Audited Financial Results for the Fiscal Year Ended June 30, 2013 December 10, 2013 1
Cherry Bekaert Comments FY 2013 Audited Financial Statements Implemented GASB Pronouncements Entity Wide Statements – GASB 34 General Fund School Operating Fund Water & Sewer Fund Waste Management Fund TIP Fund Debt – June 30, 2013 Fiscal Year 2014 – Through November 30, 2013 2
Audit Presentation City of Virginia Beach December 10, 2013
Overview Overview of Auditors’ Opinion Required communication of significant audit matters Questions
Auditors’ Opinion on the Financial Statements Unmodified Opinion Accounting principles generally accepted in the United States of America Material transactions or balances Compliance with laws and regulations material to the financial statements
Required Communications Our responsibility under generally accepted auditing standards: We assessed risk that the financial statements may contain a material misstatement, either intentional or unintentional. We documented and considered internal controls to assist us with our audit approach, not for the purpose of providing assurance on those controls.
Required Communications Our Responsibility under Government Auditing Standards (The Yellow Book) We reviewed and tested the City’s compliance with laws and regulations, noncompliance with which could have a material impact on the financial statements. We reviewed compliance with applicable laws and regulations identified in the Specifications for Audits of Counties, Cities and Towns issued by the Auditor of Public Accounts of the Commonwealth of Virginia.
Required Communications Our Responsibility under OMB A-133 We performed procedures in order to express an opinion on the City of Virginia Beach’s compliance with requirements applicable to major Federal programs. Our opinion is unmodified. We performed tests of controls to assess the City’s ability to detect material noncompliance with program requirements, not to express an opinion on controls.
Required Communications Independence In accordance with AICPA Rule 101, and the independence standards contained in Government Auditing Standards, we were, and continue to be, independent with respect to the City of Virginia Beach. Accounting Policies The City adopted GASBS Nos. 61, 63 and 65. All other existing policies have been consistently applied.
Required Communications Estimates These statements include estimates, including: Allowance for Uncollectible Accounts Other Post Employment Benefits liability Claims Liability
Required Communications Significant Audit Findings There were no disagreements or difficulties in dealing with management. There were no misstatements individually or in the aggregate identified during our audit. There were no consultations with other accountants.
Audit Presentation The City of Virginia Beach December 10, 2013
Cherry Bekaert Comments FY 2013 Audited Financial Statements Implemented GASB Pronouncements Entity Wide Statements – GASB 34 General Fund School Operating Fund Water & Sewer Fund Waste Management Fund TIP Fund Debt – June 30, 2013 Fiscal Year 2014 – Through November 30, 2013 13
No. 61, The Financial Reporting Entity Modifies requirements for component units – e.g. VBDA No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position Assets + Deferred Outflows – Liabilities – Deferred Inflows = Net Position No. 65, Items Previously Reported as Assets and Liabilities Debt issuance costs are now expenses when incurred 14
Governmental Business Total Assets $ 3,858.4 $ 1,237.3 $ 5,095.7 Deferred Outflows of Resources 0.4 1.2 1.6 Liabilities (1,179.4) (291.9) (1,471.3) Deferred Inflows of Resources (7.0) (0.4) (7.4) Net Position: Net Investment in Capital Assets 2,428.2 790.1 3,218.3 Restricted 40.9 132.9 173.8 Unrestricted 203.3 23.2 226.5 Total Net Position $ 2,672.4 $ 946.2 $ 3,618.6 CAFR Exhibit 1 15
% of BUDGET ACTUAL VARIANCE Budget LOCAL $ 816.0 $ 818.4 $ 2.4 0.3% STATE 145.8 143.4 (2.4) -1.6% FEDERAL 16.7 17.6 0.9 5.4% TOTAL REVENUES $ 978.5 $ 979.4 $ 0.9 0.1% CITY $ 674.9 $ 651.2 $ 23.7 3.5% SCHOOLS 357.7 338.9 18.8 2.5% TOTAL EXPENDITURES $ 1,032.6 $ 990.1 * $ 42.5 4.1% REVENUES OVER (UNDER) $ (54.1) $ (10.7) $ 43.4 FUND BALANCE - JULY 1 191.2 LESS: RESERVATIONS (78.1) UNASSIGNED FUND BALANCE - JUNE 30 $ 102.4 Fund Balance as a percent of FY 2014 Revenues is 10.4% CAFR Exhibit 5 * Reflects encumbrances of $8.2 million 16
