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Home My WebLink AboutAgenda - 12-18-2018 4-d - Presentation of Comprehensive Annual Financial Report for FYE 6-30-2018 and Approval of Audit Contract Extension 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: December 11, 2018 Action Agenda Item No. 4-d SUBJECT: Presentation of Comprehensive Annual Financial Report for FYE 6/30/2018 and Approval of Audit Contract Extension DEPARTMENT: Finance and Administrative Services ATTACHMENT(S): INFORMATION CONTACT: 1. GFOA Award for Excellence in Gary Donaldson, (919) 245-2453 Financial Reporting Paul Laughton, (919) 245-2152 2. PowerPoint Presentation - FY 2017-18 Financial Review UNDER SEPARATE COVER 3. Comprehensive Annual Financial Report, June 30, 2018— Hard Copy To Be Provided at the Meeting— CURRENTLYAVAILABLE EL ECTRONI CA L L Y A T.- http://www.co.orange.nc.us/732/Finan cial-Audit 4. PowerPoint Presentation-Mauldin & Jenkins— To Be Provided at the Meeting PURPOSE: To receive the Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2018 and to approve an extension to the audit contract for Mauldin & Jenkins, PLLC. BACKGROUND: The CAFR reports on all financial activity of the County for the fiscal year July 1, 2017 through June 30, 2018. Mauldin and Jenkins, a firm of Certified Public Accountants, audited the financial statements. The financial statements, audit and contract extension are required by Chapter 159-34 of the North Carolina General Statutes. The County prepares a Comprehensive Annual Financial Report (CAFR) that meets the standards set by the Government Finance Officers Association (GFOA). The CAFR is submitted to the GFOA in order to be awarded the Certificate of Achievement for Excellence in Financial Reporting. The financial report for the Orange County SportsPlex, as required under the management contract, is included in the County's CAFR. The County received an unmodified (clean) audit opinion on the financial statements received from the audit. The financial audit results indicate compliance with County financial policies. The Chief Financial Officer and representatives of Mauldin and Jenkins will cover highlights of the report and answer any questions. 2 The audit contract extension is required to accommodate Mauldin & Jenkins submittal of the audit report to the Local Government Commission on December 4, 2018. FINANCIAL IMPACT: The financial report indicates a sound financial position for Orange County. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to this item: • GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY The creation and preservation of infrastructure, policies, programs and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. RECOMMENDATION(S): The Manager recommends that the Board receive the Comprehensive Annual Financial Report as information and that the Board approve the audit contract extension per North Carolina General Statute. 3 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Orange County North Carolina For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2017 041t-&� P, ;k Executive Director/CEO 4 �R ORANGE COUNTY NORTH CAROLINA Fiscal Year 2017-18 Review and Summary Gary Donaldson, Chief Financial Officer December 11 , 2018 BOCC Regular Meeting 5 FY 2017- 18 Audited Reserves by Fund County Funds 1 Beginning of Fiscal Year End of Fiscal Year General Fund-Unassigned Fund Balance $ 34,527,885 $ 34,439,230 Article 46 Sales Tax Fund $ 3,267,750 $ 3,515,051 Community Development Fund $ 1,784,091 $ 1,777,410 Health and Dental Fund $ 2,159,028 $ 2,769,276 Housing Section 8 Fund $ 141,597 $ 166,439 Emergency Telephone Fund $ 682,821 $ 664,467 Fire District Tax Funds $ 1,154,712 $ 1,412,712 Visitors Bureau Fund $ 655,824 $ 766,785 Spay/Neuter Fund $ 62,771 $ 64,006 Solid Waste Enterprise Fund Z $ 4,191,824 $ 7,050,502 S orts lex Enterprise Fund $ 3,579,805 $ 3,580,764 Efland Sewer Operating Fund $ 238,443 $ 297,387 Notes: 1) Beginning Year and Ending Year Reserves for these funds are the fund balances or accumulated amounts for working capital requirements. 