and fmancial reporting.
President
Executive Director
It’s a good time to be in SuffolkDepartment of Finance441 Market Street • Suffolk, VA 23434
757-514-7500 • FinanceEmail.city.suffolk.va.uswww.Suffolk.va.us