$500 474.8 465.2 461.7 463.5 458.4 455.9 441.0 437.4 439.0 436.1 429.4 426.7 421.8 423.2 $400 Revenues $ Million $300 $200 $100 99 99 ₵ 89 89 ₵ 89 89 ₵ 89 89 ₵ 89 ₵ 89 89 ₵ 89 95 ₵ 95 99 ₵ 99 89 89 ₵ 89 ₵ 89 89 89 ₵ 89 ₵ 89 89 ₵ 89 $0 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Budget Actual 17
81.7 79.8 79.0 $80 74.7 73.7 73.1 70.3 70.0 68.1 67.5 65.9 65.2 64.2 57.8 $60 Revenues $ Million $40 $20 $0 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Budget Actual 18
$60 56.0 55.7 55.0 54.1 54.0 54.1 53.4 53.4 53.0 51.4 51.7 51.1 50.6 50.3 $50 $40 Revenues $ Million $30 $20 $10 $0 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Budget Actual 19
$50 45.0 44.2 43.2 42.4 41.8 41.3 41.3 41.1 40.8 40.8 41.0 40.6 39.9 $40 38.1 $30 Revenues $ Million $20 $10 $0 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Budget Actual 20
$25 23.6 23.7 22.0 21.6 20.8 20.3 20.1 19.7 19.5 $20 19.3 Revenues $ Million $15 $10 $5 $0 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Budget Actual 21
$30 26.0 25.4 25.1 25.0 24.4 24.1 $25 23.9 23.6 23.0 23.0 22.8 22.7 $20 Revenues $ Million $15 $10 $5 $0 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Budget Actual 22
$60 55.1 55.1 53.3 51.8 50.9 49.8 49.1 48.1 48.3 48.7 $50 48.4 48.2 $40 Revenues $ Million $30 $20 $10 $0 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Budget Actual 23
Hot Hotel R l Room T oom Tax Restaurant Meal T estaurant Meal Tax SB $1 OS 0.44% $0.1 CBD TIF $4.4 $0.5 GF 2% $5.8 TIP 1.06% $10.6 TIP 5% $14.6 GF 3.5% $35.1 TAP 0.5% TAP $5.0 1%/$1 $5.0 GF 2% CBD TIF TAP 1%/$1 TIP 5% SB $1 GF 3.5% TAP 0.5% TIP 1.06% OS 0.44% 24
$175 159.3 157.3 156.7 156.1 144.7 143.8 145.8 143.4 $150 143.8 143.5 142.4 140.7 137.9 138.1 $125 Revenues $ Million $100 $75 $50 $25 $0 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Budget Actual 25
$200 16.0% 12.8% 11.9% 11.1% 11.0% $150 12.0% 10.7% 10.4% 10.1% 10.1% 9.3% 8.9% % of Budgeted GF Revenue $123.4 $117.8 Dollars (Millions) $113.0 $100 8.0% $104.0 $103.4 $102.1 $102.4 $96.6 $92.7 $73.0 $50 4.0% $0 0.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Unassigned GF Balance % of Budgeted GF Revenue Policy = 8-12% of Revenues 26
Budget Actual Variance REVENUES: City $ 388.9 $ 388.9 $ - Local 2.7 3.1 0.4 School's Reserve & Other Funds 11.7 11.7 - Commonwealth 310.1 307.4 (2.7) Federal Government 17.1 20.9 3.8 Total Revenues $ 730.5 $ 732.0 $ 1.5 EXPENDITURES $ (740.6) $ (723.3) * $ 17.3 Total Reversion to City $ 18.8 * Reflects encumbrances of $5.4 million 27
Budget Actual Diff Charges for Services $ 60.1 $ 62.2 $ 2.1 Sale of Water 48.1 46.5 (1.6) Other 4.6 7.8 3.2 Total Revenues $ 112.8 $ 116.5 $ 3.7 Water Services Contract $ 27.8 $ 26.0 $ 1.8 Operating Expenses 58.2 51.9 6.3 Debt Service 19.0 13.9 5.1 Transfers to CIP 13.3 13.3 0.0 Total Expenditures $ 118.3 $ 105.1 $ 13.2 Net Change in Position $ 11.4 28
Budget Actual Diff Charges for Services $ 26.6 $ 26.6 $ (0.0) Transfer from Gen Fund 14.8 14.8 0.0 Other 0.1 0.1 0.0 Total Revenues $ 41.5 $ 41.5 $ 0.0 Program Support $ 1.0 $ 1.0 $ 0.0 Waste Disposal 21.4 18.7 2.7 Waste Collection 12.5 12.2 0.3 Yard Debris/Hazardous Waste 1.9 2.0 (0.0) Recycling 4.6 4.6 (0.1) Transfers to City Garage 0.1 0.1 0.0 Total Expenditures $ 41.5 $ 38.6 $ 2.9 Net Change in Fund Balance $ 2.9 29
Budget Actual Diff Hotel Room Tax $ 14.3 $ 14.6 $ 0.3 Restaurant Meal Tax 10.6 10.6 (0.0) Amusement Tax 5.8 5.5 (0.3) Cigarette Tax 0.9 0.9 (0.0) Transfer from Gen Fund 0.3 0.3 0.0 Other 1.5 1.6 0.1 Total Revenues $ 33.4 $ 33.5 $ 0.1 Debt Service $ 26.2 $ 26.1 $ 0.1 SGA Special Events 3.5 3.4 0.1 Operating Expenses 2.0 1.6 0.4 Transfer to Sandbridge SSD 2.3 2.4 (0.1) Transfer to Gen Fund 2.0 2.0 0.0 Total Expenditures $ 36.0 $ 35.5 $ 0.5 Net Change in Fund Balance $ (2.0) 30
Total Debt - tal Debt - $1.204B 204B Agriculture Reserve Program 3.42% General Government 54.62% Storm Water 2.13% Water and Sewer 13.70% Schools 26.13% 31
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