2) The Solid Waste Enterprise Ending Reserve increase is a result of the implementation of GASB 74/75(OPEB reporting)and a related adjustment to the OPEB liability on the balance sheet of$2.6 million from the Solid Waste Fund to the Government-wide Fund.The Solid Waste Reserves increase is not due to Operating and/or Profit/Loss performance. ORANGE COUNTY NORTH CAROLINA 6 Fund Balance Policy Compliance Unassigned Fund Balance as % of General Fund Expenditures 17.00% 16.84% 16.50% 16.23% 16.17% 16.00% 15.50% 15.00% FY 2015-16 FY 2016-17 FY 2017-18 Unassigned Fund Balance as Percent of General Fund Expenditures Fund Balance Policy Note: FY 2017-18 Unassigned Fund Balance of 16.23%= $34,439, 230 compared to 16% Policy=$33,951,266 ORANGE COUNTY The .23% difference=$487,964 NORTH CAROLINA 7 Debt Service Policy Compliance Debt Service as % of General Fund Revenues 15.00% 12.79% 12.78% 12.40% 10.00% 5.00% FY 2015-16 FY 2016-17 FY 2017-18 Debt Service as Percent of General Fund Revenues Debt Service Policy ORANGE COUNTY NORTH CAROLINA 8 Investment Earnings Performance General Fund Investment Earnings $900,000 $800,469 $800,000 $700,000 $600,000 $500,000 $437,171 $400,000 $300,000 $200,000 $151,391 $100,000 $34,300 $29,976 $9,738 $15,886 FY 2011-12 FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 ORANGE COUNTY NORTH CAROLINA 9 Investment Earnings Performance Solid Waste Fund Investment Earnings $160,000 $140,000 $136,150 $120,000 $100,000 $80,000 $79,72 $60,000 $40,000 $25,317 $20,000 $10,001 $9,535 $2,939 $2,284 FY 2011-12 FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 ORANGE COUNTY NORTH CAROLINA 10 Operating Funds Highlights ➢ Met Board County Policies; Unassigned Fund Balance and Debt Service Limit; ➢ AAA Bond Rating Affirmation by all 3 Rating Agencies citing Favorable Budget versus Actuals Performance and Reserve Levels; ➢ Refinanced Existing Debt and Achieved $2 million in savings over the life of the Debt obligations; ➢ Reduced General Fund subsidy to Solid Waste Fund from $1 .8 to $1 .5 million; ➢ Doubled Investment Earnings through timely investment of cash in higher interest rate environment three successive fiscal years; ➢ Decommissioned structurally imbalanced Vehicle Replacement Fund in Budget Amendment #10; and ➢ Implemented GASB 74 and 75 for Other Post-Employment Benefits (OPEB); with no adverse impact on Financial Statements; ORANGE COUNTY NORTH CAROLINA 11 Capital Funds Highlights ➢ Spring Installment Purchase Financing: $7.5 million included Northern Campus acquisition; Government Services Annex relocation of Electrical and HVAC; School Facilities and Buildings; 9 Sheriff Dodge Chargers; 3 Emergency Services Ambulances; 1 Animal Services Truck; 1 Solid Waste Truck and 1 Compactor Equipment; IT improvements; and Affordable Housing Land Banking. ➢ General Obligation Bonds: $64.4 million for Chapel Hill High School; $15.9 million Orange County Schools Mechanical Systems, Site acquisition, Roofing and Safety improvements; $5.9 million Two-thirds bonds for both School Districts; and $2.5 million for Affordable Housing Bonds for CASA, Empowerment and Habitat for Humanity Projects. ORANGE COUNTY NORTH CAROLINA 12 Financial Management Monitoring • Monthly and Quarterly Finance Reviews of all Funds • Budget versus Actual Variance Analyses compared with Prior Year • Financial Analysis Distinguishing Timing versus Performance Variances • Updating Economic indicators and trends in new Long-Term Financial Model • Regular Communication and Collaboration with all Departments to monitor and improve Financial Results ORANGE COUNTY NORTH CAROLINA 13 Internal Control Key Performance Indicators Key Performance Indicators Objective Interval Expenditure Recognition/Cost % of Invoices Not Paid in 30 Days Control Monthly % of Purchasing Cards Not Reconciled in 30 Days Authorized Expenditures Monthly Revenue Recognition; Accurate Revenues Not Timely Recorded Financial Reporting Monthly ORANGE COUNTY NORTH CAROLINA 14 Next: Independent Auditors Presentation ORANGE COUNTY NORTH CAROLINA