audited financial results for the fiscal year ended …...statement of net position – all city...

AUDITED FINANCIAL RESULTS FOR THE FISCAL YEAR ENDED JUNE 30, 2018

DECEMBER 11, 2018

Comprehensive Annual Financial Report (CAFR)

Clifton, Larson, Allen Comments

FY 2018 Audited Financial Statements Entity Wide Statements – GASB 34

General Fund

School Operating Fund

Enterprise Funds

TIP Fund and TAP Fund

Debt – June 30, 2018

FY 2019 results through November 30, 2018

AGENDA

i

Introductory Section Letter of Transmittal

Financial Section Independent Auditor’s Report Management’s Discussion and Analysis Basic Financial Statements Government-Wide Financial Statements – reports net position Governmental Fund Financial Statements – reports fund balance Proprietary Fund Financial Statements Required Supplementary Information Combining and Individual Financial Statements (ISFs, SRFs, Fiduciary)

Statistical Section Single Audit Continuing Disclosures

COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR)

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WEALTH ADVISORY  |  OUTSOURCING  |  AUDIT, TAX, AND CONSULTING

Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC‐registered investment advisor

©2018

 CliftonLarsonA

llen LLP

WEALTH ADVISORY  |  OUTSOURCING  |  AUDIT, TAX, AND CONSULTING

Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC‐registered investment advisor

©2018

 CliftonLarsonA

llen LLP

City of Virginia Beach2018 Comprehensive Annual Financial Reporting  (CAFR) Results

©2018

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Audit Results

Auditors’ Opinion on Financial Statements – Unmodified

Report on Internal Control Over Financial Reporting and on Complianceand Other Matters Based on an Audit of Financial StatementsPerformed in Accordance with Government Auditing Standards – nomaterial weaknesses or significant deficiencies noted

©2018

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Audit Results ‐ continued

• Independent Auditors’ Report on Compliance for Each MajorFederal Program, Report on Internal Control, and Report on theSchedule of Expenditures of Federal Awards Required by theUniform Guidance

• One Finding: Section 8 Voucher– Rent reasonableness

©2018

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Required Communications

• As described in Note 11, the City implemented GASB Statement No. 75,Accounting and Financial Reporting for Postemployment Benefits OtherThan Pensions. This statement required accrual of the OPEB liability,additional disclosures in the footnotes, and restatement of beginning netposition.

• Accounting estimates• Financial statement disclosures• No  difficulties encountered during the audit• No disagreements with management

©2018

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Required Communications ‐ continued

• No corrected or uncorrected misstatements• Management representations• Management consultations with other independent accountants• Audit of group financial statements• Other information in documents containing audited financial statements

• Required supplementary information• Supplementary information• Schedule of Expenditures of Federal Awards

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CLAconnect.com

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Greg Bussink, CPA, CGFM, CGMAPrincipal

Greg.Bussink@CLAconnect.com

Net Position

Total Economic Resources Measurement

Long-Term operational accountability

Fund Balance

Current Financial Resources Measurement

Near-Term fiscal accountability Budgetary Compliance

Legal Compliance

COMPARISON OF NET POSITION TO FUND BALANCE

CoVB - 1

STATEMENT OF NET POSITION – ALL CITY FUNDSJUNE 30, 2018

( I N M I L L I O N S )

CAFR Exhibit 1 CoVB - 2

City Schools Total

Community Development Corporation

Current Assets 1,189.9$ 199.1$ 1,389.0$ 5.8$ Capital Assets 4,511.8 535.3 5,047.1 26.9 Deferred Outflows of Resources 75.0 115.4 190.4 -

Total Assets and Deferred Outflows of Resources

5,776.7 849.8 6,626.5 32.7

Current Liabilities 108.5 91.2 199.7 0.3 Net Pension Liability 350.2 639.2 989.4 - Net OPEB Liability 105.6 164.2 269.8 - Other Long-Term Liabilities 1,443.9 51.1 1,495.0 21.3 Deferred Inflows of Resources 55.2 99.4 154.6 -

Total Liabilities and Deferred Inflows of Resources

2,063.4 1,045.1 3,108.5 21.6

Net Position:Net Investment in Capital Assets 3,176.7 535.3 3,712.0 5.6 Restricted 96.0 27.8 123.8 - Unrestricted 440.6 (758.5) (317.9) 5.5

Total Net Position 3,713.3$ (195.4)$ 3,517.9$ 11.1$

GENERAL FUND BUDGET TO ACTUALJUNE 30, 2018

( I N M I L L I O N S )

General Fund Balance only as a percent of FY2019 Revenues is 9.87%

% of BUDGET ACTUAL VARIANCE Budget

LOCAL 960.2$ 965.2$ 5.0$ 0.5%STATE 158.9 158.8 (0.1) -0.1%FEDERAL 21.7 23.1 1.4 6.5%

TOTAL REVENUES 1,140.8$ 1,147.1$ 6.3$ 0.6%

CITY 693.6$ 643.8$ 49.8$ 7.2%CITY CAPITAL PROJECTS 62.4 62.4 - - SCHOOLS 438.6 415.7 22.9 5.2%SCHOOL RESERVE FUND 17.6 8.8 8.8 50.0%SCHOOLS CAPITAL PROJECTS 4.5 4.5 - -

TOTAL EXPENDITURES 1,216.7$ 1,135.2$ 81.5$ 6.7%

REVENUES OVER (UNDER) (75.9)$ 11.9$ 87.8$

FUND BALANCE - JULY 1 218.2

LESS: RESERVATIONS (115.8)

UNASSIGNED FUND BALANCE - JUNE 30 114.3$ CoVB - 3

TOTAL REVENUES – GENERAL FUNDJUNE 30, 2018

(IN MILLIONS)

CoVB - 4

FY 2017 YTDBudget Actual Variance % Actual Actual %

* Real Estate Taxes 521.9$ 523.6$ 1.7$ 0.3 482.0$ 41.6$ 8.6 %Personal Property Taxes 102.5 108.1 5.6 5.5 100.1 8.0 8.0 Commonwealth - PPTRA 53.4 53.4 - - 53.4 0.0 0.0 General Sales Tax 65.1 63.5 (1.6) (2.5) 62.6 0.9 1.5 Utility Taxes 25.8 25.9 0.1 0.4 25.3 0.6 2.2 Telecommunications Taxes 24.9 24.0 (0.9) (3.6) 19.5 4.5 22.9 Business Licenses 46.8 48.7 1.9 4.0 47.0 1.7 3.6

* Hotel Taxes 7.2 7.2 0.0 0.2 6.9 0.3 4.8 * Meal Taxes 43.8 42.2 (1.6) (3.7) 41.5 0.7 1.7 * Cigarette Taxes 11.1 10.6 (0.5) (4.2) 11.1 (0.5) (4.1)

Human Services Charges 27.2 25.7 (1.4) (5.3) 25.8 (0.1) (0.2) Other Charge for Services 39.4 38.1 (1.3) (3.2) 19.9 18.2 91.6 Other Local Revenues 34.2 37.8 3.6 10.4 42.9 (5.1) (12.0) Commonwealth - Maintenance of Roads 49.5 48.6 (1.0) (2.0) 48.9 (0.3) (0.7) Commonwealth - Human Services Reimb. 28.4 29.1 0.7 2.6 31.6 (2.5) (7.9)

* Commonwealth - Other State Revenues 28.4 28.2 (0.2) (0.9) 23.5 4.7 20.0 * Federal Revenues 21.7 23.1 1.4 6.3 22.1 1.0 4.4 * Transfers from Other Funds 9.4 9.3 (0.1) (0.7) 34.3 (25.0) (72.9)

1,140.7$ 1,147.1$ 6.4$ 0.6 1,098.4$ 48.7$ 4.4 %

* GF portion only Green = Exceeded budget Red = Under budget Blue = Under Budget but exceeded Prior Year

FY 2018 YTD VARIANCES

TOTAL FUND BALANCE RESERVATIONSJUNE 30, 2018

( I N M I L L I O N S )

Total Fund Balance June 30, 2018 230.1$

Less Reservations: Inventories & Loans Receivable 11.0 Community Services Board Restricted Funds 2.2 School True-Up 1.5 School Reversion 22.9 School Reserve Fund 17.3 Carryforwards and Encumbrances 11.6 Trust and Gift Funds 1.1 FY 2019 City CIP Budget 31.9 FY 2019 School Operating Budget 0.4 FY 2019 School CIP Budget 3.6 Risk Management 1.8 Human Services Electronic Implementation 4.0 Salary Compression for FY 2019 3.0 Increase CIP for Beach Replenishment 3.5

115.8

Total Unassigned Fund Balance FY 2018 114.3$

% of FY2019 Budgeted Revenues 9.87% CoVB - 5

UNASSIGNED GENERAL FUND BALANCEAS OF JUNE 30, 2009 THRU 2018

( I N M I L L I O N S )

$92.7 $102.1

$113.0 $104.0 $102.4

$96.1 $97.0 $107.1

$118.4 $114.3

8.9%10.1%

11.9%

10.7%10.4%

9.5% 9.3%10.1%

10.5%9.9%

0.0%

4.0%

8.0%

12.0%

16.0%

$0

$50

$100

$150

$200

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

% o

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F R

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Unassigned GF Balance % of Budgeted GF Revenue CoVB - 6

SCHOOL OPERATING FUND – REVENUES & EXPENDITURESBUDGET TO ACTUAL AT JUNE 30, 2018

( I N M I L L I O N S )

Per City Council policy, amount reverted back to City is reappropriated back to the schools. In addition to reversion, total revenue True-Up (34.11% of non-dedicated Local Taxes) of $1.5M was reappropriated to schools in FY2019.

Budget Actual VarianceREVENUES:

City - FY18 Contribution 448.1$ 448.1$ -$ City - School Reserve Fund 8.4 8.4 - State Share of Sales Tax 73.7 74.3 0.6 Commonwealth 273.5 273.2 (0.3) Federal Government 12.2 12.6 0.4 Other 2.8 3.4 0.6

Total Revenues 818.7$ 820.0$ 1.3$

EXPENDITURES:Salaries 459.5$ 447.8$ 11.7$ Fringe Benefits 174.2 173.0 1.2 Operating Expenses 108.5 103.8 4.7 Capital Outlay 19.6 18.9 0.7 Debt Service 44.9 42.2 2.7 Transfers 12.6 12.0 0.6

Total Expenditures * 819.3$ 797.7$ 21.6$

Total School Reversion 22.9$

* Includes encumbrances of $7.0 million

CoVB - 7

ENTERPRISE FUNDSAT JUNE 30, 2018

( I N M I L L I O N S )

CoVB - 8

Water and Sewer Storm Water

Waste Management Parking

Cash and Investments 120.9$             38.3$                7.1$                  4.9$                 Cash and Investments ‐ Restricted 77.0 6.0 - - Other Assets + Deferred Outflows 736.1 383.9 13.3 0.5

Total Assets + Deferred Outflows 934.0 428.2 20.4 5.4

Total Liabilities + Deferred Inflows 255.6 61.3 9.1 1.1

Net Investment in Capital Assets 494.2 334.2 6.9 0.5 Future Debt Services 18.0 3.4 - - Unrestricted (deficit) 166.2 29.2 4.3 3.9

Total Net Position 678.4 366.8 11.2 4.4

Operating Revenues 125.3 41.7 35.1 6.0 Operating Expenses (112.8) (32.8) (37.5) (4.0)

Operating Income (Loss) 12.5 8.9 (2.4) 2.0

Other (non operating and capital contributions) 4.1 10.8 5.9 (1.7) Change in Net Position 16.6$ 19.7$ 3.5$ 0.3$

DEVELOPMENT AUTHORITYAT JUNE 30, 2018

( I N M I L L I O N S )

CoVB - 9

Development Authority

Cash and Investments 8.9$                   Cash and Investments ‐ Restricted 2.6 Other Assets + Deferred Outflows 162.8

Total Assets + Deferred Outflows 174.3

Total Liabilities + Deferred Inflows 80.3

Net Investment in Capital Assets 37.1

Future Debt Services 6.4 Unrestricted (deficit) 50.5

Total Net Position 94.0

Operating Revenues 4.2

Operating Expenses (14.9)

Operating Income (Loss) (10.7)

Other (non operating and capital contributions) 36.8 Change in Net Position 26.1$

TOURISM INVESTMENT PROGRAM (TIP) &TOURISM ADVERTISING PROGRAM (TAP)

AT JUNE 30, 2018( I N M I L L I O N S )

Tourism  Tourism Investment  AdvertisingProgram  Program 

Assets  20.5$ 2.4$ Liabilites 0.2 1.4 Fund Balance  20.4 1.0

Revenue  39.5 12.2 Expenses  (31.4) (12.7) Change in Fund Balance  8.1$ (0.5)$

Hotel Tax

TIP5%

TAP1%

GF 2%

GF3.5%

TIP1.06%

TAP0.5%

OS0.44%

Meal Tax

CoVB - 10

OUTSTANDING DEBT BY PURPOSEAS OF JUNE 30, 2018

Net Debt per Capita – $2,042

Total Tax Supported Debt - $932.1MTotal Self Supported Debt - $290.1M

General Government

51.69%

Agriculture Reserve Program

3.76%

Storm Water3.54%

Water and Sewer

17.19%

Schools 23.82%

Total Debt - $1.222B

CoVB - 11

Fund Balance of $114.3M within City Council Policy, Reservations for FY2019 operating budget include: School Reversion & Revenue Sharing - $24.4M

FY2019 CIP Budget – City-$31.9M and Schools-$3.6M

General Fund revenues of $1.147B were 0.6% ($6.3M) over budget Increase of 4.4% ($48.7M) over prior year

General Fund expenditures of $1.135B were 6.7% ($81.5M) under budget Increase of 6.5% ($69.0M) over prior year

Net Pension Liabilities for City and Schools total $1.152B $162.6 M less than FY2017

Net OPEB Liabilities for City and Schools total $269.8M

FY2018 SUMMARY

CoVB - 12